-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, ItFSiUvRQfWnwDeacftAkszBPOV8MCg/t986T0eE4GBKabzbRGLrXt/xJxzBHSpU 4mzw+U7houJCeke+zgD2og== 0000842635-08-000019.txt : 20080331 0000842635-08-000019.hdr.sgml : 20080331 20080331074324 ACCESSION NUMBER: 0000842635-08-000019 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 27 CONFORMED PERIOD OF REPORT: 20071231 FILED AS OF DATE: 20080331 DATE AS OF CHANGE: 20080331 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LYONDELL CHEMICAL CO CENTRAL INDEX KEY: 0000842635 STANDARD INDUSTRIAL CLASSIFICATION: INDUSTRIAL ORGANIC CHEMICALS [2860] IRS NUMBER: 954160558 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-10145 FILM NUMBER: 08721530 BUSINESS ADDRESS: STREET 1: 1221 MCKINNEY ST STREET 2: SUITE 700 CITY: HOUSTON STATE: TX ZIP: 77010 BUSINESS PHONE: 713-652-7200 MAIL ADDRESS: STREET 1: 1221 MCKINNEY ST STREET 2: SUITE 700 CITY: HOUSTON STATE: TX ZIP: 77010 FORMER COMPANY: FORMER CONFORMED NAME: LYONDELL PETROCHEMICAL CO DATE OF NAME CHANGE: 19920703 10-K 1 lyo10k-032808.htm FORM 10-K FOR YEAR ENDED DECEMBER 31, 2007 lyo10k-032808.htm
Table of Contents
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K

(Mark One)
x  
Annual Report Pursuant to Section 13 or 15(D) of the Securities Exchange Act of 1934 for the Fiscal Year Ended December 31, 2007

o  
Transition Report Pursuant to Section 13 or 15(D) of the Securities Exchange Act of 1934

Commission File No. 1-10145

LYONDELL CHEMICAL COMPANY
(Exact name of Registrant as specified in its charter)

Delaware
  
95-4160558
(State or other jurisdiction of
  
(I.R.S. Employer Identification No.)
incorporation or organization)
    
     
1221 McKinney Street,
Suite 700, Houston, Texas
  
 
77010
(Address of principal executive offices)
  
(Zip Code)

Registrant's telephone number, including area code: (713) 652-7200

Securities registered pursuant to Section 12(b) of the Act:                                                                                                           None

Securities registered pursuant to Section 12(g) of the Act:                                                                                                           None

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.   Yes    o       No   x
Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.   Yes   x      No   o
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes   o  No   x
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer   o      Accelerated filer   o   Non-accelerated filer   x       Smaller reporting company   o
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes   o     No   x
There were 253,448,132 shares of the Registrant's common stock issued and outstanding on June 29, 2007, the last business day of the Registrant’s most recently completed second fiscal quarter.  The aggregate market value of the voting stock held by non-affiliates of the Registrant on June 29, 2007, based on the closing price of the Registrant’s common stock on the New York Stock Exchange composite tape on that date, was $9,367,221,569.
There is no longer an established public trading market for the Registrant’s equity securities.  As of December 20, 2007, all 1,000 outstanding shares of the Registrant’s equity securities are held by affiliates.


 
 
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Lyondell Chemical Company is a global manufacturer of chemicals, a North American manufacturer of plastics, a refiner of heavy, high-sulfur crude oil and a significant producer of gasoline blending components, with 2007 revenues of approximately $29 billion and assets of approximately $27 billion as of December 31, 2007.
 
On December 20, 2007, an indirect wholly owned subsidiary of LyondellBasell Industries AF S.C.A. (formerly known as Basell AF S.C.A.) merged with and into Lyondell, with LyondellBasell Industries indirectly acquiring all of the outstanding shares of Lyondell’s common stock at $48.00 per share.  As a result, Lyondell is now an indirect wholly owned subsidiary of LyondellBasell Industries.  On December 20, 2007, in connection with the acquisition by LyondellBasell Industries, the shares of certain indirect wholly owned subsidiaries of Lyondell were sold to other subsidiaries of LyondellBasell Industries in exchange for approximately $617 million in cash, in the aggregate, and, in addition, one of the subsidiaries was sold subject to $668 million of intercompany indebtedness owed to a subsidiary retained by Lyondell.  The subsidiaries that were sold indirectly owned:
 
·  
Lyondell’s facility located at Botlek (near Rotterdam), The Netherlands and other administrative and customer service facilities and assets in The Netherlands;
 
·  
Lyondell’s interests in its European joint venture with Bayer AG, which owns a facility at Maasvlakte (also near Rotterdam), The Netherlands and related assets; and
 
·  
Lyondell’s sales offices in Singapore; Tokyo, Japan; Sao Paulo, Brazil; Vienna, Austria; and Dusseldorf, Germany.
 
For a description of the acquisition by LyondellBasell Industries and the related subsidiary restructuring activities, see Note 3 to the Consolidated Financial Statements.
 
Lyondell operates in three reportable business segments:
 
·  
Lyondell’s chemicals business segment produces and markets: ethylene, its co-products and derivatives; acetyls; propylene oxide (“PO”), its co-products and derivatives; toluene diisocyanate (“TDI”); and fragrance and flavors chemicals.  Ethylene co-products include propylene, butadiene and aromatics, which include benzene and toluene.  Derivatives of ethylene in this segment primarily include ethylene oxide (“EO”), ethylene glycol (“EG”) and other EO derivatives, as well as ethanol.  Acetyls include vinyl acetate monomer (“VAM,” which also is a derivative of ethylene), acetic acid and methanol.  PO’s co-products include styrene monomer (“styrene” or “SM”) and tertiary butyl alcohol (“TBA”).  Isobutylene is a derivative of TBA.  PO derivatives include propylene glycol (“PG”), propylene glycol ethers (“PGE”) and butanediol (“BDO”).
 
·  
Lyondell’s polymers business segment produces and markets polyethylene (high density polyethylene (“HDPE”), low density polyethylene (“LDPE”) and linear low density polyethylene (“LLDPE”)) and polypropylene.
 
·  
Lyondell’s fuels business segment produces and markets refined petroleum products, including gasoline, ultra low sulfur diesel, jet fuel, lubricants (“lube oils”) and aromatics, which include benzene and toluene.  The segment also produces and markets gasoline blending components such as methyl tertiary butyl ether (“MTBE”), ethyl tertiary butyl ether (“ETBE”) and alkylate.
 
 
 
Lyondell’s chemicals business is conducted in part by its subsidiaries.  In the chemicals segment, the production of ethylene and its co-products and primary derivatives (other than acetyls) is conducted through Equistar Chemicals, LP (together with its consolidated subsidiaries, “Equistar”), an indirect wholly owned subsidiary of Lyondell.  The acetyls and fragrance and flavors chemicals portions of Lyondell’s chemicals business are conducted through Millennium Chemicals Inc. (together with its consolidated subsidiaries, “Millennium”), a wholly owned subsidiary of Lyondell.  Equistar previously was a joint venture between Lyondell, Millennium and another partner.  Lyondell purchased the other partner’s interest in Equistar in 2002 and then acquired Millennium in a stock-for-stock business combination on November 30, 2004, thereby also indirectly acquiring the remaining interest in Equistar held by Millennium.
 
Lyondell’s fuels business (other than MTBE, ETBE and alkylate) is conducted through Houston Refining LP (“Houston Refining,” formerly known as LYONDELL-CITGO Refining LP or LCR).  Houston Refining was a joint venture between Lyondell and CITGO Petroleum Corporation (“CITGO”) until Lyondell acquired CITGO’s 41.25% interest in Houston Refining on August 16, 2006, effective as of July 31, 2006.  For a description of the acquisition, see Note 3 to the Consolidated Financial Statements.  Equistar produces alkylate and MTBE, and Lyondell produces MTBE and ETBE.
 
On May 15, 2007, Lyondell sold its worldwide inorganic chemicals business to The National Titanium Dioxide Company Ltd (Cristal) in a transaction valued at approximately $1.3 billion, including the acquisition of working capital and the assumption of specified liabilities directly related to the business.  For a description of the sale, see Note 4 to the Consolidated Financial Statements.
 
In this Annual Report on Form 10-K, unless the context requires otherwise:
 
·  
“LyondellBasell Industries” refers to LyondellBasell Industries AF S.C.A. and its consolidated subsidiaries, and “Basell” refers to Basell AF S.C.A. prior to the December 20, 2007 acquisition of Lyondell,
·  
“Lyondell” or the “Company” refers to Lyondell Chemical Company and its consolidated subsidiaries,
·  
“LCC” refers to Lyondell Chemical Company without its consolidated subsidiaries,
·  
“Equistar” refers to Equistar Chemicals, LP and its consolidated subsidiaries,
·  
“Millennium” refers to Millennium Chemicals Inc. and its consolidated subsidiaries, and
·  
“Houston Refining” refers to Houston Refining LP (formerly known as LYONDELL-CITGO Refining LP or LCR).
 


 
 


Prior to Lyondell’s December 20, 2007 acquisition by LyondellBasell Industries, Lyondell operated in the following three business segments:  ethylene, co-products and derivatives; PO and related products; and refining.  For additional segment information and for geographic information for each of the years in the three-year period ended December 31, 2007, see Note 24 to the Consolidated Financial Statements.
 
 
Lyondell Chemical Company was incorporated under the laws of Delaware in 1985.  Its principal executive offices are located at 1221 McKinney Street, Suite 700, Houston, Texas 77010 (Telephone: (713) 652-7200).  Lyondell’s website address is www.lyondellbasell.com.  Lyondell’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to those reports are available free of charge through www.lyondellbasell.com as soon as reasonably practicable after those reports are electronically filed with or furnished to the Securities and Exchange Commission.  Information contained on Lyondell’s website (www.lyondellbasell.com) or any other website is not incorporated into this Annual Report and does not constitute a part of this Annual Report.
 
 
 
Lyondell’s chemicals business segment produces: ethylene, its co-products and derivatives; acetyls; PO, its co-products and derivatives; TDI; and fragrance and flavors chemicals.
 
Lyondell’s production of ethylene, its co-products and primary derivatives (other than acetyls) is conducted through Equistar.  The acetyls and fragrance and flavors chemicals portions of Lyondell’s chemicals business are conducted through Millennium.
 
In the chemicals segment, Lyondell produces ethylene, its co-products and primary derivatives at ten facilities located in four states in the U.S.  Ethylene co-products include propylene, butadiene and aromatics, which include benzene and toluene.  Ethylene derivatives include EO, EG and other EO derivatives, as well as ethanol.  In addition, in the chemicals segment, Lyondell produces acetyls, such as VAM (which also is a derivative of ethylene), acetic acid and methanol.  Ethylene is the most significant petrochemical in terms of worldwide production volume and is the key building block for polyethylene and a large number of other chemicals, plastics and synthetics.  Ethylene and its co-products and derivatives are fundamental to many segments of the economy, including the production of consumer products, packaging, housing and automotive components and other durable and nondurable goods.
 
Lyondell produces PO, its co-products and derivatives at two facilities located in Texas, one facility located in Japan and one facility located in France.  Lyondell produces its PO through two distinct technologies based on indirect oxidation processes that yield co-products.  One process yields TBA as the co-product; the other yields SM as the co-product.  The two technologies are mutually exclusive, necessitating that a manufacturing facility be dedicated either to PO/TBA or to PO/SM.  Isobutylene is a derivative of TBA.  MTBE and ETBE are other derivatives of TBA, and are gasoline blending components reported in Lyondell’s fuels business segment.  PG, PGE and BDO are derivatives of PO.  PG collectively refers to mono-propylene glycol (“MPG”), PG meeting U.S. pharmacopeia standards (“PGUSP”) and several grades of di-propylene glycol (“DPG”) and tri-propylene glycol (“TPG”).  In addition, Rhodia Intermédiaires (“Rhodia”) operates a TDI facility located in Pont de Claix, France on behalf of Lyondell.
 
Lyondell also produces fragrance and flavors chemicals.  The Brunswick, Georgia and Jacksonville, Florida facilities manufacture terpene-based fragrance ingredients and flavor ingredients, primarily for the oral care markets.  Lyondell also supplies products for use in a number of other applications, including chemical reaction agents, or initiators, for the rubber industry and solvents and cleaners, such as pine oil, for the hard surface cleaner markets.
 


The following table outlines:
 
·  
the primary products of Lyondell’s chemicals segment;
·  
annual processing capacity as of December 31, 2007; and
·  
the primary uses for those products.
 
See “Item 2. Properties” for the locations where Lyondell produces the primary products of its chemicals segment.
 
Unless otherwise specified, annual processing capacity was calculated by estimating the average number of days in a typical year that a production unit of a plant is expected to operate, after allowing for downtime for regular maintenance, and multiplying that number by an amount equal to the unit’s optimal daily output based on the design raw material mix.  Because the processing capacity of a production unit is an estimated amount, actual production volumes may be more or less than the capacities set forth below.  Capacities shown include 100% of the capacity of joint venture facilities.
 
Product
Annual Capacity
Primary Uses
Ethylene
10.8 billion pounds (a)
Ethylene is used as a raw material to manufacture polyethylene, EO, ethanol, ethylene dichloride, styrene and VAM.
Ethylene Co-Products:
    
Propylene
4.8 billion pounds (a)(b)
Propylene is used to produce polypropylene, acrylonitrile and propylene oxide.
Butadiene
1.2 billion pounds 
Butadiene is used to manufacture styrene-butadiene rubber and polybutadiene rubber, which are used in the manufacture of tires, hoses, gaskets and other rubber products.  Butadiene is also used in the production of paints, adhesives, nylon clothing, carpets, paper coatings and engineered plastics.
Aromatics:
    
Benzene
310 million gallons 
Benzene is used to produce styrene, phenol and cyclohexane. These products are used in the production of nylon, plastics, synthetic rubber and polystyrene.  Polystyrene is used in insulation, packaging and drink cups.
Toluene
66 million gallons
Toluene is used as an octane enhancer in gasoline, as a chemical raw material for benzene and/or paraxylene production, and a core ingredient in TDI, a compound used in urethane production.
Ethylene Derivatives:
    
Ethylene Oxide (EO)
1.5 billion pounds EO
equivalents; 400 million
pounds as pure EO (c)
EO is used to produce surfactants, industrial cleaners, cosmetics, emulsifiers, paint, heat transfer fluids and ethylene glycol.
Ethylene Glycol (EG)
1.4 billion pounds (c)
EG is used to produce polyester fibers and film, polyethylene terephthalate (“PET”) resin, heat transfer fluids and automobile antifreeze.
Other Ethylene Oxide
Derivatives
225 million pounds
EO derivatives include ethylene glycol ethers and ethanolamines, and are used to produce paint and coatings, polishes, solvents and chemical intermediates.
Ethanol
50 million gallons 
Ethanol is used in the production of solvents as well as household, medicinal and personal care products.

 



Product
Annual Capacity
Primary Uses
Acetyls:
    
Vinyl Acetate
Monomer
(VAM)
820 million pounds
VAM is a petrochemical product used to produce a variety of polymers products used in adhesives, water-based paint, textile coatings and paper coatings.
Acetic Acid
1.2 billion pounds
Acetic acid is a raw material used to produce VAM, terephthalic acid (used to produce polyester for textiles and plastic bottles), industrial solvents and a variety of other chemicals.
Methanol
190 million gallons (d)
Methanol is a raw material used to produce acetic acid, MTBE, formaldehyde and several other products.
Propylene Oxide (PO)
3.4 billion pounds (e)
PO is a key component of polyols, PG, PGE and BDO.
PO Co-Products:
    
Styrene Monomer
(SM)
3.7 billion pounds (f)
SM is used to produce plastics, such as expandable polystyrene for packaging, foam cups and containers, insulation products and durables and engineering resins.
TBA Derivative—Isobutylene
950 million pounds (g)
Isobutylene is a derivative of TBA used in the manufacture of synthetic rubber as well as fuel and lubricant additives, such as MTBE and ETBE.
PO Derivatives:
    
Propylene Glycol (PG)
1.0 billion pounds (h)
PG is used to produce unsaturated polyester resins for bathroom fixtures and boat hulls; lower toxicity antifreeze, coolants and aircraft deicers; and cosmetics and cleaners.
Propylene Glycol
Ethers (PGE)
135 million pounds (i)
PGE are used as solvents for paints, coatings, cleaners and a variety of electronics applications.
Butanediol (BDO)
120 million pounds (j)
BDO is used in the manufacture of engineering resins, films, personal care products, pharmaceuticals, coatings, solvents and adhesives.
Toluene Diisocyanate
(TDI)
274 million pounds (k)
TDI is combined with polyols to produce flexible foam for automotive seating and home furnishings.
Fragrance and Flavors
Chemicals
(l)
Fragrance and flavors chemicals include terpene-based fragrance ingredients and flavor ingredients, primarily for the oral care markets, and also include products used in applications such as chemical reaction agents, or initiators, for the rubber industry and solvents and cleaners, such as pine oil, for the hard surface cleaner markets.

 
__________
 
(a)  
Excludes 850 million pounds/year of ethylene capacity and 200 million pounds/year of propylene capacity at Lyondell’s Lake Charles, Louisiana ethylene and co-products facility, which has been idled since the first quarter 2001.  Although Lyondell retains the physical ability to restart or sell that facility, in the third quarter of 2006 Lyondell determined that it had no expectation of resuming production at that facility.
(b)  
Does not include refinery-grade material from Lyondell’s refinery or production from the product flexibility unit at the Channelview facility, which can convert ethylene and other light petrochemicals into propylene.  These facilities have an annual processing capacity of an additional one billion pounds/year of propylene.
(c)  
Includes 700 million pounds/year of EO equivalents capacity and 800 million pounds/year of EG capacity at the Beaumont, Texas facility, which represents 100% of the EO equivalents capacity and EG capacity, respectively, at the facility.  The Beaumont, Texas facility is owned by PD Glycol, a 50/50 partnership with E. I. du Pont de Nemours and Company (“DuPont”).
(d)  
Represents 100% of the methanol capacity at the La Porte, Texas facility, which is owned by La Porte Methanol Company, a partnership owned 85% by Lyondell and 15% by Linde AG (“Linde”).


(e)  
On December 20, 2007, in connection with Lyondell’s acquisition by LyondellBasell Industries, Lyondell sold to another subsidiary of LyondellBasell Industries the shares of the Lyondell subsidiary that indirectly owned Lyondell’s facility at Botlek (near Rotterdam), The Netherlands and that owned Lyondell’s interest in its European joint venture with Bayer AG.  The European joint venture owns a facility at Maasvlakte (also near Rotterdam), The Netherlands.  Accordingly, although operated as part of the overall LyondellBasell Industries PO capacity, as a result of this subsidiary sale, the PO capacity excludes an aggregate of 1.250 billion pounds of capacity of the Botlek and Maasvlakte facilities.  PO capacity includes 100% of the 385 million pounds of capacity of Nihon Oxirane Co. Ltd. (“Nihon Oxirane”), a joint venture of which Lyondell owns 40%, and 1.6 billion pounds of capacity that represents Bayer Corporation’s share of PO production from the Channelview PO/SM I plant and the Bayport, Texas PO/TBA plants under the U.S. PO Joint Venture between Lyondell and Bayer Corporation.  Lyondell’s net proportionate interest in PO capacity is approximately 1.6 billion pounds.  See “PO Joint Ventures and Other Agreements.”
(f)  
Although operated as part of the overall LyondellBasell Industries SM capacity, as a result of the December 20, 2007 subsidiary sale, the SM capacity excludes 1.483 billion pounds of capacity of the Maasvlakte facility.  SM capacity includes approximately 1.1 billion pounds of SM production from the Channelview PO/SM II plant that is committed to unrelated equity investors under processing agreements and 100% of the 830 million pounds of capacity of Nihon Oxirane, of which Lyondell owns 40%.  Lyondell’s net proportionate interest in SM capacity is approximately 2.0 billion pounds.  See “PO Joint Ventures and Other Agreements.”
(g)  
Represents total high-purity isobutylene capacity and purified isobutylene capacity.  Although operated as part of the overall LyondellBasell Industries isobutylene capacity, as a result of the December 20, 2007 subsidiary sale, the isobutylene capacity excludes 550 million pounds of capacity of the Botlek facility.
(h)  
Although operated as part of the overall LyondellBasell Industries PG capacity, as a result of the December 20, 2007 subsidiary sale, the PG capacity excludes 175 million pounds of capacity of the Botlek facility.  PG capacity includes 100% of the approximately 220 million pounds of capacity of Nihon Oxirane, of which Lyondell owns 40%.  Lyondell’s net proportionate interest in PG capacity is approximately 900 million pounds.  The capacity stated is MPG capacity.  Smaller quantities of DPG and TPG are co-produced with MPG.  At Lyondell’s facilities in the U.S. and Europe, these DPG and TPG products are purified and marketed.  See “PO Joint Ventures and Other Agreements.”
(i)  
Although operated as part of the overall LyondellBasell Industries PGE capacity, as a result of the December 20, 2007 subsidiary sale, the PGE capacity excludes 298 million pounds of capacity of the Botlek facility.
(j)  
Although operated as part of the overall LyondellBasell Industries BDO capacity, as a result of the December 20, 2007 subsidiary sale, the BDO capacity excludes 275 million pounds of capacity of the Botlek facility.
(k)  
Represents the average annual TDI capacity at Lyondell’s plant in Pont de Claix, France, which is operated by Rhodia.  See “PO Joint Ventures and Other Agreements.”
(l)  
With respect to fragrance and flavors chemicals, Lyondell frequently works closely with customers in developing products to satisfy the specific requirements of those customers, and capacity varies accordingly.
 
 
In 2007, no single chemicals segment customer accounted for 10% or more of Lyondell’s total revenues.
 
Lyondell produces ethylene at six sites located in three states.  Lyondell’s ethylene generally is consumed internally as a raw material in the production of derivatives and polymers, or is shipped by pipeline to customers.  For the year ended December 31, 2007, approximately 72% of Lyondell’s ethylene, based on sales dollars, was used by Lyondell’s ethylene derivatives or polymers facilities or sold to related parties at market-related prices.  The sales to related parties during 2007 include significant ethylene sales, pursuant to a long-term ethylene supply agreement, to Occidental Chemical Corporation, a subsidiary of Occidental Petroleum Corporation (together with its subsidiaries and affiliates, collectively, “Occidental”).  Occidental owned 5.5% of Lyondell’s outstanding common stock until selling the remainder of its Lyondell common stock in open market transactions from May 2007 through July 2007. See Note 7 to the Consolidated Financial Statements.  Sales of ethylene accounted for less than 10% of Lyondell’s total revenues in 2007, 2006 and 2005.
 
Ethylene co-products are manufactured by Lyondell primarily at four facilities in Texas.  The Morris, Illinois and Clinton, Iowa facilities also produce moderate quantities of propylene.
 


Lyondell uses the propylene as a raw material for production of PO and polypropylene and also sells propylene to other subsidiaries of LyondellBasell Industries at market-related prices.  The propylene production that is not consumed internally or sold to related parties generally is sold under multi-year contracts. In addition, pursuant to a 15-year propylene supply arrangement entered into in 2003 with a subsidiary of Sunoco, Inc. (“Sunoco”), Lyondell supplies 700 million pounds of propylene annually to Sunoco.  Under the arrangement, a majority of the propylene is supplied under a cost-based formula and the balance is supplied on a market-related basis.  Sales of propylene accounted for approximately 10% of Lyondell’s total revenues in 2007 and 12% in each of 2006 and 2005.
 
Lyondell generally sells its butadiene under multi-year contracts.  Lyondell uses the benzene as a raw material for production of styrene.  Lyondell’s fuels business uses the toluene to blend into gasoline.  Of the benzene and toluene production that is not consumed internally, most of the benzene generally is sold under multi-year contracts and most of the toluene is sold under annual contracts.  The chemicals business also markets the benzene and toluene produced by the fuels business for a marketing fee.  Sales of benzene and toluene accounted for less than 10% of Lyondell’s total revenues in 2007, 2006 and 2005.
 
Lyondell at times purchases ethylene, propylene, benzene and butadiene for resale, when necessary, to satisfy customer demand for these products above production levels.  Volumes of ethylene, propylene, benzene and butadiene purchased for resale can vary significantly from period to period.  However, purchased volumes generally do not have a significant impact on profitability.
 
Most of the ethylene and propylene production of the Channelview, Chocolate Bayou, Corpus Christi and La Porte facilities is shipped via a pipeline system which has connections to numerous U.S. Gulf Coast consumers.  This pipeline system, some of which is owned and some of which is leased, extends from Corpus Christi to Mont Belvieu to Port Arthur, Texas as well as around the Lake Charles, Louisiana area.  In addition, exchange agreements with other ethylene and co-products producers allow access to customers who are not directly connected to this pipeline system.  Some ethylene is shipped by railcar from Clinton, Iowa to Morris, Illinois and also to customers.  A pipeline owned and operated by an unrelated party is used to transport ethylene from Morris, Illinois to Tuscola, Illinois.  Some propylene is shipped by ocean-going vessel.  Butadiene, benzene, toluene and other products are distributed by pipeline, railcar, truck, barge or ocean-going vessel.
 
EO or EO equivalents, and EO’s primary derivative, EG, are produced at the Bayport facility located in Pasadena, Texas and through a 50/50 joint venture with DuPont in Beaumont, Texas.  The Bayport facility also produces other derivatives of EO, principally ethylene glycol ethers and ethanolamines.  EO and EG typically are sold under multi-year contracts, with market-based pricing.  Glycol ethers and ethanolamines are sold primarily into the solvent and distributor markets at market prices.  EO is shipped by railcar, and its derivatives are shipped by railcar, truck, isotank or ocean-going vessel.
 
The vast majority of the ethylene derivatives products are sold in North America and Europe, primarily through the sales organizations of Lyondell and its affiliates.  Sales agents are generally engaged to market the ethylene derivatives products in the rest of the world.
 
VAM and acetic acid are manufactured by Lyondell at facilities in La Porte, Texas.  Sales of VAM accounted for less than 10% of Lyondell’s total revenues in 2007, 2006 and 2005.  Sales of acetyls collectively accounted for less than 10% of Lyondell’s total revenues in 2007, 2006 and 2005.
 
VAM and acetic acid are consumed internally, sold into domestic and export markets generally under multi-year contracts, and also are sold on a spot basis.  Contract pricing for sales of VAM and acetic acid generally is determined by market-based negotiation, market index or cost-based formulas.  VAM and acetic acid are shipped by barge, ocean-going vessel, pipeline, tank car and tank truck.  Lyondell has bulk storage arrangements in Europe and South America to better serve its customers’ requirements in those regions.  Sales are made through a direct sales force, agents and distributors.
 
The La Porte, Texas methanol facility is owned by La Porte Methanol Company, Lyondell’s 85%-owned joint venture with Linde.  Each party to the joint venture receives its respective share of the methanol production.  Lyondell’s acetyls business uses the methanol as a raw material for acetic acid and also sells the methanol under annual contracts and on a spot basis to large domestic customers.  The product is shipped by barge and pipeline.


In North America, Lyondell produces PO, TBA, isobutylene, PG and PGE at its Bayport (Pasadena), Texas plants and PO, SM, isobutylene and BDO at its Channelview, Texas plants.  The Bayport PO/TBA plants and the Channelview PO/SM I plant are owned by the U.S. PO manufacturing joint venture (the “U.S. PO Joint Venture”) between Lyondell and Bayer Corporation (“Bayer”).  The Channelview PO/SM II plant is owned by Lyondell together with unrelated equity investors.  See “PO Joint Ventures and Other Agreements.”
 
In Europe, Lyondell produces PO, TBA and PG at a plant in Fos-sur-Mer, France.  In addition, Rhodia operates a TDI facility located in Pont de Claix, France on behalf of Lyondell.  See “PO Joint Ventures and Other Agreements.”  On December 20, 2007, in connection with Lyondell’s acquisition by LyondellBasell Industries, Lyondell sold to another subsidiary of LyondellBasell Industries the shares of the Lyondell subsidiary that indirectly owned Lyondell’s facility at Botlek (near Rotterdam), The Netherlands and Lyondell’s interests in its European joint venture with Bayer AG, which owns a facility at Maasvlakte (also near Rotterdam), The Netherlands.  The Botlek facility produces PO, TBA, isobutylene, PG, PGE and BDO.  The Maasvlakte facility produces PO and SM.  Although the Botlek and Maasvlakte facilities are no longer owned by Lyondell, they are owned by Lyondell’s parent, LyondellBasell Industries, and are operated as part of the overall LyondellBasell Industries businesses.  The products produced on behalf of LyondellBasell Industries at those facilities are marketed and sold together with those same products produced at facilities owned directly by Lyondell.
 
In the Asia Pacific region, Lyondell has a 40% interest in Nihon Oxirane, a joint venture that operates a PO/SM plant and a PG plant in Chiba, Japan.  See “PO Joint Ventures and Other Agreements.”
 
Lyondell estimates, based in part on published data, that worldwide demand for PO was approximately 15 billion pounds in 2007.  More than 85% of that volume was consumed in the manufacture of three families of PO derivative products: polyols, glycols and glycol ethers.  The remainder was consumed in the manufacture of performance products, including BDO and its derivatives.
 
Lyondell produces and delivers its PO and PO co-products through sales agreements, processing agreements and spot sales as well as product exchanges.  Lyondell has a number of multi-year processing (or tolling) and sales agreements in an effort to mitigate the adverse impact of competitive factors and economic business cycles on demand for its PO.  In addition, Bayer’s ownership interest in the U.S. PO Joint Venture represents ownership of an in-kind portion of the PO production of the U.S. PO Joint Venture.  See “PO Joint Ventures and Other Agreements.” PO sold in the merchant market accounted for less than 10% of Lyondell’s total revenues in 2007, 2006 and 2005.  Lyondell’s PO derivatives are sold through market-based sales contracts and spot sales.
 
Production levels at Lyondell’s PO/SM and PO/TBA co-product production facilities primarily are determined by the demand for PO and PO derivatives.  The resulting production levels of co-product SM and the TBA derivatives (isobutylene, which is reported in the chemicals business segment, and MTBE and ETBE, which are reported in the fuels business segment) thus depend primarily on the demand for PO and PO derivatives and secondarily on the relative market demand for SM, isobutylene, MTBE and ETBE, as well as the operational flexibility of Lyondell’s multiple production facilities in meeting this demand.  See “Fuels Segment” for additional information about the production of MTBE and ETBE.
 
Based on published data, worldwide demand for SM in 2007 was approximately 57 billion pounds.  SM accounted for less than 10% of Lyondell’s total revenues in 2007, 2006 and 2005. Lyondell sells most of its SM production into the North American merchant markets and to European, Asian and South American export markets through long-term sales contracts and processing agreements.  See “PO Joint Ventures and Other Agreements.”
 
Lyondell purchases SM for resale, when necessary, to satisfy customer demand for this co-product above co-product production levels.  Volumes of SM purchases made for resale can vary significantly from period to period.  However, purchased volumes have not historically had a significant impact on profitability.
 
Lyondell converts most of its TBA to isobutylene and also sells some of its TBA into the market.  Lyondell’s chemical business generally sells the isobutylene to unrelated parties under market-based sales agreements and in the spot market or sells the isobutylene to Lyondell’s fuels business, which either reacts the isobutylene with methanol or ethanol to produce MTBE and ETBE, respectively.  Isobutylene sales accounted for less than 10% of Lyondell’s total revenues in 2007, 2006 and 2005.


Sales of Lyondell’s PO, its co-products and derivatives and TDI are made by Lyondell, Nihon Oxirane and their affiliates directly, and through distributors and independent agents located in the Americas, Europe, the Middle East, Africa and the Asia Pacific region.  Lyondell has centralized certain sales and order fulfillment functions in regional customer service centers located in Houston, Texas and Hong Kong, China.  Lyondell also has long-term contracts for distribution and logistics to ensure reliable and efficient supply to its customers.  PO, PG, SM and TDI are transported by barge, ocean-going vessel, pipeline, tank car and tank truck.  BDO primarily is transported by tank truck and railcar.
 
Fragrance ingredients are used primarily in the production of perfumes. The major consumers of perfumes worldwide are soap and detergent manufacturers.  Lyondell sells directly worldwide to major soap, detergent and fabric conditioner producers.  It also sells a significant quantity of product to the major fragrance compounders and to producers of cosmetics and toiletries.  Lyondell’s supply agreements with customers are typically short-term in duration (up to one year).  Approximately 60% of Lyondell’s 2007 fragrance and flavors chemicals sales were made outside the United States.  Sales are made primarily by Lyondell directly , while agents and distributors are used in areas where volume does not justify full-time sales coverage.
 
 
On March 31, 2000, Lyondell contributed its Channelview, Texas PO/SM I plant and its Bayport, Texas PO/TBA plants to the U.S. PO Joint Venture.  Bayer’s ownership interest in the U.S. PO Joint Venture represents ownership of 1.6 billion pounds of the PO production annually, in-kind.  Lyondell takes in-kind the remaining PO production and all co-product (SM and TBA) production from the U.S. PO Joint Venture.  As part of the transaction, Lyondell and Bayer also formed a separate joint venture (the “PO Technology Joint Venture”) through which Bayer was granted a non-exclusive and non-transferable right to use certain PO technology in the U.S. PO Joint Venture.  Under the terms of the operating and logistics agreements, Lyondell operates the U.S. PO Joint Venture plants and arranges and coordinates the logistics of PO delivery from the plants.  Lyondell and Bayer do not share marketing or product sales under the U.S. PO Joint Venture.
 
Lyondell’s PO/SM II plant at the Channelview, Texas complex is owned by Lyondell together with unrelated equity investors.  Lyondell retains a majority interest in the PO/SM II plant and is the operator of the plant.  A portion of the SM output of the PO/SM II plant is committed to the unrelated equity investors under processing agreements.  As of December 31, 2007, Lyondell had 1.1 billion pounds of SM capacity, or 30% of its worldwide capacity, committed to unrelated equity investors under these processing arrangements.
 
Lyondell has a 40% equity interest in Nihon Oxirane, a joint venture in Japan with Sumitomo Chemical Co., Ltd. (“Sumitomo”).  Since 1976, Nihon Oxirane has operated a PO/SM plant in Chiba, Japan.  In the first quarter 2005, Nihon Oxirane began production at its new PG plant in Chiba, Japan with an annual PG capacity of 220 million pounds. Through Nihon Oxirane, Lyondell also will participate in marketing most of the PO capacity from a new 440 million pound facility under construction in Rabigh, Saudi Arabia by Sumitomo and Saudi Aramco, which is scheduled to start-up in late 2008.
 
During 2007, Lyondell announced the formation of a joint venture with Sinopec Zhenhai Refining & Chemical Co., Ltd. (“ZRCC”) for the construction of a world-scale PO/SM facility in Ningbo, China, with completion of construction expected in 2009. The new facility will have an annual PO production capacity of 604 million pounds and an annual SM production capacity of 1.3 billion pounds.  Lyondell contributed a license right to its proprietary PO/SM technology in exchange for approximately 20% of the PO profitability from the facility.  The parties will jointly market all of the PO manufactured by the new facility.
 
Lyondell also has a multi-year agreement with Shiny Chemical Co., Ltd. (“Shiny”) whereby Lyondell markets and sells the PGE produced at Shiny’s new PGE plant in Tainan, Taiwan.  Shiny’s new PGE plant, which is based on Lyondell’s technology, started-up during the second quarter of 2007.
 


The TDI facility at Pont de Claix, France is designed to have an average annual production capacity of 274 million pounds of TDI, and is operated by Rhodia on behalf of Lyondell pursuant to an operating agreement, which extends through March 31, 2016.  Rhodia is responsible for providing all raw materials for the TDI production, except toluene, toluene diamine and carbon monoxide, which Lyondell purchases in the market.  The TDI produced at the Pont de Claix facility is marketed principally in Europe, the Middle East and Africa.  In March 2008, Rhodia and Lyondell announced that they have launched exclusive negotiations with the Perstorp Group in order to sell the TDI business in combination with certain Rhodia businesses at Pont de Claix.
 
 
Raw material cost is the largest component of the total cost for the production of ethylene and its co-products.  The primary raw materials used are heavy liquids and natural gas liquids (“NGLs”).  Heavy liquids include crude oil-based naphtha and gas oil, as well as condensate, a very light crude oil resulting from natural gas production (collectively referred to as “heavy liquids”).  NGLs include ethane, propane and butane.  The use of heavy liquid raw materials results in the production of a significant amount of co-products such as propylene, butadiene, benzene and toluene, as well as gasoline blending components, while the use of NGLs results in the production of a smaller amount of co-products, such as propylene.
 
The flexibility to consume a wide range of raw materials has historically provided plants with that flexibility with an advantage over plants that are restricted in their raw material processing capability.  Facilities using heavy liquids historically have generated, on average, approximately four cents of additional variable margin per pound of ethylene produced compared to facilities restricted to using ethane.  This margin advantage is based on an average of historical data over a period of years and is subject to short-term fluctuations, which can be significant.  For example, published reports indicated that during 2007 the advantage ranged from 2.6 cents to 5.5 cents.  The costs of producing ethylene from heavy liquids and NGLs can change daily, based on the relative values of crude oil and natural gas, as well as the relative values of the products generated through the use of those raw materials.  As a result, there have been in the past, and could continue to be in the future, periods of time when the use of heavy liquids does not provide an advantage or is disadvantaged versus the use of NGLs.  Lyondell has the capability to process heavy liquids at its Channelview, Corpus Christi and Chocolate Bayou ethylene and co-products facilities.  Lyondell’s Channelview and Corpus Christi facilities have the greatest operational flexibility among Lyondell’s facilities to process significant quantities of either heavy liquids or NGLs, depending upon the relative economic advantage of the alternative raw materials.
 
As described above, management believes that this raw material flexibility is a key advantage in the production of ethylene and co-products.  As a result, heavy liquids requirements for these businesses are sourced globally via a mix of contractual and spot arrangements.  Spot market purchases are made in order to maintain raw material flexibility and to take advantage of raw material pricing opportunities.  A large portion of the NGLs requirements for these businesses are purchased via contractual arrangements from a variety of sources, but NGLs also are purchased on the spot market.  A portion of the heavy liquids requirements for these businesses also are obtained from the fuels business.  Heavy liquids generally are delivered by ship or barge, and NGLs generally are delivered via pipeline.
 
Lyondell also purchases large amounts of natural gas to be used as energy for consumption in its business via market-based contractual arrangements with a variety of sources.
 
The primary raw material for the ethylene derivatives products is ethylene.  Lyondell’s ethylene derivatives facilities generally can receive their ethylene directly from Lyondell’s ethylene facilities via its pipeline system, pipelines owned by unrelated parties or on-site production.
 
In addition to ethylene, acetic acid is a primary raw material for the production of VAM.  For VAM produced by Lyondell, Lyondell obtains its entire requirements for acetic acid and ethylene from its internal production.  In 2007, Lyondell used a large percentage of its acetic acid production to produce VAM.
 
The primary raw materials required for the production of acetic acid are carbon monoxide and methanol.  Lyondell purchases the carbon monoxide from Linde pursuant to a long-term contract under which pricing is based primarily on cost of production.  La Porte Methanol Company, Lyondell’s 85%-owned joint venture, supplies all of the methanol requirements for acetyls production.  Natural gas is the primary raw material required for the production of methanol.
 
 
The raw materials for ethylene and its co-products and derivatives are, in general, commodity chemicals with numerous bulk suppliers and ready availability at competitive prices.  Historically, raw material availability for ethylene and its co-products and derivatives has not been an issue.  For additional discussion regarding the effects of raw material pricing and supply on recent operating results, see “Item 1A.  Risk Factors—Risks Relating to the Businesses—Costs of raw materials and energy, as well as reliability of supply, may result in increased operating expenses and reduced results of operations” and “Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
 
The primary raw materials used for the production of PO and its co-products and derivatives are propylene, isobutane, ethylene and benzene.  The market prices of these raw materials historically have been related to the price of crude oil and its principal refinery derivatives, NGLs, natural gas, as well as market conditions for these materials.  These materials are received in bulk quantities via pipeline or marine vessels.
 
In the U.S., Lyondell obtains a large portion of its propylene, benzene and ethylene raw materials needed for the production of PO and its co-products and derivatives internally from Lyondell’s ethylene and ethylene co-products facilities.  Raw materials for the non-U.S. production of PO and its co-products and derivatives primarily are obtained from unrelated parties.  Lyondell consumes a significant portion of its internally-produced PO in the production of PO derivatives.
 
Lyondell consumes large volumes of isobutane for the production of PO and its co-products and derivatives.  Lyondell has invested in facilities, or entered into processing agreements with unrelated parties, to convert the widely available commodity, normal butane, to isobutane.  Lyondell also is a large consumer of oxygen for its PO/TBA plants at Bayport, Texas and Fos-sur-Mer, France.
 
The cost of raw materials generally is the largest component of total production cost for PO and its co-products and derivatives.  Generally, the raw materials requirements for these businesses are purchased at market-based prices from numerous suppliers in the U.S. and Europe with which Lyondell has established contractual relationships, as well as in the spot market.  The raw materials for these businesses are, in general, commodity chemicals with ready availability at competitive prices.  Historically, raw material availability has not been an issue.  However, in order to enhance reliability and competitiveness of prices and rates for supplies of raw materials, industrial gas and other utilities, Lyondell has long-term agreements and other arrangements for a substantial portion of its production requirements, including arrangements with Lyondell’s ethylene and ethylene co-products facilities.  For additional discussion regarding the effects of raw material pricing and supply on recent operating performance, see “Item 1A.  Risk Factors—Risks Relating to the Businesses—Costs of raw materials and energy, as well as reliability of supply, may result in increased operating expenses and reduced results of operations” and “Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
 
Lyondell’s Jacksonville site has facilities for the fractionation of crude sulfate turpentine (“CST”), the key raw material used by Lyondell for the production of fragrance ingredients. Through fractionation, the components of CST are separated into relatively pure individual materials, which are then used to ultimately produce a number of fragrance and flavors chemicals, including synthetic pine oil, anethole, l-carvone and coolants. The Brunswick site produces linalool, geraniol and dihydromyrcenol from the alpha-pinene component of CST.  Lyondell believes it is the largest purchaser and distiller of CST in the world, based on the amount of CST processed.  CST is a by-product of the kraft papermaking process.  Lyondell purchases CST from approximately 35 pulp mills in North America.  These purchases are made under long-term contracts in order to ensure a stable supply of CST.  Additionally, Lyondell purchases quantities of CST, gum turpentine or derivatives from Indonesia, China, Europe and South America, as business conditions dictate.
 


 
With respect to ethylene, its co-products and derivatives and acetyls, competition is based on price, product quality, product delivery, reliability of supply, product performance and customer service.  Industry consolidation has led to fewer, although larger, competitors.  Profitability is affected not only by supply and demand for ethylene, its co-products and derivatives and acetyls, but also by raw material costs and price competition among producers, which may intensify due to, among other things, the addition of new capacity.  In general, demand is a function of economic growth in the United States and elsewhere in the world, which fluctuates.  It is not possible to accurately predict the changes in raw material costs, market conditions, capacity utilization and other factors that will affect industry profitability in the future.  During the next five years, forecasts for the worldwide average annual ethylene capacity additions are projected at approximately 5%, with more than 90% of these additions in the Middle East and Northeast Asia.  The average worldwide demand growth is expected to lag this rate by less than 1%.  In the U.S., relatively stable ethylene supply combined with sustained demand levels are projected to result in continued high average operating rates through 2008.  Capacity share figures for Lyondell and its competitors, discussed below, are based on completed production facilities and, where appropriate, include the full capacity of joint venture facilities and certain long-term supply arrangements.
 
Lyondell competes with other large marketers and producers for sales of ethylene, its co-products and derivatives and acetyls, including Celanese Corporation (“Celanese”), Chevron Phillips Chemical Company LP (“ChevronPhillips”), The Dow Chemical Company (“Dow”), Eastman Chemical Company, Enterprise Products Partners L.P., Exxon Mobil Corporation (“ExxonMobil”), Huntsman Corporation, Ineos, Methanex, Methanol Holdings Trinidad Limited and Shell Chemical Company (“Shell”).  Lyondell’s ethylene rated capacity at December 31, 2007 was approximately 10.8 billion pounds per year, or approximately 14% of total North American ethylene production capacity.  Based on published rated production capacities, Lyondell is the second largest producer of ethylene in North America.  North American ethylene rated capacity at December 31, 2007 was approximately 78 billion pounds per year, with approximately 76% of that North American capacity located along the Gulf Coast.  Lyondell also is the second largest producer of VAM and acetic acid in North America and the fourth largest producer of VAM and acetic acid worldwide, based on 2007 published rated production capacity.
 
With respect to PO, its co-products and derivatives and TDI, competition is based on a variety of factors, including product quality and price, reliability of supply, technical support, customer service and potential substitute materials.  Profitability is affected by the worldwide level of demand along with price competition, which may intensify due to, among other things, new industry capacity.  From 2008 to 2012, approximately 3.4 billion pounds of new industry PO capacity, or approximately 20% of 2007 global PO capacity (approximately 4% annual average capacity growth), is expected to be added, with approximately half of these additions in the Middle East and China.  During this period, the average annual world demand growth is expected to be approximately 4%.  Demand is a function of economic growth in the United States and elsewhere in the world, which fluctuates.  The PO demand growth rate also could be impacted by further development of alternative bio-based PO derivatives. It is not possible to predict accurately the changes in raw material costs, market conditions and other factors that will affect industry profitability in the future.  Capacity share figures for Lyondell and its competitors, discussed below, are based on completed production facilities and, where appropriate, include the full capacity of joint venture facilities and certain supply arrangements.
 
Lyondell’s major worldwide competitors for sales of PO are Dow and Shell.  Based on published data regarding PO capacity, Lyondell believes that, including the total capacity of Nihon Oxirane and the U.S. PO Joint Venture, Lyondell is one of the largest producers of PO worldwide, with approximately 21% of the total worldwide capacity for PO.
 
Lyondell competes with many marketers and producers worldwide for sales of SM, among which are BASF SE, ChevronPhillips, Dow, Ineos-NOVA, Saudi Basic Industries Corp. (“SABIC”), Shell and TOTAL.  Based on published data regarding SM capacity, Lyondell believes that it is one of the largest producers of SM worldwide.
 
Lyondell competes for sales of TBA and isobutylene with producers in the U.S. and Europe.  Lyondell believes that it is one of the largest producers of isobutylene worldwide.
 


Lyondell manufactures TDI through a long-term processing arrangement with Rhodia at the Pont de Claix, France facility.  See “PO Joint Ventures and Other Agreements” above.  Lyondell competes with several marketers and producers for sales of TDI principally in Europe, the Middle East and Africa, including BASF SE and Bayer AG.
 
Lyondell competes in the fragrance and flavors chemicals businesses primarily on the basis of price, quality, service and on its ability to produce its products to the technical and quality specifications of its customers.  Lyondell works closely with many of its customers in developing products to satisfy the specific requirements of those customers.  Since Lyondell’s supply agreements with customers are typically short-term in duration (up to one year), Lyondell’s fragrance and flavors chemicals businesses are substantially dependent on long-term customer relationships based upon quality, innovation and customer service.  From time to time, a customer may change the formulations of an end-product into which one of Lyondell’s fragrance ingredients is used, which may affect demand for that ingredient.  The major competitors with respect to fragrance and flavors chemicals are BASF SE, Derives Resiniques Et Terpeniques (DRT), DSM, Kuraray Co. LTD and International Flavors & Fragrances Inc.
 
 
 
 
Lyondell’s polymers business segment, conducted through Equistar, produces polyolefins, including polyethylene (high density polyethylene (“HDPE”), low density polyethylene (“LDPE”) and linear low density polyethylene (“LLDPE”)) and polypropylene.  Lyondell’s polymers business is operated as part of the overall LyondellBasell Industries polymers business.
 
Lyondell produces polymers at seven facilities located in four states in the U.S.  Lyondell’s polymers products are used in consumer and industrial applications ranging from food and beverage packaging to housewares and construction materials.
 
The following table outlines:
 
·  
the primary products of Lyondell’s polymers segment;
·  
annual processing capacity as of December 31, 2007; and
·  
the primary uses for those products.
 
See “Item 2. Properties” for the locations where Lyondell produces the primary products of its polymers segment.
 


Unless otherwise specified, annual processing capacity was calculated by estimating the average number of days in a typical year that a production unit of a plant is expected to operate, after allowing for downtime for regular maintenance, and multiplying that number by an amount equal to the unit’s optimal daily output based on the design raw material mix.  Because the processing capacity of a production unit is an estimated amount, actual production volumes may be more or less than the capacities set forth below.
 
Product
Annual Capacity
Primary Uses
Polyethylene:
    
High density
polyethylene (HDPE)
3.1 billion pounds
 
HDPE is used to manufacture grocery, merchandise and trash bags; food containers for items from frozen desserts to margarine; plastic caps and closures; liners for boxes of cereal and crackers; plastic drink cups and toys; dairy crates; bread trays; pails for items from paint to fresh fruits and vegetables; safety equipment such as hard hats; house wrap for insulation; bottles for household and industrial chemicals and motor oil; milk, water, and juice bottles; large (rotomolded) tanks for storing liquids  such as agricultural and lawn care chemicals; and pipe.
Low density
polyethylene (LDPE)
1.5  billion pounds
 
LDPE is used to manufacture food packaging films; plastic bottles for packaging food and personal care items; dry cleaning bags; ice bags; pallet shrink wrap; heavy-duty bags for mulch and potting soil; boil-in-bag bags; coatings on flexible packaging products; and coatings on paper board such as milk cartons. Ethylene vinyl acetate is a specialized form of LDPE used in foamed sheets, bag-in-box bags, vacuum cleaner hoses, medical tubing, clear sheet protectors and flexible binders.
Linear low density
polyethylene (LLDPE)
1.2 billion pounds 
LLDPE is used to manufacture garbage and lawn-leaf bags; industrial can liners; housewares; lids for coffee cans and margarine tubs, dishpans, home plastic storage containers, kitchen trash containers; large (rotomolded) toys like outdoor gym sets; drip irrigation tubing; wire and cable insulating resins and compounds used to insulate copper and fiber optic wiring, and film; shrink wrap for multi-packaging canned food, bag-in-box bags, produce bags, and pallet stretch wrap.
Polypropylene
280 million pounds
Polypropylene is used to manufacture fibers for carpets, rugs and upholstery; housewares; automotive battery cases; automotive fascia, running boards and bumpers; grid-type flooring for sports facilities; fishing tackle boxes; and bottle caps and closures.

 
 
Lyondell manufactures polyethylene using a variety of technologies at five facilities in Texas and at the Morris, Illinois and Clinton, Iowa facilities.  HDPE accounted for less than 10% of Lyondell’s total revenues in 2007, 2006 and 2005.  Polyethylene (HDPE, LDPE and LLDPE collectively) accounted for approximately 10%, 13% and 14% of Lyondell’s total revenues in 2007, 2006 and 2005, respectively.
 
Polyethylene products primarily are sold to an extensive base of established customers.  Approximately two-thirds of Lyondell’s domestic polyethylene product volumes are sold to customers under annual or multi-year contracts.  The remainder of the polyethylene volume generally is sold under customary terms and conditions without formal contracts.  In either case, in most of the continuous supply relationships, prices are subject to change upon mutual agreement.  Lyondell also produces performance polymer products, which include enhanced grades of polyethylene and polypropylene.  Lyondell believes that, over a business cycle, average selling prices and profit margins for performance polymers tend to be higher than average selling prices and profit margins for higher-volume commodity polyethylenes.
 
Lyondell manufactures polypropylene at its Morris, Illinois facility.  Polypropylene is sold for various applications in the automotive, housewares and appliance industries.


Polymers primarily are distributed by railcar or truck.  The vast majority of Lyondell’s polymers products are sold in North America, primarily through Lyondell’s sales organization.  Sales agents are generally engaged to market Lyondell’s polymers products in the rest of the world.  Approximately 9% of Lyondell’s polymers, based on sales dollars, were exported from the United States during 2007, with 61% of those export sales to Mexico, South America and Central America.
 
No single polymers segment customer accounted for 10% or more of Lyondell’s revenues in 2007.
 
 
The primary raw material for the production of polyethylene is ethylene.  Substantially all of the ethylene used in Lyondell’s polyethylene production is produced internally by the ethylene facilities in Lyondell’s chemicals business segment.  Lyondell’s polyethylene facilities generally can receive their ethylene directly from Lyondell’s ethylene facilities via its pipeline system, pipelines owned by unrelated parties or on-site production.  However, the polyethylene plants at Chocolate Bayou, La Porte and Bayport, Texas are connected by pipeline to unrelated parties and could receive ethylene via exchanges or purchases.
 
The primary raw material for the production of polypropylene is propylene.  The polypropylene facility at Morris, Illinois receives propylene from Lyondell’s propylene facilities located on-site, as well as unrelated parties.
 
The raw materials for polymers are, in general, commodity chemicals with numerous bulk suppliers and ready availability at competitive prices.  Historically, raw material availability for polymers has not been an issue.  For additional discussion regarding the effects of raw material pricing and supply on recent operating results, see “Item 1A.  Risk Factors—Risks Relating to the Businesses—Costs of raw materials and energy, as well as reliability of supply, may result in increased operating expenses and reduced results of operations” and “Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
 
 
Competition in the polymers businesses is based on price, product quality, product delivery, reliability of supply, product performance and customer service.  Industry consolidation has led to fewer, although larger, competitors.  Profitability is affected not only by supply and demand for polymers, but also by raw material costs and price competition among producers, which may intensify due to, among other things, the addition of new capacity.  In general, demand is a function of economic growth in the United States and elsewhere in the world, which fluctuates.  It is not possible to accurately predict the changes in raw material costs, market conditions, capacity utilization and other factors that will affect industry profitability in the future.  However, Lyondell expects that global polyethylene capacity additions over the next five years, primarily in the Middle East and Northeast Asia, will exceed the average annual worldwide demand growth by 1% per year.  Over the next five years Lyondell expects that global polypropylene capacity additions will exceed the average annual worldwide demand growth by slightly more than in the case of polyethylene.  Capacity share figures for Lyondell’s facilities and those of its competitors, discussed below, are based on completed production facilities.
 
Lyondell competes with other large marketers and producers for sales of polymers, including ChevronPhillips, Dow, ExxonMobil, Formosa Plastics Corporation, Ineos, NOVA Chemicals Corporation, TOTAL and Westlake Polymers.  Based on published rated industry capacities, Lyondell is the third largest producer of polyethylene in North America. The rated capacity of Lyondell’s polyethylene units as of December 31, 2007 was approximately 5.8 billion pounds per year, or approximately 14% of total industry capacity in North America.
 


 
 
Lyondell’s fuels business (other than MTBE, ETBE and alkylate) is conducted through Houston Refining, which owns the refinery discussed below.  Houston Refining became a wholly owned subsidiary of Lyondell on August 16, 2006, as a result of Lyondell’s acquisition of CITGO’s 41.25% interest in Houston Refining.  Equistar produces alkylate and MTBE,  and Lyondell produces MTBE and ETBE.
 
Lyondell’s refinery (the “Refinery”), which is located on the Houston Ship Channel in Houston, Texas, has a heavy, high sulfur crude oil processing capacity of approximately 268,000 barrels per day on a calendar day basis (normal operating basis), or approximately 280,000 barrels per day on a stream day basis (maximum achievable over a 24 hour period).  The Refinery is a full conversion refinery designed to run heavy (16 to 18 degrees API), high sulfur crude oil.  This crude oil is more viscous and dense than traditional crude oil and contains higher concentrations of sulfur and heavy metals, making it more difficult to refine into gasoline and other high value fuel products, but has historically been less costly to purchase.  Processing heavy, high sulfur crude oil in significant quantities requires a refinery with extensive coking, catalytic cracking, hydrotreating and desulfurization capabilities, i.e., a “complex refinery.”  The Refinery’s complexity enables it to operate in full conversion mode, producing a slate of products that consists primarily of high value, clean products.  The Refinery’s clean products include gasoline (including blendstocks for oxygenate blending), jet fuel and ultra low sulfur diesel.  The Refinery’s products also include heating oil, lube oils (industrial lubricants, white oils and process oils), carbon black oil, refinery-grade propylene, petrochemical feedstocks, sulfur, residual fuel, petroleum coke and aromatics.  The aromatics produced are benzene and toluene.
 
The fuels segment also produces gasoline blending components such as MTBE, ETBE and alkylate.  MTBE is produced at three facilities located in Texas, and MTBE and ETBE are produced at one facility located in France.  Alkylate is produced at one facility located in Texas.
 
The following table outlines:
 
·  
the primary products of Lyondell’s fuels segment;
·  
annual rated capacity (on a calendar day basis) as of December 31, 2007; and
·  
the primary uses for those products.
 
See “Item 2. Properties” for the locations where Lyondell produces the primary products of its fuels segment.
 


The term “annual rated capacity,” as used in this table, is calculated by estimating the average number of days in a typical year that a production unit of a plant is expected to operate, after allowing for downtime for regular maintenance, and multiplying that number by an amount equal to the unit’s optimal daily output based on the design raw material mix.  Because the rated capacity of a production unit is an estimated amount, the actual production volumes may be more or less than the rated capacity.
 
Product
Annual Capacity
Primary Uses
Gasoline and components
120,000 barrels per day
Automotive fuel
Ultra Low Sulfur Diesel
95,000 barrels per day
Fuel for diesel cars and trucks
Jet Fuel
25,000 barrels per day
Aviation fuel
Aromatics:
      
Benzene (a)
10 million gallons per year
Nylon for clothing and consumer items; polystyrene for insulation, packaging and drink cups
  
Toluene (a)
46 million gallons per year
Gasoline component and chemical raw material for producing benzene
  
Paraxylene (a)(b)
266 million pounds per year
Polyester fibers for clothing and fabrics, PET soft drink bottles and films for audio and video tapes
  
Orthoxylene (a)(b)
226 million pounds per year
Plasticizer in products such as rainwear, shower curtains, toys and auto upholstery and an intermediate in paints and fiberglass
  
Lube Oils
4,000 barrels per day
Automotive and industrial engine and lube oils, railroad engine additives and white oils for food-grade applications
  
Gasoline Blending
Components:
      
Methyl Tertiary Butyl
Ether (MTBE)/
Ethyl Tertiary Butyl
Ether (ETBE)
966 million gallons
(63,000 barrels/day) (c)
MTBE is a high octane gasoline blending component;  ETBE is an alternative gasoline blending component based on agriculturally produced ethanol
  
Alkylate
337 million gallons
Alkylate is a high octane gasoline blending component
  
__________
 
(a)  
Produced by the fuels business and marketed by the chemicals business.
 
(b)  
Lyondell ceased production of paraxylene and orthoxylene in January 2008.
 
(c)  
Represents total MTBE capacity.  Lyondell also produces ETBE in France and has the ability to produce ETBE at its Channelview, Texas plant as an alternative to MTBE production.  Although operated as part of the overall LyondellBasell Industries capacity, as a result of the December 20, 2007 subsidiary sale by Lyondell to another subsidiary of LyondellBasell Industries, the capacity excludes 14,000 barrels per day of capacity of the Botlek facility.
 

 
No single fuels segment customer accounted for 10% or more of Lyondell’s 2007 revenues.
 
The Refinery produces gasoline (including blendstocks for oxygenate blending), ultra low sulfur diesel, heating oil, jet fuel, aromatics, lube oils, petrochemical feedstocks and other industrial products.  These products are sold in large commodity markets.  The Refinery evaluates and determines its optimal product output mix, based on spot market prices and conditions.
 
Gasoline accounted for 13% of Lyondell’s total revenues in 2007 and less than 10% in 2006 and 2005.  Houston Refining has only been a consolidated subsidiary of Lyondell since Lyondell’s August 16, 2006 acquisition of CITGO’s interest in Houston Refining.  Accordingly, none of the individual products of Lyondell’s fuels business produced at the Refinery accounted for 10% or more of Lyondell’s total revenues in 2006 or 2005.  However, gasoline accounted for approximately 37% of Houston Refining’s total revenues in 2006 and 39% in 2005.  Diesel accounted for approximately 30% of Houston Refining’s total revenues in 2006 and 2005.


Before Lyondell’s August 2006 acquisition of CITGO’s interest in Houston Refining, CITGO was required to purchase and Houston Refining was required to sell at market-based prices 100% of the finished gasoline, jet fuel, heating oil, diesel fuel, coke and sulfur produced at the Refinery.  Lyondell now markets and sells all of these products, which means that Lyondell is subject to the normal risks that it faces when selling commodity products.  See “Item 1A. Risk Factors—Risks Relating to the Businesses—Lyondell sells commodity products in highly competitive global markets and faces significant price pressures.” Benzene and toluene produced by the Refinery are marketed by Lyondell’s chemicals business.  Prior to Lyondell’s acquisition of CITGO’s interest in Houston Refining, CITGO served as the Refinery’s sole agent to market paraxylene and orthoxylene produced by the Refinery.  Lyondell ceased production of paraxylene and orthoxylene in January 2008.
 
The Refinery’s products primarily are sold in bulk on the U.S. Gulf Coast to other refiners, marketers, distributors and wholesalers, at market-related prices.  Diesel fuel is produced to meet ultra low sulfur specifications for the on-road transportation market.  Most of the Refinery’s products are sold under contracts with a term of one year or less or are sold in the spot market.  The Refinery’s products generally are transported to customers via pipelines and terminals owned and operated by other parties.  Products also are transported via rail cars, barge and truck.  In addition to sales of refined products produced at the Refinery, Lyondell also sells refined products purchased or received on exchange from other parties.  The exchange arrangements help optimize refinery supply operations and lower transportation costs.  To meet market demands, Lyondell also from time to time purchases refined products manufactured by others for resale to Lyondell’s customers.
 
Before Lyondell’s acquisition of CITGO’s interest in Houston Refining, CITGO also purchased all of the lube oils produced at the Refinery.  In connection with the acquisition, the previous lubricant sales agreement was terminated and replaced with short-term transitional agreements.  Lyondell subsequently entered into new agreements with unrelated parties for the purchase of the lube oils produced at the Refinery at market-related prices.  Lube oils are transported from the Refinery by customers by vessel, barge, rail car and truck.
 
MTBE, ETBE and alkylate are gasoline blending components.  In North America, Lyondell produces MTBE at three facilities in Texas and produces alkylate at one facility in Texas.  Lyondell also has the ability to produce ETBE at one of the Texas facilities as an alternative to MTBE production.
 
In Europe, Lyondell produces MTBE and ETBE at a plant in Fos-sur-Mer, France.  On December 20, 2007, in connection with Lyondell’s acquisition by LyondellBasell Industries, Lyondell sold to another subsidiary of LyondellBasell Industries the shares of the Lyondell subsidiary that indirectly owned Lyondell’s facility at Botlek (near Rotterdam), The Netherlands.  The Botlek facility produces MTBE and ETBE.  Although the Botlek facility is no longer owned by Lyondell, it is owned by Lyondell’s parent, LyondellBasell Industries, and is operated as part of the overall LyondellBasell Industries businesses.  The products produced on behalf of LyondellBasell Industries at the Botlek facility are marketed and sold together with those same products produced at facilities owned directly by Lyondell.
 
MTBE and ETBE are derivatives of TBA, which is a co-product of the PO produced by Lyondell’s chemicals business segment.  Production levels at Lyondell’s PO/TBA co-product production facilities primarily are determined by the demand for Lyondell’s PO and PO derivatives.  Accordingly, the resulting production levels of the TBA derivatives (such as MTBE and ETBE) depend primarily on the demand for PO and PO derivatives and secondarily on the relative market demand for MTBE and ETBE, as well as the operational flexibility of Lyondell’s multiple production facilities in meeting this demand.  Separately, MTBE and alkylate also are produced as derivatives of the ethylene co-products produced by Lyondell’s chemicals business segment.  When necessary, Lyondell purchases MTBE for resale to satisfy customer demand for MTBE above Lyondell’s production levels.  Volumes of MTBE purchased for resale can vary significantly from period to period.  However, purchased volumes have not historically had a significant impact on profitability.
 
Lyondell sells its MTBE and ETBE production under market-based sales agreements and in the spot market. Lyondell blends its alkylate into gasoline and also sells alkylate under short-term contracts and in the spot market.  MTBE and ETBE together accounted for approximately 11% of Lyondell’s total revenues in 2007, 9% in 2006 and 12% in 2005.  Sales of alkylate accounted for less than 10% of Lyondell’s total revenues in 2007, 2006 and 2005.
 


Substantially all refiners and blenders have discontinued the use of MTBE in the U.S., partly as a result of U.S. federal governmental initiatives to increase use of bio-ethanol in gasoline as well as some state legislation to reduce or ban the use of MTBE.  However, MTBE demand for gasoline blending remains strong within the remaining global market.  Accordingly, Lyondell is marketing its MTBE produced in the U.S. for use outside of the U.S.  Lyondell’s U.S.-based and European-based MTBE plants generally have the flexibility to produce either MTBE or ETBE to accommodate market needs.  Lyondell produces ETBE in Europe to address Europe’s growing demand for biofuels.  See “Item 1A.  Risk Factors—Risks Relating to the Businesses—Legislative and other actions have eliminated substantially all U.S. demand for MTBE. Therefore, Lyondell has been selling its U.S.-produced MTBE for use outside of the U.S., and may in the future produce an alternative gasoline blending component, iso-octene, in the U.S., which may be less profitable than MTBE,” “Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations – Environmental Matters” and Note 20 to the Consolidated Financial Statements for additional discussion regarding these U.S. federal and state initiatives and their impact on Lyondell.
 
Sales of Lyondell’s MTBE, ETBE and alkylate are made by marketing and sales personnel from Lyondell and its affiliates, and through distributors and independent agents located in the Americas, Europe, the Middle East, Africa and the Asia Pacific region.  Lyondell has centralized certain sales and order fulfillment functions in regional customer service centers located in Houston, Texas and Hong Kong, China.  Lyondell also has long-term contracts for distribution and logistics to ensure reliable and efficient supply to its customers.  MTBE, ETBE and alkylate are transported by barge, ocean-going vessel and tank truck.
 
 
Before Lyondell’s August 2006 acquisition of CITGO’s interest in Houston Refining, most of the crude oil used as a raw material for the Refinery was purchased under a crude supply agreement with PDVSA Petróleo, S.A. (“PDVSA Oil”), an affiliate of Petróleos de Venezuela, S.A. (“PDVSA”), the national oil company of Venezuela.  That previous crude supply agreement provided for the purchase and supply of 230,000 barrels per day of heavy, high sulfur crude oil (approximately 86% of the 268,000 barrels per day refining capacity at the Refinery, on a calendar day basis), and incorporated deemed-margin, formula-based pricing, which Lyondell believes reduced the volatility of Houston Refining’s earnings and cash flows over the contract life.  In connection with Lyondell’s acquisition of CITGO’s interest in Houston Refining, the previous crude supply agreement with PDVSA Oil was terminated and replaced with a new crude oil contract.  The new contract provides for the purchase and supply of 230,000 barrels per day of heavy, high sulfur crude oil and extends through 2011 and year to year thereafter. The new crude oil contract incorporates market-based pricing, which is determined using a formula reflecting published market indices.  The new pricing formula is designed to be consistent with published prices for similar grades of crude oil.
 
There are risks associated with reliance on PDVSA Oil for supplies of crude oil and with enforcing the provisions of contracts with companies such as PDVSA Oil that are non-United States affiliates of a sovereign nation.  For example, from time to time in the past, PDVSA Oil has declared itself in a force majeure situation and subsequently reduced deliveries of crude oil purportedly based on announced OPEC production cuts.  Any modification, breach or termination of the crude oil contract, or any interruption in this source of crude oil, could adversely affect Lyondell.  For additional information regarding these risks, see “Item 1A. Risk Factors—Risks Relating to the Businesses—Lyondell’s crude oil contract with PDVSA Oil is subject to the risk of enforcing contracts against non-U.S. affiliates of a sovereign nation and political, force majeure and other risks.”
 
Lyondell’s chemicals business converts most of its TBA to isobutylene and sells some of the TBA into the market.  In the fuels segment, the isobutylene from the chemicals segment is reacted with methanol or ethanol to produce MTBE and ETBE.  Methanex is the exclusive supplier of the worldwide methanol raw material requirements for Lyondell (other than for the acetyls portion of its chemicals business segment, acquired in November 2004).  The agreement provides supplies of methanol at cost-based prices through 2009, and Methanex has an option to extend the agreement for an additional period of up to three years.  Lyondell purchases its ethanol requirements for the production of ETBE from regional producers and importers in Europe at market-related prices.  MTBE and alkylate also are produced as derivatives of Lyondell’s ethylene co-products produced by Lyondell’s chemicals business segment.  For further discussion regarding the raw materials requirements for the production of MTBE, ETBE and alkylate, see “Chemicals Segment—Raw Materials.”
 


 
The markets for fuels products tend to be volatile as well as cyclical as a result of changing crude oil and refined product prices. Crude oil prices are impacted by worldwide political events, the economics of exploration and production and refined products demand. Prices and demand for fuels products are influenced by seasonal and short-term factors such as weather and driving patterns, as well as by longer term issues such as the economy, energy conservation and alternative fuels.  Industry fuels products supply is dependent on industry operating capabilities and on long-term refining capacity.  Growth in demand for fuels products without comparable growth in U.S. supply or imports has led to tight fuels products supply conditions in the U.S.
 
With a capacity of approximately 268,000 barrels per day (on a calendar day basis), Lyondell believes that the Refinery is one of North America’s largest full conversion refineries capable of processing significant quantities of heavy, high sulfur crude oil.
 
Lyondell competes for the purchase of heavy, high sulfur crude oils based on price and quality.  Although most of Lyondell’s crude oil supplies are secured under long term contract with PDVSA Oil, supply disruptions could impact the availability and pricing for heavy, high sulfur crudes.  Lyondell competes in gasoline and distillate markets as a bulk supplier of fungible products satisfying industry and government specifications.  Competition is based on price and location.
 
Lyondell’s refining competitors are major integrated oil companies, refineries owned or controlled by foreign governments, and independent domestic refiners.  Based on published data, as of December 31, 2007, there were 149 operable crude oil refineries in the United States, and total domestic refinery capacity was approximately 17.4 million barrels per day.  During 2007, the Refinery processed an average of approximately 261,000 barrels per day of crude oil or approximately 1.5% of all U.S. crude capacity.
 
Lyondell competes for sales of MTBE and ETBE with independent MTBE producers worldwide and independent ETBE producers in Europe.  The most significant MTBE competitor is SABIC, and the most significant ETBE competitors are SABIC, Neste and Oxeno.  Based in part on published data regarding capacity, Lyondell believes that it is one of the largest marketers and producers of MTBE and ETBE worldwide.  MTBE and ETBE face competition from products such as ethanol and other octane components.  See “Item 1A.  Risk Factors—Risks Relating to the Businesses—Legislative and other actions have eliminated substantially all U.S. demand for MTBE.  Therefore, Lyondell has been selling its U.S.-produced MTBE for use outside of the U.S., and may in the future produce an alternative gasoline blending component, iso-octene, in the U.S., which may be less profitable than MTBE” and “Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations – Environmental Matters.”  Lyondell competes with other refiners and olefins manufacturers for sales of alkylate that Lyondell does not internally blend into gasoline.
 


 
Lyondell (together with the industries in which it operates) is subject to extensive national, state and local environmental laws and regulations concerning, and is required to have permits and licenses regulating, emissions to the air, discharges onto land or waters and the generation, handling, storage, transportation, treatment and disposal of waste materials.  In some cases, compliance with environmental, health and safety laws and regulations can only be achieved by capital expenditures.  In the years ended December 31, 2007, 2006 and 2005, Lyondell (including Houston Refining for 2007 and from August 16, 2006 through December 31, 2006) spent approximately $156 million, $127 million and $82 million, respectively, for environmentally related capital expenditures at existing facilities.  The significant increases in planned and actual capital expenditures in 2007, 2006 and 2005 reflected increased spending on projects related to air emission reductions, low sulfur fuels and wastewater management principally at Lyondell’s Gulf Coast plants.  Under the Clean Air Act, the eight-county Houston/Galveston region was designated a severe non-attainment area for ozone by the Environmental Protection Agency (“EPA”).  Emission reduction controls were installed at Lyondell’s refinery and each of its ten facilities in the Houston/Galveston region to comply with the November 2007 deadline.  Also under the Clean Air Act, the EPA adopted new standards for gasoline that required refiners to produce a low sulfur gasoline by 2006 and ultra low sulfur diesel by the end of 2009.  The Refinery met the 2006 low sulfur gasoline compliance target and complied with a requirement to 80% of on-road diesel fuel as ultra low sulfur diesel by June 2006.  Lyondell currently estimates that environmentally related capital expenditures at its facilities will be approximately $65 million for 2008 and $30 million in 2009.  For additional information regarding environmentally related capital expenditures, see “Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations—Environmental Matters.”
 
 
Lyondell conducts research and development principally at technology centers in Cincinnati, Ohio and Newtown Square, Pennsylvania.
 
Lyondell maintains an extensive patent portfolio and continues to file new patent applications in the United States and other countries.  As of December 31, 2007, Lyondell owned approximately 260 United States patents and approximately 735 worldwide patents.  Lyondell owns trademarks and trademark registrations in the United States and in other countries, including the “Lyondell,” “Equistar,” “Millennium” and “Houston Refining” trade names.  While Lyondell believes that its intellectual property provides competitive advantages, Lyondell does not regard its businesses as being materially dependent upon any single patent, trademark or license.
 
The research and development expenditures for Lyondell were $74 million in the combined Successor and Predecessor periods in 2007, $72 million in 2006 and $70 million in 2005.  In addition, as part of the acquisition of Lyondell by LyondellBasell Industries, $95 million of the purchase price was allocated to in-process research and development (“IPR&D”).  Accordingly, Lyondell’s results of operations for the 2007 Successor period include a charge of $95 million for the value of the IPR&D for the period from December 21 to December 31, 2007.
 
 
At December 31, 2007, Lyondell had approximately 7,340 full-time and part-time employees.  Of these employees, approximately 6,860 were located in the United States and Latin America, approximately 410 were located in Europe and approximately 70 were located in Asia.  As of December 31, 2007, approximately 14% of the employees located in the U.S. and approximately 93% of the employees located in Europe were represented by labor unions.  Of the employees located in the U.S. that are represented by labor unions, approximately 58% are covered by a collective bargaining agreement between Houston Refining and the United Steelworkers Union, which expires in January 2009.  In addition to its own employees, Lyondell uses the services of independent contractors in the routine conduct of its businesses and may use the services of LyondellBasell Industries’ employees pursuant to shared services and loaned employee arrangements.  Lyondell believes its relations with its employees are good.
 


 
There are many factors that may affect Lyondell’s businesses and results of operations. For additional discussion regarding factors that may affect Lyondell’s businesses and operating results, see “Item 1.  Business,” “Item 3.  Legal Proceedings,” “Forward-Looking Statements,” “Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Item 7A.  Disclosure of Market Risk.” If one or more of these risks actually occur, Lyondell’s business, financial position or results of operations could be materially and adversely affected.
 
 
Costs of raw materials and energy, as well as reliability of supply, may result in increased operating expenses and reduced results of operations.
 
Lyondell purchases large amounts of raw materials and energy for its businesses.  The cost of these raw materials and energy, in the aggregate, represents a substantial portion of its operating expenses.  The costs of raw materials and energy generally follow price trends of, and vary with the market conditions for, crude oil and natural gas, which may be highly volatile and cyclical.  Raw material and energy costs remain at high levels, and a weak U.S. dollar adds to the volatility in Lyondell’s raw material costs.  There have been, and will likely continue to be, periods of time when Lyondell is unable to pass raw material and energy cost increases on to customers quickly enough to avoid adverse impacts on its results of operations.  Customer consolidation also has made it more difficult to pass along cost increases to customers.  Lyondell’s results of operations have been, and could be in the future, significantly affected by increases and volatility in these costs.  Cost increases also may increase working capital needs, which could reduce Lyondell’s liquidity and cash flow.  In addition, when raw material and energy costs increase rapidly and are passed along to customers as product price increases, the credit risks associated with certain customers can be compounded.  To the extent Lyondell increases its product sales prices to reflect rising raw material and energy costs, demand for products may decrease as customers reduce their consumption or use substitute products, which may have an adverse impact on Lyondell’s results of operations.  See “Lyondell sells commodity products in highly competitive global markets and faces significant price pressures” below.
 
In addition, higher North American and European natural gas prices relative to natural gas cost-advantaged regions, such as the Middle East, have diminished the ability of many chemical producers to compete internationally since natural gas prices affect a significant portion of the industry’s raw materials and energy sources.  This environment has in the past caused, and may in the future cause, a reduction in Lyondell’s exports from North America and Europe, and has in the past reduced, and may in the future reduce, the competitiveness of U.S. and European producers.  It also has in the past increased the competition for product sales within North America and Europe, as production that would otherwise have been sold in other geographic regions was instead offered for sale in these regions, resulting in excess supply and lower margins in North America and Europe, and may do so in the future.
 
Furthermore, across Lyondell, there are a limited number of suppliers for some of its raw materials and utilities and, in some cases, the number of sources for and availability of raw materials and utilities is specific to the particular geographic region in which a facility is located.  It is also common in the chemical and refining industries for a facility to have a sole, dedicated source for its utilities, such as steam, electricity and gas.  For some of Lyondell products, the facilities and/or distribution channels of raw material suppliers and utilities suppliers and Lyondell form an integrated system.  This is especially true in the U.S. Gulf Coast where the infrastructure of the chemical and refining industries is tightly integrated such that a major disruption of supply of a given commodity or utility can negatively affect numerous participants, including suppliers of other raw materials.  If one or more of Lyondell’s significant raw material or utility suppliers were unable to meet its obligations under present supply arrangements, raw materials become unavailable within the geographic area from which they are now sourced, or supplies are otherwise disrupted, Lyondell’s businesses could suffer reduced supplies or be forced to incur increased costs for their raw materials or utilities, which would have a direct negative impact on plant operations.  For example, Hurricanes Katrina and Rita negatively affected crude oil and natural gas supplies, as well as supplies of some of Lyondell’s other raw materials, contributing to increases in raw material prices during the second half of 2005 and, in some cases, disrupting production.  In addition, hurricane-related disruption of rail and pipeline traffic in the U.S. Gulf Coast area negatively affected shipments of raw materials and product.


The cyclicality and volatility of the chemical and refining industries may cause significant fluctuations in Lyondell’s operating results.
 
Lyondell’s operating results are subject to the cyclical and volatile nature of the supply-demand balance in both the chemical and refining industries, and Lyondell’s future operating results are expected to continue to be affected by this cyclicality and volatility. These industries historically have experienced alternating periods of capacity shortages leading to tight supply, causing prices and profit margins to increase, followed by periods when substantial capacity is added, resulting in oversupply, declining capacity utilization rates and declining prices and profit margins.  The volatility these industries experience occurs as a result of changes in the supply and demand for products, changes in energy prices and changes in various other economic conditions around the world.  The cyclicality and volatility of these industries results in significant fluctuations in profits and cash flow from period to period and over the business cycles.
 
The chemical industry experienced tight supply in many product areas and increased demand as the global economy improved during the past several years. As a result, profitability in the industry increased, even in a world of volatile raw material and energy costs. However, it is uncertain whether business conditions will remain positive. The global economic and political environment continues to be uncertain, and a recession or other negative changes could result in a decline in demand and place pressure on Lyondell’s results of operations. In addition, new capacity additions by some participants in the industry, especially those in the Middle East and Asia that began in 2006 and are expected to continue, could lead to another period of oversupply and poor profitability.
 
Lyondell may reduce production at or idle a facility for an extended period of time or exit a business because of an oversupply of a particular product and/or a lack of demand for that particular product, or high raw material prices, which makes production uneconomical. Any decision to permanently close facilities or exit a business would result in impairment and other charges to earnings. Temporary outages sometimes last for several quarters or, in certain cases, longer, and could cause Lyondell to incur costs, including the expenses of maintaining and restarting these facilities. It is possible that factors such as increases in raw material costs or lower demand in the future will cause Lyondell to reduce operating rates, idle facilities or exit uncompetitive businesses.
 
External factors beyond Lyondell’s control can cause fluctuations in demand for Lyondell’s products and in its prices and margins, which may result in lower operating results.
 
External factors beyond Lyondell’s control can cause volatility in the price of raw materials and other operating costs, as well as significant fluctuations in demand for Lyondell’s products and can magnify the impact of economic cycles on its businesses.  Examples of external factors include:
 
·  
supply of and demand for crude oil and other raw materials;
 
·  
changes in customer buying patterns and demand for Lyondell’s products;
 
·  
general economic conditions;
 
·  
domestic and international events and circumstances;
 
·  
competitor actions;
 
·  
governmental regulation in the U.S. and abroad; and
 
·  
severe weather and natural disasters.
 


Lyondell believes that global events have had an impact on its businesses in recent years and may continue to do so.  In addition, a number of Lyondell’s products are highly dependent on durable goods markets, such as the construction and automotive markets, which also are cyclical and impacted by many of the external factors referenced above.  Many of Lyondell’s products are components of other chemical products that, in turn, are subject to the supply-demand balance of both the chemical and refining industries and general economic conditions.  The volatility and elevated level of prices for crude oil and natural gas have resulted in increased raw material costs, and the impact of the factors cited above and others may once again cause a slowdown in the business cycle, reducing demand and lowering operating rates and, ultimately, reducing profitability.
 
Lyondell sells commodity products in highly competitive global markets and faces significant price pressures.
 
Lyondell sells its products in highly competitive global markets.  Due to the commodity nature of many of its products, competition in these markets is based primarily on price and to a lesser extent on product performance, product quality, product deliverability, reliability of supply and customer service.  As a result, Lyondell generally is not able to protect its market position for these products by product differentiation and may not be able to pass on cost increases to its customers.
 
In addition, Lyondell faces increased competition from companies that may have greater financial resources and different cost structures or strategic goals than Lyondell, such as large integrated oil companies (many of which also have chemical businesses), government-owned businesses, and companies that receive subsidies or other government incentives to produce certain products in a specified geographic region.  Increased competition from these companies, especially in Lyondell’s ethylene and refining businesses, could limit Lyondell’s ability to increase product sales prices in response to raw material and other cost increases, or could cause Lyondell to reduce product sales prices to compete effectively, which could reduce Lyondell’s profitability.
 
Accordingly, increases in raw material and other costs may not necessarily correlate with changes in prices for these products, either in the direction of the price change or in magnitude.  In addition, Lyondell’s ability to increase product sales prices, and the timing of those increases, are affected by the supply-demand balances for its products, as well as the capacity utilization rates for those products.  Timing differences in pricing between rising raw material costs, which may change daily, and contract product prices, which in many cases are negotiated only monthly or less often, sometimes with an additional lag in effective dates for increases, have reduced and may continue to reduce profitability.  Even in periods during which raw material prices decline, Lyondell may suffer decreasing profits if raw material price reductions occur at a slower rate than decreases in the selling prices of its products.
 
Further, volatility in costs and pricing can result in commercial disputes with customers and suppliers with respect to interpretations of complex contractual arrangements. Significant adverse resolution of any such disputes also could reduce profitability.
 
If the Lyondell businesses are not successfully integrated with the historical Basell businesses, unanticipated costs may be incurred and operations may be disrupted.
 
The process of effectively integrating Basell and Lyondell into one company will require significant managerial and financial resources.  The costs and time required to integrate these businesses into one organization could cause the interruption of, or a loss of momentum in, the activities of any one, or several, of the operations of the constituent entities, including Lyondell.  A failure to successfully integrate Lyondell with Basell’s legacy business operations within the expected time frame could adversely affect Lyondell’s business, financial condition and results of operations.  The acquisition also may expose Lyondell to certain additional risks, including:
 
 
Ÿ
difficulties arising from LyondellBasell Industries operating a significantly larger and more complex organization and adding Lyondell’s operations to Basell’s legacy operations;
 
 
Ÿ
difficulties in the assimilation of the assets and operations of the Lyondell businesses with the assets and operations of Basell, especially when the assets are in business segments not shared historically by both companies or involve joint venture partners;


Ÿ  
the loss of, or difficulty in attracting, customers, business partners or key employees as a result of uncertainties associated with the acquisition or otherwise;
 
Ÿ  
customers and business partners being unwilling to continue doing business with Lyondell on the same or similar terms as a result of the acquisition;
 
 
Ÿ
challenges associated with the implementation of changes in management in connection with the acquisition and the integration of the combined company management team;
 
 
Ÿ
difficulties in consolidating the workforces of Lyondell and Basell;
 
 
Ÿ
the diversion of attention from other business concerns;
 
 
Ÿ
difficulties arising from coordinating geographically disparate organizations, systems and facilities;
 
 
Ÿ
difficulties arising from coordinating and consolidating corporate and administrative functions, including integration of internal controls and procedures;
 
 
Ÿ
unforeseen legal, regulatory, contractual, labor or other issues; and
 
 
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the failure to realize expected profitability or growth.
 
Further, unexpected costs and challenges may arise whenever businesses with different operations or management are combined.
 
Lyondell’s crude oil contract with PDVSA Oil is subject to the risk of enforcing contracts against non-U.S. affiliates of a sovereign nation and political, force majeure and other risks.
 
Lyondell’s crude oil contract with PDVSA Oil, an affiliate of PDVSA, the national oil company of Venezuela, provides for the purchase and supply of 230,000 barrels per day of heavy, high sulfur crude oil (approximately 86% of the refining capacity at the refinery). There are risks associated with reliance on PDVSA Oil for supplies of crude oil and with enforcing the provisions of contracts with companies such as PDVSA Oil that are non-United States affiliates of a sovereign nation.  For example, from time to time in the past, PDVSA Oil has declared itself in a force majeure situation and subsequently reduced deliveries of crude oil purportedly based on announced OPEC production cuts.  All of the crude oil supplied by PDVSA Oil under the crude oil contract is produced in Venezuela, and it is impossible to predict how governmental policies may change under the current or any subsequent Venezuelan government.  In addition, there are risks associated with enforcing judgments of United States courts against entities whose assets are located outside of the United States and whose management does not reside in the United States.  Any modification, breach or termination of the crude oil contract, or any interruption in this source of crude oil, could adversely affect Lyondell, as alternative crude oil supplies with similar margins may not always be available for purchase.
 
Lyondell’s operations and assets are subject to extensive environmental, health and safety and other laws and regulations, which could result in material costs or liabilities.
 
Lyondell cannot predict with certainty the extent of future liabilities and costs under environmental, health and safety and other laws and regulations and whether liabilities and costs will be material.  Lyondell also may face liability for alleged personal injury or property damage due to exposure to chemicals or other hazardous substances at its current or former facilities or chemicals that it manufactures, handles or owns.  In addition, because Lyondell’s products are components of a variety of other end-use products, Lyondell, along with other members of the chemical industry, is inherently subject to potential claims related to those end-use products.  Although claims of the types described above have not historically had a material impact on Lyondell’s operations, a substantial increase in the success of these types of claims could result in the expenditure of a significant amount of cash by Lyondell to pay claims, and could reduce its operating results.
 


Lyondell (together with the industries in which it operates) is subject to extensive national, state and local environmental laws and regulations concerning, and is required to have permits and licenses regulating, emissions to the air, discharges onto land or waters and the generation, handling, storage, transportation, treatment and disposal of waste materials.  Many of these laws and regulations provide for substantial fines and potential criminal sanctions for violations.  Some of these laws and regulations are subject to varying and conflicting interpretations.  In addition, some of these laws and regulations require Lyondell to meet specific financial responsibility requirements.  Lyondell cannot accurately predict future developments, such as increasingly strict environmental laws, and inspection and enforcement policies, as well as higher compliance costs, which might affect the handling, manufacture, use, emission or disposal of products, other materials or hazardous and non-hazardous waste.  Some risk of environmental costs and liabilities is inherent in Lyondell’s operations and products, as it is with other companies engaged in similar businesses, and there is no assurance that material costs and liabilities will not be incurred.  In general, however, with respect to the costs and risks described above, Lyondell does not expect that it will be affected differently than the rest of the industries where its facilities are located.
 
Environmental laws may have a significant effect on the nature and scope of cleanup of contamination at current and former operating facilities, the costs of transportation and storage of raw materials and finished products and the costs of the storage and disposal of wastewater.  Also, U.S. “Superfund” statutes may impose joint and several liability for the costs of remedial investigations and actions on the entities that generated waste, arranged for disposal of the wastes, transported to or selected the disposal sites and the past and present owners and operators of such sites.  All such responsible parties (or any one of them, including Lyondell) may be required to bear all of such costs regardless of fault, the legality of the original disposal or ownership of the disposal site.  In addition, similar environmental laws and regulations that have been or may be enacted in countries outside of the U.S. may impose similar liabilities and costs upon Lyondell.
 
Lyondell has on-site solid-waste management units at several facilities.  It is anticipated that corrective measures will be necessary to comply with federal and state requirements with respect to these facilities.  Lyondell also has liabilities under the Resource Conservation and Recovery Act and various state and non-U.S. government regulations related to several current and former plant sites.  Lyondell also is responsible for a portion of the remediation of certain off-site waste disposal facilities.  Lyondell is contributing funds to the cleanup of several waste sites throughout the U.S. under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) and the Superfund Amendments and Reauthorization Act of 1986, including the Kalamazoo River Superfund Site discussed below.  Lyondell also has been named as a potentially responsible party at several other sites.  Lyondell’s policy is to accrue remediation expenses when it is probable that such efforts will be required and the related expenses can be reasonably estimated.  Estimated costs for future environmental compliance and remediation are necessarily imprecise due to such factors as the continuing evolution of environmental laws and regulatory requirements, the availability and application of technology, the identification of presently unknown remediation sites and the allocation of costs among the potentially responsible parties under applicable statutes.  For further discussion regarding Lyondell’s environmental matters and related accruals (including those discussed in this risk factor), and environmentally-related capital expenditures, see also Note 20 to the Consolidated Financial Statements, “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Environmental Matters,” “Item 1. Business—Environmental Capital Expenditures” and “Item 3. Legal Proceedings—Environmental Matters.”  If actual expenditures exceed the amounts accrued, that could have an adverse effect on Lyondell’s results of operations and financial position.
 
Kalamazoo River Superfund Site—Lyondell acquired Millennium on November 30, 2004.  A Millennium subsidiary has been identified as a Potential Responsible Party (“PRP”) with respect to the Kalamazoo River Superfund Site.  The site involves cleanup of river sediments and floodplain soils contaminated with polychlorinated biphenyls, cleanup of former paper mill operations, and cleanup and closure of landfills associated with the former paper mill operations.  Litigation concerning the matter commenced in December 1987 but was subsequently stayed and is being addressed under CERCLA.
 


In 2000, the Kalamazoo River Study Group (the “KRSG”), of which the Millennium subsidiary and other PRPs are members, submitted to the State of Michigan a Draft Remedial Investigation and Draft Feasibility Study, which evaluated a number of remedial options for the river.  The estimated costs for these remedial options ranged from $0 to $2.5 billion.  Although the KRSG study identified a broad range of remedial options, not all of those options would represent reasonably possible outcomes.  Management does not believe that any single remedy among those options represented the highest-cost reasonably possible outcome.
 
In 2004, Lyondell recognized a liability representing Millennium’s interim allocation of 55% of the $73 million total of estimated cost of riverbank stabilization, recommended as the preferred remedy in 2000 by the KRSG study, and of certain other costs.
 
At the end of 2001, the U.S. EPA took lead responsibility for the river portion of the site at the request of the State of Michigan.  In 2004, the EPA initiated a confidential process to facilitate discussions among the agency, the Millennium subsidiary, other PRPs, the Michigan Departments of Environmental Quality and Natural Resources, and certain federal natural resource trustees about the need for additional investigation activities and different possible approaches for addressing the contamination in and along the Kalamazoo River.  As these discussions have continued, management has obtained new information about regulatory oversight costs and other remediation costs, including a proposed remedy to be applied to a specific portion of the river, and has been able to reasonably estimate anticipated costs for certain other segments of the river, based in part on experience to date with the remedy currently being applied to the one portion of the river.  As a result, Lyondell recognized $47 million during 2007 and $2 million in 2006 for additional estimated probable future remediation costs.
 
As of December 31, 2007, the probable additional future remediation spending associated with the river cannot be determined with certainty but the amounts accrued are believed to be the current best estimate of future costs, based on information currently available.  At December 31, 2007, the balance of the liability related to the river was $98 million.
 
In addition Lyondell has recognized a liability primarily related to Millennium’s estimated share of remediation costs for two former paper mill sites and associated landfills, which are also part of the Kalamazoo River Superfund Site.  At December 31, 2007, the balance of the liability was $47 million.  Although no final agreement has been reached as to the ultimate remedy for these locations, Millennium has begun remediation activity related to these sites.
 
Millennium’s ultimate liability for the Kalamazoo River Superfund Site will depend on many factors that have not yet been determined, including the ultimate remedies selected, the determination of natural resource damages, the number and financial viability of the other PRPs, and the determination of the final allocation among the PRPs.  Millennium’s ultimate liability for the Kalamazoo River Superfund Site is not affected by the sale of the inorganic chemicals business, which closed on May 15, 2007.
 
Other regulatory requirements—In addition to the matters described above, Lyondell is subject to other material regulatory requirements that could result in higher operating costs, such as regulatory requirements relating to the security of its facilities, and the transportation, exportation or registration of its products.  Although Lyondell has compliance programs and other processes intended to ensure compliance with all such regulations, Lyondell is subject to the risk that its compliance with such regulations could be challenged.  Non-compliance with certain of these regulations could result in the incurrence of additional costs, penalties or assessments that could be significant.
 


Legislative and other actions have eliminated substantially all U.S. demand for MTBE.  Therefore, Lyondell has been selling its U.S.-produced MTBE for use outside of the U.S., and may in the future produce an alternative gasoline blending component, iso-octene, in the U.S., which may be less profitable than MTBE.
 
Substantially all refiners and blenders have discontinued the use of MTBE in the U.S., partly as a result of U.S. federal governmental initiatives to increase use of bio-ethanol in gasoline as well as some state legislation to reduce or ban the use of MTBE.  Accordingly, Lyondell is marketing its U.S.-produced MTBE for use outside of the U.S.  However, there are higher distribution costs and import duties associated with exporting MTBE outside of the U.S., and the increased supply of MTBE may reduce profitability of MTBE in these export markets.  Lyondell’s U.S.-based and European-based MTBE plants generally have the flexibility to produce either MTBE or ETBE to accommodate market needs.  Lyondell produces and sells ETBE in Europe to address Europe’s growing demand for biofuels.  In addition, Lyondell may, in the future, modify equipment at its Channelview, Texas facility to provide Lyondell with the flexibility to produce an alternative gasoline blending component known as iso-octene (also known as “di-isobutylene” or “DIB”) or either MTBE or ETBE at that facility in the future.  Any decision to produce iso-octene will depend on the timing and cost of equipment modifications, and product decisions will continue to be influenced by regulatory and market developments.  The profit contribution related to iso-octene may be lower than that historically realized on MTBE.  In addition, iso-octene is a new product without an established history.
 
Proceedings related to the alleged exposure to lead-based paints and lead pigments could require Millennium to spend material amounts in litigation and settlement costs and judgments.
 
Together with alleged past manufacturers of lead-based paint and lead pigments for use in paint, Millennium has been named as a defendant in various legal proceedings alleging personal injury, property damage, and remediation costs allegedly associated with the use of these products.  The plaintiffs include individuals and governmental entities, and seek recovery under a variety of theories, including negligence, failure to warn, breach of warranty, conspiracy, market share liability, fraud, misrepresentation and nuisance.  The majority of these legal proceedings assert unspecified monetary damages in excess of the statutory minimum and, in certain cases, equitable relief such as abatement of lead-based paint in buildings.  These legal proceedings are in various trial stages and post-dismissal settings, some of which are on appeal.  One legal proceeding relating to lead pigment or paint was tried in 2002.  On October 29, 2002, the judge in that case declared a mistrial after the jury declared itself deadlocked.  The sole issue before the jury was whether lead pigment in paint in and on Rhode Island buildings constituted a “public nuisance.”  The re-trial of this case began on November 1, 2005.  On February 22, 2006, a jury returned a verdict in favor of the State of Rhode Island finding that the cumulative presence of lead pigments in paints and coatings on buildings in the state constitutes a public nuisance; that a Millennium subsidiary, Millennium Holdings, LLC, and other defendants either caused or substantially contributed to the creation of the public nuisance; and that those defendants, including the Millennium subsidiary, should be ordered to abate the public nuisance.  On February 28, 2006, the judge held that the state could not proceed with its claim for punitive damages.  On February 26, 2007, the court issued its decision denying the post-verdict motions of the defendants, including Millennium, for a mistrial or a new trial.  The court concluded that it would enter an order of abatement and appoint a special master to assist the court in determining the scope of the abatement remedy.  On March 16, 2007, the court entered a final judgment on the jury’s verdict.  On March 20, 2007, Millennium filed its notice of appeal with the Rhode Island Supreme Court.  On December 18, 2007, the trial court appointed two special masters to serve as “examiners” and to assist the trial court in the proposed abatement proceedings.
 


While Lyondell believes that Millennium has valid defenses to all the lead-based paint and lead pigment proceedings and is vigorously defending them, litigation is inherently subject to many uncertainties.  Additional lead-based paint and lead pigment litigation may be filed against Millennium in the future asserting similar or different legal theories and seeking similar or different types of damages and relief, and any adverse court rulings or determinations of liability, among other factors, could affect this litigation by encouraging an increase in the number of future claims and proceedings.  In addition, from time to time, legislation and administrative regulations have been enacted or proposed to impose obligations on present and former manufacturers of lead-based paint and lead pigment respecting asserted health concerns associated with such products or to overturn successful court decisions.  Lyondell is unable to predict the outcome of lead-based paint and lead pigment litigation, the number or nature of possible future claims and proceedings, or the effect that any legislation and/or administrative regulations may have on Millennium and, therefore, Lyondell.  In addition, Lyondell cannot reasonably estimate the scope or amount of the costs and potential liabilities related to such litigation, or any such legislation and regulations.  Thus, any liability Millennium incurs with respect to pending or future lead-based paint or lead pigment litigation, or any legislation or regulations could, to the extent not covered or reduced by insurance or other recoveries, have a material impact on Millennium’s and, therefore, Lyondell’s results of operations.  In addition, Lyondell has not accrued any liabilities for judgments or settlements against Millennium resulting from lead-based paint and lead pigment litigation.  Any liability that Millennium may ultimately incur with respect to lead-based paint and lead pigment litigation is not affected by the sale of the inorganic chemicals business, which closed on May 15, 2007.  See “Item 3. Legal Proceedings—Litigation Matters” for additional discussion regarding lead-based paint and lead pigment litigation.
 
Interruptions of operations at Lyondell’s facilities may result in liabilities or lower operating results.
 
Lyondell owns and operates large-scale facilities, and Lyondell’s operating results are dependent on the continued operation of its various production facilities and the ability to complete construction and maintenance projects on schedule.  Material operating interruptions at Lyondell’s facilities, including, but not limited to, interruptions caused by the events described below, may materially reduce the productivity and profitability of a particular manufacturing facility, or Lyondell as a whole, during and after the period of such operational difficulties.
 
In addition, because Lyondell’s refinery located in Houston, Texas is Lyondell’s only refining operation, an outage at the refinery could have a particularly negative impact on Lyondell’s operating results.  Unlike Lyondell’s PO and ethylene production facilities, which may at times have sufficient excess capacity to mitigate the negative impact of lost production at another similar Lyondell facility, Lyondell does not have the ability to increase refining production elsewhere in an effort to mitigate the negative impact on operating results resulting from an outage at the refinery.
 
Although Lyondell takes precautions to enhance the safety of its operations and minimize the risk of disruptions, its operations, along with the operations of other members of the chemical and refining industries, are subject to hazards inherent in chemical manufacturing and refining and the related storage and transportation of raw materials, products and wastes. These potential hazards include:
 
·  
pipeline leaks and ruptures;
 
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explosions;
 
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fires;
 
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severe weather and natural disasters;
 
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mechanical failure;
 
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unscheduled downtimes;
 
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supplier disruptions;


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labor shortages or other labor difficulties;
 
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transportation interruptions;
 
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remediation complications;
 
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chemical spills;
 
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discharges or releases of toxic or hazardous substances or gases;
 
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storage tank leaks;
 
·  
other environmental risks; and
 
·  
terrorist acts.
 
Some of these hazards can cause personal injury and loss of life, severe damage to or destruction of property and equipment and environmental damage, and may result in suspension of operations, the shutdown of affected facilities and the imposition of civil or criminal penalties.  Furthermore, Lyondell also will continue to be subject to present and future claims with respect to workplace exposure, exposure of contractors on its premises as well as other persons located nearby, workers’ compensation and other matters.
 
Lyondell maintains property, business interruption and casualty insurance that it believes are in accordance with customary industry practices, but it is not fully insured against all potential hazards incident to its businesses, including losses resulting from natural disasters, war risks or terrorist acts.  Changes in insurance market conditions have caused, and may in the future cause, premiums and deductibles for certain insurance policies to increase substantially and, in some instances, for certain insurance to become unavailable or available only for reduced amounts of coverage.  If Lyondell was to incur a significant liability for which it was not fully insured, Lyondell might not be able to finance the amount of the uninsured liability on terms acceptable to it or at all, and might be obligated to divert a significant portion of its cash flow from normal business operations.
 
Lyondell’s international operations are subject to exchange rate fluctuations, exchange controls, political risks and other risks relating to non-U.S. operations.
 
Lyondell has substantial international operations, which are subject to the risks of doing business abroad, including fluctuations in currency exchange rates, transportation delays and interruptions, political and economic instability and disruptions, restrictions on the transfer of funds, the imposition of duties and tariffs, import and export controls, changes in governmental policies, labor unrest and current and changing regulatory environments. These events could reduce the demand for Lyondell’s products internationally, decrease the prices at which it can sell its products internationally or disrupt production or other operations internationally, which could reduce its operating results.  In addition, Lyondell obtains a substantial portion of its principal raw materials from sources outside the U.S., which are subject to these same risks. Although Lyondell has compliance programs and processes intended to ensure compliance with applicable customs, currency exchange control regulations, transfer pricing regulations or any other laws or regulations to which it may be subject, Lyondell is subject to the risk that its compliance could be challenged. Furthermore, these laws may be modified, the result of which may be to prevent or limit non-U.S. subsidiaries from transferring cash to Lyondell. For geographic data, see Note 24 to the Consolidated Financial Statements.
 
In addition, Lyondell generates revenue from export sales and operations conducted outside the U.S. that may be denominated in currencies other than the relevant functional currency. Exchange rates between these currencies and U.S. dollars in recent years have fluctuated significantly and may do so in the future. Future events, which may significantly increase or decrease the risk of future movement in foreign currencies in which it conducts its business, cannot be predicted. Lyondell also may hedge certain revenues and costs using derivative instruments to minimize the impact of changes in the exchange rates of those currencies compared to the respective functional currencies. It is possible that fluctuations in foreign exchange rates will result in reduced operating results.


Conflicts of interest between Lyondell and its owner, LyondellBasell Industries, could be resolved in a manner that may be perceived to be adverse to Lyondell.
 
Lyondell is an indirect wholly owned subsidiary of LyondellBasell Industries.  All executive officers of Lyondell and all members of Lyondell’s Board of Directors also serve as officers of LyondellBasell Industries.  Conflicts of interest may arise between LyondellBasell Industries and Lyondell when decisions arise that could have different implications for LyondellBasell Industries and Lyondell, and conflicts of interest could be resolved in a manner that may be perceived to be adverse to Lyondell.
 
Lyondell pursues acquisitions, dispositions and joint ventures, which may not yield the expected benefits.
 
Lyondell seeks opportunities to generate value through business combinations, purchases and sales of assets and contractual arrangements or joint ventures.  Transactions that Lyondell pursues may be intended to, among other things, result in the realization of synergies, the creation of efficiencies or the generation of cash to reduce debt.  Although these transactions may be expected to yield longer-term benefits if the expected efficiencies and synergies of the transactions are realized, they could reduce Lyondell’s operating results in the short term because of the costs, charges and financing arrangements associated with such transactions or the benefits of a transaction may not be realized to the extent anticipated.  Other transactions may advance future cash flows from some of Lyondell’s businesses, thereby yielding increased short-term liquidity, but consequently resulting in lower cash flows from these operations over the longer term.
 
Shared control of joint ventures may delay decisions or actions regarding the joint ventures.
 
A portion of Lyondell’s operations currently are, and may in the future be, conducted through joint ventures.  Lyondell shares control of these joint ventures with third parties.
 
Lyondell’s forecasts and plans with respect to these joint ventures assume that its joint venture partners will observe their joint venture obligations.  In the event that any of Lyondell’s joint venture partners do not observe their joint venture obligations, it is possible that the affected joint venture would not be able to operate in accordance with its business plans or that Lyondell would be required to increase its level of commitment in order to give effect to such plans.
 
As with any such joint venture arrangements, differences in views among the joint venture participants may result in delayed decisions or in failures to agree on major matters, potentially adversely affecting the business and operations of the joint ventures and in turn the business and operations of Lyondell.
 
 
Lyondell’s consolidated balance sheet is highly levered and its available cash, access to additional capital and business and future prospects could be limited by its significant amount of debt and other financial obligations and the current weak condition of the capital markets.
 
Lyondell's consolidated balance sheet is highly levered.  At December 31, 2007, Lyondell had $18.5 billion of consolidated debt, including $7.2 billion owed to related parties, the current portion of long-term debt and $834 million of debt for which Lyondell is not the primary obligor.  This debt represented 98% of Lyondell’s consolidated capitalization.  Also at that date, Lyondell had guaranteed $9.1 billion, $8.0 billion of which is reflected on our balance sheet, comprising the $7.2 billion owed to related parties and $834 million for which Lyondell is not the primary obligor; and €1.8 billion and $1.1 billion of debt of related parties and had $1 billion outstanding under the Accounts Receivable Securitization Facility.  Substantially all of the indebtedness to third parties owed or guaranteed by Lyondell is secured by assets of Lyondell pledged as collateral.  In addition, Lyondell has contractual commitments and ongoing pension and post-retirement benefit obligations that will require cash contributions in 2008 and beyond as described in “—Contractual and Other Obligations” under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation.”
 


Lyondell’s level of debt and other obligations could have significant adverse consequences on its business and its future prospects, including that it could:
 
 
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make Lyondell more vulnerable to a downturn in its businesses, its industry or the economy in general as a significant percentage of its cash flow from operations is required to make payments on its indebtedness, making it more difficult to react to changes in its business and in market or industry conditions;
 
 
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require Lyondell to dedicate a substantial portion of its future cash flow from operations to the payment of principal and interest on indebtedness, thereby reducing the availability of its cash flow to grow its business and to fund working capital, capital expenditures, research and development efforts and other general corporate purposes;
 
 
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constrain its ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions, debt service requirements or other purposes, on satisfactory terms or at all, especially given the current weak environment in the capital markets;
 
 
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make it more difficult for it to satisfy its financial obligations;
 
 
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place it at a competitive disadvantage as compared to competitors that have less debt and lower debt service requirements; and
 
 
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make it more vulnerable to increases in interest rates since part of its indebtedness is, and any future debt may be, subject to variable interest rates.
 
For a discussion regarding Lyondell’s ability to pay or refinance its debt, see the “—Liquidity and Capital Resources” section under “Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
 
The substantial level of indebtedness and other financial obligations of Lyondell, as well of LyondellBasell Industries generally, also increases the possibility that LCC, or another borrower whose obligations are guaranteed by LCC, may be unable to generate cash sufficient to pay, when due, the principal of, interest on or other amounts due in respect of its indebtedness and other financial obligations.  If LCC, or another borrower for which LCC or one of its subsidiaries is a guarantor, were unable to pay principal and interest on debt, a default would exist under the terms of that debt instrument, which could have significant adverse consequences for Lyondell.  See “Failure to comply with debt covenants or to pay principal and interest when due could result in an acceleration of debt.”
 
Lyondell requires a significant amount of cash to service its indebtedness, and its ability to generate cash depends on many factors beyond its control and on the performance of its subsidiaries and their ability to make distributions to it.
 
The ability of Lyondell to make payments on and refinance its indebtedness depends on its ability to generate cash from its directly held businesses and on the performance of its subsidiaries and their ability to make distributions.  Because a substantial portion of Lyondell’s operations are conducted by its subsidiaries, its cash flow and ability to repay debt are dependent in part upon cash dividends and distributions or other transfers from its subsidiaries.  Lyondell’s subsidiaries are separate and distinct legal entities.  Payment of dividends and distributions by its subsidiaries to Lyondell may be subject to restrictions under applicable law.
 


The businesses of Lyondell and its subsidiaries may not generate sufficient cash flow from operations to meet debt service obligations, future borrowings may not be available under current or future credit facilities in an amount sufficient to enable Lyondell to pay its indebtedness at or before maturity and it may not be able to refinance its indebtedness on reasonable terms, if at all.  Factors beyond the control of Lyondell and its subsidiaries affect their economic performance and accordingly Lyondell’s ability to make these payments and refinancings.  These factors are discussed elsewhere in these “Risk Factors” and the “Forward-Looking Statements” section.
 
Further, the ability of Lyondell and its subsidiaries to fund capital expenditures and working capital may depend on the availability of funds under lines of credit and other liquidity facilities.  If, in the future, sufficient cash is not generated from operations to meet debt service obligations and funds are not available under lines of credit or other liquidity facilities, Lyondell and its subsidiaries may need to reduce or delay non-essential expenditures, such as capital expenditures and research and development efforts.  In addition, they may need to refinance debt, obtain additional financing or sell assets, which they may not be able to do on reasonable terms, if at all.
 
Although Lyondell is highly leveraged, its parent may cause it to pay dividends for the benefit of the parent and its affiliates.  The debt agreements to which Lyondell is subject do not restrict its ability to pay dividends unless its availability under the Asset-Based Facilities falls below a specified threshold.  Cash used to pay dividends would not be available to pay principal of or interest on Lyondell's debt, to make capital expenditures or for other uses in its business.
 
Lyondell’s variable rate obligations subject it to interest rate risk and in addition interest rates under the Interim Loan are subject to increase for other reasons, which could cause its debt service obligations to increase significantly.
 
As of December 31, 2007, LCC’s variable rate borrowings under the Senior Secured Credit Facilities, the Interim Loan and debt for which Lyondell is not the primary obligor totaled approximately $19,544 million.  Although Lyondell and its co-obligors may have interest rate hedge arrangements in effect from time to time, its interest expense could increase if interest rates increase, because its variable rate obligations may not be fully hedged and they bear interest at floating rates, generally equal to adjusted EURIBOR and LIBOR plus an applicable margin or, in the case of the Senior Secured Credit Facilities, may instead bear interest at the alternate base rate plus an applicable margin.  Additionally, the Asset-Based Facilities, consisting of the Accounts Receivable Securitization Facility and the Inventory-Based Credit Facility, bear interest at floating rates.  In addition, the applicable margin under the Interim Loan (and under any Extended Loan into which it may be converted) will increase by an additional 0.50% on June 18, 2008 and at the end of each three-month period thereafter.  The applicable margin under the Interim Loan (and any such Extended Loan) also is subject to change based on the ratings assigned to indebtedness of LyondellBasell Industries.  A 0.50% increase in the interest rate on variable rate obligations would cost Lyondell approximately $98 million per year in incremental interest expense.
 
Despite current indebtedness levels, Lyondell and its subsidiaries may still be able to incur or guarantee substantially more debt.  This could increase the risks associated with its substantial level of financial obligations.
 
Lyondell and its subsidiaries may be able to incur or guarantee substantial additional indebtedness in the future.  Although its debt instruments contain restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of qualifications and exceptions, and the indebtedness incurred in compliance with these restrictions could be substantial.  Among other things, Lyondell may incur additional obligations to the extent there is available capacity under the revolving credit facility portion of the Senior Secured Credit Facilities or under the Asset-Based Facilities.  See “—Liquidity and Capital Resources” section under “Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations.” If Lyondell and its subsidiaries incur or guarantee additional financial obligations above the existing levels, the risks associated with its substantial level of financial obligations would increase.
 


The terms of the Senior Secured Credit Facilities, the Interim Loan, the Basell Notes due 2015, and the Asset Based Facilities may restrict Lyondell’s current and future operations, particularly its ability to respond to changes or to take certain actions.
 
The Senior Secured Credit Facilities, Interim Loan, Basell Notes due 2015 and Asset-Based Facilities contain a number of restrictive covenants that impose significant operating and financial restrictions on Lyondell, as well as on LyondellBasell Industries, and may limit Lyondell’s ability to engage in acts that may be in its long-term best interests.  These include covenants restricting, among other things, Lyondell’s ability to: incur, assume or permit to exist indebtedness or guarantees; incur, assume or permit to exist liens; make loans and investments; engage in mergers, acquisitions, and other business combinations; prepay, redeem or purchase certain indebtedness; amend or otherwise alter terms of certain indebtedness, and other material agreements; make dispositions of assets; engage in transactions with affiliates; enter into or permit to exist contractual obligations limiting its ability to make distributions or to incur or permit to exist liens; and alter the conduct of business.  In addition, the Senior Secured Credit Facilities and Asset-Backed Facilities contain covenants that limit the level of capital expenditures per year.  The Senior Secured Credit Facilities also require the maintenance by LyondellBasell Industries of specified financial ratios: (1) a maximum First Lien Senior Secured Leverage Ratio (as defined) of 3.75:1.0 on a consolidated basis; and (2) a minimum Consolidated Debt Service Ratio (as defined) of 1.1:1.0 on a consolidated basis.  The Asset-Based Facilities require that total excess availability under the Asset-Based Facilities may not be less than $100 million for two or more consecutive business days.  The Asset-Based Facilities also provide that if for any period of four consecutive fiscal quarters the Fixed Charge Coverage Ratio (as defined) of LyondellBasell Industries, on a consolidated basis, is less than 1.10:1.0, then during the next quarter, total excess availability may not be less than $200 million for five consecutive business days or more, unless, on each such day, total excess availability is at least $150 million and total collateral availability is at least $275 million.  The proceeds of loans under the Inventory-Based Credit Facility may not be used to make certain dividends or distributions by LCC in the event that the daily average total excess availability fails to exceed $225 million on any of the five consecutive business days prior to the date of the dividend or distribution.  The ability to meet those financial ratios and other requirements can be affected by events beyond the control of Lyondell and, over time, these covenants may not be satisfied.
 
Failure to comply with covenants or to pay principal and interest when due could result in an acceleration of debt.
 
A breach by LCC or any other obligor of the covenants or the failure to pay principal and interest when due under any of the Senior Secured Credit Facilities, Interim Loan, Asset Based Facilities or other indebtedness of LCC or its affiliates could result in a default or cross-default under all or some of those instruments.  If any such default or cross-default occurs, the applicable lenders may elect to declare all outstanding borrowings, together with accrued interest and other amounts payable thereunder, to be immediately due and payable.  In such circumstances, the lenders under the Senior Secured Credit Facilities and the Inventory-Based Credit Facility also have the right to terminate any commitments they have to provide further borrowings, and the counterparties under the Accounts Receivable Securitization Facility may terminate further purchases of interests in accounts receivable and receive all collections from previously sold interests until they have collected on their interests in those receivables, thus reducing the entity’s liquidity.  In addition, following such an event of default, the lenders under the Senior Secured Credit Facilities and the Interim Loan and the counterparties under the Asset-Based Inventory Facility have the right to proceed against the collateral granted to them to secure the obligations, which in some cases includes Lyondell’s available cash.  In certain situations to avoid a potential default, LCC may be required to make mandatory prepayments under related party loans.  If the obligations under the Senior Secured Credit Facilities, the Interim Loan, the Asset Based Facilities or any other material financing arrangement were to be accelerated, it is not likely that the obligors would have, or be able to obtain, sufficient funds to make these accelerated payments, and as a result LCC or one or more of its subsidiaries could be forced into bankruptcy or liquidation.  In addition, if Lyondell were unable generally to pay its debts as they become due, PDVSA Oil would have the right to terminate its crude oil contract with Lyondell’s subsidiary Houston Refining.  See “Lyondell’s crude oil contract with PDVSA Oil is subject to the risk of enforcing contracts against non-U.S. affiliates of a sovereign nation and political, force majeure and other risks.”
 


 
Certain of the statements contained in this report are “forward-looking statements” within the meaning of the federal securities laws.  Forward-looking statements can be identified by words such as “estimate,” “believe,” “expect,” “anticipate,” “plan,” “budget” or other words that convey the uncertainty of future events or outcomes.  Many of these forward-looking statements have been based on expectations and assumptions about future events that may prove to be inaccurate.  While management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond Lyondell’s control.  Lyondell’s actual results (including the results of its joint ventures) could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including but not limited to:
 
·  
the availability, cost and price volatility of raw materials and utilities,
·  
the supply/demand balances for Lyondell’s and its joint ventures’ products, and the related effects of industry production capacities and operating rates,
·  
uncertainties associated with the U.S. and worldwide economies, including those due to political tensions in the Middle East and elsewhere,
·  
legal, tax and environmental proceedings,
·  
the cyclical nature of the chemical and refining industries,
·  
operating interruptions (including leaks, explosions, fires, weather-related incidents, mechanical failure, unscheduled downtime, supplier disruptions, labor shortages or other labor difficulties, transportation interruptions, spills and releases and other environmental risks),
·  
current and potential governmental regulatory actions in the U.S. and in other countries,
·  
terrorist acts and international political unrest,
·  
competitive products and pricing pressures,
·  
Lyondell’s ability to implement its business strategies, including integration within LyondellBasell Industries,
·  
risks of doing business outside the U.S., including foreign currency fluctuations,
·  
Lyondell’s ability to service its substantial indebtedness,
·  
available cash and access to capital markets, and
·  
technological developments.
 
Any of these factors, or a combination of these factors, could materially affect Lyondell’s future results of operations (including those of its joint ventures) and the ultimate accuracy of the forward-looking statements.  These forward-looking statements are not guarantees of future performance, and Lyondell’s actual results (including those of its joint ventures) and future developments may differ materially from those projected in the forward-looking statements.  Management cautions against putting undue reliance on forward-looking statements or projecting any future results based on such statements or present or prior earnings levels.
 
All forward-looking statements in this Form 10-K are qualified in their entirety by the cautionary statements contained in this section and elsewhere in this report.  See “Item 1.  Business,” “Item 1A.  Risk Factors,” “Item 3. Legal Proceedings,” “Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Item 7A.  Disclosure of Market Risk” for additional information about factors that may affect Lyondell’s businesses and operating results (including those of its joint ventures).  These factors are not necessarily all of the important factors that could affect Lyondell and its joint ventures.  Use caution and common sense when considering these forward-looking statements.  Lyondell does not intend to update these statements unless securities laws require it to do so.
 
In addition, this report contains summaries of contracts and other documents.  These summaries may not contain all of the information that is important to an investor, and reference is made to the actual contract or document for a more complete understanding of the contract or document involved.
 


 
The data included or incorporated by reference in this report regarding the chemical and refining industries, product capacity and ranking, including Lyondell’s capacity positions, the capacity positions of its competitors for certain products and expected rates of demand, is based on independent industry publications, reports from government agencies or other published industry sources and Lyondell’s estimates.  These estimates are based on information obtained from customers, distributors, suppliers, trade and business organizations and other contacts in the markets in which Lyondell operates and managements’ knowledge and experience.  These estimates involve risks and uncertainties and are subject to change based on various factors, including those discussed under “Item 1A.  Risk Factors” and “Forward-Looking Statements.”
 
 
The body of generally accepted accounting principles is commonly referred to as “GAAP.”  For this purpose, a non-GAAP financial measure is generally defined by the Securities and Exchange Commission as one that purports to measure historical or future financial performance, financial position or cash flows but excludes or includes amounts that would not be so adjusted in the most comparable U.S. GAAP measure.  From time to time Lyondell discloses so-called non-GAAP financial measures, primarily EBITDA, or earnings before interest, taxes, depreciation and amortization of long-lived assets, as well as proportionate share data for Lyondell and its joint ventures.  The non-GAAP financial measures described herein or in other documents issued by Lyondell are not a substitute for the GAAP measures of earnings, for which management has responsibility.
 
Lyondell sometimes uses EBITDA in its communications with investors, financial analysts and the public.  This is because EBITDA is perceived as a useful and comparable measure of operating performance and the contributions of operations to liquidity.  For example, interest expense is dependent on the capital structure and credit rating of a company.  However, debt levels, credit ratings and, therefore, the impact of interest expense on earnings vary in significance between companies.  Similarly, the tax positions of individual companies can vary because of their differing abilities to take advantage of tax benefits, with the result that their effective tax rates and tax expense can vary considerably.  Finally, companies differ in the age and method of acquisition of productive assets, and thus the relative costs of those assets, as well as in the depreciation (straight-line, accelerated, units of production) method, which can result in considerable variability in depreciation and amortization expense between companies.  Thus, for comparison purposes, management believes that EBITDA can be useful as an objective and comparable measure of operating profitability and the contribution of operations to liquidity because it excludes these elements of earnings that do not provide information about the current operations of existing assets.  Accordingly, management believes that disclosure of EBITDA can provide useful information to investors, financial analysts and the public in their evaluation of companies’ operating performance and the contribution of operations to liquidity.
 
As a result of Lyondell’s acquisition by LyondellBasell Industries AF S.C.A., Lyondell’s assets and liabilities were revalued to reflect the values assigned in accounting for the purchase of Lyondell.  To recognize the application of a different basis of accounting following the acquisition, the consolidated financial statements present separately the periods prior to the acquisition (“Predecessor”) and the 11-day period after the acquisition (“Successor”).  For purposes of presenting Management’s Discussion and Analysis of Financial Condition and the Results of Operations, management believes that combining the 2007 Successor and Predecessor periods results in a more meaningful comparison of 2007 and 2006 results of operations and cash flows.  Where appropriate, such as the impact of the step up to fair value on depreciation and amortization expense and the impact of acquisition-related debt on interest expense, the purchase accounting effects are addressed.  A discussion of the 11-day Successor period results and cash flows is also presented.
 
As a result of Lyondell’s acquisition of 100% of Houston Refining, Lyondell sometimes uses throughput margin per barrel information for the fuels segment.  Throughput margin per barrel is a statistic that is commonly reported by independent refiners, and management believes that it provides useful information to help investors, financial analysts and the public analyze and evaluate fuels segment performance compared to other refiners and to industry benchmarks.  Lyondell’s presentation of throughput margins for the fuels segment should not be considered as an alternative to GAAP measures such as fuels segment revenues and operating income.
 
 
 
Lyondell also sometimes reports adjusted net income (loss) or adjusted EBITDA, excluding specified items that are unusual in nature or are not comparable from period to period and that are included in GAAP measures of earnings.  Management believes that excluding these items may help investors compare operating performance between two periods.  Such adjusted data is always reported with an explanation of the items that are excluded.
 
Lyondell historically reported certain proportionate share data for Lyondell and its joint ventures that were not consolidated, but were accounted for by the equity method of accounting.  Accordingly, in Lyondell’s financial statements investors only saw a single line item – investment in a joint venture – for the unconsolidated joint ventures in the balance sheet and one line item – equity income from a joint venture investment – in the income statement.  Therefore, investors may not have obtained a complete appreciation of the magnitude of certain operating and financial measures for Lyondell and its unconsolidated joint ventures and the scope of their business activities.  Management believes that reporting certain proportionate share data may have given investors a more complete picture of the size and scope of the operating activities of Lyondell and its joint ventures and, accordingly, Lyondell may continue to report such proportionate share data for historical periods.
 
 
 
 
The principal manufacturing facilities are set forth below, and are identified by the principal segment or segments using the facility.  The facilities are wholly owned, except as otherwise noted below.
 
         
Location
  
Segment
  
Principal Products
Bayport (Pasadena), Texas (a)*
  
Chemicals
  
PO, PG, PGE, TBA and isobutylene
         
Bayport (Pasadena), Texas †*
  
Chemicals
  
EO, EG and other EO Derivatives
         
Bayport (Pasadena), Texas (b)†
  
Polymers
  
LDPE
         
Beaumont, Texas (c)†                                        
  
Chemicals
  
EG
         
Brunswick, Georgia                                        
  
Chemicals
  
Fragrance and Flavors Chemicals
         
Channelview, Texas (d)†*
  
Chemicals
  
Ethylene, Propylene, Butadiene, Benzene and Toluene
   
Fuels                
  
Alkylate and MTBE
         
Channelview, Texas (a)(e)†*
  
Chemicals
  
PO, BDO, SM and isobutylene
   
Fuels                
  
MTBE
         
Chiba, Japan (f)                                        
  
Chemicals
  
PO, PG and SM
         
Chocolate Bayou, Texas (g)(h)†
  
Chemicals
  
Ethylene, Propylene, Butadiene, Benzene and Toluene
   
Fuels                
  
MTBE
         
Chocolate Bayou, Texas (g) †*
  
Polymers
  
HDPE
         
Clinton, Iowa †*                                        
  
Chemicals
  
Ethylene and Propylene
   
Polymers
  
LDPE and HDPE
         
Corpus Christi, Texas †*
  
Chemicals
  
Ethylene, Propylene, Butadiene and Benzene
         
Fairport Harbor, Ohio *
  
Polymers
  
Performance Polymers
         
Fos-sur-Mer, France (h)
  
Chemicals
  
PO, PG and TBA
   
Fuels                
  
MTBE and ETBE
         
Houston, Texas*                                        
  
Fuels                
  
Gasoline, Diesel, Jet Fuel, Benzene, Toluene and Lube Oils
         
Jacksonville, Florida                                        
  
Chemicals
  
Fragrance and Flavors Chemicals



Location
  
Segment
  
Principal Products
La Porte, Texas †*                                        
  
Chemicals
  
Ethylene and Propylene
   
Polymers
  
LDPE and LLDPE
         
La Porte, Texas †                                        
  
Chemicals
  
VAM and Acetic Acid
         
La Porte, Texas (i)                                        
  
Chemicals
  
Methanol
         
Lake Charles, Louisiana (j)
  
Chemicals
  
Ethylene and Propylene
         
Matagorda, Texas †*                                        
  
Polymers
  
HDPE
         
Morris, Illinois †*                                        
  
Chemicals
  
Ethylene and Propylene
   
Polymers
  
LDPE, LLDPE and Polypropylene
         
Newark, New Jersey                                        
  
Chemicals
  
Denatured Alcohol
         
Pont de Claix, France (k)
  
Chemicals
  
TDI
         
Tuscola, Illinois †                                        
  
Chemicals
  
Ethanol
         
Victoria, Texas (h)†*                                        
  
Polymers
  
HDPE
__________
 
†
Facilities which received the OSHA Star Certification, which is the highest safety designation issued by the U.S. Department of Labor.
*
The facility, or portions of the facility, as applicable, owned by Lyondell are mortgaged as collateral for Lyondell’s credit facility.
(a)
The Bayport PO/TBA plants and the Channelview PO/SM I plant are held by the U.S. PO Joint Venture between Bayer and Lyondell.
(b)
The facility is located on leased land.  The facility is operated by an unrelated party.
(c)
The Beaumont facility is owned by PD Glycol, a partnership owned 50% by an unrelated party.  The facility is located on leased land.
(d)
The Channelview facility has two ethylene processing units.  An unrelated party owns an idled facility at the site on land leased from Lyondell.  Lyondell also operates a styrene maleic anhydride unit and a polybutadiene unit, which are owned by an unrelated party and are located on property leased from Lyondell within the Channelview facility.
(e)
Unrelated equity investors hold a minority interest in the PO/SM II plant at the Channelview facility.
(f)
The PO/SM plant and the PG plant located in Chiba, Japan are owned by Nihon Oxirane, a joint venture owned 60% by an unrelated party.
(g)
Millennium and Occidental each contributed a facility located at the Chocolate Bayou site.  These facilities are not on contiguous property.
(h)
The facility is located on leased land.
(i)
The facility is owned by La Porte Methanol Company, a partnership owned 15% by an unrelated party.
(j)
The Lake Charles ethylene and co-products facility has been idled since the first quarter of 2001.  Although Lyondell retains the physical ability to restart or sell that facility, in the third quarter of 2006 Lyondell determined that it had no expectation of resuming production at that facility.  The facility and land are leased from Occidental under a lease that expires in May 2009.
(k)
The plant is located on land leased by an unrelated party that operates the plant on behalf of Lyondell.  Certain assets are owned by the unrelated party.



 
Lyondell leases its executive offices in downtown Houston, Texas.  Lyondell also maintains leased research facilities in Newtown Square, Pennsylvania.  Lyondell’s Asia Pacific headquarters are located in leased facilities in Hong Kong.  Lyondell also leases various sales facilities.
 
Depending on location and market needs, Lyondell’s production facilities can receive primary raw materials by pipeline, railcar, truck, barge or ship and can deliver finished products by pipeline, railcar, truck, barge, isotank, ship or in drums.  Lyondell charters ships, owns and charters barges and leases isotanks and railcars for the dedicated movement of products between plants, products to customers or terminals, or raw materials to plants, as necessary.  Lyondell also has barge docking facilities and related terminal equipment for loading and unloading raw materials and products.  Lyondell owns and leases railcars for use in its businesses.
 
Lyondell uses an extensive pipeline system, some of which it owns and some of which it leases, extending from Corpus Christi to Mont Belvieu to Port Arthur and around the Lake Charles area.  Lyondell also owns other pipelines in connection with its Chocolate Bayou, Corpus Christi, La Porte, Matagorda and Victoria facilities.  Lyondell uses a pipeline owned and operated by an unaffiliated party to transport ethylene from its Morris facility to its Tuscola facility.  Lyondell also owns and leases several pipelines connecting the Channelview facility, the Refinery and the Mont Belvieu storage facility, which are used to transport raw materials, butylenes, hydrogen, butane, MTBE and unfinished gasolines.  Lyondell’s refinery receives its crude raw materials from pipelines located in the Houston Ship Channel that are owned and operated by unaffiliated parties.
 
Lyondell leases liquid and bulk storage and warehouse facilities at terminals in the Americas, Europe and the Asia Pacific region.  Lyondell owns storage capacity for NGLs, ethylene, propylene and other hydrocarbons in caverns within a salt dome in Mont Belvieu, Texas, and operates additional ethylene and propylene storage facilities with related brine facilities on leased property in Markham, Texas.
 
 
 
 
Lyondell and its joint ventures are, from time to time, defendants in lawsuits, some of which are not covered by insurance.  Many of these suits make no specific claim for relief.  Although final determination of legal liability and the resulting financial impact with respect to any such litigation cannot be ascertained with any degree of certainty, Lyondell does not believe that any ultimate uninsured liability resulting from the legal proceedings in which it or its joint ventures currently are involved (directly or indirectly) will individually, or in the aggregate, have a material adverse effect on the business or financial position of Lyondell.  However, the adverse resolution in any reporting period of one or more of these suits could have a material impact on Lyondell’s results of operations for that period, which may be mitigated by contribution or indemnification obligations of co-defendants or others, or by any insurance coverage that may be available.
 
Although Lyondell and its joint ventures are involved in numerous and varied legal proceedings, a significant portion of their outstanding litigation arose in five contexts: (1) claims for personal injury or death allegedly arising out of exposure to the products produced by or located on the premises of the respective entities; (2) claims for personal injury or death, and/or property damage allegedly arising out of the generation and disposal of chemical wastes at Superfund and other waste disposal sites; (3) claims for personal injury, property damage and/or air, noise and water pollution allegedly arising out of operations; (4) employment and benefits related claims; and (5) commercial disputes.
 


Lyondell—Two shareholder lawsuits styled as class actions have been filed against LCC and its directors.  The lawsuits are entitled Plumbers and Pipefitters Local 51 Pension Fund, On Behalf of Itself and Others Similarly Situated v. Lyondell Chemical Company, et al. (filed July 23, 2007 in the District Court of Harris County, Texas) and Walter E. Ryan Jr., Individually and on Behalf of All Other Similarly Situated v. Lyondell Chemical Company, et al. (filed August 20, 2007 in the Court of Chancery of the State of Delaware).  The Ryan case also named as defendants Basell and its subsidiary that merged with and into Lyondell on December 20, 2007 (“Merger Sub”).  On August 29, 2007, the Plumbers petition was amended to add as defendants Basell and Merger Sub.  The complaints generally allege that (1) LCC’s board of directors breached their fiduciary duties in negotiating and approving the merger and by administering an unfair sale process that failed to maximize shareholder value, and engaged in self dealing by obtaining unspecified personal benefits in connection with the merger not shared equally by other shareholders; and (2) LCC, Basell and Merger Sub aided and abetted the LCC board of directors in breaching their fiduciary duties.  In addition, the complaints allege that LCC and its board of directors failed to disclose in the preliminary proxy statement certain information regarding the merger and the process leading up to the merger.  The plaintiffs in these lawsuits sought to enjoin the merger.  In the Texas case, a hearing was held on November 9, 2007 on a motion filed by plaintiff for a preliminary injunction against the merger and the taking of the shareholder vote.  On November 13, 2007, the judge in the Texas case denied the plaintiff’s motion for preliminary injunction.  On February 1, 2008, the judge granted a plea to the jurisdiction and dismissed the case; the deadline for plaintiff to appeal this decision expired March 3, 2008.  In the Delaware case, a hearing was held on November 26, 2007 on motions filed by defendants for summary judgment and for certification of the plaintiff class.  The court granted the motion for certification and has not yet ruled on the other motion.  The merger was consummated on December 20, 2007.  Plaintiffs seek rescission of the merger, a constructive trust upon any benefits improperly received by any of the defendants, other unspecified equitable relief, and an award of attorneys’ fees and costs.  LCC believes that the lawsuits are without merit and that it has valid defenses to all claims and will vigorously defend this litigation.
 
On April 12, 2005, BASF Corporation (“BASF”) filed a lawsuit against LCC in the Superior Court of New Jersey, Morris County asserting various claims relating to alleged breaches of a propylene oxide sales contract and seeking damages in excess of $100 million.  LCC denies it breached the contract.  LCC believes the maximum refund due to BASF is $22.5 million on such propylene oxide sales and has paid such amount to BASF.  On August 13, 2007, the jury returned a verdict in favor of BASF in the amount of approximately $170 million (which includes the above $22.5 million).  On October 3, 2007, the judge determined that prejudgment interest on the verdict would be $36 million.  LCC is appealing this verdict and has posted a bond, which is collateralized by a $200 million letter of credit.  LCC does not expect the verdict to result in any material adverse effect on its business, financial position, liquidity or results of operations.
 
Beginning November 2004, several lawsuits styled as class actions on behalf of U.S. purchasers were filed in federal court against LCC and certain other chemical companies alleging violations of U.S. antitrust law in connection with the manufacture and sale of polyether polyols, methylene diphenyl diisocyanate (“MDI”) and toluene diisocyanate (“TDI”), and seeking treble damages in an unspecified amount.  The lawsuits have been consolidated by the Judicial Panel for Multidistrict Litigation in the United States District Court for the District of Kansas.  In addition, in May 2006, two lawsuits styled as class actions were filed in the Ontario Superior Court of Justice, London, Ontario, Canada and the Superior Court, Province of Quebec, District of Quebec, Canada, both alleging claims and seeking relief similar to that in the Multidistrict Litigation.  In June 2007, LCC was named as an additional defendant in a case previously filed in the Superior Court for the State of California, County of San Francisco, on behalf of indirect purchasers of polyether polyols, MDI and TDI and other products alleging claims and seeking relief similar to that in the Multidistrict Litigation.  The case has been stayed pending further order of the California court. LCC believes that it has valid defenses to all claims.  Also, LCC received a document subpoena dated February 15, 2006 from the Antitrust Division of the U.S. Department of Justice (the “DOJ”) regarding the manufacture and sale of the above products.  LCC cooperated with the DOJ in connection with the subpoena and, on December 10, 2007, the DOJ notified LCC that it had closed the grand jury investigation of possible antitrust violations by manufacturers of TDI, MDI and polyether polyols.  At this time, LCC believes it has not violated any antitrust laws.  LCC does not expect the resolution of these matters to result in any material adverse effect on its business, financial position, liquidity or results of operations.
 


Millennium—In 2004, Lyondell’s Millennium subsidiary received requests from the staff of the Northeast Regional Office of the Securities and Exchange Commission for the voluntary production of documents in connection with an informal inquiry into the previously disclosed restatement of Millennium’s financial statements for the years 1998 through 2002 and for the first quarter of 2003.  Millennium has complied with all such requests received.  On November 26, 2007, Millennium was notified that the Securities and Exchange Commission had completed its investigation and did not intend to recommend any enforcement action.
 
Together with alleged past manufacturers of lead-based paint and lead pigments for use in paint, Millennium has been named as a defendant in various legal proceedings alleging personal injury, property damage, and remediation costs allegedly associated with the use of these products.  The plaintiffs include individuals and governmental entities, and seek recovery under a variety of theories, including negligence, failure to warn, breach of warranty, conspiracy, market share liability, fraud, misrepresentation and nuisance.  The majority of these legal proceedings assert unspecified monetary damages in excess of the statutory minimum and, in certain cases, seek equitable relief such as abatement of lead-based paint in buildings.  Legal proceedings relating to lead pigment or paint are in various trial stages and post-dismissal settings, some of which are on appeal.
 
Millennium’s defense costs to date for lead-based paint and lead pigment litigation largely have been covered by insurance.  Millennium has not accrued any liabilities for any lead-based paint and lead pigment litigation.  Millennium has insurance policies that potentially provide approximately $1 billion in indemnity coverage for lead-based paint and lead pigment litigation.  Millennium’s ability to collect under the indemnity coverage would depend upon, among other things, the resolution of certain potential coverage defenses that the insurers are likely to assert and the solvency of the various insurance carriers that are part of the coverage block at the time of such a request.  As a result of insurance coverage litigation initiated by Millennium, an Ohio trial court issued a decision in 2002 effectively requiring certain insurance carriers to resume paying defense costs in the lead-based paint and lead pigment cases.  Indemnity coverage was not at issue in the Ohio court’s decision.  On February 23, 2006, certain Lloyd’s, London insurance underwriters filed a declaratory judgment action in the Supreme Court of the State of New York (trial court) against several of their policyholders, including Millennium, contesting their responsibility to provide insurance coverage for all of the lead-based paint and lead pigment cases, including the Rhode Island case discussed below.  On March 7, 2006, Millennium filed an amended complaint in the Ohio case referenced above that revived its Ohio state court litigation, seeking, among other relief, a declaratory judgment as to the responsibility of all of its insurance carriers for any judgments or settlements in connection with any lead-based paint and lead pigment litigation involving Millennium.  On April 26, 2006, the judge in the Ohio case granted Millennium’s motion to amend the complaint to include all insurance carriers.  On March 14, 2006, Millennium filed a motion to dismiss the New York case in favor of the pre-existing Ohio action, and on August 8, 2006, the Supreme Court of the State of New York dismissed the declaratory judgment action as to all carriers except those that asserted cross claims against Millennium, which cross claims were stayed.  On or about October 5, 2006, Lloyd’s, London filed a notice of appeal of the New York trial court’s decision.  This appeal was heard by the New York Supreme Court Appellate Division on October 3, 2007.  On October 25, 2007, the Appellate Division upheld the trial court’s dismissal of Lloyd’s, London’s declaratory judgment action.  In addition to the declaratory judgment action initiated by certain Lloyd’s, London underwriters, certain excess carriers filed cross-claims in New York seeking similar declaratory relief.  These claims were initially stayed and were subsequently dismissed on September 18, 2007.  On December 28, 2007, some, but not all, of these excess carriers filed a notice of appeal of the trial court’s dismissal.  The insurance carriers have in the past and may in the future attempt to deny indemnity coverage if there is ever a settlement or a final, non-appealable adverse judgment in any lead-based paint or lead pigment case.
 


After owning the Glidden Paints business for six months, in 1986, a predecessor of a current subsidiary of Millennium sold, through a stock sale, its Glidden Paints business.  As part of that sale, the seller and purchaser agreed to provide indemnification to each other against certain claims made during the first eight years after the sale, and the purchaser agreed to fully indemnify the seller against such claims made after the eight-year period.  With the exception of two cases described below, all pending lead-based paint and lead pigment litigation involving Millennium, including the Rhode Island case, were filed after the eight-year period.  Accordingly, Millennium believes that it is entitled to full indemnification from the purchaser against lead-based paint and lead pigment cases filed after the eight-year period.  The purchaser disputes that it has such an indemnification obligation, and claims that the seller must indemnify it. As Millennium has not paid either a settlement or any judgment, its indemnification claims have not been finally resolved.  The only two remaining cases originally filed within the eight-year period following the 1986 sale of the Glidden Paints business include as parties a current Millennium subsidiary and an alleged predecessor company.  One case filed by the New York City Housing Authority remains inactive.  The other matter is a personal injury case in Ohio.  On January 25, 2007, the Ohio Court of Appeals affirmed summary judgment in favor of Millennium and its co-defendants and, on June 20, 2007, the Ohio Supreme Court declined to hear plaintiff’s appeal.
 
Lyondell believes that Millennium has valid defenses to all pending lead-based paint and lead pigment proceedings and is vigorously defending them.  However, litigation is inherently subject to many uncertainties.  Additional lead-based paint and lead pigment litigation may be filed against Millennium in the future asserting similar or different legal theories and seeking similar or different types of damages and relief, and any adverse court rulings or determinations of liability, among other factors, could affect the litigation by encouraging an increase in the number of future claims and proceedings.  In addition, from time to time, legislation and administrative regulations have been enacted or proposed to impose obligations on present and former manufacturers of lead-based paint and lead pigment respecting asserted health concerns associated with such products or to overturn successful court decisions.  Millennium is unable to predict the outcome of lead-based paint and lead pigment litigation, the number or nature of possible future claims and proceedings, or the effect that any legislation and/or administrative regulations may have on Millennium.  In addition, management cannot reasonably estimate the scope or amount of the costs and potential liabilities related to such litigation, or any such legislation and regulations.  Accordingly, Lyondell has not accrued any amounts for such litigation.
 
Since the beginning of 2007, 29 cases have been dismissed either voluntarily, upon defendants’ motion, or tried to a jury verdict favorable to defendants, including Millennium.  Millennium currently remains named a defendant in 26 cases arising from Glidden’s manufacture of lead pigments.  These cases are in various stages of the litigation process.  Of the 26 cases, most seek damages for personal injury and are brought by individuals, and four of the cases seek damages and abatement remedies based on public nuisance and are brought by states, cities and/or counties in three states (California, Ohio and Rhode Island).
 
On October 29, 2002, after a trial in which the jury deadlocked, the court in State of Rhode Island v. Lead Industries Association, Inc., et al. (which commenced in the Superior Court of Providence, Rhode Island, on October 13, 1999) declared a mistrial.  The sole issue before the jury was whether lead pigment in paint in and on public and private Rhode Island buildings constituted a “public nuisance.”  The new trial in this case began on November 1, 2005.  On February 22, 2006, a jury returned a verdict in favor of the State of Rhode Island finding that the cumulative presence of lead pigments in paints and coatings on buildings in the state constitutes a public nuisance; that a Millennium subsidiary and other defendants either caused or substantially contributed to the creation of the public nuisance; and that those defendants, including the Millennium subsidiary, should be ordered to abate the public nuisance.  On February 28, 2006, the judge held that the state could not proceed with its claim for punitive damages.  On February 26, 2007, the court issued its decision denying the post-verdict motions of the defendants, including Millennium, for a mistrial or a new trial.  The court concluded that it would enter an order of abatement and appoint a special master to assist the court in determining the scope of the abatement remedy. On March 16, 2007, the court entered a final judgment on the jury’s verdict.  On March 20, 2007, Millennium filed its notice of appeal with the Rhode Island Supreme Court.  On December 18, 2007, the trial court appointed two special masters to serve as “examiners” and to assist the trial court in the proposed abatement proceedings.
 


 
From time to time Lyondell and its joint ventures receive notices or inquiries from federal, state or local governmental entities of alleged violations of environmental laws and regulations pertaining to, among other things, the disposal, emission and storage of chemical and petroleum substances, including hazardous wastes.  Any such alleged violations may become the subject of enforcement actions, settlement negotiations or other legal proceedings and may (individually or in the aggregate) involve monetary sanctions of $100,000 or more (exclusive of interest and costs).
 
Lyondell’s accrued liability for future environmental remediation costs at current and former plant sites and other remediation sites totaled $207 million as of December 31, 2007.  The remediation expenditures are expected to occur over a number of years, and not to be concentrated in any single year.  In the opinion of management, there is no material estimable range of reasonably possible loss in excess of the liabilities recorded for environmental remediation.  However, it is possible that new information about the sites for which the accrual has been established, new technology or future developments such as involvement in investigations by regulatory agencies, could require Lyondell to reassess its potential exposure related to environmental matters.  The liabilities for individual sites range from less than $1 million to $145 million.  The $145 million liability relates to the Kalamazoo River Superfund Site.  For additional information regarding environmental matters, including the liability related to the Kalamazoo River Superfund Site, see “Item 1A. Risk Factors—Risks Relating to the Businesses—Lyondell’s  operations and assets are subject to extensive environmental, health and safety and other laws and regulations, which could result in material costs or liabilities,” “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Environmental Matters” and Note 20 to the Consolidated Financial Statements.
 
In December 2006, the State of Texas filed a lawsuit in the District Court, Travis County, Texas, against Equistar and its owners, Lyondell and Millennium, alleging past violations of various environmental regulatory requirements at Equistar’s Channelview, Chocolate Bayou and La Porte, Texas facilities and Millennium’s La Porte, Texas facility, and seeking an unspecified amount of damages.  The previously disclosed Texas Commission on Environmental Quality (“TCEQ”) notifications alleging noncompliance of emissions monitoring requirements at Equistar’s Channelview facility and Millennium’s La Porte facility and seeking civil penalties of $167,000 and $179,520, respectively, have been included as part of this lawsuit.  Lyondell does not believe that the ultimate resolution of this matter will have a material adverse effect on the business, financial position, liquidity or results of operations of Lyondell.
 
Equistar—In May 2007, the TCEQ notified Equistar that it is seeking a civil penalty of $160,843 in connection with alleged noncompliance during 2002, 2005 and 2006 with various air pollution regulations at the Channelview facility and that it is seeking a civil penalty of $153,330 in connection with alleged noncompliance during 2005 and 2006 with various air pollution regulations at the Channelview facility.  These matters were later combined with a similar smaller matter at Channelview and resolved in December 2007 for a penalty of $182,316.
 
In October 2007, the TCEQ notified Equistar that it is seeking a penalty of $129,400 in connection with alleged exceedances of permitted emissions at Equistar’s Chocolate Bayou plant.  In December 2007, the penalty was reduced to $126,400 in resolution of this matter.
 
Millennium—A Millennium subsidiary has been identified as a PRP with respect to the Kalamazoo River Superfund Site.  The site involves cleanup of river sediments and floodplain soils contaminated with polychlorinated biphenyls, cleanup of former paper mill operations, and cleanup and closure of landfills associated with the former paper mill operations.  Litigation concerning the matter commenced in December 1987 but was subsequently stayed and is being addressed under CERCLA.  Millennium’s ultimate liability for the Kalamazoo River Superfund Site will depend on many factors that have not yet been determined, including the ultimate remedy selected, the determination of natural resource damages, the number and financial viability of the other PRPs, and the determination of the final allocation among the PRPs.
 


Houston Refining—In May 2007, the TCEQ notified Houston Refining that it is seeking a civil penalty of $892,700 in connection with alleged noncompliance with various provisions of the Texas Clean Air Act during 2006 and 2005.  The TCEQ subsequently reduced the proposed penalty to $484,040.  Houston Refining does not believe that the ultimate resolution of the matter will have a material adverse effect on the business, financial position, liquidity or results of operation of Houston Refining. 
 
 
Lyondell and its joint ventures are parties to various indemnification arrangements, including arrangements entered into in connection with acquisitions, divestitures and the formation of joint ventures.  For example, Lyondell entered into indemnification arrangements in connection with the transfer of assets and liabilities from Atlantic Richfield Company to Lyondell prior to Lyondell’s initial public offering and in connection with Lyondell’s acquisition of the outstanding shares of ARCO Chemical Company; Equistar and its owner companies (including Lyondell and Millennium) entered into indemnification arrangements in connection with the formation of Equistar; and Millennium entered into indemnification arrangements in connection with its demerger from Hanson plc.  Pursuant to these arrangements, Lyondell and its joint ventures provide indemnification to and/or receive indemnification from other parties in connection with liabilities that may arise in connection with the transactions and in connection with activities prior to completion of the transactions.  These indemnification arrangements typically include provisions pertaining to third party claims relating to environmental and tax matters and various types of litigation.  As of December 31, 2007, Lyondell has not accrued any significant amounts for such indemnification obligations, and is not aware of other circumstances that would be likely to lead to significant future indemnification claims against Lyondell.  Lyondell cannot determine with certainty the potential amount of future payments under the indemnification arrangements until events arise that would trigger a liability under the arrangements.
 
 
 
Lyondell held a special meeting of its shareholders on November 20, 2007.  At the special shareholder meeting, each of the following proposals was approved by Lyondell’s shareholders:
 
1.
Approve and adopt the Agreement and Plan of Merger, dated as of July 16, 2007, among Basell, BIL Acquisition Holdings Limited and Lyondell, as such agreement may be amended from time to time; and
 
2.
Adjourn the special meeting, if necessary, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve and adopt the merger agreement.
 
The votes, as tabulated by the independent inspector of elections, were as follows:
 
1.           Approval and Adoption of Merger Agreement:
   
For:
  
166,895,281
    
   
Against:
  
747,927
    
   
Abstain:
  
365,305
    
   
Broker Non-Votes:
  
0
    
 
2.           Adjournment Proposal:
   
For:
  
156,544,739
    
   
Against:
  
11,049,706
    
   
Abstain:
  
414,068
    
   
Broker Non-Votes:
  
0
    


 
 
 
Lyondell does not have a class of equity securities registered pursuant to Section 12 of the Securities Exchange Act of 1934.  There is no established public trading market for the common stock of Lyondell.  As a result of LyondellBasell Industries’ acquisition of Lyondell on December 20, 2007, Lyondell is an indirect wholly owned subsidiary of LyondellBasell Industries.
 
 
Prior to Lyondell’s acquisition by LyondellBasell Industries, Lyondell paid $0.225 per share quarterly cash dividends on its shares of common stock (which were paid after the end of the quarter to which they related).  During 2007 and 2006, Lyondell paid $229 million and $223 million, respectively, in cash dividends on its common stock.
 
LCC is party to debt agreements that contain restrictions that provide that it may not pay dividends unless (1) the daily average Total Excess Availability (as defined in the Asset-Based Inventory Facility credit agreement) exceeds $225 million on each business day during the five consecutive business days immediately preceding the date of such dividend payment and (2) on the date of such dividend payment, no default shall have occurred and be continuing.  Furthermore, pursuant to a settlement agreement entered into with the Pension Benefit Guaranty Corporation in 1998, LCC may not pay extraordinary dividends (as defined by regulations under the Employee Retirement Income Security Act of 1974, as amended) without providing a letter of credit meeting certain specified requirements.  In February 2002, LCC provided a letter of credit meeting these requirements.
 
 
Lyondell did not repurchase any shares of its common stock during the fourth quarter of 2007.
 

 


 
The following selected financial data should be read in conjunction with the Consolidated Financial Statements and the notes thereto and “Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
 
   
Successor
    
Predecessor
  
   
For the
period from
December 21
through
December 31,
    
For the
period from
January 1
through
December 20,
    
For the year ended December 31,
  
Millions of dollars
  
2007 (a)
    
2007 (a)
    
2006 (b)
    
2005 (b)
    
2004 (b)
    
2003
  
Results of Operations Data:
                                    
Sales and other operating
revenues
   $ 929     $ 27,674     $ 20,882     $ 17,257     $ 5,850     $ 3,781  
Income (loss) from equity
investments
     - -       2       78       124       451       (103 )
Income (loss) from continuing
operations (c)
     (146 )     84       736       540       137       (302 )
Balance Sheet Data:
                                                
Total assets
     27,313               17,846       15,089       16,065       7,633  
Long-term debt
     17,454               8,018       5,974       7,412       4,151  
Cash Flow Data:
                                                
Cash provided (used) by –
                                                
Operating activities
     (271 )     1,934       1,222       1,594       354       99  
Investing activities
     (157 )     879       (2,868 )     (211 )     424       (218 )
Financing activities
     (150 )     (2,300 )     1,491       (1,580 )     (416 )     266  

__________

(a)  
As a result of the acquisition of Lyondell Chemical Company (“Lyondell”) by LyondellBasell Industries AF SCA (“LyondellBasell Industries”) on December 20, 2007, Lyondell’s assets and liabilities were revalued to reflect the values assigned in Lyondell Basell Industries’ accounting for the purchase of Lyondell, resulting in a new basis of accounting.  To indicate the application of a different basis of accounting for the period subsequent to the acquisition, the 2007 financial statements present separately the period prior to the acquisition (“Predecessor”) and the 11-day period after the acquisition (“Successor”).
 
(b)  
Results of operations and cash flow data reflect the consolidation of Houston Refining LP (“Houston Refining”) from August 16, 2006, and Millennium Chemicals Inc. (“Millennium”) and Equistar Chemicals, LP (“Equistar”) for the full year 2006 and 2005, and for December 2004.  Balance sheet data include Houston Refining as of December 31, 2006, and Millennium and Equistar balances from December 31, 2004.  Lyondell’s interests in Houston Refining and Equistar were accounted for using the equity method prior to August 16, 2006 and December 1, 2004, respectively.
 
(c)  
Loss from continuing operations for the 2007 Successor period included an after-tax charge of $95 million for purchased in-process research and development as a result of LyondellBasell Industries’ December 20, 2007 acquisition of Lyondell.  Income from continuing operations for the 2007 Predecessor period included after-tax charges of $424 million resulting from the December 20, 2007 acquisition and related debt repayments.  Income from continuing operations for 2006 included after-tax charges of $114 million related to the termination of Houston Refining’s previous crude supply agreement and $69 million for impairment of the net book value of the idled Lake Charles, Louisiana ethylene facility.  Income from continuing operations for 2005 included a $127 million after-tax charge for impairment of the net book value of the Lake Charles, Louisiana toluene diisocyanate facility.  Income from continuing operations for 2004 included a $64 million after-tax charge for purchased in-process research and development as a result of Lyondell’s acquisition of Millennium on November 30, 2004 and the resulting consolidation of Equistar.
 


Lyondell’s computation of the ratios of earnings to fixed charges for the five-year period ended December 31, 2007 is reflected in the table below.
 
   
Successor
    
Predecessor
  
   
For the
period from
December 21
through
December 31,
    
For the
period from
January 1
through
December 20,
    
For the year ended December 31,
  
Millions of dollars, except ratio data
  
2007
    
2007
    
2006
    
2005
    
2004
    
2003
  
Income (loss) from continuing
operations before income taxes
   $ (169 )   $ 170     $ 1,146     $ 733     $ 152     $ (481 )
Deduct income (loss) from
equity investments
     - -       2       78       124       451       (103 )
Add distributions of earnings from
equity investments
     - -       - -       73       123       424       144  
Earnings adjusted for equity
investments
     (169 )     168       1,141       732       125       (234 )
Fixed charges:
                                                
Interest expense, gross
     56       614       648       634       464       415  
Portion of rentals representative of
interest
     3       96       69       59       25       22  
Total fixed charges before
capitalized interest
     59       710       717       693       489       437  
Capitalized interest
     - -       - -       - -       - -       - -       19  
Total fixed charges including
capitalized interest
     59       710       717       693       489       456  
Earnings before fixed charges
   $ (110 )   $ 878     $ 1,858     $ 1,425     $ 614     $ 203  
Ratio of earnings to fixed charges (a)
     - -       1.2       2.6       2.1       1.3       - -  
__________

(a)  
For the eleven days ended December 31, 2007, and for the year 2003, earnings were insufficient to cover fixed charges by $169 million and $253 million, respectively.
 
 
 
This discussion should be read in conjunction with the information contained in the Consolidated Financial Statements of Lyondell Chemical Company, together with its consolidated subsidiaries (collectively, “Lyondell” or “the Company”), and the notes thereto.
 
Lyondell’s consolidated operating results are determined using the last-in, first-out (“LIFO”) method of accounting for inventory (see Note 2 to the Consolidated Financial Statements) and are discussed in the following “Overview” and “Results of Operations” sections.  This discussion is supplemented by a discussion of Lyondell’s segment operating results under the “Segment Analysis” heading of “Results of Operations.”  For purposes of evaluating segment results, management reviews operating results determined using the first-in, first-out (“FIFO”) method of accounting for inventory.
 
In addition to comparisons of annual operating results, Lyondell has included, as additional disclosure, certain “trailing quarter” comparisons of fourth quarter 2007 operating results to third quarter 2007 operating results.  Lyondell’s businesses are highly cyclical, in addition to experiencing some less significant seasonal effects.  Trailing quarter comparisons may offer important insight into current business directions.
 


References to industry benchmark prices or costs, including the weighted average cost of ethylene production, are generally to industry prices and costs reported by Chemical Marketing Associates, Incorporated (“CMAI”), except that crude oil and natural gas and naphtha benchmark price references are to industry prices reported by Platts, a reporting service of The McGraw-Hill Companies.
 
 
On December 20, 2007, Basell AF S.C.A. (“Basell”) indirectly acquired the outstanding common shares of Lyondell for $48 per common share in an all cash transaction pursuant to an agreement and plan of merger dated as of July 16, 2007.  As a result, Lyondell became an indirect wholly owned subsidiary of Basell, and Basell was renamed LyondellBasell Industries AF S.C.A. (together with its consolidated subsidiaries, “LyondellBasell Industries” and without Lyondell, the “Basell Group”).  The purchase of Lyondell’s outstanding common stock and other equity instruments, assumption of debt and related transaction costs resulted in a total purchase price of $21 billion.  See “Financial Condition” below for a discussion of the financing of the transaction.
 
Concurrent with the acquisition, Lyondell sold certain of its non-U.S. subsidiaries to LyondellBasell Industries for their fair value of $1,288 million, including $668 million of debt payable to Lyondell by one of the subsidiaries.  The trade sales revenues of these subsidiaries were $2,459 million for the 2007 Predecessor period (defined below).
 
From December 20, 2007, Lyondell’s consolidated financial statements reflect a revaluation of Lyondell’s assets and liabilities to the values assigned in LyondellBasell Industries’ accounting for the purchase of Lyondell.  In addition, Lyondell has recognized in its financial statements $834 million of debt for which it is not the primary obligor, but which it has guaranteed, and which was used by LyondellBasell Industries in the acquisition of Lyondell, and related debt issuance costs of $179 million (collectively, “push-down debt”).
 
While the accompanying consolidated financial statements present separately the period prior to the acquisition (“Predecessor”) and the 11-day period after the acquisition (“Successor”) to recognize the application of a different basis of accounting, management believes that combining the 2007 Successor and Predecessor periods results in a more meaningful comparison of 2007 and 2006 results of operations and cash flows.  Where appropriate, such as the impact of the step up to fair value on depreciation and amortization expense and the impact of acquisition-related debt on interest expense, the purchase accounting effects are addressed.  A discussion of the 11-day Successor period results and cash flows is also presented.
 


The combined Predecessor and Successor period results for 2007, which are discussed in these “Results of Operations,” are presented in the following table:
 
   
Successor
    
Predecessor
              
   
For the
period from
December 21
through
    
For the
period from
January 1
through
    
Combined
    
Predecessor
  
   
December 31,
    
December 20,
    
For the year ended December 31,
  
Millions of dollars
  
2007
    
2007
    
2007
    
2006
    
2005
  
Sales and other operating revenues
   $ 929     $ 27,674     $ 28,603     $ 20,882     $ 17,257  
Cost of sales
     (950 )     (25,555 )     (26,505 )     (18,555 )     (15,307 )
Asset impairments
     - -       - -       - -       (106 )     (195 )
Selling, general and administrative expenses
     (8 )     (697 )     (705 )     (509 )     (437 )
Research and development expenses
     (2 )     (72 )     (74 )     (72 )     (70 )
Purchased in-process research
and development
     (95 )     - -       (95 )     - -       - -  
Acquisition-related costs
     - -       (62 )     (62 )     - -       - -  
Operating income (loss)
     (126 )     1,288       1,162       1,640       1,248  
Interest expense
     (56 )     (614 )     (670 )     (648 )     (634 )
Interest income
     4       33       37       39       32  
Other income (expense), net
     9       (539 )     (530 )     37       (37 )
Income from equity investments
     - -       2       2       78       124  
(Provision for) benefit from income taxes
     23       (86 )     (63 )     (410 )     (193 )
Income (loss) from continuing operations
     (146 )     84       (62 )     736       540  
Loss from discontinued operations,
net of tax
     - -       (85 )     (85 )     (550 )     (9 )
Net income (loss)
   $ (146 )   $ (1 )   $ (147 )   $ 186     $ 531  

 
 
General—Lyondell is a leading global manufacturer of chemicals, a North American manufacturer of plastics, a refiner of heavy, high sulfur crude oil and a significant producer of gasoline blending components.  As a result of the acquisition by LyondellBasell Industries, Lyondell reassessed segment reporting based on the current management structure, including the impact of the integration of Lyondell’s businesses into the LyondellBasell Industries’ portfolio of businesses.  Based on this analysis, Lyondell concluded that management is focused on the chemicals segment, the polymers segment and the fuels segment.  See “Segment Analysis” below for a description of the segments.
 
On May 15, 2007, Lyondell completed the sale of its worldwide inorganic chemicals business in a transaction valued at approximately $1.3 billion, including the acquisition of working capital and the assumption of certain liabilities directly related to the business (see Note 4 to the Consolidated Financial Statements).  As a result, a substantial portion of the inorganic chemicals business segment is being reported as a discontinued operation, including comparative periods presented.  Unless otherwise indicated, the following discussion of Lyondell’s operating results relates only to Lyondell’s continuing operations.
 
The fuels segment includes Lyondell’s equity investment in Houston Refining LP (formerly known as LYONDELL-CITGO Refining LP or LCR), a joint venture with CITGO Petroleum Corporation (“CITGO”), through August 15, 2006.  Lyondell purchased CITGO’s 41.25% interest in Houston Refining LP (“Houston Refining”) on August 16, 2006 and, as a result of the transaction, Houston Refining became a wholly owned subsidiary of Lyondell.  The operations of Houston Refining are consolidated prospectively from August 16, 2006.
 


2007 Versus 2006—Strong gasoline markets during 2007 and 2006 benefited refining margins and margins for other gasoline blending components.  However, continued escalation of prices for crude oil and natural gas liquids during 2007 contributed to higher raw material costs for chemical producers that put pressure on chemical product margins.
 
Lyondell’s 2007 results from continuing operations were negatively affected by costs associated with the acquisition of Lyondell by LyondellBasell Industries and the related refinancing of debt.  See the following discussion of “Results of Operations – Income from Continuing Operations” for additional items affecting the periods’ results.
 
Lyondell’s 2007 underlying operating results from continuing operations were negatively affected by lower overall chemicals product margins in the 2007 periods due primarily to the escalation of raw material prices during 2007.  These negative effects were only partly offset by improved fuels segment results, which reflected Lyondell’s increased ownership of and higher profitability from Houston Refining operations compared to 2006 and higher profitability from other gasoline blending components.  Fuels segment 2006 results included a $176 million pretax charge, representing Lyondell’s proportionate share of a crude supply contract termination cost related to the August 16, 2006 purchase of CITGO’s share in Houston Refining.
 
2006 Versus 2005—During 2006 and 2005, the markets for Lyondell’s chemicals and polymers products generally continued to experience favorable supply and demand conditions.  Refiners continued to experience tight supply and demand conditions in 2006 and 2005.  Raw material costs averaged higher in 2006 compared to 2005, resulting primarily from the effect of higher average crude oil prices.  Despite increased volatility during 2006 and a decrease late in the year, crude oil prices averaged higher in 2006 compared to 2005.
 
Lyondell’s results from continuing operations for 2006 compared to 2005 primarily reflected a higher contribution from the fuels segment as refining operations more than offset the effects of lower methyl tertiary butyl ether (“MTBE”) and ethyl tertiary butyl ether (“ETBE”) margins.  The improved contribution from refining results reflected Lyondell’s increased ownership of Houston Refining, the benefits of a new market-based crude oil contract and higher operating rates compared to 2005, which included the negative effects of planned and unplanned outages.  Results for chemicals and polymers products in 2006 compared to 2005 reflected higher average sales prices, which more than offset higher costs, primarily higher raw material costs.
 
MTBE/ETBE profitability decreased during 2006 as a result of significantly lower margins over raw material costs compared to 2005, when the MTBE/ETBE margins benefited from strong demand and tight gasoline supplies, which were exacerbated by industry supply disruptions caused by the U.S. Gulf Coast hurricanes.  In the third quarter 2005, the U.S. Gulf Coast hurricanes, Katrina and Rita, disrupted market supply/demand balances as well as the operations of most Gulf Coast refiners and producers of ethylene.
 
Results of continuing operations for 2006 included the pretax charge of $176 million, representing Lyondell’s share of costs related to termination of Houston Refining’s previous crude supply agreement and a pretax charge of $106 million related to impairment of the net book value of Lyondell’s idled Lake Charles, Louisiana ethylene plant.  Results for 2006 also included a benefit from the settlement of disputes among Lyondell, CITGO, Petróleos de Venezuela, S.A. (“PDVSA”) and their respective affiliates, which resulted in net payments of $74 million to Lyondell.  Results for 2005 included pretax charges of $195 million for impairment of the net book value of Lyondell’s Lake Charles, Louisiana, toluene diisocyanate (“TDI”) plant and related assets.  See the following discussion of “Results of Operations – Income from Continuing Operations” for additional items affecting the periods’ results.
 
In 2006, income from discontinued operations included pretax charges of $552 million, primarily for impairment of goodwill related to the inorganic chemicals business.
 
Successor Period—The $146 million net loss in the Successor period was primarily due to a $95 million charge for acquisition-related in-process research and development (“IPR&D”), sales of inventory carried at fair value as a result of the acquisition and higher interest expense due to acquisition-related increases in debt levels.  The IPR&D charge was not tax deductible.


 
As a result of Lyondell’s acquisition of CITGO’s 41.25% interest in Houston Refining on August 16, 2006, Houston Refining is a wholly owned consolidated subsidiary, and Lyondell’s operating income includes the operations of Houston Refining prospectively from August 16, 2006.  Prior to August 16, 2006, Lyondell’s activities in the fuels business segment were conducted through its 58.75% interest in Houston Refining, accounted for using the equity method.
 
Revenues—Lyondell’s revenues were $28,603 million in 2007, $20,882 million in 2006 and $17,257 million in 2005.  A portion of the increases in 2007 and 2006 were due to the 2006 consolidation of Houston Refining, which added $8,485 million and $2,849 million to Lyondell’s 2007 and 2006 revenues, respectively.  The remaining increases of $2,085 million, or 12%, in 2007 and $776 million, or 4%, in 2006 were primarily due to higher average product sales prices.
 
Cost of Sales—Lyondell’s cost of sales was $26,505 million in 2007, $18,555 million in 2006 and $15,307 million in 2005.  The consolidation of Houston Refining added $7,609 million and $2,326 million to cost of sales in 2007 and 2006, respectively.  Cost of sales also included net charges of $82 million in 2007 related to commercial disputes, including amounts associated with the 2005 shutdown of Lyondell’s Lake Charles TDI facility, and charges representing Lyondell’s exposure to industry losses expected to be underwritten by industry insurance consortia of $24 million and $49 million in 2006 and 2005, respectively.  The remaining increases of $2,609 million, or 16%, in 2007 and $947 million, or 6%, in 2006 were primarily the result of higher costs, primarily higher average raw materials costs, resulting from the effects of higher crude oil and NGL-based raw material prices.
 
Asset Impairments—Asset impairments included charges of $106 million in 2006 for impairment of the net book value of Lyondell’s idled ethylene facility in Lake Charles, Louisiana and $195 million in 2005 for impairment of the net book value of Lyondell’s Lake Charles, Louisiana TDI plant.
 
SG&A Expenses—Selling, general and administrative (“SG&A”) expenses were $705 million in 2007, $509 million in 2006 and $437 million in 2005.  The increase in SG&A expenses in 2007 compared to 2006 included $144 million of higher compensation expense primarily related to Lyondell’s higher 2007 common stock price and $40 million of higher estimated environmental remediation costs, while the increase in 2006 compared to 2005 was primarily due to higher compensation and benefit expense.
 
Acquisition-Related Costs—In connection with the December 20, 2007 acquisition of Lyondell by LyondellBasell Industries, Lyondell incurred $62 million of acquisition-related costs, including advisory fees and underwriting fees related to the accounts receivable securitization facility.
 
In-Process Research and Development Charge—As part of the acquisition of Lyondell by LyondellBasell Industries, LyondellBasell Industries allocated $95 million of the purchase price to Lyondell’s IPR&D.  Accordingly, Lyondell’s results of operations for the 2007 Successor period included a charge of $95 million for the value of the IPR&D, which is not deductible for tax purposes.
 
Operating Income—Lyondell had operating income of $1,162 million, $1,640 million and $1,248 million in 2007, 2006 and 2005, respectively.  Lyondell’s 2007 and 2006 operating income included Houston Refining’s operating income of $852 million and $383 million.  The benefit of increased ownership of Houston Refining in 2007, compared to 2006, was more than offset by lower operating results for ethylene-related products, and the above-noted increases in SG&A expenses and the IPR&D charge.
 
The benefit of the increased ownership of Houston Refining in 2006, compared to 2005, was partially offset by lower product margins for MTBE/ETBE in 2006.  In addition, operating income in 2006 and 2005 included the impairment charges of $106 million and $195 million, respectively, discussed above.  Operating results for each of Lyondell’s business segments are reviewed further in the “Segment Analysis” below.
 


Interest Expense—Interest expense was $670 million in 2007, $648 million in 2006 and $634 million in 2005.  Lyondell’s 2007 interest expense primarily attributable to $17,942 million of new debt related to the acquisition of Lyondell by LyondellBasell Industries was $44 million, of which $33 million was related party interest.  Interest on $834 million of push-down debt for which Lyondell is not the primary obligor and amortization of related debt issuance costs included in related party interest expense totaled $7 million.  Interest expense in 2007 and 2006 also included $112 million and $55 million, respectively, of interest attributable to $2.65 billion of debt primarily associated with the purchase of CITGO’s 41.25% interest in Houston Refining on August 16, 2006.  These increases in interest expense were substantially offset by decreases in 2007, 2006 and 2005, which primarily reflected net repayments of more than $4 billion principal amount of debt from September 2004, including $1,379 million and $881 million related to repayments in 2007 and 2006, respectively.  See the “Financing Activities” section of “Financial Condition” below for a description of the issuance and repayment of debt during 2007, 2006 and 2005.
 
Other Income (Expense), Net—Lyondell had other expense, net, of $530 million in 2007, other income, net, of $37 million in 2006 and other expense, net, of $37 million in 2005.  Other expense, net, in 2007 included $591 million of charges related to the prepayment of $7,092 million of debt during 2007, including $489 million of charges on the refinancing of $3,978 million of debt associated with the acquisition of Lyondell. These charges were partially offset by $41 million of foreign exchange gains primarily on intercompany loans, which reflected the significant increase in value of the euro compared to the U.S. dollar and the determination that certain outstanding intercompany debt will be repaid in the foreseeable future, and $10 million of related party royalty and service agreement income.
 
Other income, net, in 2006 included net payments of $74 million received by Lyondell in settlement of all disputes among Lyondell, CITGO and PDVSA and their respective affiliates, partially offset by charges of $40 million related to the prepayment of $881 million of debt during 2006.  Lyondell’s other expense, net, of $37 million in 2005 included $45 million of charges related to the prepayment of $1,458 million of debt during 2005.
 
Income from Equity Investment in Houston Refining—Prior to Lyondell’s August 16, 2006 purchase of CITGO’s 41.25% interest in Houston Refining, Lyondell’s income from its equity investment in Houston Refining was $73 million in 2006 and $123 million in 2005. Houston Refining’s 2006 operating results included a $300 million charge related to termination of Houston Refining’s previous crude supply contract and an $8 million charge representing reimbursement of legal fees and expenses that had been paid by Lyondell on behalf of Houston Refining.  Lyondell’s 58.75% share of these charges was $176 million and $5 million, respectively.  See Note 8 to the Consolidated Financial Statements.  Houston Refining’s operating results are reviewed in the discussion of the fuels segment below.
 
Income Tax—For 2007, Lyondell had a tax provision of $63 million on pretax income of $1 million due primarily to the nondeductible IPR&D charges of $95 million and the effect of non-U.S. earnings that were effectively taxed at rates higher than the U.S. statutory rate.  Lyondell’s effective income tax rate was 36% in 2006 and 26% in 2005.  The effective income tax rate for 2006 primarily reflected the above-noted effect of non-U.S. earnings, which was largely offset by the benefit of a reduction in the statutory income tax rate in The Netherlands.  The effective income tax rate for 2005 primarily reflected benefits from the ultimate determination of income tax liabilities related to prior years.
 


Income from Continuing Operations—Lyondell had a loss from continuing operations of $62 million in 2007, and income from continuing operations of $736 million and $540 million, respectively, in 2006 and 2005.  The following table summarizes the major components contributing to the results of operations in 2007, 2006 and 2005.  The segment results reflect inventory costs and cost of sales determined using the FIFO method of accounting for inventory.  Operating income included Houston Refining prospectively from August 16, 2006.  Income from Lyondell’s equity investment in Houston Refining in 2006 reflected the period from January 1, 2006 through August 15, 2006.
 
   
2007
    
2006
    
2005
  
Millions of dollars
                  
Operating income (loss) of:
                  
Chemicals segment
   $ 672     $ 1,001     $ 911  
Polymers segment
     155       137       52  
Fuels segment
     1,360       684       333  
Other:
                        
LIFO adjustment
     (869 )     (166 )     (45 )
Other
     (156 )     (16 )     (3 )
Operating income
     1,162       1,640       1,248  
Income from equity investment in Houston Refining
     - -       73       123  
Interest expense, net
     (633 )     (609 )     (602 )
Other income (expense), net
     (530 )     37       (37 )
Other
     2       5       1  
Provision for income taxes
     63       410       193  
Income (loss) from continuing operations
   $ (62 )   $ 736     $ 540  

 
Lyondell’s income (loss) from continuing operations for the periods shown included the following previously discussed items:
 
   
2007
    
2006
    
2005
  
Millions of dollars
                  
Pretax charges (benefits):
                  
Debt retirement charges
   $ 591     $ 40     $ 45  
Purchased IPR&D
     95       - -       - -  
Effect of stock price increases on incentive compensation expense
     158       - -       - -  
Acquisition-related costs
     62       - -       - -  
Net charges (benefits) related to commercial disputes
     82       (70 )     - -  
Foreign exchange gains on intercompany loans
     (39 )     - -       - -  
Lake Charles ethylene facility impairment
     - -       106       - -  
Lake Charles TDI facility impairment
     - -       - -       195  
Crude supply contract termination cost
     - -       176       - -  
Insurance–related charges (benefits), net
     (33 )     10       58  
Total pretax income effect
     916       262       298  
Tax effect of above items
     (299 )     (92 )     (104 )
Texas Margin Tax credit, net of federal income tax
     (17 )     - -       - -  
Settlement of prior year income tax issues
     - -       - -       (61 )
Total reduction of net income
   $ 600     $ 170     $ 133  

 


The decrease in income from continuing operations in 2007 compared to 2006 was primarily due to costs associated with the acquisition of Lyondell by LyondellBasell Industries and the related refinancing of debt as well as lower operating results.  Refinancing and acquisition-related costs included charges related to debt prepayment of $544 million, purchased IPR&D and other acquisition related costs.  The lower operating income was due to lower product margins in the chemicals segment resulting from higher raw material costs, which were only partly offset by the benefit of Lyondell’s increased ownership of Houston Refining and improved operating results for the fuels segment.
 
Income from continuing operations in 2006 increased compared to 2005 due to improved fuels segment results, which reflected the effect of increased ownership of Houston Refining and higher underlying operating results for Lyondell’s refining operations, including a new market-based crude oil contract, the benefits of which were partly offset by lower MTBE/ETBE profitability.  Operating results for the fuels segment were negatively impacted in 2006 by Lyondell’s $176 million share of the $300 million cost to terminate Houston Refining’s previous crude supply agreement and in 2005 by planned and unplanned outages.  Impairment charges negatively affected operating results of the chemicals segment by $106 million and $195 million, respectively, in 2006 and 2005.
 
Loss from Discontinued Operations, Net of Tax—Loss from discontinued operations, net of tax, was $85 million in 2007, $550 million in 2006 and $9 million in 2005.  The loss in 2007 was primarily due to the May 15, 2007 sale of the inorganic chemicals business and reflected the unfavorable tax effect of nondeductible capital losses resulting from the sale.  See Note 4 to the Consolidated Financial Statements for additional information related to the sale of the inorganic chemicals business.  Operating results for the inorganic chemicals business in 2006 were negatively affected by the $549 million after-tax charge, primarily for goodwill impairment, higher raw material and utility costs compared to 2005, and production problems primarily at a plant in the United Kingdom.  Compared to 2005, product sales prices in 2006 were moderately higher.  The 2005 operating results were negatively affected by the effects of inventory reduction efforts, including reduced plant operating rates, which were initiated in the third quarter 2005 in response to weak 2005 demand.
 
Fourth Quarter 2007 versus Third Quarter 2007—Lyondell had a loss from continuing operations of $548 million in the fourth quarter 2007 compared to income from continuing operations of $206 million in the third quarter 2007.  The fourth quarter 2007 included the aforementioned refinancing and acquisition-related costs.  The underlying operating results for all of Lyondell’s business segments were lower in the fourth quarter 2007 compared to the third quarter 2007, primarily due to higher raw material costs.  The operating results of the segments are reviewed in the Segment Analysis below.   The loss from discontinued operations, net of tax, was $3 million in the fourth quarter 2007.
 
Segment Analysis
 
Lyondell’s businesses are in three reportable segments:  chemicals, polymers and fuels.  As a result of Lyondell’s purchase of CITGO’s 41.25% equity interest in Houston Refining and Lyondell’s resulting 100% ownership, the operations of Houston Refining are consolidated prospectively from August 16, 2006.  Prior to August 16, 2006, Lyondell accounted for its investment in Houston Refining using the equity method.
 


For purposes of evaluating segment results, management reviews operating results, as presented below, determined using the FIFO method of accounting for inventory.  The following discussion is supplemental to the above “Overview” and “Results of Operations” sections, which discuss Lyondell’s consolidated operating results determined using the LIFO method of inventory accounting.
 
The following tables reflect selected financial information for Lyondell’s reportable segments.
 
   
2007
    
2006
    
2005
  
Millions of dollars
                  
Sales and other operating revenues:
                  
Chemicals segment
   $ 15,093     $ 14,979     $ 14,236  
Polymers segment
     3,495       3,424       3,110  
Fuels segment
     13,447       5,125       2,025  
Other, including intersegment eliminations
     (3,432 )     (2,646 )     (2,114 )
Total
   $ 28,603     $ 20,882     $ 17,257  
                         
Operating income (loss):
                        
Chemicals segment
   $ 672     $ 1,001     $ 911  
Polymers segment
     155       137       52  
Fuels segment
     1,360       684       333  
Other:
                        
LIFO adjustment
     (869 )     (166 )     (45 )
Other
     (156 )     (16 )     (3 )
Total
   $ 1,162     $ 1,640     $ 1,248  
                         
Income from equity investments:
                        
Houston Refining
   $ - -     $ 73     $ 123  

 
Other operating income includes a $95 million charge in the 2007 Successor period for the value of the purchase price allocated by LyondellBasell Industries to Lyondell’s IPR&D.
 
Chemicals Segment
 
Overview—In its chemicals segment, Lyondell manufactures and markets ethylene and its co-products, primarily propylene, butadiene and aromatics, which include benzene and toluene; ethylene derivatives, including ethylene glycol (“EG”), ethylene oxide (“EO”) and other EO derivatives, as well as ethanol; acetyls, including vinyl acetate monomer (“VAM”), acetic acid and methanol; propylene oxide (“PO”); PO co-products, including styrene monomer (“styrene” or “SM”) and tertiary butyl alcohol (“TBA”); TBA derivative, isobutylene; PO derivatives, including propylene glycol (“PG”), propylene glycol ethers (“PGE”) and butanediol (“BDO”); TDI; and fragrance and flavors chemicals.
 
During 2007 compared to 2006, U.S. ethylene markets experienced lower profitability despite operating rates in the mid-90% range.  Ethylene and polyethylene sales prices decreased more than raw material costs late in 2006, and did not increase as rapidly as raw material costs during 2007.  As discussed below, prices of both crude oil-based liquid raw materials and natural gas liquids-based raw materials averaged higher in 2007, reaching record levels late in 2007.  While prices of these raw materials also averaged higher in 2006 compared to 2005, increases in product sales prices kept pace.  U.S. market demand for ethylene increased an estimated 2.5% in 2007 compared to 2006 and 4.2% in 2006 compared to 2005.  During the three-year period, markets for ethylene derivatives and ethylene co-products and for PO and PO derivatives generally continued to experience favorable supply and demand conditions, while styrene markets continued to be oversupplied.
 


Benchmark crude oil and natural gas prices generally have been indicators of the level and direction of movement of raw material and energy costs for ethylene and its co-products in the chemicals segment.  Ethylene and its co-products are produced from two major raw material groups:
 
·  
crude oil-based liquids (“liquids” or “heavy liquids”), including naphthas, condensates, and gas oils, the prices of which are generally related to crude oil prices; and
 
·  
natural gas liquids (“NGLs”), principally ethane and propane, the prices of which are generally affected by natural gas prices.
 
Lyondell has the ability to shift its ratio of raw materials used in the production of ethylene and its co-products to take advantage of the relative costs of heavy liquids and NGLs.  Although the prices of these raw materials are generally related to crude oil and natural gas prices, during specific periods the relationships among these materials and benchmarks may vary significantly.
 
The following table shows the average U.S. benchmark prices for crude oil and natural gas for the applicable three-year period, as well as benchmark U.S. sales prices for ethylene and propylene, which Lyondell produces and sells or consumes internally.  The benchmark weighted average cost of ethylene production, which is reduced by co-product revenues, is based on CMAI’s estimated ratio of heavy liquid raw materials and NGLs used in U.S. ethylene production and is subject to revision.
 
   
Average Benchmark Price for the Year and
Percent Change Versus Prior Year Average
  
   
2007
    
Percent
Increase
    
2006
    
Percent
Increase
(Decrease)
    
2005
  
                               
Crude oil – dollars per barrel
     72.23       9 %     66.03       17 %     56.44  
Natural gas – dollars per million BTUs
     6.81       4 %     6.53       (14 )%     7.58  
NWE naphtha – dollars per barrel
     75.91       21 %     62.72       19 %     52.79  
Weighted average cost of
ethylene production – cents per pound
     37.98       22 %     31.05       5 %     29.58  
Ethylene – cents per pound
     48.75       1 %     48.08       9 %     44.21  
Propylene – cents per pound
     50.41       10 %     45.83       12 %     40.75  

 
For crude oil, the table above reflects the average quoted price for West Texas Intermediate (“WTI”) crude oil.  During the first half of 2007, the WTI crude oil price was lower relative to other benchmark crude oil prices, such as Brent crude oil, and, therefore, was not indicative of the rate of increase in crude oil-based raw material costs.  As a result, the benchmark price of Northwest Europe (“NWE”) naphthas, which is representative of trends in certain market prices, is included in the table above.  Prices for WTI crude oil realigned with other benchmark crude oil prices during the latter half of 2007.  WTI crude oil prices increased from $58 per barrel in early January 2007, to $96.01 per barrel at the end of December 2007.
 
Similarly, while natural gas prices were relatively stable, ethane prices rose significantly during 2007, reaching record levels.  These increases were indicative of the pressure on the cost of Lyondell’s raw materials, both crude oil-based and NGL-based.
 
Although benchmark crude oil prices decreased late in 2006, benchmark crude oil prices averaged higher in 2006 compared to 2005. Natural gas prices, which affect energy costs in addition to NGL-based raw materials, averaged lower in 2006 compared to 2005.  Despite the 2006 decrease in natural gas prices, NGL-based raw material prices averaged higher in 2006 than in 2005.  As a result, raw material costs averaged higher in 2006 compared to 2005.
 


During 2007 compared to 2006, Lyondell’s chemicals segment experienced lower profitability as sales price increases for ethylene and its co-products failed to keep up with higher average raw material costs.  The impact of the lower ethylene product margins overwhelmed improvements in the underlying operating results of ethylene derivatives, PO and derivatives and TDI, which primarily reflected higher product margins.  Styrene operating results reflected the effects of lower product margins.  Results for 2007 were also negatively affected by $82 million of charges related to commercial disputes and higher incentive compensation expense related to the acquisition, while 2006 results included the pretax charge of $106 million related to impairment of the net book value of the idled Lake Charles, Louisiana ethylene facility.
 
Chemicals segment operating results for 2006 compared to 2005 primarily reflected the benefits of higher sales prices for ethylene products, including significantly higher ethylene co-product sales prices, which substantially offset higher costs, primarily higher raw material costs.  TDI operating results improved in 2006 as a result of higher product margins and the shutdown of the Lake Charles TDI facility in 2005, which reduced the level of operating losses in 2006 compared to the losses sustained in 2005.  Operating results for styrene were comparable, while operating results for PO and derivatives reflected the negative effects of outages related to equipment installation at one of Lyondell’s U.S. MTBE plants.
 
Results for 2006 included the pretax charge of $106 million related to impairment of the net book value of the idled Lake Charles, Louisiana ethylene facility.  The 2005 operating results included the $195 million charge related to the impairment of the net book value of the Lake Charles TDI facility.
 
The following table sets forth chemicals segment sales and other operating revenues, operating income and selected product sales volumes.
 
   
For the year ended December 31,
  
   
2007
    
2006
    
2005
  
Millions of dollars
                  
Sales and other operating revenues
   $ 15,093     $ 14,979     $ 14,236  
Operating income
     672       1,001       911  
                         
Sales volumes, in millions
                        
Ethylene and derivatives (pounds)
     11,559       11,599       11,629  
Intersegment sales to polymers included above (pounds)
     5,309       5,113       5,211  
Other ethylene derivatives included above (pounds)
     2,256       2,022       1,952  
Ethylene co-products:
                        
Non-aromatics (pounds)
     7,819       8,247       7,749  
Aromatics (gallons)
     354       358       412  
PO and derivatives (pounds)
     3,237       3,193       3,236  
Co-product styrene (pounds)
     3,914       4,248       3,885  

 
Revenues—Lyondell’s chemicals segment revenues of $15,093 million in 2007 were comparable to revenues of $14,979 million in 2006.  Higher average sales prices in 2007 for most products in the chemicals segment were substantially offset by lower sales volumes for ethylene co-products and styrene.  The lower 2007 ethylene co-product sales volumes reflected a shift by Lyondell from heavy liquids raw materials to increased use of NGL-based raw materials in ethylene production during 2007.  The use of NGL-based raw materials results in lower volumes of ethylene co-product production per pound of ethylene production.
 


Revenues of $14,979 million in 2006 increased 5% compared to revenues of $14,236 million in 2005, primarily due to higher average sales prices.  As noted in the table below, benchmark ethylene co-product sales prices averaged higher in 2007 compared to 2006 and, in 2006 compared to 2005, benchmark sales prices for ethylene, propylene and benzene averaged higher.
 
   
Average Benchmark Price for the Year and
Percent Change Versus Prior Year Average
  
   
2007
    
Percent
Increase
    
2006
    
Percent
Increase
    
2005
  
Ethylene – cents per pound
     48.75       1 %     48.08       9 %     44.21  
Propylene – cents per pound
     50.41       10 %     45.83       12 %     40.75  
Benzene – cents per gallon
     361.67       11 %     326.33       13 %     289.88  

 
Operating Income—The chemicals segment had operating income of $672 million in 2007 compared to $1,001 million in 2006.  In 2007 compared to 2006, the underlying operations of the chemicals segment primarily reflected the negative effects of higher raw material costs on margins for ethylene-related products.  In 2007 the underlying operations for PO and PO derivatives were higher compared to 2006 as a result of higher product margins in 2007.  Styrene results were lower in 2007 compared to 2006.  Operating results for 2007 included net charges of $82 million related to commercial disputes, including amounts associated with the 2005 shutdown of Lyondell’s Lake Charles TDI facility, as well as higher compensation expense as a result of the increase in Lyondell’s common stock price in 2007.  Operating results in 2006 were negatively affected by a $106 million impairment charge related to the Lake Charles, Louisiana ethylene facility.
 
Lyondell’s chemicals segment had operating income of $1,001 million in 2006 compared to $911 million in 2005.  Operating results for 2006 and 2005 included impairment charges of $106 million and $195 million, respectively, related to the Lake Charles, Louisiana ethylene and TDI facilities.  Operating income in 2006 reflected higher raw material costs for ethylene and derivatives, partly offset by higher average sales prices including significantly higher ethylene co-product sales prices.  TDI operating results improved in 2006 as a result of higher product margins and the shutdown of the Lake Charles TDI facility in 2005, which reduced the level of operating losses in 2006 compared to the losses sustained in 2005.  Operating results for PO and derivatives were negatively affected in 2006 by outages resulting from equipment installation at one of Lyondell’s U.S. MTBE plants (see “Fuels Segment” below), while styrene operating results were comparable in 2006 and 2005.
 
Fourth Quarter 2007 versus Third Quarter 2007—The chemicals segment had operating income of $111 million in the fourth quarter 2007 compared to $182 million in the third quarter 2007.  Fourth quarter 2007 operating results primarily reflected lower product margins for ethylene and its co-products due to higher raw material costs and the effects of an extended maintenance turnaround at an ethylene plant, which contributed to 11% lower sales volumes for ethylene and its derivatives and 6% lower sales volumes for co-products.  Fourth quarter 2007 operating results for PO & its derivatives were lower reflecting lower product margins compared to the third quarter 2007.
 
 
Polymers Segment
 
The polymers segment includes polyethylene, including high density polyethylene (“HDPE”), low density polyethylene (“LDPE”) and linear low density polyethylene (“LLDPE”), and polypropylene.
 
U.S. domestic and export market demand for polyethylene increased an estimated 3.2% in 2007 compared to 2006 and 6.1% in 2006 compared to 2005.  During 2007, polyethylene markets experienced strong export demand growth, while domestic demand was relatively unchanged compared to 2006.
 


During 2007 compared to 2006, higher profitability in the polymers segment reflected lower raw material costs, which offset polyethylene sales prices that averaged slightly lower compared to 2006.  In 2006 compared to 2005, polymers segment results improved as average polyethylene sales prices increased more than the average price of ethylene.
 
The following table sets forth the polymers segment’s sales and other operating revenues, operating income and product sales.
 
   
For the year ended December 31,
  
   
2007
    
2006
    
2005
  
Millions of dollars
                  
Sales and other operating revenues
   $ 3,495     $ 3,424     $ 3,110  
Operating income
     155       137       52  
                         
Sales volumes, in millions
                        
Polyethylene (pounds)
     5,357       5,171       4,971  
Polypropylene (pounds)
     245       260       273  

 
Revenues—Revenues of $3,495 million in 2007 were 2% higher compared to revenues of $3,424 million in 2006.  The increase in revenues in 2007 was primarily due to the effect of 7% higher sales volumes, which was substantially offset by lower average sales prices.  The continued strength in the export market during 2007 contributed to the increase in sales volumes compared to 2006.
 
Revenues of $3,424 million in 2006 increased 10% compared to revenues of $3,110 million in 2005, reflecting the effects of higher average sales prices.  Sales volumes in the 2006 and 2005 periods were comparable.
 
Operating Income—The polymers segment had operating income of $155 million in 2007 compared to $137 million in 2006.  The $18 million increase in 2007 operating results reflected higher product margins as lower raw material costs and the effects of higher sales volumes offset the combined effect of lower average sales prices for polyethylene, higher compensation expense and costs related to unscheduled maintenance.
 
Operating income was $137 million in 2006 compared to $52 million in 2005.  The $85 million increase reflected higher product margins, as average sales prices increased more than raw material costs.
 
Fourth Quarter 2007 versus Third Quarter 2007—The polymers segment had operating income of $56 million in the fourth quarter 2007 compared to $62 million in the third quarter 2007.  Higher raw material costs in the fourth quarter 2007 were not offset by the effects of higher average sales prices, resulting in a decrease of $6 million in fourth quarter 2007 results compared to the third quarter 2007.  Although export sales volumes remained strong in the fourth quarter 2007 compared to the third quarter 2007, overall sales volumes in the fourth quarter 2007 decreased 7%.
 
 
Fuels Segment
 
Overview—The fuels segment includes refined petroleum products produced by Houston Refining, as well as gasoline blending components, such as MTBE and ETBE and alkylate.  Prior to Lyondell’s acquisition of the remaining interest in Houston Refining on August 16, 2006, Lyondell’s fuels segment operations included its joint venture ownership interest in Houston Refining, which Lyondell accounted for using the equity method.  A separate discussion of the refining operations based on the operating results of Houston Refining on a 100% basis (see Notes 4 and 10 to the Consolidated Financial Statements) follows the fuels segment discussion.
 


Strong gasoline markets during 2006 and 2007 benefited refining margins and margins for other gasoline blending components.  The combined benchmark refining margins for WTI 2-1-1 and WTI-Maya in 2007 were unchanged compared to 2006.  Refiners experienced tight supply and demand conditions in 2006 and 2005.
 
Fuels segment operating results in 2007 compared to 2006 benefited from stronger margins for ETBE and MTBE and Lyondell’s increased ownership of and higher profitability from refining operations compared to 2006, which included the $176 million pretax charge, representing Lyondell’s proportionate share of the previous crude supply contract termination cost.
 
Fuels segment operating results for 2006 compared to 2005 were negatively affected by significantly lower MTBE product margins and unplanned outages associated with the installation of iso-octene production capability at one of Lyondell’s U.S. MTBE plants.  MTBE margins in 2006 declined from the strong post-hurricane levels experienced in 2005.  The refining operation’s results in 2006 compared to 2005 reflected the benefits of the increased ownership and the new market-based crude oil contract for the last five months of 2006, ongoing tight supply and demand conditions and more reliable operations.  Results in 2006 included the $176 million charge, representing Lyondell’s share of the $300 million charge related to the termination of the previous crude supply contract.  Refining operations in 2005 were negatively affected by a shutdown in preparation for the hurricane and subsequent problems in re-starting operations.
 
In late March 2008, Houston Refining began unscheduled maintenance on its fluid catalytic cracking unit, which is expected to return to service in mid April 2008.  The refinery will operate at reduced rates during the outage.
 
The following table sets forth the fuels segment’s sales and other operating revenues, operating income, income from equity investment in Houston Refining (prior to August 16, 2006) and sales volumes for certain gasoline blending components.  See the discussion of “Refining Operations” below for refining sales volumes and operating results of Houston Refining on a 100% basis.
 
   
For the year ended December 31,
  
   
2007
    
2006
    
2005
  
Millions of dollars
                  
Sales and other operating revenues
   $ 13,447     $ 5,125     $ 2,025  
Operating income
     1,360       684       333  
Income from equity investment in Houston Refining
     - -       73       123  
                         
Sales volumes, in millions
                        
Gasoline blending components – MTBE/ETBE (gallons)
     1,175       942       985  

 
Revenues—The fuels segment had revenues of $13,447 million in 2007, $5,125 million in 2006 and $2,025 million in 2005.  The increases over the three-year period were primarily due to the consolidation of Houston Refining prospectively from August 16, 2006, which added $8,485 million to 2007 revenues and $2,849 million to 2006 revenues.  The remaining $2,686 million increase in 2007 compared to 2006 was due to higher sales prices and a 25% increase in gasoline blending components (MTBE and ETBE) sales volumes.  Higher average sales prices for gasoline blending components in 2006 were partially offset by the effect of 4% lower sales volumes that resulted from the outages at one of Lyondell’s U.S. MTBE plants described below.
 


Operating income—The fuels segment had operating income of $1,360 million in 2007, $684 million in 2006 and $333 million in 2005.  The increases over the three-year period were primarily due to the consolidation of Houston Refining prospectively from August 16, 2006, which added $852 million and $383 million to operating income in 2007 and 2006, respectively.  The remaining increase in operating income in 2007 was primarily due to higher margins for gasoline blending components, which reflected higher average sales prices that more than offset higher raw material costs and the effects of the 25% increase in sales volumes compared to 2006.  The remaining decrease in 2006 operating results was primarily due to significantly lower margins for gasoline blending components compared to the high, hurricane-affected levels experienced in 2005 and the effects of planned and unplanned outages associated with the installation of equipment at one of Lyondell’s U.S. MTBE plants to enable future iso-octene production including lower 2006 sales volumes.
 
Fourth Quarter 2007 versus Third Quarter 2007—The fuels segment had operating income of $233 million in the fourth quarter 2007 compared to $301 million in the third quarter 2007.  The decrease was primarily due to seasonally lower product margins for gasoline blending components and the effects of insurance settlements in the third quarter 2007.  Operating results for the third and fourth quarters of 2007 included insurance settlements of $30 million and $3 million, respectively, related to the 2005 Hurricane Rita claim.  The underlying operations of the refining business were relatively unchanged in the fourth quarter 2007 as the effects of lower aromatics and lubes margins were offset by the effect of 3% higher crude processing rates.  Total crude oil processing rates averaged 279,000 barrels per day in the fourth quarter 2007 compared to 271,000 barrels per day in the third quarter 2007.
 
Income from Equity Investment in Houston Refining—Prior to Lyondell’s August 16, 2006 purchase of CITGO’s 41.25% interest in Houston Refining, Lyondell’s income from its equity investment in Houston Refining was $73 million in 2006 and $123 million in 2005.  Houston Refining’s 2006 operating results included a $300 million charge related to termination of Houston Refining’s previous crude supply contract and an $8 million charge representing reimbursement of legal fees and expenses that had been paid by Lyondell on behalf of Houston Refining.  Lyondell’s 58.75% share of these charges was $176 million and $5 million, respectively.  See Note 8 to the Consolidated Financial Statements.
 
Refining Operations—The following discussion of the fuels segment’s refining operations is based on the operating results of Houston Refining on a 100% basis, using the LIFO basis of accounting for inventory.
 
Houston Refining produces refined petroleum products, including gasoline, ultra low sulfur diesel, jet fuel, aromatics and lubricants.  PDVSA Petróleo, S.A. (“PDVSA Oil”) supplies heavy, high sulfur Venezuelan crude oil to Houston Refining under a long-term contract (see Note 8 to the Consolidated Financial Statements).  Under both the former crude supply agreement (“CSA”) and the current crude oil contract, the refining segment purchases 230,000 barrels per day of heavy, high sulfur crude oil, which constitutes approximately 86% of its rated crude oil refining capacity of 268,000 barrels per day.  Houston Refining generally purchases the balance of its crude oil requirements on the spot market.  Profit margins on spot market crude oil historically were more volatile and, in recent years, were higher than margins on CSA crude oil.  The pricing under the new crude oil contract is market based.
 


The following table sets forth Houston Refining’s sales and other operating revenues, net income, sales volumes for refined products, crude processing rates for the periods indicated and benchmark refining margins.
 
   
For the year ended December 31,
  
   
2007
    
2006
    
2005
  
Millions of dollars
                  
Sales and other operating revenues
   $ 10,492     $ 8,858     $ 6,741  
Operating income
     852       528       232  
                         
Thousands of barrels per day
                        
Refined products sales volumes:
                        
Gasoline and components
     127       113       104  
Diesel and heating oil
     83       90       80  
Jet fuel
     19       16       13  
Aromatics
     8       7       8  
Other refined products
     122       117       86  
Total refined products sales volumes
     359       343       291  
                         
Crude processing rates
     261       270       217  
                         
Market margins - $ per barrel
                        
WTI – 2-1-1
   $ 12.80     $ 10.70     $ 10.99  
WTI Maya
     12.49       14.86       15.65  
Total
   $ 25.29     $ 25.56     $ 26.64  

 
Revenues—Revenues of $10,492 million in 2007 were 18% higher compared to revenues of $8,858 million in 2006.  The increase in revenues in 2007 was due to the effects of higher average refined product sales prices and 5% higher sales volumes driven largely by stronger transportation fuel markets.  Total crude processing rates were 3% lower in 2007 compared to 2006 due to a first quarter 2007 planned maintenance turnaround.
 
Revenues of $8,858 million in 2006 were 31% higher compared to revenues of $6,741 million in 2005.  The increase in revenues in 2006 was due to the effect of higher average refined product sales prices, driven largely by higher crude oil prices, and the effect of 18% higher sales volumes.  The higher sales volumes reflected the 24% higher crude processing rates compared to 2005, which was negatively affected by the third quarter Gulf Coast hurricanes and the subsequent problems restarting production as well as second quarter 2005 maintenance activity and equipment failures.
 
Operating Income—Houston Refining’s operating income was $852 million in 2007 compared to $528 million in 2006.  Operating results for 2006 included the pretax charge of $300 million related to the termination of the CSA with PDVSA.  Underlying operating results in 2007 reflected the benefit from higher margins realized under the new crude oil contract for the full year compared to five months in 2006, partly offset by the $140 million estimated effect of the planned maintenance turnaround in the first quarter 2007.  In addition, results in 2007 included insurance settlements totaling $33 million related to the 2005 Hurricane Rita claim.
 
Houston Refining had operating income of $528 million in 2006 compared to $232 million in 2005.  Operating results in 2006 included the $300 million pretax charge related to the termination of the CSA.  The underlying operations in 2006 benefited from the effect of the new market-based crude oil contract as well as from higher crude oil margins and crude processing rates compared to 2005, which was negatively affected by planned and unplanned outages, the third quarter Gulf Coast hurricanes and subsequent problems restarting operations.
 


 
The following operating, investing and financing activities reflect transactions related to the acquisition of Lyondell by LyondellBasell Industries on December 20, 2007 and the consolidation of Houston Refining prospectively from August 16, 2006.
 
Operating, investing and financing activities of continuing operations for the combined Predecessor and Successor periods of 2007, which are discussed below, are presented in the following table:
 
   
Successor
    
Predecessor
              
   
For the
period from
December 21
through
    
For the
period from
January 1
through
    
Combined
    
Predecessor
  
   
December 31,
    
December 20,
    
For the year ended December 31,
  
Millions of dollars
  
2007
    
2007
    
2007
    
2006
    
2005
  
Source (use) of cash:
                              
Operating activities
   $ (271 )   $ 2,052     $ 1,781     $ 1,183     $ 1,530  
Investing activities
     (157 )     (292 )     (449 )     (2,854 )     111  
Financing activities
     (150 )     (2,224 )     (2,374 )     1,525       (1,669 )

 
Operating Activities—Operating activities of continuing operations provided cash of $1,781 million in 2007, $1,183 million in 2006 and $1,530 million in 2005.  The $598 million increase in 2007 compared to 2006 primarily reflected the net benefits from consolidating the operating cash flows of Houston Refining for a full year and from lower utilization of cash to fund the main components of working capital – accounts receivable and inventory, net of accounts payable, which were offset by the effects of higher cash payments as reflected in “Other, net.”  Part of the increase in these cash payments, primarily for income taxes, interest, maintenance turnaround costs and pension funding, was attributable to consolidating Houston Refining as well as to the increase in debt related to the acquisition of CITGO’s 41.25% interest in Houston Refining.  In addition, the 11-day Successor period in 2007 included $238 million of change-in-control cash payments, resulting from the acquisition of Lyondell by LyondellBasell Industries.
 
Changes in the main components of working capital provided cash of $1,018 million in 2007 and used cash of $408 million in 2006.  The cash provided by the main components of working capital in 2007 was primarily due to a $346 million net decrease in accounts receivable and a $721 million net increase in accounts payable.  In connection with the acquisition of Lyondell by LyondellBasell Industries, on December 20, 2007, Lyondell entered into a new $1,150 million, five-year, Accounts Receivable Securitization Facility, and repaid and terminated its previous $150 million LCC and $600 million Equistar Chemicals, LP (“Equistar”) accounts receivable sales facilities.  The balance of Lyondell’s accounts receivable sold under the new facility was $1,000 million at December 31, 2007 compared to $100 million at December 31, 2006 under the previous facilities.  The increased utilization of the Accounts Receivable Securitization Facility was primarily related to the financing of the acquisition.  The remaining increase in accounts receivable reflected higher sales volumes and prices in December 2007 compared to December 2006, while the increase in accounts payable primarily reflected higher prices for raw materials in comparing the same periods.
 
The $347 million decrease in cash flow from operating activities in 2006 compared to 2005 was primarily due to a net increase in the main components of working capital in 2006, which used cash of $408 million compared to a net decrease in 2005 that provided cash of $60 million.  The negative comparative cash flow effect of the main components of working capital was partly offset by the effect of higher net income in 2006, including the effect of consolidating Houston Refining effective August 16, 2006, which increased 2006 net income by approximately $150 million.
 


The net increase in working capital in 2006 was primarily due to increases of $234 million and $136 million in inventory and accounts receivable, respectively, and a $38 million decrease in accounts payable.  A significant portion of the increase in inventory was due to higher volumes of water-borne cargos in transit at December 31, 2006 compared to December 31, 2005 and the effect of the conversion to provide iso-octene production flexibility at a U.S. MTBE facility.  The increase in accounts receivable reflected the effects of a $175 million decrease in the outstanding amount of accounts receivable sold under the accounts receivable sales facilities partly offset by a decrease in Houston Refining accounts receivable due to a decrease in product sales prices from the date of acquisition to December 31, 2006.  The decrease in accounts payable is also related to Houston Refining and reflects a decrease in the price of crude oil from the date of acquisition to December 31, 2006.
 
In addition, prior to January 2006, discounts were offered to certain customers for early payment for product.  As a result, some receivable amounts were collected in December 2005 and 2004 that otherwise would have been expected to be collected in January 2006 and 2005, respectively.  This included collections of $84 million and $66 million in December 2005 and 2004, respectively, related to receivables from Occidental Chemical Corporation, a subsidiary of Occidental Petroleum Corporation (together with its subsidiaries and affiliates, collectively “Occidental”), which was considered a related party through December 20, 2007 (see Note 7 to the Consolidated Financial Statements).
 
Operating activities of discontinued operations used cash of $118 million in 2007 and provided cash of $39 million in 2006 and $64 million in 2005.  The use of cash in 2007 was primarily due to increases in working capital and lower operating results.
 
Investing Activities—Investing activities of continuing operations used cash of $449 million in 2007 and $2,854 million in 2006, and provided cash of $111 million in 2005.  The cash used in 2007 included the effects of transactions related to the LyondellBasell Industries acquisition of Lyondell, while the use of cash in 2006 primarily reflected the Lyondell acquisition of CITGO’s 41.25% share of Houston Refining for $2,505 million.
 
In connection with the December 20, 2007 acquisition of Lyondell by LyondellBasell Industries, Lyondell sold certain non-U.S. subsidiaries to the Basell Group for net cash proceeds of $592 million and $668 million of debt payable to Lyondell by one of the subsidiaries.  Lyondell made advances to the Basell Group of $166 million under a loan agreement maturing in 2014 and $135 million pursuant to a current account agreement with the Basell Group (see Note 7 to the Consolidated Financial Statements).  Other investing activities included capital expenditures of $517 million, $94 million of tax reimbursements to CITGO related to the August 16, 2006 acquisition of CITGO’s 41.25% share of Houston Refining and $97 million of payments to discontinued operations primarily to fund working capital increases.
 
In 2006, Lyondell purchased CITGO’s 41.25% interest in Houston Refining, making cash payments of $2,558 million, less cash acquired of $53 million.  The cash payments of $2,558 million consisted of: $1,629 million for the acquisition of the 41.25% interest in Houston Refining, the acquisition of working capital of $145 million, $445 million to repay and terminate Houston Refining’s $450 million term loan facility, including accrued interest of $4 million, $39 million to repay a loan payable to CITGO, including $4 million of accrued interest, and $300 million related to the termination of the previous crude supply agreement.  As part of the transaction, Houston Refining and PDVSA Oil terminated the previous crude supply agreement and entered into a new crude oil contract.  See “Financing Activities” below for related financing activities and “Liquidity and Capital Resources” for a description of the new crude oil contract.
 
The cash provided in 2005 primarily reflected net payments and distributions from the inorganic chemicals business of $269 million related to the repatriation of earnings of non U.S. subsidiaries. See discussion of discontinued operations below.
 


The following table summarizes capital expenditures and capital-related contributions to joint ventures as well as 2008 planned capital spending for continuing operations.
 
Millions of dollars
  
Plan
2008
    
2007
    
2006
    
2005
  
Capital expenditures by segment:
                        
Chemicals, including contributions to PO Joint Ventures
   $ 193     $ 326     $ 231     $ 194  
Polymers
     22       19       19       12  
Fuels, including Houston Refining on a 100% basis
     205       210       253       181  
Other
     8       9       5       5  
Total capital expenditures by segment on a 100% basis
     428       564       508       392  
                                 
    Less:
                                
Houston Refining – through August 15, 2006
     - -       - -       140       176  
Contributions to PO Joint Ventures
     8       47       22       20  
     Consolidated capital expenditures
of Lyondell’s continuing operations
   $ 420     $ 517     $ 346     $ 196  

 
The higher 2007 and 2006 capital expenditure levels primarily reflected spending for environmental and regulatory requirements, base plant support, projects to improve manufacturing efficiency and projects directed toward profit enhancement.  The lower 2008 planned capital expenditures reflect lower spending for projects related to profit enhancement and regulatory requirements.
 
During 2006 and 2005, Lyondell made cash contributions of $64 million and $128 million, respectively, to and received $117 million and $183 million, respectively, of cash distributions in excess of earnings from Houston Refining.  The lower level of activity in 2006 was due to Lyondell’s consolidation of Houston Refining effective on August 16, 2006.
 
Net cash provided by investing activities in 2007 included the $1,089 million of net cash proceeds from the sale of Lyondell’s worldwide inorganic chemicals business, which were used to reduce debt.  See Note 4 to the Consolidated Financial Statements and “Financing Activities” below.
 
Investing activities of discontinued operations provided cash of $82 million in 2007 and used cash of $14 million in 2006 and $322 million in 2005.  During the 2007 period, funds received from continuing operations increased $57 million, while capital expenditures of discontinued operations decreased $38 million compared to the 2006 period.  The cash used in 2005 primarily reflected $269 million of payments and distributions to affiliates included in the continuing operations of Lyondell.  See discussion of continuing operations above.
 
Financing Activities—Financing activities of continuing operations used cash of $2,374 million in 2007, provided cash of $1,525 million in 2006 and used cash of $1,669 million in 2005.  The cash used in 2007 primarily reflected the acquisition of Lyondell by LyondellBasell Industries and the related repayment of long-term debt.  The cash provided in the 2006 period primarily reflected borrowing to finance Lyondell’s purchase of CITGO’s 41.25% interest in Houston Refining, partly offset by repayments of debt.  Cash used by financing activities in 2005 primarily reflected prepayment of long-term debt.
 
On December 20, 2007, in connection with the acquisition of Lyondell by LyondellBasell Industries, Lyondell and other subsidiaries of the Basell Group entered into a Senior Secured Credit Facility, including a six-year $2,000 million term loan A facility due 2013, a seven-year $7,550 million and €1,300 million term loan B facility due 2014 and a six-year $1,000 million multicurrency revolving credit facility due 2013.  Lyondell received net proceeds of $1,478 million and $7,361 million, respectively, under the A and B term loan facilities.
 


Also on December 20, 2007, Lyondell entered into a five-year $1,150 million Accounts Receivable Securitization Facility, and together with a subsidiary of the Basell Group entered into a five-year $1,000 million senior secured inventory-based credit facility, both of which mature in December 2012.  At December 31, 2007, Lyondell had $100 million outstanding under the senior secured inventory-based revolving credit facility and $1,000 million of sold accounts receivable outstanding under the Accounts Receivables Securitization Facility.
 
On December 20, 2007, Lyondell also received proceeds of $7,166 million and $717 million, respectively, from the Basell Group pursuant to a loan agreement that matures in 2014 and a credit line under a current account agreement with the Basell Group.
 
Borrowings under these new facilities were used to acquire the outstanding shares of Lyondell common stock and other equity instruments for $11,371 million, retire certain indebtedness of Lyondell and its subsidiaries, as discussed below, and pay related fees and expenses of $305 million.  Borrowings under the revolving credit facility may also be used for general corporate purposes.
 
On December 20, 2007, Lyondell retired $1,753 million principal amount outstanding under its $2.65 billion senior secured term loan and terminated its then-existing senior secured credit facility, including the term loan and a $1,055 million revolving credit facility, repaid $300 million principal amount outstanding under its then-existing $400 million Equistar inventory-based revolving credit facility and terminated that facility.  Lyondell also terminated its previous $150 million LCC accounts receivable sales facility and $600 million Equistar accounts receivable sales facility.
 
Pursuant to tender offers, Lyondell also repaid the following LCC and Equistar notes in December 2007 in the indicated principal amounts, totaling $3,978 million, and paid premiums totaling $489 million:
 
· $899 million of LCC’s 8.25% Senior Unsecured Notes due 2016,
· $872 million of LCC’s 8% Senior Unsecured Notes due 2014,
· $510 million of LCC’s 6.875% Senior Unsecured Notes due 2017,
· $324 million of LCC’s 10.5% Senior Secured Notes due 2013,
· $585 million of Equistar’s 8.75% Notes due 2009,
· $396 million of Equistar’s 10.625% Senior Notes due 2011, and
· $392 million of Equistar’s 10.125% Senior Notes due 2008.
 
In 2008, Lyondell called and repaid the remaining $31 million principal amount due under these notes that was not tendered, and paid premiums totaling $2 million.
 
In conjunction with the tender offers, on December 5, 2007, Lyondell obtained consents from holders of the tendered notes to effect certain proposed amendments to the indentures governing the notes, including the elimination of substantially all the restrictive covenants.
 
In 2007, prior to and as a result of the pending acquisition of Lyondell by LyondellBasell Industries, Lyondell repaid $106 million principal amount of the Millennium Chemicals Inc. (“Millennium”) 4% Senior Convertible Debentures using a combination of Lyondell common stock and cash valued at $380 million.  Pursuant to the indenture governing the Debentures, the Debentures were convertible at a conversion rate of 75.7633 Lyondell shares of common stock per one thousand dollar principal amount of the Debentures.  The remaining $44 million principal amount of the Debentures outstanding at December 31, 2007 was converted into cash of $158 million and paid in January 2008.
 


Also during 2007, Lyondell repaid $278 million principal amount of LCC’s 11.125% Senior Secured Notes due 2012, paying premiums totaling $18 million, and $18 million principal amount of the $2.65 billion LCC term loan due 2013.  Lyondell also obtained consents to a proposed amendment of a restrictive provision of the indenture related to its 10.5% Senior Secured Notes due 2013, which required Lyondell to refinance subordinated debt with new subordinated debt.  The amendment permitted the refinancing of subordinated debt with senior debt.  As a result, Lyondell issued $510 million principal amount of LCC 6.875% Senior Unsecured Notes due 2017, paying debt issuance costs of $8 million, and repaid, at par, the outstanding $500 million principal amount of LCC’s 10.875% Senior Subordinated Notes due 2009.
 
In 2007, Equistar also repaid $300 million principal amount of its 10.125% Senior Notes due 2008 and $300 million principal amount of its 10.625% Senior Notes due 2011, paying premiums totaling $32 million.  Also during 2007, Millennium repaid the remaining $373 million principal amount of its 9.25% Senior Notes due 2008, paying a premium of $13 million, and $4 million principal amount of its 7.625% Senior Debentures due 2026.
 
In January 2007, Occidental Chemical Holding Corporation (“OCHC”), a subsidiary of Occidental Petroleum Corporation, notified Lyondell that it was exercising the warrant held by OCHC for the purchase of 5 million shares of Lyondell common stock for $25 per share.  The terms of the warrant provided that Lyondell could elect to net settle the exercise by delivering that number of shares of Lyondell common stock having a market value equal to the difference between the exercise price and the market price.  In February 2007, pursuant to the terms of the warrant, OCHC received a net payment of 682,210 shares of Lyondell common stock, having a value of $20 million.  Subsequently, OCHC sold its remaining shares of Lyondell common stock.
 
During August 2006, LCC entered into a senior secured credit facility that included a $2.65 billion, seven-year term loan and an $800 million, five-year revolving credit facility, incurring transaction costs of $43 million.  The purchase of CITGO’s 41.25% interest in Houston Refining was financed with $2,601 million of the proceeds of the term loan.  The $800 million, five-year revolving credit facility replaced LCC’s then-existing $475 million senior secured revolving credit facility and Houston Refining’s then-existing $150 million senior secured revolving credit facility.  In September 2006, LCC increased the amount under the revolving credit facility from $800 million to $1,055 million and reduced the then-current interest rate on the term loan from London Interbank Offered Rate (“LIBOR”) plus 2% to LIBOR plus 1.75%.

In September 2006, LCC issued $875 million of 8% Senior Unsecured Notes due 2014 and $900 million of 8.25% Senior Unsecured Notes due 2016, incurring transaction costs of $36 million.  Lyondell used the net proceeds to repay $875 million of the seven-year term loan and to purchase the remaining $849 million principal amount of LCC’s 9.625% Senior Secured Notes, Series A, due 2007, paying a premium of $20 million.  In December 2006, Lyondell called and purchased the remaining $430 million principal amount of LCC’s 9.5% Senior Secured Notes due 2008 and paid a premium of $10 million.
 
Also, in 2006, Equistar repaid the $150 million of 6.5% Notes outstanding, which matured in February 2006; Millennium purchased $158 million principal amount of its 7% Senior Notes due 2006, paying a premium of $2 million, and $85 million principal amount of 9.25% Senior Notes due 2008, paying a premium of $5 million; and LCC purchased $50 million principal amount of 9.625% Senior Secured Notes, Series A due 2007, paying a premium of $2 million.  During 2005, LCC prepaid: $300 million of its 9.5% Senior Secured Notes due 2008 and the remaining $700 million of the 9.875% Senior Secured Notes, Series B, due 2007; paid an aggregate of $36 million in prepayment premiums; purchased $1 million of its 9.625% Senior Secured Notes, Series A, due 2007; and paid, at maturity, $100 million of its 9.375% Debentures due 2005.  Also in 2005, Millennium purchased $342 million principal amount of its 7% Senior Notes due 2006, $13 million of the 9.25% Senior Notes due 2008 and $1 million of the 7.625% Senior Debentures due 2026, paying total premiums of $10 million.
 
During the two-year period ended December 31, 2006, LCC amended and subsequently replaced its senior secured revolving credit facility, and amended its indentures and its then-existing accounts receivable sales facility; Equistar amended its then-existing inventory-based revolving credit facility and accounts receivable sales facility; and Millennium amended its then-existing $150 million senior secured revolving credit facilities, the previous credit facility and the indenture governing the 4% Convertible Senior Debentures.
 
 
 
Lyondell paid quarterly cash dividends of $0.225 per share of common stock totaling $229 million in 2007, $223 million in 2006 and $222 million in 2005.
 
Proceeds and related tax benefits from the exercise of stock options totaled $115 million in 2007, $34 million in 2006 and $48 million in 2005.  The tax benefits of the options exercised during 2007, 2006 and 2005 were $53 million, $7 million and $16 million, respectively.  As a result of the acquisition of Lyondell by LyondellBasell Industries, all outstanding options under Lyondell’s incentive plans vested and were cancelled in exchange for a cash payment of $109 million, which reflected the $48 per share merger consideration, less the exercise price of the options.
 
The repayment of debt upon the May 15, 2007 sale of the discontinued operations used cash of $99 million.  In connection with the sale, Millennium repaid and terminated its revolving credit facilities of $125 million in the U.S., $25 million in Australia, €60 million in the U.K. and the term loan in Australia.  The outstanding balances under the Australian term loan and the credit facility in the U.K. were $50 million and $49 million, respectively, at May 15, 2007.
 
Financing activities of discontinued operations provided cash of $23 million in 2007, used cash of $34 million in 2006 and provided cash of $89 million in 2005.  During the 2007 period and prior to the May 15, 2007 sale of the worldwide inorganic chemicals business, $49 million was drawn on the €60 million credit facility in the U.K., while repayments included $20 million of the term loan in Australia and $6 million of other debt.  The 2005 and 2006 activity primarily reflects borrowing of $100 million in 2005 under the Australian senior term loan and related repayments of $29 million in 2006.
 
Liquidity and Capital Resources—Total debt, including current maturities, under which Lyondell is the primary obligor was $17,772 million as of December 31, 2007.  In addition, as a result of the December 20, 2007 acquisition of Lyondell by LyondellBasell Industries, Lyondell recognized in its financial statements $834 million of acquisition-related or push-down debt for which it is a guarantor, as described below, but is not the primary obligor (See notes 1 and 13).  Current maturities of long-term debt at December 31, 2007 included the annual amortization of $71 million and $75 million, respectively, for Lyondell’s term loans A and B, $100 million principal amount outstanding under Lyondell’s inventory-based credit facility, $158 million of Millennium’s 4% Senior Convertible Debentures and $31 million of untendered debt that has been called and paid.  Lyondell intends to reduce debt as market conditions permit.
 
LCC and certain of its subsidiaries, including Equistar and Millennium, are guarantors of certain of the Basell Group’s debt, including an $8,000 million Interim Loan, 8.375% High Yield Notes due 2015, comprising borrowings of $615 million and €500 million ($736 million), and amounts borrowed by the Basell Group under the Senior Secured Credit Facility, consisting of $500 million borrowed under term loan A and €1,287 million ($1,894 million) under term loan B.  The Interim Loan, together with proceeds from other borrowings, was used to finance the acquisition.  If not repaid prior to the 12 months tenure, the Interim Loan converts to a senior secured loan in December 2008 and is due December 2015.  The Interim Loan bears interest at LIBOR plus a margin that increases by 0.5% for each three-month period beginning in June 2008.  In addition, certain subsidiaries of LCC are guarantors under the senior secured inventory-based credit facility.
 
LCC also guarantees $150 million of Equistar debt, consisting of the 7.55% Debentures due 2026.  The level of debt and the limitations imposed by current or future debt agreements, as further discussed below and in Note 15 to the Consolidated Financial Statements could have significant consequences on Lyondell’s business and future prospects.
 
Subsequent to the acquisition of Lyondell, LyondellBasell Industries manages the cash and liquidity of Lyondell and its other subsidiaries as a single group and a global cash pool.  Substantially all of the group’s cash is managed centrally, with operating subsidiaries participating through an intercompany uncommitted revolving credit facility.  The majority of the operating subsidiaries of LyondellBasell Industries, including Lyondell, have provided guarantees or collateral for the new debt of various LyondellBasell Industries subsidiaries totaling approximately $20 billion that was used primarily to acquire Lyondell.  Accordingly, the major bond rating agencies have assigned a corporate rating to LyondellBasell Industries as a group relevant to such borrowings.  Management believes this corporate rating is reflective of the inherent credit for Lyondell, as well as for the group as a whole.
 
 
In view of the interrelated nature of the credit and liquidity position of LyondellBasell Industries and its subsidiaries, and pursuant to Staff Accounting Bulletin Topic 5(j) of the Securities and Exchange Commission, Lyondell has recognized debt of $834 million for which it is not the primary obligor, but which it has guaranteed (the push-down debt), that was used in the acquisition of Lyondell by LyondellBasell Industries.
 
Lyondell’s consolidated balance sheet is levered and its available cash, access to additional capital and business and future prospects could be limited by its significant amount of debt and other financial obligations and the current condition of the capital markets.  Lyondell requires a significant amount of cash to service its indebtedness, and its ability to generate cash will depend on future operating performance, which could be affected by general economic, financial, competitive, legislative, regulatory, business and other factors, many of which are beyond its control.  In addition, Lyondell could be impacted by the operating performance and cash requirements of the subsidiaries of the Basell Group.
 
Lyondell’s near-term profitability, particularly in ethylene-related products, may continue to be impacted by the unpredictability of price movements in crude oil and other raw materials.  Strong heavy crude refining and ETBE/MTBE margins should continue with the approaching 2008 summer driving season.
 
Subsequent to December 31, 2007, LyondellBasell Industries’ incurred costs associated with the closing of its acquisition of Solvay's engineering plastics business and is expected to close the acquisition of Shell's refinery at Berre, France on April 1, 2008.  To ensure continuing financial flexibility on March 27, 2008, LyondellBasell Industries entered into a $750 million committed revolving line of credit with an affiliate of Access Industries.  Borrowings under the line are available to Lyondell and a subsidiary of the Basell Group.
 
Additionally, operating cash flows have been reduced by a number of anticipated requirements, including the usual first quarter seasonality patterns such as annual rebate settlements and bonus payments, coupled with scheduled one-time compensation and other payments in connection with the acquisition of Lyondell by LyondellBasell Industries.  First quarter operating cash flows have been further impacted by the unanticipated increase in raw material prices, which increased net working capital, and the somewhat weaker operating performance of Lyondell’s ethylene-related products business.
 
Lyondell believes that its cash balances, cash generated from operating activities, Lyondell’s ability to move cash among its wholly owned subsidiaries, funds from lines of credit and cash generated from funding under various liquidity facilities available to Lyondell through LyondellBasell Industries will be adequate to meet anticipated future cash requirements, including scheduled debt repayments, necessary capital expenditures, and ongoing operations.
 
 
        On March 27, 2008, LyondellBasell Industries entered into a new senior unsecured $750 million, eighteen-month revolving credit facility, which may be extended by mutual agreement of the parties.  Lyondell and a subsidiary of the Basell Group are borrowers under the facility.  The $750 million revolving credit facility is in addition to the existing credit facilities available to Lyondell and is provided to Lyondell by Access Industries Holdings, LLC, an affiliate of the Access Group (see “Item 12.  Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” of this Annual Report on Form 10-K).  The revolving credit facility has substantially the same terms as the Senior Secured Credit Facility except that it is unsecured and is not guaranteed by the subsidiaries of LyondellBasell Industries, including Lyondell.  As of March 28, 2008, there were no borrowings outstanding under the facility.  At each borrower’s option, loans under the revolving credit facility bear interest until the first full fiscal quarter commencing on or after June 30, 2008, at rates equal to LIBOR plus 6% or the higher of the (i) federal funds rate plus 0.5% and (ii) prime rate, plus, in each case, 5%.  Thereafter, interest rates will be adjusted, from time to time, based upon the First Lien Senior Secured Leverage Ratio as calculated at such time and as further described in the revolving credit facility.
 
In connection with the BASF Corporation lawsuit described in the “Litigation” section of Note 20 to the Consolidated Financial Statements, Lyondell posted appeal bonds, which are collateralized by a $200 million letter of credit issued under the inventory-based credit facility.
 
In April 2006, Lyondell was granted an arbitration award related to a commercial dispute with Bayer AG and Bayer Corporation (collectively, “Bayer”).  The award, which has not been recognized in earnings, pertains to several issues related to the U.S. PO and PO technology joint ventures and included declaratory judgment in Lyondell’s favor concerning interpretation of the contract provisions at issue.  Lyondell was awarded $121 million through June 30, 2005, plus interest and costs of arbitration.  Post-judgment interest on the award continues to accrue.  In August 2006, Lyondell filed a motion in federal district court in Texas to enforce the award, and Bayer subsequently filed motions and other proceedings to vacate or otherwise attack the arbitration award.  These motions and proceedings are still pending.
 
As part of the Houston Refining acquisition, the previous crude supply agreement was terminated for a payment by Houston Refining to PDVSA of $300 million, and the parties entered into a new crude oil contract.  The new crude oil contract, which provides for the purchase and supply of 230,000 barrels per day of heavy, high sulfur crude oil, extends through 2011 and year to year thereafter.  The contract contains market-based pricing, which is determined using a formula reflecting published market indices.  The pricing is designed to be consistent with published prices for similar grades of crude oil.
 
On May 15, 2007, Lyondell completed the sale of its worldwide inorganic chemicals business in a transaction valued at approximately $1.3 billion, including the acquisition of working capital and the assumption of certain liabilities directly related to the business.  In conjunction with this transaction, Lyondell determined that the carrying value of goodwill associated with the inorganic chemicals business was impaired at December 31, 2006, resulting in a charge to Lyondell’s 2006 earnings and a reduction of the carrying value of the goodwill of $545 million.  The inorganic chemicals business’ 2006 annual sales were approximately $1.4 billion and total assets at December 31, 2006 were $1.8 billion, of which $316 million was the remaining goodwill.
 
In November 2007, Moody’s Investors Service (“Moody’s”) lowered its ratings for LyondellBasell Industries to B1 to reflect the substantial amount of debt assumed by LyondellBasell Industries in its acquisition of Lyondell.  At December 31, 2007, Lyondell had cash on hand of $370 million, which included $51 million of cash held by Millennium’s continuing operations and $60 million of cash held by Equistar.  Total unused availability under various liquidity facilities available to Lyondell was $1,614 million as of December 31, 2007, after giving effect to a total minimum unused availability requirement of $100 million under the Accounts Receivable Securitization Facility and the senior secured inventory-based credit facility, and included the following:
 
·  
$980 million under a $1,000 million senior secured multicurrency revolving credit facility, which matures in December 2013.  Availability under the revolving credit facility is reduced to the extent of outstanding borrowings by Lyondell and its co-borrowers under the credit facility and outstanding letters of credit provided under the credit facility, which totaled $20 million as of December 31, 2007.  Lyondell had no outstanding borrowings under the revolving credit facility at December 31, 2007.
 


·  
$150 million under Lyondell’s $1,150 million Accounts Receivable Securitization Facility, which matures in December 2012.  The agreement currently permits the sale of up to $1,150 million of total interest in domestic accounts receivable of LCC, Equistar and Houston Refining.  The outstanding amount of accounts receivable sold under the Accounts Receivable Securitization Facility was $1,000 million at December 31, 2007.
 
·  
$584 million in total under a five-year $1,000 million senior secured inventory-based credit facility of Lyondell and a subsidiary of the Basell Group, after giving effect to the borrowing base net of $316 million of outstanding letters of credit under the inventory-based credit facility as of December 31, 2007.  The borrowing base is determined using a formula applied to inventory balances.  Lyondell’s outstanding borrowing under the inventory-based credit facility at December 31, 2007 was $100 million.
 
LCC Debt and Accounts Receivable Securitization Facility—As noted above under “Financing Activities,” on December 20, 2007, Lyondell entered into a five-year $1,150 million Accounts Receivable Securitization Facility and together with other affiliates in the Basell Group entered into a Senior Secured Credit Facility and a five-year $1,000 million senior secured inventory-based credit facility.  At the option of Lyondell, the Accounts Receivable Securitization Facility, and at the option of Lyondell and one of its affiliates in the Basell Group, the senior secured inventory-based credit facility, may be increased, provided that the total aggregate amount of increase in the Accounts Receivable Securitization Facility and the senior secured inventory-based credit facility does not exceed $600 million.
 
The Senior Secured Credit Facility, Accounts Receivable Securitization Facility, senior secured inventory-based credit facility and the Senior Secured Interim Loan contain restrictive covenants, including covenants that establish maximum levels of annual capital expenditures and require the maintenance of specified financial ratios by LyondellBasell Industries on a consolidated basis.  These covenants, as well as debt guarantees, are described in Note 15 to Lyondell’s Consolidated Financial Statements.  See “Effects of a Breach” below for discussion of the potential impact of a breach of these covenants.
 
Equistar Debt and Accounts Receivable Sales Facility—On December 20, 2007, Lyondell, entered into a five-year $1,150 million Accounts Receivable Securitization Facility.  Concurrently, Equistar entered into a receivable sales agreement with Lyondell, which matures in December 2012.  Also on December 20, 2007, Equistar, together with Lyondell and an affiliate of the Basell Group, entered into a five-year $1,000 million senior secured inventory-based credit facility, which matures in December 2012.  See “LCC Debt and Accounts Receivable Sales Facility” section above for a description of these facilities.
 
The indenture governing Equistar’s 7.55% Notes due 2026 contains restrictive covenants.  These covenants are described in Note 15 to Lyondell’s Consolidated Financial Statements.
 
Millennium Debt—Millennium’s indentures contain certain covenants; however Millennium is no longer prohibited from making certain restricted payments, including dividends to Lyondell, nor is it required to maintain financial ratios as a result of the repayment in June 2007 of its 9.25% Senior Notes due 2008.  The remaining covenants are described in Note 15 to Lyondell’s Consolidated Financial Statements.
 
In connection with Lyondell’s acquisition by LyondellBasell Industries on December 20, 2007, Millennium amended the indenture governing its 4% Convertible Senior Debentures, as required, to reflect a conversion amount for each $1,000 principal amount of Debentures equal to the consideration to be issued in the acquisition to holders of Lyondell common stock; and pursuant to the indenture, the Debentures were convertible at a conversion rate of 75.7633 Lyondell shares per one thousand dollar principal amount of the Debentures.  In 2007, prior to and as a result of the pending acquisition of Lyondell by LyondellBasell Industries, Millennium repaid $106 million principal amount of the Debentures using a combination of Lyondell common stock and cash valued at $380 million.  The $44 million principal amount of the Debentures outstanding at December 31, 2007 was converted into cash of $158 million and paid in January 2008.
 


Millennium’s revolving credit facilities of $125 million in the U.S., $25 million in Australia and €60 million in the U.K. and term loan in Australia were variously secured by equity interests in and assets of Lyondell’s worldwide inorganic chemicals business.  In May 2007, these facilities were repaid and terminated by Lyondell, as required, using proceeds of the sale of the inorganic chemicals business.  See Note 4 to Lyondell’s Consolidated Financial Statements for debt of discontinued operations.
 
Joint Venture Debt—As part of the August 2006 purchase of CITGO’s 41.25% interest in Houston Refining, Houston Refining’s $450 million senior secured term loan facility, $150 million senior secured revolving credit facility and $35 million loan payable to CITGO were repaid and terminated.  Houston Refining no longer has any debt to unaffiliated parties.  As a result of the purchase, Houston Refining is a wholly owned subsidiary of Lyondell.
 
Effects of a Breach—A breach by LCC or any other obligor of the covenants or the failure to pay principal and interest when due under any of the Senior Secured Credit Facility, Interim Loan, Inventory-Based Credit Facility, Accounts Receivable Securitization Facility or other indebtedness of LCC or its affiliates could result in a default or cross-default under all or some of those instruments.  If any such default or cross default occurs, the applicable lenders may elect to declare all outstanding borrowings, together with accrued interest and other amounts payable thereunder, to be immediately due and payable.  In such circumstances, the lenders under the Senior Secured Credit Facility and the Inventory-Based Credit Facility also have the right to terminate any commitments they have to provide further borrowings, and the counterparties under the Accounts Receivable Securitization Facility may terminate further purchases of interests in accounts receivable and receive all collections from previously sold interests until they have collected on their interests in those receivables, thus reducing the entity’s liquidity.  In addition, following such an event of default, the lenders under the Senior Secured Credit Facility and the Interim Loan and the counterparties under the Inventory-Based Credit Facility have the right to proceed against the collateral granted to them to secure the obligations, which in some cases includes Lyondell’s available cash.  In certain situations to avoid a potential default, LCC may be required to make mandatory prepayments under related party loans.  If the obligations under the Senior Secured Credit Facility, Interim Loan, Inventory-Based Credit Facility, Accounts Receivable Securitization Facility or any other material financing arrangement were to be accelerated, it is not likely that the obligors would have, or be able to obtain, sufficient funds to make these accelerated payments, and as a result LCC or one or more of its subsidiaries could be forced into bankruptcy or liquidation.  In addition, if Lyondell were unable generally to pay its debts as they become due, PDVSA Oil would have the right to terminate its crude oil contract with Lyondell’s subsidiary Houston Refining.  See “Lyondell’s crude oil contract with PDVSA Oil is subject to the risk of enforcing contracts against non-U.S. affiliates of a sovereign nation and political, force majeure and other risks.”
 
Off-Balance Sheet Arrangements—The Securities and Exchange Commission (“SEC”) has described various characteristics to identify contractual arrangements that would fall within the SEC’s definition of off-balance sheet arrangements.  Lyondell is a party to a $1,150 million Accounts Receivable Securitization Facility, which matures in December 2012, that has some of those characteristics.
 
Pursuant to the facility, Lyondell sells, through a wholly owned bankruptcy remote subsidiary, on an ongoing basis and without recourse, interests in a pool of domestic accounts receivable to financial institutions participating in the facility.  Lyondell is responsible for servicing the receivables.  The amount of interests in the pool of receivables permitted to be sold is determined by formula.  The agreement currently permits the sale of up to $1,150 million of total interest in the domestic accounts receivable of LCC, Equistar and Houston Refining.  The Accounts Receivable Securitization Facility may, at the option of Lyondell, be increased by $600 million, which amount would decline by the increase in the inventory-based revolving credit facility.  At December 31, 2007, the outstanding amount of receivables sold under the facility was $1,000 million.  Accounts receivable in the consolidated balance sheets are reduced by the sales of interests in the pool.
 
The facility accelerates availability to the business of cash from product sales that otherwise would have been collected over the normal billing and collection cycle.  The availability of the Accounts Receivable Securitization Facility provides one element of Lyondell’s ongoing sources of liquidity and capital resources.  Upon termination of the facility, cash collections related to accounts receivable then in the pools would first be applied to the outstanding interests sold, but Lyondell would in no event be required to repurchase such interests.  See Note 10 to the Consolidated Financial Statements for additional accounts receivable information.
 
 
Other obligations that do not give rise to liabilities that would be reflected in Lyondell’s balance sheet are described below under “Purchase Obligations” and “Operating Leases.”
 
Contractual and Other Obligations—The following table summarizes, as of December 31, 2007, Lyondell’s minimum payments for long-term debt, and contractual and other obligations for the next five years and thereafter.
 
         
Payments Due By Period
  
Millions of dollars
  
Total
    
2008
    
2009
    
2010
    
2011
    
2012
    
Thereafter
  
Long-term debt
   $ 9,889     $ 435     $ 147     $ 325     $ 301     $ 413     $ 8,268  
Related party borrowings:
                                                        
Related party borrowings of
       Lyondell
     7,883       717       - -       - -       - -       - -       7,166  
Push-down debt
     834       - -       - -       - -       - -       - -       834  
Interest on long-term debt
     5,652       820       797       781       751       725       1,778  
Interest on related party borrowings:
                                                        
Interest on related party borrowings of Lyondell
     9,654       713       847       991       1,134       1,277       4,692  
Push-down debt
     1,124       83       99       115       132       149       546  
Pension benefits:
                                                        
PBO
     1,515       109       102       103       103       111       987  
Assets
     (1,455 )     - -       - -       - -       - -       - -       (1,455 )
Funded status
     60                                                  
Other postretirement benefits
     254       18       18       19       20       20       159  
Advances from customers
     175       37       28       26       23       10       51  
Other
     375       12       36       34       29       28       236  
Deferred income taxes
     3,884       77       60       204       230       246       3,067  
Other obligations:
                                                        
Purchase obligations
     6,590       724       659       648       645       636       3,278  
Operating leases
     1,312       257       212       159       118       67       499  
Total
   $ 47,695     $ 4,012     $ 3,005     $ 3,405     $ 3,486     $ 3,682     $ 30,105  

 
Long-Term Debt—Lyondell’s long-term debt includes credit facilities of Lyondell and the Basell Group and debt obligations of LCC, including obligations to affiliates of the Basell Group, as well as debt obligations of Lyondell’s wholly owned subsidiaries, Equistar and Millennium.  See Note 15 to the Consolidated Financial Statements for a discussion of covenant requirements under the credit facilities and indentures and additional information regarding long-term debt.
 
Related Party Borrowings—Lyondell’s related party borrowings include obligations to affiliates of the Basell Group under which Lyondell is the primary obligor and $834 million of push-down debt for which Lyondell is not the primary obligor, but which it has guaranteed, and which was used by LyondellBasell Industries in the acquisition of Lyondell.
 
Interest—The long-term debt and related party debt agreements contain provisions for the payment of monthly, quarterly or semi-annual interest at a stated rate of interest over the term of the debt.  These payment obligations, including interest on push-down debt for which Lyondell is not the primary obligor, are reflected in the table above.  Lyondell does not anticipate that it will be required to fund all or part of the obligations related to push-down debt.
 


Pension Benefits—Lyondell maintains several defined benefit pension plans, as described in Note 18 to the Consolidated Financial Statements.  At December 31, 2007, the projected benefit obligation for Lyondell’s pension plans, including Equistar and Millennium plans, exceeded the fair value of plan assets by $60 million.  Subject to future actuarial gains and losses, as well as actual asset earnings, Lyondell, together with its consolidated subsidiaries, will be required to fund the $60 million, with interest, in future years.  Lyondell’s pension contributions, including discontinued operations, were $264 million in 2007, $210 million in 2006 and $131 million in 2005.  Required contributions for continuing operations are expected to be approximately $11 million in 2008.  Estimates of pension benefit payments through 2012 are included in the table above.
 
Other Postretirement Benefits—Lyondell provides other postretirement benefits, primarily medical benefits to eligible participants, as described in Note 18 to the Consolidated Financial Statements.  Other postretirement benefits are unfunded and are paid by Lyondell as incurred.  Estimates of other postretirement benefit payments through 2012 are included in the table above.
 
Advances from Customers—Lyondell received advances from customers in prior years in connection with long-term sales agreements under which Lyondell is obligated to deliver product primarily at cost-based prices.  These advances are treated as deferred revenue and will be amortized to earnings as product is delivered over the remaining terms of the respective contracts, which primarily range from 4 to 13 years.  The unamortized long-term portion of such advances totaled $142 million and $220 million as of December 31, 2007 and 2006, respectively.
 
Other—Other primarily consists of accruals for environmental remediation costs and obligations under deferred compensation arrangements.
 
Deferred Income Taxes—The scheduled settlement of the deferred tax liabilities shown in the table is based on the scheduled reversal of the underlying temporary differences.  Actual cash tax payments will vary dependent upon future taxable income.
 
Purchase Obligations—Lyondell is party to various obligations to purchase products and services, principally for utilities and industrial gases.  These commitments are designed to assure sources of supply and are not expected to be in excess of normal requirements.  Included in purchase obligations is a commitment to reimburse Rhodia for the costs of operating the TDI facility at Pont de Claix, France, through March 2016.  The Rhodia obligations, denominated in euros, include fixed and variable components.  The actual future obligation will vary with fluctuations in foreign currency exchange rates, market prices of raw materials and other variable cost components such as utility costs.  Approximately 18% to 23% of the annual payments shown in the table above are subject to such variability.  See the “Commitments” section of Note 20 to the Consolidated Financial Statements for a description of Lyondell’s commitments and contingencies, including these purchase obligations.
 
Operating Leases—Lyondell leases various facilities and equipment under noncancelable lease arrangements for various periods.  See Note 16 to the Consolidated Financial Statements for related lease disclosures.
 
 
 
Thus far in 2008, global business fundamentals remain similar to those in the fourth quarter 2007 in the chemicals segment, with raw material and energy costs continuing their upward climb, creating significant margin pressure in ethylene and ethylene derivative products.  The PO and PO derivative product sales volumes, margins and overall business conditions are generally more stable.  Polymer segment sales volumes are somewhat depressed due to weaker demand in North America, but export sales volumes remain strong driven by global demand and the weak U.S. dollar.  Heavy crude refining margins are comparable to prior years, while MTBE/ETBE margins are strong thus far in the first quarter 2008.
 
The near-term direction of crude oil and other raw material price movements remains unclear.  This unpredictability may continue to impact Lyondell’s near-term profitability, particularly in ethylene-related products.  Strong heavy crude refining and MTBE/ETBE margins should continue.
 
 
 
As a result of the July 16, 2007 agreement and plan of merger, Lyondell began reporting transactions with the Basell Group as related party transactions beginning with the third quarter 2007.  Lyondell also conducts transactions with Occidental, which was considered a related party during the 2007 Predecessor period as a result of Occidental’s representation on Lyondell’s Board of Directors.
 
Lyondell also conducted transactions with Houston Refining prior to Lyondell’s August 16, 2006 purchase of its partner’s 41.25% interest in Houston Refining (see Notes 7 and 8).  These transactions are continuing; however, subsequent to August 16, 2006, these transactions are eliminated in the Consolidated Financial Statements of Lyondell.
 
Houston Refining also makes purchases of product from Occidental.  Subsequent to August 16, 2006, transactions during the Predecessor period between Houston Refining and Occidental are reported as Lyondell related party transactions.
 
Lyondell believes that such transactions are effected on terms substantially no more or less favorable than those that would have been agreed upon by unrelated parties on an arm’s-length basis.  See Note 7 to the Consolidated Financial Statements for further discussion of related party transactions involving the Basell Group, Occidental, Lyondell, and Houston Refining.
 
 
 
Lyondell applies those accounting policies that management believes best reflect the underlying business and economic events, consistent with accounting principles generally accepted in the U.S.  Lyondell’s more critical accounting policies include those related to the basis of presentation, long-lived assets, including the costs of major maintenance turnarounds and repairs, the valuation of goodwill, accruals for long-term employee benefit costs such as pension and other postretirement costs, liabilities for anticipated expenditures to comply with environmental regulations, and accruals for taxes based on income.  Inherent in such policies are certain key assumptions and estimates made by management.  Management periodically updates its estimates used in the preparation of the financial statements based on its latest assessment of the current and projected business and general economic environment.  These critical accounting policies have been discussed with Lyondell’s Board of Directors.  Lyondell’s significant accounting policies are summarized in Note 2 to the Consolidated Financial Statements.
 
Basis of Presentation—As a result of Lyondell’s acquisition by LyondellBasell Industries on December 20, 2007, Lyondell’s assets and liabilities were revalued to reflect the values assigned in LyondellBasell Industries’ accounting for the purchase of Lyondell, resulting in a new basis of accounting.  The revaluations included Lyondell’s long-lived assets and goodwill and related accruals for taxes based on the estimated deductibility of the new values assigned.  The values assigned involved the use of assumptions, estimates and judgments based on known conditions as of the acquisition date and available information at the time of the preparation of these consolidated financial statements.  As the acquisition occurred on December 20, 2007, information is still being acquired and analyzed to finalize the allocation of the purchase price to assets and liabilities acquired.  Accordingly, the purchase price allocation is preliminary.  Subsequent adjustment to finalize the purchase price allocation is not expected to be material.
 
The consolidated financial statements include the accounts of Lyondell and its subsidiaries.  Investments in joint ventures where Lyondell exerts a certain level of management control, but lacks full decision making ability over all major issues, are accounted for using the equity method.  Governance for Lyondell’s major unconsolidated joint venture, Houston Refining prior to August 16, 2006, was generally based on equal representation from the partners who jointly controlled certain key management decisions.  These included approval of the strategic plan, capital expenditures and annual budget, issuance of debt and the appointment of executive management of the joint venture.  Accordingly, Lyondell’s investment in Houston Refining prior to August 16, 2006 was carried on the equity method, even though Lyondell’s ownership percentage exceeded 50%.
 
 
Long-Lived Assets—With respect to long-lived assets, key assumptions included the estimates of the asset fair values and useful lives at the acquisition date and the recoverability of carrying values of fixed assets and other intangible assets, as well as the existence of any obligations associated with the retirement of fixed assets.  Such estimates could be significantly modified and/or the carrying values of the assets could be impaired by such factors as new technological developments, new chemical industry entrants with significant raw material or other cost advantages, uncertainties associated with the U.S. and world economies, the cyclical nature of the chemical and refining industries, and uncertainties associated with governmental actions, whether regulatory or, in the case of Houston Refining, with respect to the new crude oil contract.
 
To reflect economic and market conditions, from time to time Lyondell may temporarily idle manufacturing facilities.  Assets that are temporarily idled are reviewed for impairment at the time they are idled, and at least annually thereafter.  Lyondell had no major idled facilities as of December 31, 2007, nor did earnings for 2007 include any charges related to impairment.
 
Earnings for 2006 included a $106 million pretax charge for impairment of the net book value of Lyondell’s ethylene facility in Lake Charles, Louisiana, which was idled in the first quarter of 2001, pending sustained improvement in market conditions.  In 2006, Lyondell undertook a study of the feasibility, cost and time required to restart the Lake Charles ethylene facility.  As a result, management determined that restarting the facility would not be justified.
 
Earnings for 2005 included pretax charges of $195 million for a reduction of the carrying value of Lyondell’s Lake Charles, Louisiana, TDI plant and related assets.  The charges, as well as a decision to cease TDI production at the plant, reflected the facility’s poor financial results and Lyondell’s projections of future plant capital requirements, high energy and raw material costs and low industry capacity utilization rates, which made it commercially impracticable to continue production of TDI at the plant.  Hurricane Rita contributed to the decision, as it damaged the plant and contributed to increased energy costs.  The net book value of the long-lived assets included in Lyondell’s investment in its other TDI facility, which is operated by Rhodia in Pont de Claix, France is $102 million.  Based on current operating profits in the TDI business, as well as estimates of expected future cash flows, the book value of this investment is not believed to be impaired at December 31, 2007.
 
The estimated useful lives of long-lived assets range from 3 to 30 years.  Depreciation and amortization of these assets, including amortization of deferred turnaround costs, under the straight-line method over their estimated useful lives totaled $907 million in 2007.  Based upon the estimated fair values and re-assessed useful lives at December 20, 2007, the depreciation and amortization would be $1,314 million per year.  If the useful lives of the assets were found to be shorter than originally estimated, depreciation and amortization charges would be accelerated over the revised useful life.
 
Lyondell defers the costs of major periodic maintenance and repair activities (“turnarounds”) in excess of $5 million, amortizing such costs over the period until the next expected major turnaround of the affected unit.  During 2007, 2006 and 2005, cash expenditures of approximately $146 million, $71 million and $67 million, respectively, were deferred and are being amortized, predominantly over 4 to 7 years.  Amortization in 2007, 2006 and 2005, of previously deferred turnaround costs was $89 million, $63 million and $56 million, respectively.  Additional information on long-lived assets, deferred turnaround costs and related depreciation and amortization appears in Note 12 to the Consolidated Financial Statements.
 
Goodwill—Goodwill of $5,247 million at December 31, 2007 represents the excess of purchase price paid by LyondellBasell Industries over the fair value assigned to the net tangible and identifiable intangible assets of Lyondell.  Lyondell evaluates the carrying value of goodwill annually or more frequently if events or changes in circumstances indicate that the carrying amount may exceed fair value.  Recoverability is determined by comparing the estimated fair value of the reporting unit to which the goodwill applies to the carrying value, including goodwill, of that reporting unit.
 


The recoverability of Lyondell’s goodwill is dependent upon the future valuations associated with its reporting units, which could change significantly based upon business performance or other factors.
 
In conjunction with Lyondell’s sale of its worldwide inorganic chemicals business, discussed in Note 4 to the Consolidated Financial Statements, Lyondell determined that the carrying value of goodwill associated with the inorganic chemicals business was impaired at December 31, 2006.  Accordingly, Lyondell’s 2006 income from discontinued operations reflected a charge of $545 million to recognize impairment of the carrying value of the goodwill related to this business.
 
Long-Term Employee Benefit Costs—The costs to Lyondell of long-term employee benefits, particularly pension and other postretirement medical and life insurance benefits, are incurred over long periods of time, and involve many uncertainties over those periods.  The net periodic benefit cost attributable to current periods is based on several assumptions about such future uncertainties, and is sensitive to changes in those assumptions.  It is management’s responsibility, often with the assistance of independent experts, to select assumptions that in its judgment represent its best estimates of the future effects of those uncertainties.  It also is management’s responsibility to review those assumptions periodically to reflect changes in economic or other factors that affect those assumptions.
 
The current benefit service costs, as well as the existing liabilities, for pensions and other postretirement benefits are measured on a discounted present value basis.  The discount rate is a current rate, related to the rate at which the liabilities could be settled.  Lyondell’s assumed discount rate is based on average rates published by Moody’s and Merrill Lynch for high-quality (Aa rating) ten-year fixed income securities.  For the purpose of measuring the U.S. benefit obligations at December 31, 2007, Lyondell increased its assumed discount rate from 5.75% to 6.25%, reflecting market interest rates at December 31, 2007.  The 6.25% rate also will be used to measure net periodic benefit cost during 2008.  A one percentage point reduction in the assumed discount rates would increase Lyondell’s benefit obligation for pensions and other postretirement benefits by approximately $194 million, and would not have a material effect on Lyondell’s net income.
 
The benefit obligation and the periodic cost of other postretirement medical benefits also are measured based on assumed rates of future increase in the per capita cost of covered health care benefits.  As of December 31, 2007, the assumed rate of increase was 9% for 2008 decreasing 1% per year to 5% in 2012 and thereafter.  A one percentage point change in the health care cost trend rate assumption would have no significant effect on either the benefit liability or the net periodic cost, due to limits on Lyondell’s maximum contribution level under the medical plan.
 
The net periodic cost of pension benefits included in expense also is affected by the expected long-term rate of return on plan assets assumption.  Investment returns that are recognized currently in net income represent the expected long-term rate of return on plan assets applied to a market-related value of plan assets which, for Lyondell, is defined as the market value of assets.  The expected rate of return on plan assets is a longer term rate, and is expected to change less frequently than the current assumed discount rate, reflecting long-term market expectations, rather than current fluctuations in market conditions.
 
Lyondell’s expected long-term rate of return on U.S. plan assets of 8% is based on the average level of earnings that its independent pension investment advisor had advised could be expected to be earned over time.  The expectation is based on an asset allocation of 55% U.S. equity securities (8.9% expected return), 15% non-U.S. equity securities (9% expected return), 25% fixed income securities (6% expected return), and 5% real estate investments (8.3% expected return) recommended by the advisor, and has been adopted for the plans.  The actual return on plan assets in 2007 was 9%.
 
The actual rate of return on plan assets may differ from the expected rate due to the volatility normally experienced in capital markets.  Management’s goal is to manage the investments over the long term to achieve optimal returns with an acceptable level of risk and volatility.  Based on the market value of plan assets at December 31, 2007, a one percentage point decrease in this assumption for Lyondell would decrease Lyondell’s net income by approximately $9 million.
 


Net periodic pension cost recognized each year includes the expected asset earnings, rather than the actual earnings or loss.  This unrecognized amount, to the extent it exceeds ten percent of the projected benefit obligation for the respective plan, will be recognized as additional net periodic benefit cost over the average remaining service period of the participants in each plan.
 
Additional information on the key assumptions underlying these benefit costs appears in Note 18 to the Consolidated Financial Statements.
 
Liabilities for Environmental Remediation Costs—Anticipated expenditures related to investigation and remediation of contaminated sites, which include current and former plant sites and other remediation sites, are accrued when it is probable a liability has been incurred and the amount of the liability can be reasonably estimated.  Only ongoing operating and monitoring costs, the timing of which can be determined with reasonable certainty, are discounted to present value.  Future legal costs associated with such matters, which generally are not estimable, are not included in these liabilities.
 
As of December 31, 2007, Lyondell’s accrued liability for future environmental remediation costs at current and former plant sites and other remediation sites totaled $207 million.  The liabilities for individual sites range from less than $1 million to $145 million, and remediation expenditures are expected to occur over a number of years, and not to be concentrated in any single year.  In the opinion of management, there is no material estimable range of reasonably possible loss in excess of the liabilities recorded for environmental remediation.  However, it is possible that new information about the sites for which the accrual has been established, new technology or future developments such as involvement in investigations by regulatory agencies, could require Lyondell to reassess its potential exposure related to environmental matters.  See Note 20 to the Consolidated Financial Statements for further discussion of environmental remediation matters.
 
Accruals for Taxes Based on Income—Uncertainties exist with respect to interpretation of complex U.S. federal and non-U.S. tax regulations.  Management expects that Lyondell’s interpretations will prevail.  Also, Lyondell has recognized deferred tax benefits relating to its future utilization of past operating losses.  Lyondell believes it is more likely than not that the amounts of deferred tax assets in excess of the related valuation reserves will be realized.  Further details on Lyondell’s income taxes appear in Note 19 to the Consolidated Financial Statements.
 
 
 
In December 2007, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 160, Noncontrolling Interests in Consolidated Financial Statements – an amendment to ARB No. 51, which establishes new accounting and disclosure requirements for noncontrolling, or minority, interests, including their classification as a separate component of equity and the adjustment of net income to include amounts attributable to minority interests.  Statement 160 also establishes new accounting standards requiring recognition of a gain or loss upon deconsolidation of a subsidiary.  SFAS No. 160 will be effective for Lyondell beginning in 2009, with earlier application prohibited.
 
Also in December 2007, the FASB issued SFAS No. 141 (revised 2007), Business Combinations, which requires  an acquiring entity to recognize all assets acquired and liabilities assumed in a transaction at the acquisition-date at fair value with limited exceptions.  SFAS No. 141 (revised 2007) will change the accounting treatment for certain specific items, including: expensing of most acquisition and restructuring costs; recording acquired contingent liabilities, in-process research and development and noncontrolling, or minority, interests at fair value; and recognizing changes in income tax valuations and uncertainties after the acquisition date as income tax expense.  SFAS No. 141 (revised 2007) also includes new disclosure requirements.  For Lyondell, SFAS No. 141 (revised 2007)  will apply to business combinations with acquisition dates beginning in 2009.  Earlier adoption is prohibited.
 
Although certain past transactions, including the acquisition of Lyondell by LyondellBasell Industries, would have been accounted for differently under SFAS No. 160 and SFAS No. 141 (revised 2007), application of these statements in 2009 will not affect historical amounts.
 
 
In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities – Including an amendment of FASB Statement No. 115, which permits election of fair value to measure many financial instruments and certain other items.  SFAS No. 159 is effective for Lyondell beginning in 2008.  Lyondell does not expect the application of SFAS No. 159 to have a material effect on its consolidated financial statements.
 
In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements.  The new standard defines fair value, establishes a framework for its measurement and expands disclosures about such measurements.  In February 2008, the FASB issued FASB Staff Position FAS 157-2, delaying the effective date of SFAS No. 157 for nonfinancial assets and nonfinancial liabilities.  The effective date for Lyondell would be at the beginning of 2009.  Lyondell is currently evaluating the effect of SFAS No. 157 on its consolidated financial statements.
 
Lyondell adopted the provisions of FASB Interpretation (“FIN”) No. 48, Accounting for Uncertainty in Income Taxes, on January 1, 2007.  As a result of the implementation of FIN No. 48, Lyondell recognized a $47 million increase in the liability related to uncertain income tax positions, which was accounted for as a $41 million increase in goodwill related to the acquisition of Millennium, a $4 million increase in deferred tax assets and a $2 million increase of the January 1, 2007 balance of retained deficit (see Note 19).
 
        Effective December 31, 2006, Lyondell adopted the provisions of Statement of Financial Accounting Standards (“SFAS”) No. 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans – An Amendment of FASB Statements No. 87, 88, 106, and 132R, which primarily requires an employer to recognize in its statement of financial position an asset for a plan’s overfunded status or a liability for a plan’s underfunded status through comprehensive income in the year in which changes occur.  Lyondell’s application of SFAS No. 158 as of December 31, 2006 to its continuing operations resulted in increases of $21 million and $105 million in its current and long-term benefit liabilities, respectively, a decrease of $1 million in other assets, a decrease of $35 million in deferred tax liabilities and an increase of $92 million in accumulated other comprehensive loss in its consolidated balance sheet as of December 31, 2006 (see Note 18).
 
 
 
Various environmental laws and regulations impose substantial requirements upon the operations of Lyondell.  Lyondell’s policy is to be in compliance with such laws and regulations, which include, among others, the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA” or “Superfund”) as amended, the Resource Conservation and Recovery Act (“RCRA”) and the Clean Air Act Amendments (“Clean Air Act”).  Lyondell does not specifically track all recurring costs associated with managing hazardous substances and pollution in ongoing operations.  Such costs are included in cost of sales.
 
Lyondell’s accrued liability for future environmental remediation costs at current and former plant sites and other remediation sites totaled $207 million as of December 31, 2007.  The remediation expenditures are expected to occur over a number of years, and not to be concentrated in any single year.  In the opinion of management, there is no material estimable range of reasonably possible loss in excess of the liabilities recorded for environmental remediation.  However, it is possible that new information about the sites for which the accrual has been established, new technology or future developments such as involvement in investigations by regulatory agencies, could require Lyondell to reassess its potential exposure related to environmental matters.  The liabilities for individual sites range from less than $1 million to $145 million.  The $145 million liability relates to the Kalamazoo River Superfund Site.  See “Critical Accounting Policies” above and the “Environmental Remediation” section of Note 20 to the Consolidated Financial Statements for additional discussion of Lyondell’s liabilities for environmental remediation, including the liability related to the Kalamazoo River Superfund Site.
 
Lyondell also makes capital expenditures to comply with environmental regulations.  Capital expenditures for regulatory compliance in 2007, 2006 and 2005 totaled approximately $156 million, $127 million and $82 million, respectively.  The 2007 and 2006 spending included Houston Refining prospectively from August 16, 2006.  Capital expenditures by Houston Refining (on a 100% basis) for regulatory compliance in 2007, 2006 and 2005 were $101 million, $134 million and $106 million, respectively.
 
 
Lyondell currently estimates that environmentally related capital expenditures at its facilities will be approximately $65 million in 2008 and $30 million in 2009.
 
The significant increases in planned and actual capital expenditures in 2007, 2006 and 2005 reflected increased spending on projects related to air emission reductions, low sulfur fuels and wastewater management, principally at Lyondell’s Gulf Coast plants.  Under the Clean Air Act, the eight-county Houston/Galveston region was designated a severe non-attainment area for ozone by the Environmental Protection Agency (“EPA”).  Emission reduction controls were installed at Lyondell’s refinery (“Refinery”) and each of its ten facilities in the Houston/Galveston region to comply with the November 2007 deadline.  Also, under the Clean Air Act, the EPA adopted new standards for gasoline that required refiners to produce a low sulfur gasoline by 2006 and ultra low sulfur diesel  by the end of 2009.  The Refinery met the 2006 low sulfur gasoline compliance target and complied with a requirement to produce 80% of on-road diesel fuel as ultra low sulfur diesel by June 2006.
 
 
 
See Note ‎17 to the Consolidated Financial Statements for discussion of Lyondell’s management of commodity price risk, foreign currency exposure and interest rate risk through its use of derivative instruments and hedging activities.
 
 
A substantial portion of Lyondell’s products and raw materials are commodities whose prices fluctuate as market supply and demand fundamentals change.  Accordingly, product margins and the level of Lyondell’s profitability tend to fluctuate with changes in the business cycle.  Lyondell tries to protect against such instability through various business strategies.  These include provisions in sales contracts allowing Lyondell to pass on higher raw material costs through timely price increases, formula price contracts to transfer or share commodity price risk, and increasing the depth and breadth of Lyondell’s product portfolio.
 
In addition, Lyondell selectively uses commodity swap, option, and futures contracts with various terms to manage the volatility related to purchases of natural gas and raw materials, as well as product sales.  Market risks created by these derivative instruments and the mark-to-market valuations of open positions are monitored by management.
 
During 2007 and 2006, Lyondell entered into futures contracts, with respect to purchases of crude oil and sales of gasoline and heating oil, and settled futures positions of 1,330 million gallons and 148 million gallons, respectively, of gasoline and heating oil, which resulted in net gains of $53 million and $1 million, respectively.  Lyondell also settled futures contracts of 4 million barrels of crude oil during 2007, resulting in a net gain of $3 million.  Also during 2007, Lyondell entered into futures contracts designated as cash flow hedges to offset the effect of changes in the price of silver used as catalyst in the production process.  Gains, related to these cash flow hedges, of less than $1 million were deferred in Accumulated Other Comprehensive Income (“AOCI”) as of December 31, 2007.
 
At December 31, 2007, futures contracts for 20 million gallons of gasoline and heating oil in the notional amount of $46 million that matured in February and March of 2008, and futures contracts for 1 million troy ounces of silver in the notional amount of $15 million, maturing in September 2008, were outstanding.  At December 31, 2006, futures contracts for 12 million gallons of gasoline in the notional amount of $20 million and 900 thousand barrels of crude oil in the notional amount of $56 million, maturing in February and March 2007, were outstanding.  The fair value, based on quoted market prices, resulted in a net payable of less than $1 million and $3 million at December 31, 2007 and 2006.
 
Using sensitivity analysis and hypothetical unfavorable changes in market prices ranging from 16% to 30% from those in effect at December 31, 2007, the effect would be to reduce net income by approximately $4 million.  The quantitative information about market risk is necessarily limited because it does not take into account the effects of the underlying operating transactions.
 
 
During 2005, the derivative transactions were not significant compared to Lyondell’s overall inventory purchases and product sales.  
 
 
 
Lyondell manufactures and markets its products in a number of countries throughout the world and, as a result, is exposed to changes in foreign currency exchange rates.  Costs in some countries are incurred, in part, in currencies other than the applicable functional currency.  Lyondell utilizes forward, swap and option derivative contracts with terms normally lasting less than three months to protect against the adverse effect that exchange rate fluctuations may have on foreign currency denominated trade receivables and trade payables.  These derivatives generally are not designated as hedges for accounting purposes.  There were no outstanding foreign currency forward, swap or option contracts at December 31, 2007 and 2006.
 
 
 
Lyondell is exposed to interest rate risk with respect to variable rate debt.  At December 31, 2007, Lyondell had $17,867 million of outstanding variable rate debt, including $7,883 million of related party debt and $834 million of push-down debt for which Lyondell is not the primary obligor, but which it has guaranteed and which was used by LyondellBasell Industries in the acquisition of Lyondell.  Using sensitivity analysis and a hypothetical 10% increase in interest rates from those in effect at year end, the increase in annual interest expense on the variable-rate debt would reduce net income by approximately $105 million.
 
Derivative instruments have been used selectively to manage the ratio of fixed- to variable-rate debt.  Pursuant to the Senior Secured Credit Facility (see Note 15 to the Consolidated Financial Statements), the borrowers are required to enter into hedging arrangements to reduce interest rate risk exposure.  The hedging arrangements are to cover at least 50% of LyondellBasell Industries total debt, with certain exclusions, for at least three years.  Therefore, Lyondell and other LyondellBasell Industries subsidiaries that are borrowers under the Senior Secured Credit Facility must enter into and maintain hedging arrangements to collectively meet that requirement.
 
In 2007, Lyondell terminated all of its outstanding interest rate swap agreements upon repayment of the underlying debt and recorded a loss of $2 million.  Accordingly, at December 31, 2007, there were no outstanding interest rate swap agreements.  At December 31, 2006, interest rate swap agreements in the notional amount of $175 million were outstanding, which were designated as fair-value hedges of underlying fixed-rate obligations.  The fair value of these interest rate swap agreements was an obligation of $3 million at December 31, 2006, resulting in a decrease in the carrying value of long-term debt and the recognition of a corresponding liability.
 

 

 


 
 
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Consolidated Financial Statements:
  
 
 
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LYONDELL–CITGO Refining LP (currently known as Houston Refining LP)
  
 
Unaudited Financial Statements:
  
 
 
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150
151
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LYONDELL–CITGO Refining LP
  
 
 
158
 
Financial Statements:
  
 
 
159
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The management of Lyondell Chemical Company is responsible for establishing and maintaining adequate internal control over financial reporting.  Lyondell’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
 
Lyondell management assessed the effectiveness of Lyondell’s internal control over financial reporting as of December 31, 2007.  In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control—Integrated Framework.  Based on its assessment, Lyondell’s management has concluded that Lyondell’s internal control over financial reporting was effective as of December 31, 2007 based on those criteria.
 
The effectiveness of Lyondell’s internal control over financial reporting as of December 31, 2007 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears herein.
 


 
To the Board of Directors and Stockholder
of Lyondell Chemical Company
 
In our opinion, the accompanying consolidated balance sheet and the related consolidated statement of income, of stockholder's equity and cash flows present fairly, in all material respects, the financial position of Lyondell Chemical Company and its subsidiaries at December 31, 2007, and the results of their operations and their cash flows for the period from December 21, 2007 to December 31, 2007 in conformity with accounting principles generally accepted in the United States of America.  Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2007, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).  The Company's management is responsible for these financial statements, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management's Report on Internal Control over Financial Reporting.  Our responsibility is to express opinions on these financial statements and on the Company's internal control over financial reporting based on our integrated audit.  We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects.  Our audit of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation.  Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.  Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinions.
 
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.  A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
 
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
 

 
/s/  PricewaterhouseCoopers LLP
 
Houston, Texas
March 27, 2008


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
To the Board of Directors and Stockholders
of Lyondell Chemical Company:
 
In our opinion, the accompanying consolidated balance sheet and the related consolidated statements of income, of stockholders’ equity and cash flows present fairly, in all material respects, the financial position of Lyondell Chemical Company and its subsidiaries at December 31, 2006, and the results of their operations and their cash flows for the period January 1, 2007 to December 20, 2007, and the years ended December 31, 2006 and 2005 in conformity with accounting principles generally accepted in the United States of America.  These financial statements are the responsibility of the Company’s management.  Our responsibility is to express an opinion on these financial statements based on our audits.  We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.
 
As discussed in Note 2 to the consolidated financial statements, the Company changed the manner in which it accounts for defined benefit pension and other postretirement plans in 2006 and the manner in which accounts for uncertain tax positions in 2007.
 

 
/s/  PricewaterhouseCoopers LLP
 
Houston, Texas
March 27, 2008


 
   
Successor
    
Predecessor
  
   
For the
period from
December 21
through
December 31,
    
For the
period from
January 1
through
December 20,
    
For the year ended
December 31,
  
Millions of dollars, except per share data
  
2007
    
2007
    
2006
    
2005
  
Sales and other operating revenues:
                        
Trade
   $ 927     $ 26,889     $ 19,548     $ 15,558  
Related parties
     2       785       1,334       1,699  
      929       27,674       20,882       17,257  
Operating costs and expenses:
                                
Cost of sales
     950       25,555       18,555       15,307  
Asset impairments
     - -       - -       106       195  
Selling, general and administrative expenses
     8       697       509       437  
Research and development expenses
     2       72       72       70  
Purchased in-process research
and development
     95       - -       - -       - -  
Acquisition-related costs
     - -       62       - -       - -  
      1,055       26,386       19,242       16,009  
Operating income (loss)
     (126 )     1,288       1,640       1,248  
Interest expense:
                                
Related parties
     (33 )     - -       - -       - -  
Other
     (23 )     (614 )     (648 )     (634 )
Interest income:
                                
Related parties
     3       - -       - -       - -  
Other
     1       33       39       32  
Other income (expense), net:
                                
Related parties
     10       - -       - -       - -  
Other
     (1 )     (539 )     37       (37 )
Income (loss) before
equity investments and income taxes
     (169 )     168       1,068       609  
Income from equity investments:
                                
Houston Refining LP
     - -       - -       73       123  
Other
     - -       2       5       1  
      - -       2       78       124  
Income (loss) from continuing operations
before income taxes
     (169 )     170       1,146       733  
Provision for (benefit from) income taxes
     (23 )     86       410       193  
Income (loss) from continuing operations
     (146 )     84       736       540  
Loss from discontinued operations, net of tax
     - -       (85 )     (550 )     (9 )
 
Net income (loss)
   $ (146 )   $ (1 )   $ 186     $ 531  
                                 


See Notes to the Consolidated Financial Statements.


 
   
Successor
    
Predecessor
  
Millions, except shares and par value data
  
December 31,
2007
    
December 31,
2006
  
ASSETS
            
Current assets:
            
Cash and cash equivalents
   $ 370     $ 401  
Deposits with related party
     135       - -  
Accounts receivable:
                
Trade, net
     1,212       1,837  
Related parties
     165       95  
Inventories
     3,354       1,877  
Prepaid expenses and other current assets
     232       147  
Note receivable from related party
     2       - -  
Deferred tax assets
     - -       102  
Current assets held for sale
     - -       687  
Total current assets
     5,470       5,146  
Property, plant and equipment, net
     12,504       8,542  
Investments and long-term receivables:
                
Investment in PO joint ventures
     564       778  
Note receivable from related party
     835       - -  
Other
     187       115  
Goodwill, net
     5,247       1,332  
Intangible assets, net
     2,398       632  
Other assets, net
     187       232  
Long-term assets held for sale
     - -       1,069  
Total assets
   $ 27,392     $ 17,846  
 
See Notes to the Consolidated Financial Statements.


CONSOLIDATED BALANCE SHEETS – (Continued)
 
   
Successor
    
Predecessor
  
Millions, except shares and par value data
  
December 31,
2007
    
December 31,
2006
  
LIABILITIES AND STOCKHOLDERS’ EQUITY
            
Current liabilities:
            
Current maturities of long-term debt
   $ 435     $ 18  
Related party borrowings
     717       - -  
Accounts payable:
                
Trade
     2,287       1,785  
Related parties
     132       83  
Accrued liabilities
     726       980  
Deferred income taxes
     431       - -  
Current liabilities associated with assets held for sale
     - -       341  
Total current liabilities
     4,728       3,207  
Long-term debt:
                
Banks and other unrelated parties
     9,454       7,936  
Related parties
     8,000       - -  
Other liabilities
     827       1,453  
Deferred income taxes
     3,884       1,537  
Long-term liabilities associated with assets held for sale
     - -       391  
Commitments and contingencies
                
Minority interests
     126       134  
Stockholders’ equity:
                
Common stock, $1.00 par value, 1,000 and 340,000,000 shares authorized,
respectively, 1,000 shares and 249,764,306 shares issued, respectively
     - -       250  
Additional paid-in capital
     507       3,248  
Retained deficit
     (144 )     (330 )
Accumulated other comprehensive income
     10       42  
Treasury stock, at cost, 793,736 shares
     - -       (22 )
Total stockholders’ equity
     373       3,188  
Total liabilities and stockholders’ equity
   $ 27,392     $ 17,846  
 
See Notes to the Consolidated Financial Statements.


 
   
Successor
    
Predecessor
  
   
For the
period from
December 21
through
December 31,
    
For the
period from
January 1
through
December 20,
    
For the year ended
December 31,
  
Millions of dollars
  
2007
    
2007
    
2006
    
2005
  
Cash flows from operating activities:
                        
Net income (loss)
   $ (146 )   $ (1 )   $ 186     $ 531  
Loss from discontinued operations, net of tax
     - -       85       550       9  
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
                                
Depreciation and amortization
     39       868       711       631  
Asset impairments
     - -       - -       106       195  
Equity investments –
                                
Amounts included in net income
     - -       (2 )     (78 )     (124 )
Distributions of earnings
     - -       - -       73       123  
Deferred income taxes
     (22 )     (31 )     59       136  
Purchased in-process research and development
     95       - -       - -       - -  
Debt prepayment premiums and charges
     - -       591       40       45  
Changes in assets and liabilities that provided (used) cash:
                                
Accounts receivable
     98       248       (136 )     (119 )
Inventories
     (23 )     (26 )     (234 )     (88 )
Accounts payable
     89       632       (38 )     267  
Other, net
     (401 )     (312 )     (56 )     (76 )
Net cash provided by (used in) operating
activities – continuing operations
     (271 )     2,052       1,183       1,530  
Net cash provided by (used in) operating
activities – discontinued operations
     - -       (118 )     39       64  
Net cash provided by (used in) operating activities
     (271 )     1,934       1,222       1,594  
Cash flows from investing activities:
                                
Proceeds from sale of investments in non-U.S. subsidiaries,
net of cash sold
     - -       592       - -       - -  
Expenditures for property, plant and equipment
     (22 )     (495 )     (346 )     (196 )
Advances under loan agreements to related parties
     (135 )     (166 )     - -       - -  
Acquisition of Houston Refining LP and
related payments, net of cash acquired
     - -       (94 )     (2,505 )     - -  
Distributions from affiliates in excess of earnings
     - -       3       117       183  
Contributions and advances to affiliates
     - -       (47 )     (86 )     (148 )
Payments and distributions from (to) discontinued operations
     - -       (97 )     (40 )     269  
Other
     - -       12       6       3  
Net cash provided by (used in) investing activities –
continuing operations
     (157 )     (292 )     (2,854 )     111  
Net proceeds from sale of discontinued operations before
required repayment of debt
     - -       1,089       - -       - -  
Other net cash provided by (used in) investing activities –
discontinued operations
     - -       82       (14 )     (322 )
Net cash provided by (used in) investing activities
     (157 )     879       (2,868 )     (211 )


See Notes to the Consolidated Financial Statements.


CONSOLIDATED STATEMENTS OF CASH FLOWS – (Continued)
 
   
Successor
    
Predecessor
  
   
For the
period from
December 21
through
December 31,
    
For the
period from
January 1
through
December 20,
    
For the year ended
December 31,
  
Millions of dollars
  
2007
    
2007
    
2006
    
2005
  
Cash flows from financing activities:
                        
Repurchase of common stock
     - -       (11,262 )     - -       - -  
Proceeds from loan agreements with related parties
     - -       7,883       - -       - -  
Issuance of long-term debt
     - -       9,412       4,356       - -  
Repayment of long-term debt
     (4 )     (8,158 )     (2,641 )     (1,504 )
Net borrowings (repayments) under revolving credit facility
     (130 )     130       - -       - -  
Dividends paid
     - -       (229 )     (223 )     (222 )
Payments for stock options
     - -       (109 )     - -       - -  
Proceeds from and tax benefits of stock option exercises
     - -       115       27       64  
Other, net
     (16 )     (6 )     6       (7 )
Net cash provided by (used in) financing activities –
continuing operations
     (150 )     (2,224 )     1,525       (1,669 )
Debt required to be repaid upon sale of discontinued
operations
     - -       (99 )     - -       - -  
Other net cash provided by (used in) financing activities –
discontinued operations
     - -       23       (34 )     89  
Net cash provided by (used in) financing activities
     (150 )     (2,300 )     1,491       (1,580 )
Effect of exchange rate changes on cash
     - -       (11 )     8       (14 )
Increase (decrease) in cash and cash equivalents
     (578 )     502       (147 )     (211 )
Cash and cash equivalents at beginning of period
     948       446       593       804  
Cash and cash equivalents at end of period
     370       948       446       593  
Less: Cash and cash equivalents
at end of period – discontinued operations
     - -       - -       45       50  
Cash and cash equivalents at end of period – continuing operations
   $ 370     $ 948     $ 401     $ 543  
 
See Notes to the Consolidated Financial Statements.


CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
 
Millions, except shares
  
Common Stock
    
Additional
Paid-In
    
Retained
Earnings
    
Accumulated
Other
Comprehensive
    
Net
Stockholders’
    
Comprehensive
  
   
Issued
    
Treasury
    
Capital
    
(Deficit)
    
Income (Loss)
    
Equity
    
Income (Loss)
  
Predecessor
                                          
Balance, January 1, 2005
   $ 245     $ (28 )   $ 3,143     $ (600 )   $ 56     $ 2,816        
Net income
     - -       - -       - -       531       - -       531     $ 531  
Cash dividends ($0.90 per share)
     - -       - -       - -       (222 )     - -       (222 )     - -  
Foreign currency translation,
net of tax of $17
     - -       - -       - -       - -       (191 )     (191 )     (191 )
Reissuance of 30,764 treasury shares
under benefit plans
     - -       1       - -       - -       - -       1       - -  
Issuance of 3,334,472 shares of
common stock under benefit plans
including tax benefit of $19
     3       - -       64       - -       - -       67       - -  
Non-qualified stock option grants,
net of tax of $1
     - -       - -       3       - -       - -       3       - -  
Derivative instruments
     - -       - -       - -       - -       (1 )     (1 )     (1 )
Other
     - -       4       1       (1 )     - -       4       - -  
Comprehensive income
                                                   $ 339  
Balance, December 31, 2005
   $ 248     $ (23 )   $ 3,211     $ (292 )   $ (136 )   $ 3,008          
Net income
     - -       - -       - -       186       - -       186     $ 186  
Cash dividends ($0.90 per share)
     - -       - -       - -       (223 )     - -       (223 )     - -  
Foreign currency translation,
net of tax of $19
     - -       - -       - -       - -       172       172       172  
Reissuance of 32,415 treasury
shares under benefit plans
     - -       1       - -       - -       - -       1       - -  
Issuance of 1,887,921 shares of
common stock under benefit plan
including tax benefit of $7
     2       - -       32       - -       - -       34       - -  
Non-qualified stock option grants,
net of tax of $2
     - -       - -       5       - -       - -       5       - -  
Minimum pension liability,
net of tax of $23
     - -       - -       - -       - -       60       60       60  
Change in accounting for pension
and other postretirement benefits,
net of tax of $15
     - -       - -       - -       - -       (54 )     (54 )     - -  
Other
     - -       - -       - -       (1 )     - -       (1 )     - -  
Comprehensive income
                                                   $ 418  
Balance, December 31, 2006
   $ 250     $ (22 )   $ 3,248     $ (330 )   $ 42     $ 3,188          

See Notes to the Consolidated Financial Statements





CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY – (Continued)
 
Millions, except shares
  
Common Stock
    
Additional
Paid-In
    
Retained
Earnings
    
Accumulated
Other
Comprehensive
    
Net
Stockholders’
    
Comprehensive
  
   
Issued
    
Treasury
    
Capital
    
(Deficit)
    
Income (Loss)
    
Equity
    
Income (Loss)
  
Net income
     - -       - -       - -       (1 )     - -       (1 )   $ (1 )
Cash dividends ($0.90 per share)
     - -       - -       - -       (229 )     - -       (229 )     - -  
Foreign currency translation,
net of tax of $16
     - -       - -       - -       - -       101       101       101  
Amortization of actuarial and investment loss included in net periodic benefit cost, net of tax of $3
     - -       - -       - -       - -       5       5       5  
Reissuance of 54,550 treasury
shares under benefit plans
     - -       (1 )     2       - -       - -       1       - -  
Issuance of 3,966,630 shares of
common stock under benefit plan
including tax benefit of $57
     4       - -       117       - -       - -       121       - -  
Non-qualified stock option grants,
net of tax of $4
     - -       - -       8       - -       - -       8       - -  
Issuance of 5,802,050 shares of
common stock upon conversion
of Millennium Chemicals Inc.
4% Convertible Debentures
     6       - -       (6 )     - -       - -       - -       - -  
Issuance of 682,210 shares of
common stock to Occidental
Chemical Holding Corporation
upon exercise of warrant
     1       - -       8       - -       - -       9       - -  
Sale of discontinued operations
     - -       - -       - -       - -       (72 )     (72 )     - -  
Other
     - -       - -       - -       (3 )     1       (2 )     1  
Comprehensive income
                                                   $ 106  
Balance, December 20, 2007
   $ 261     $ (23 )   $ 3,377     $ (563 )   $ 77     $ 3,129          
                                                         
Successor
                                                        
Beginning balance
   $ - -     $ - -     $ 507     $ - -     $ - -     $ 507          
Net loss
     - -       - -       - -       (146 )     - -       (146 )   $ (146 )
Interest on push-down debt
     - -       - -       - -       2       - -       2          
Foreign currency translation,
net of tax of $5
     - -       - -       - -       - -       10       10       10  
Comprehensive loss
                                                   $ (136 )
Balance, December 31, 2007
   $ - -     $ - -     $ 507     $ (144 )   $ 10     $ 373          


See Notes to the Consolidated Financial Statements.



 
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94
LYONDELL CHEMICAL COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS―(Continued)
 

 
Lyondell Chemical Company, together with its consolidated subsidiaries (collectively, “Lyondell” or “the Company”), is a global  manufacturer of chemicals, a North American manufacturer of plastics, a refiner of heavy, high-sulfur crude oil and a significant producer of gasoline blending components.  The consolidated financial statements include the accounts of Lyondell Chemical Company and its consolidated subsidiaries.  Investments in joint ventures where Lyondell exerts a certain level of management control, but lacks full decision making ability over all major issues, are accounted for using the equity method.  Under those circumstances, the equity method is used even though Lyondell’s ownership percentage may exceed 50%.
 
On December 20, 2007, LyondellBasell Industries AF S.C.A. (formerly known as Basell AF S.C.A.), indirectly acquired all of the shares of Lyondell common stock.  As a result Lyondell is now an indirect wholly owned subsidiary of LyondellBasell Industries AF S.C.A. (together with its consolidated subsidiaries “LyondellBasell Industries” and without Lyondell, the “Basell Group”) (see Note 3).
 
As a result of Lyondell’s 2006 purchase of its partner’s 41.25% equity interest in Houston Refining LP (formerly known as LYONDELL-CITGO Refining LP or “LCR”) and Lyondell’s resulting 100% ownership of Houston Refining LP (“Houston Refining”), the operations of Houston Refining are consolidated prospectively from August 16, 2006.  Prior to August 16, 2006, Lyondell accounted for its investment in Houston Refining using the equity method (see Note 8).
 
On May 15, 2007, Lyondell completed the sale of its worldwide inorganic chemicals business in a transaction valued at approximately $1.3 billion, including the acquisition of working capital and assumption of certain liabilities directly related to the business.  Accordingly, Lyondell’s inorganic chemicals business operations are presented as discontinued operations for periods prior to the sale (see Note 4).
 
As a result of Lyondell’s acquisition by LyondellBasell Industries on December 20, 2007, Lyondell’s assets and liabilities were revalued to reflect the values assigned in LyondellBasell Industries’ accounting for the purchase of Lyondell, resulting in a new basis of accounting.  In addition, Lyondell recorded $834 million of debt for which it is not the primary obligor, but which it has guaranteed, and which was used by LyondellBasell Industries in the acquisition of Lyondell (“push-down debt”), and $179 million of related debt issuance costs.
 
In Staff Accounting Bulletin (“SAB”), Topic 5J, Push Down Basis of Accounting Required in Certain Limited Circumstances, the Securities and Exchange Commission requires, among other things, that, in situations where debt is used to acquire substantially all of an acquiree’s common stock and the acquiree guarantees the debt or pledges its assets as collateral for the debt, the debt and related interest expense and debt issuance costs be reflected in, or “pushed down” to, the acquiree’s financial statements.  Lyondell guarantees $834 million of debt, but under which Lyondell is not the primary obligor.
 
Although this presentation may not reflect the likely future demands on Lyondell resources for servicing the debt of LyondellBasell Industries, it provides an indication of that financial position after considering the possible demand on Lyondell resources relating to the debt of LyondellBasell Industries.  To facilitate an understanding of the impact on these consolidated financial statements, the effects of push-down debt are segregated.
 

95
LYONDELL CHEMICAL COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS―(Continued)
 

1.       Basis of Presentation – (Continued)
 
The consolidated statements of income for the 11-day period subsequent to the acquisition reflect depreciation and amortization expense based on the new value of the related assets and interest expense that resulted from the debt used to finance the acquisition; therefore, the financial information for the periods prior to and subsequent to the acquisition is not generally comparable.  To indicate the application of a different basis of accounting for the period subsequent to the acquisition, the 2007 financial statements and certain notes to the consolidated financial statements present separately the period prior to the acquisition (“Predecessor”) and the 11-day period after the acquisition (“Successor”).  If not so indicated, information in the notes to the consolidated financial statements is presented on a full year basis.
 
 
 
Revenue Recognition—Revenue from product sales is recognized at the time of transfer of title and risk of loss to the customer, which usually occurs at the time of shipment.  Revenue is recognized at the time of delivery if Lyondell retains the risk of loss during shipment.  For products that are shipped on a consignment basis, revenue is recognized when the customer uses the product.  Costs incurred in shipping products sold are included in cost of sales.  Billings to customers for shipping costs are included in sales revenue.
 
Cash and Cash Equivalents—Cash equivalents consist of highly liquid debt instruments such as certificates of deposit, commercial paper and money market accounts.  Cash equivalents include instruments with maturities of three months or less when acquired.  Cash equivalents are stated at cost, which approximates fair value.  Lyondell’s policy is to invest cash in conservative, highly rated instruments and to limit the amount of credit exposure to any one institution.
 
Lyondell has no requirements for compensating balances in a specific amount at a specific point in time.  Lyondell does maintain compensating balances for some of its banking services and products.  Such balances are maintained on an average basis and are solely at the Company’s discretion.
 
Allowance for Doubtful Accounts—The Company establishes provisions for doubtful accounts receivable based on management’s estimates of amounts that it believes are unlikely to be collected.  Collectability of receivables is reviewed and the allowance for doubtful accounts is adjusted at least quarterly, based on aging of specific accounts and other available information about the associated customers.
 
Inventories—Inventories are stated at the lower of cost or market.  Cost is determined using the last-in, first-out (“LIFO”) method for substantially all inventories, except for materials and supplies, which are valued using the average cost method.
 
Inventory exchange transactions, which involve fungible commodities and do not involve the payment or receipt of cash, are not accounted for as purchases and sales.  Any resulting volumetric exchange balances are accounted for as inventory, with cost determined using the LIFO method.
 
Property, Plant and Equipment—Property, plant and equipment are recorded at cost.  Depreciation is computed using the straight-line method over the estimated useful asset lives, generally 25 years for major manufacturing equipment, 30 years for buildings, 5 to 15 years for light equipment and instrumentation, 15 years for office furniture and 3 to 5 years for information system equipment.  Upon retirement or sale, Lyondell removes the cost of the asset and the related accumulated depreciation from the accounts and reflects any resulting gain or loss in the Consolidated Statements of Income.  The Company’s policy is to capitalize interest cost incurred on debt during the construction of major projects exceeding one year.

96
LYONDELL CHEMICAL COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS―(Continued)
 
 
2.       Summary of Significant Accounting Policies – (Continued)
 
Long-Lived Asset Impairment—The Company evaluates long-lived assets, including identifiable intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.  When it is probable that undiscounted future cash flows will not be sufficient to recover an asset’s carrying amount, the asset is written down to its estimated fair value.
 
Goodwill—Goodwill at December 31, 2007 represents the excess of purchase price paid by LyondellBasell Industries over the fair value assigned to the net tangible and identifiable intangible assets of Lyondell.  Goodwill prior to December 20, 2007 represented the excess of purchase price paid over the fair value assigned to the net tangible and identifiable intangible assets of businesses previously acquired by Lyondell.  Goodwill is reviewed for impairment at least annually.
 
Identifiable Intangible Assets—Costs to purchase and to develop software for internal use are deferred and amortized on a straight-line basis over periods of 3 to 10 years.
 
Costs of maintenance and repairs exceeding $5 million incurred as part of turnarounds of major units at Lyondell’s manufacturing facilities are deferred and amortized using the straight-line method over the period until the next planned turnaround, predominantly 4 to 7 years.  These costs are necessary to maintain, extend and improve the operating capacity and efficiency rates of the production units.
 
Other intangible assets are carried at cost or amortized cost and primarily consist of emission credits, various contracts, technology, patents and license costs and deferred debt issuance costs.  These assets are amortized using the straight-line method over their estimated useful lives or over the term of the related agreement, if shorter.
 
Environmental Remediation Costs—Anticipated expenditures related to investigation and remediation of contaminated sites, which include current and former plant sites and other remediation sites, are accrued when it is probable a liability has been incurred and the amount of the liability can reasonably be estimated.  Only ongoing operating and monitoring costs, the timing of which can be determined with reasonable certainty, are discounted to present value.  Future legal costs associated with such matters, which generally are not estimable, are not included in these liabilities.
 
Legal Costs—Lyondell expenses legal costs, including those incurred in connection with loss contingencies, as incurred.
 
Income Taxes—Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, as well as the net tax effects of net operating loss carryforwards.  Valuation allowances are provided against deferred tax assets when it is more likely than not that some portion or all of the deferred tax asset will not be realized.
 
Minority Interests—Minority interests primarily represent the interests of unaffiliated investors in a partnership that owns Lyondell’s PO/SM II plant at the Channelview, Texas complex and in a partnership that owns the LaPorte Methanol Company plant in LaPorte, Texas.  The minority interests’ share of the partnerships’ income or loss is reported in “Other income, net” in the Consolidated Statements of Income.
 
Foreign Currency Translation—Lyondell operates primarily in two functional currencies: the euro for operations in Europe, and the U.S. dollar for the U.S. and other locations.
 

97
LYONDELL CHEMICAL COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS―(Continued)
 

2.       Summary of Significant Accounting Policies – (Continued)
 
Use of Estimates—The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods.  Actual results could differ from those estimates.
 
Reclassifications—Certain previously reported amounts have been reclassified to conform to classifications adopted in 2007.
 
Accounting and Reporting Changes—In December 2007, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 160, Noncontrolling Interests in Consolidated Financial Statements – an amendment to ARB No. 51, which establishes new accounting and disclosure requirements for noncontrolling, or minority, interests, including their classification as a separate component of equity and the adjustment of net income to include amounts attributable to minority interests.  SFAS 160 also establishes new accounting standards requiring recognition of a gain or loss upon deconsolidation of a subsidiary.  SFAS No. 160 will be effective for Lyondell beginning in 2009, with earlier application prohibited.
 
Also in December 2007, the FASB issued SFAS No. 141 (revised 2007), Business Combinations, which requires  an acquiring entity to recognize all assets acquired and liabilities assumed in a transaction at the acquisition-date at fair value with limited exceptions.  SFAS No. 141 (revised 2007) will change the accounting treatment for certain specific items, including: expensing of most acquisition and restructuring costs; recording acquired contingent liabilities, in-process research and development and noncontrolling, or minority, interests at fair value; and recognizing changes in income tax valuations and uncertainties after the acquisition date as income tax expense.  SFAS No. 141 (revised 2007) also includes new disclosure requirements.  For Lyondell, SFAS No. 141 (revised 2007) will apply to business combinations with acquisition dates beginning in 2009.  Earlier adoption is prohibited.
 
Although certain past transactions, including the acquisition of Lyondell by LyondellBasell Industries, would have been accounted for differently under SFAS No. 160 and SFAS No. 141 (revised 2007), application of these statements in 2009 will not affect historical amounts.
 
In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities - Including an amendment of FASB Statement No. 115, which permits election of fair value to measure many financial instruments and certain other items.  SFAS No. 159 is effective for Lyondell beginning in 2008.  Lyondell does not expect the application of SFAS No. 159 to have a material effect on its consolidated financial statements.
 
In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements.  The new standard defines fair value, establishes a framework for its measurement and expands disclosures about such measurements.   In February 2008, the FASB issued FASB Staff Position FAS 157-2, delaying the effective date of SFAS No. 157 for nonfinancial assets and nonfinancial liabilities.  The effective date for Lyondell would be at the beginning of 2009.  Lyondell is currently evaluating the effect of SFAS No. 157 on its consolidated financial statements.
 
Lyondell adopted the provisions of FASB Interpretation (“FIN”) No. 48, Accounting for Uncertainty in Income Taxes, on January 1, 2007.  As a result of the implementation of FIN No. 48, Lyondell recognized a $47 million increase in the liability related to uncertain income tax positions, which was accounted for as a $41 million increase in goodwill related to the acquisition of Millennium Chemicals, Inc. (together with its consolidated subsidiaries “Millennium”), a $4 million increase in deferred tax assets and a $2 million increase of the January 1, 2007 balance of retained deficit (see Note 19).
 

98
LYONDELL CHEMICAL COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS―(Continued)
 

2.       Summary of Significant Accounting Policies – (Continued)
 
Effective December 31, 2006, Lyondell adopted the provisions of Statement of Financial Accounting Standards (“SFAS”) No. 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans – An Amendment of FASB Statements No. 87, 88, 106, and 132R, which primarily requires an employer to recognize in its statement of financial position an asset for a plan’s overfunded status or a liability for a plan’s underfunded status through comprehensive income in the year in which changes occur.  Lyondell’s application of SFAS No. 158 as of December 31, 2006 to its continuing operations resulted in increases of $21 million and $105 million in its current and long-term benefit liabilities, respectively, a decrease of $1 million in other assets, a decrease of $35 million in deferred tax liabilities and an increase of $92 million in accumulated other comprehensive loss in its consolidated balance sheet as of December 31, 2006 (see Note 18).
 
 
 
On December 20, 2007, LyondellBasell Industries indirectly acquired the outstanding common shares of Lyondell for $48 per common share in an all cash transaction.  As a result, Lyondell became an indirect, wholly owned subsidiary of LyondellBasell Industries.
 
From December 20, 2007, Lyondell’s consolidated financial statements reflect a revaluation of Lyondell’s assets and liabilities, to reflect the values assigned in LyondellBasell Industries’ accounting for the purchase of Lyondell.  In addition, Lyondell recognized in its financial statements $834 million of the debt it has guaranteed, but for which it is not the primary obligor, and $179 million of related debt issuance costs.  The purchase of Lyondell’s outstanding common stock and other equity instruments, assumption of debt and related transaction costs resulted in a total purchase price of $20,873 million, including the purchase of Lyondell common stock and other equity instruments for $12,371 million, the fair value of retained and refinanced debt of $7,506 million and transaction and other costs of $996 million.  See Note 15 for discussion of the financing of the transaction.
 

99
LYONDELL CHEMICAL COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS―(Continued)
 

3.       Acquisition of Lyondell by LyondellBasell Industries
 
The following table provides information regarding the preliminary adjustments to Lyondell’s assets and liabilities and the resulting goodwill.  As discussed in Note 1, the following adjustments to Lyondell’s historical book values of assets and liabilities, including goodwill, recognized in LyondellBasell Industries acquisition of Lyondell, have been recognized by Lyondell, resulting in the assets and liabilities of Lyondell being recorded at their respective fair values at December 20, 2007.
 
Millions of dollars
      
Total purchase price
   $ 20,873  
Less:
        
Debt retained, at fair value
     (819 )
Debt refinanced, at par value
     (6,687 )
Debt for which Lyondell is not a primary obligor
     (834 )
Debt issue costs for debt for which Lyondell is not a primary obligor
     179  
Transaction costs paid by Lyondell:
        
Debt prepayment premiums
     (489 )
Change in control costs
     (284 )
Other transaction costs
     (176 )
Purchase price to allocate
     11,763  
Book value of Lyondell net assets acquired
     3,129  
Excess purchase price to allocate
     8,634  
         
Allocation of excess purchase price to assets and liabilities:
        
Inventories
     1,682  
Plant, property and equipment
     4,824  
Investments and joint ventures
     238  
Predecessor goodwill
     (1,303 )
Other identifiable intangibles
     1,662  
Purchased in-process research and development
     95  
Deferred taxes, net
     (2,937 )
Debt
     (834 )
Other, net
     (40 )
Goodwill
   $ 5,247  

 
The goodwill is not deductible for tax purposes.  The purchase price allocation used in the preparation of these financial statements is preliminary due to the continuing analyses relating to the determination of the fair values of the assets acquired and liabilities assumed.  Any changes to the fair value of net assets acquired, based on information as of the acquisition date, would result in a corresponding adjustment to goodwill.  Management does not expect the finalization of these matters to have a material effect on the allocation.
 
Lyondell has completed a preliminary assignment of the goodwill to reportable segments.  Goodwill of $2,300 million was assigned to the fuels segment, $2,697 million was assigned to the chemicals segment and $250 million was assigned to the polymers segment.  Management does not expect the finalization of the purchase price allocation to have a material effect on the assignment of goodwill to reportable segments.
 

100
LYONDELL CHEMICAL COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS―(Continued)
 

3.       Acquisition of Lyondell by LyondellBasell Industries – (Continued)
 
Approximately $95 million, or less than 1% of the purchase price, was allocated to purchased in-process research and development (“IPR&D”) of Lyondell.  The estimated fair value of IPR&D was developed using probable discounted cash flows on a project-by-project basis.  The activities represented by these projects will be continued by Lyondell, and the values assigned represent intangibles with no alternative future use.  Accordingly, Lyondell’s results of operations in the Successor period included a charge of $95 million for the value of the acquired IPR&D.
 
Other identifiable intangible assets included the following:
 
                     
Weighted
        
               
Fair
    
Average Life
    
Useful Life
  
Millions of dollars
  
Predecessor
    
Adjustment
    
Value
    
(Years)
    
(Years)
  
Emission credits
   $ 47     $ 676     $ 723       - -    
Indefinite
  
Technology, patents and licenses
     45       463       508       14       8 – 15  
Various contracts
     6       323       329       7       3 – 11  
Debt issuance costs on push-down debt
     - -       179       179                  
Other
     651       21       672                  
Total intangible assets
   $ 749     $ 1,662     $ 2,411                  

 
The total weighted average life of the acquired identifiable intangible assets that are subject to amortization is 11 years.
 
Concurrent with the acquisition by LyondellBasell Industries, Lyondell sold certain of its non-U.S. subsidiaries to other subsidiaries of the Basell Group for fair value of $1,288 million, including $668 million of debt payable to Lyondell by one of the subsidiaries.  No gain or loss was recognized on the sale of Lyondell’s investment.
 
Certain of the non-U.S. subsidiaries sold to the Basell Group make payments to Lyondell under shared-service arrangements and also make royalty payments, based on sales, to Lyondell for use of the related technology.  Prior to the acquisition of Lyondell by LyondellBasell Industries on December 20, 2007, these payments were eliminated in consolidation.  In addition, Lyondell sells product, primarily methyl tertiary butyl ether (“MTBE”) and ethyl tertiary butyl ether (“ETBE”), to these subsidiaries.
 
The following unaudited pro forma historical results of Lyondell assume the acquisition was consummated as of the beginning of each period presented:
 
Millions of dollars
  
For the
period from
January 1
through
December 20,
2007
    
For the year
ended
December 31,
2006
  
Sales and other operating revenues
   $ 25,603     $ 19,301  
Loss from continuing operations
     (646 )     (475 )
Net loss
     (731 )     (1,025 )

 

101
LYONDELL CHEMICAL COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS―(Continued)
 

3.       Acquisition of Lyondell by LyondellBasell Industries – (Continued)
 
The above pro forma results include a $95 million after-tax charge for purchased in-process research and development in each period and reflect the sale of the non-U.S. subsidiaries to other subsidiaries of the Basell Group.  The unaudited pro forma data do not include the charges of $591 million related to debt refinancing in the 2007 Predecessor period.  The pro forma effect from January 1, 2006 through August 16, 2006 of the acquisition of the remaining 41.25% share of Houston Refining by Lyondell in August 2006 is summarized in Note 8.
 
The unaudited pro forma data presented above are not necessarily indicative of the results of operations of Lyondell that would have occurred had the transaction actually been consummated as of the beginning of the respective periods, nor are they necessarily indicative of future results.
 
 
 
On May 15, 2007, Lyondell completed the sale of its worldwide inorganic chemicals business in a transaction valued at approximately $1.3 billion, including working capital and assumption of certain liabilities directly related to the business.
 
The following represent the elements of cash flow for the year ended December 31, 2007 related to the sale of the inorganic chemicals business:
 
   
Predecessor
  
Millions of dollars
      
Gross sales proceeds
   $ 1,143  
Cash and cash equivalents sold
     (37 )
Costs related to the sale
     (17 )
Net proceeds from sale of discontinued operations
before required repayment of debt
     1,089  
Debt required to be repaid
     (99 )
Net proceeds from sale of discontinued operations
   $ 990  

 
The operations of the inorganic chemicals business have been classified as discontinued operations in the consolidated statements of income and cash flows and the assets and associated liabilities have been classified as held for sale in the consolidated balance sheets.  Unless otherwise indicated, information presented in the notes to the financial statements relates only to Lyondell’s continuing operations.
 
Amounts included in income from discontinued operations for all periods presented are summarized as follows:
 
   
Predecessor
  
Millions of dollars
  
2007
    
2006
    
2005
  
Sales and other operating revenues
   $ 514     $ 1,346     $ 1,349  
                         
Loss on sale of discontinued operations
     (25 )     - -       - -  
Other income (loss) from
discontinued operations
     18       (553 )     17  
Provision for (benefit from) income taxes
     78       (3 )     26  
Loss from discontinued operations, net of tax
   $ (85 )   $ (550 )   $ (9 )


102
LYONDELL CHEMICAL COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS―(Continued)
 
 
4.       Discontinued Operations – (Continued)
 
The final amount that Lyondell will receive in compensation for working capital has not been determined.  Unresolved amounts totaling less than $30 million are subject to possible arbitration proceedings.
 
The 2007 provision for income taxes primarily reflects the unfavorable effect of capital losses, the potential benefits of which were not expected to be available to Lyondell within the expiration period of such benefits.  Income taxes payable related to the sale were $88 million.
 
As a result of the acquisition of Lyondell by LyondellBasell Industries (see Note 3) and the related sale by Lyondell to the Basell Group of certain of its non-U.S. subsidiaries, such benefits will be realized in the 2007 U.S. federal income tax return, and the value of such benefits was recognized in accounting for the acquisition.
 
Lyondell’s evaluation of strategic alternatives for its worldwide inorganic chemicals business, which resulted in the May 15, 2007 sale of the inorganic chemicals business, indicated that the carrying values of goodwill and certain software costs associated with the inorganic chemicals business were impaired at December 31, 2006, based on the then pending sale and the value expected to be received for the business.  Accordingly, Lyondell’s 2006 loss from discontinued operations reflected a charge of $545 million to recognize impairment of the carrying value of the goodwill and $7 million to recognize the impairment of the carrying value of the software costs.  The impairment of goodwill had no tax effect.
 
The assets and liabilities of the inorganic chemicals business classified as held for sale are summarized as follows at December 31, 2006 (Predecessor period):
 
Millions of dollars
      
Cash
   $ 45  
Inventories
     381  
Other current assets
     261  
Total current assets
     687  
Property, plant and equipment
     604  
Goodwill, net
     316  
Other noncurrent assets, net
     149  
Total long-term assets
     1,069  
Total assets
   $ 1,756  
Current maturities of long-term debt
   $ 4  
Other current liabilities
     337  
Total current liabilities
     341  
Long-term debt
     82  
Other noncurrent liabilities
     269  
Minority interest
     40  
Total long-term liabilities
     391  
Total liabilities
   $ 732  

 
See Note 15 for a description of the long-term debt included above.
 
Additionally, stockholders’ equity included accumulated other comprehensive income of $55 million at December 31, 2006 associated with discontinued operations.

103
LYONDELL CHEMICAL COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS―(Continued)
 
 
 
Lyondell ceased production of toluene diisocyanate (“TDI”) at the Lake Charles, Louisiana TDI plant in the third quarter of 2005.  Lyondell’s earnings for 2005 reflect a pretax charge of $195 million for impairment of the net book value of the plant and related assets.  Earnings for 2007 reflect additional charges totaling $64 million, related to resolution of commercial arrangements associated with the TDI facility under which payments will be made over the next four years.  Any additional costs that may be incurred with respect to the TDI facility are not expected to be material to Lyondell’s results of operations.
 
Lyondell’s 2006 earnings reflect a pretax charge of $106 million for impairment of the net book value of its idled Lake Charles, Louisiana ethylene facility.  In the third quarter of 2006, Lyondell undertook a study of the feasibility, cost and time required to restart the Lake Charles ethylene facility.  As a result, management determined that restarting the facility would not be justified.  The remaining net book value of the related assets of $10 million represents an estimate, based on probabilities, of alternative-use value.  Lyondell does not expect to incur any significant future costs with respect to the facility.
 
 
 
During 2005, two major hurricanes impacted the chemical and related industries in the coastal and off-shore regions of the Gulf of Mexico.  Net income in 2005 reflected charges totaling $58 million, before tax, representing Lyondell’s exposure to industry losses expected to be underwritten by industry insurance consortia, primarily resulting from hurricane damages.
 
As a result of Hurricane Rita, Lyondell and Houston Refining also incurred various costs that are subject to insurance reimbursements.  Such costs include those incurred in conjunction with suspending operations at substantially all of Lyondell’s Gulf Coast plants and at the refinery, minor damage to facilities, and costs to restore operations.  Net income in 2005 included $24 million of such costs incurred by Lyondell, of which all but a $5 million deductible under the relevant insurance policies are subject to reimbursement through insurance.  For Houston Refining, similar costs totaled $18 million, of which Lyondell’s proportionate share was $11 million.  Houston Refining experienced problems in restarting a major production unit that was shut down in connection with the hurricane, resulting in a significant reduction in crude oil processing rates during the fourth quarter 2005 until the unit was restored to normal operations in December 2005.  Houston Refining’s hurricane-related costs and business interruption claims are subject to a deductible of $50 million per incident under the relevant insurance policies.
 
During 2007 and 2006, Lyondell recognized benefits of $33 million and $14 million, respectively, for insurance reimbursements of $56 million and $20 million, respectively, less amounts paid to CITGO Petroleum Corporation (“CITGO”), representing settlement of outstanding claims of Houston Refining.  In addition, Lyondell recognized benefits of $1 million in each of 2007 and 2006 from insurance reimbursements related to Lyondell’s plants.  No benefits were recognized in 2005.
 

104
LYONDELL CHEMICAL COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS―(Continued)
 

 
As a result of the July 16, 2007 agreement and plan of merger between Basell and Lyondell, Lyondell began reporting transactions, including sales of product, with the Basell Group as related party transactions beginning in the third quarter 2007 (see Note 3).
 
Concurrent with the December 20, 2007 acquisition of Lyondell by LyondellBasell Industries, Lyondell sold certain of its non-U.S. subsidiaries to the Basell Group for fair value of $1,288 million, including $668 million of debt payable to Lyondell by one of the subsidiaries as discussed below.  See Notes 3 and 12.
 
Certain of the non-U.S. subsidiaries sold to the Basell Group make royalty payments, based on sales, to Lyondell for use of the related technology and also make payments to Lyondell under shared-service arrangements.  Prior to the acquisition of Lyondell by LyondellBasell Industries on December 20, 2007, income and expense related to these royalty and service payments were eliminated in consolidation.  Lyondell also sells product, primarily MTBE and ETBE, to these subsidiaries.
 
Lyondell also conducts transactions with Occidental Petroleum Corporation (together with its subsidiaries and affiliates, collectively “Occidental”), which was considered a related party during the 2007 Predecessor period as a result of Occidental’s representation on Lyondell’s Board of Directors prior to December 20, 2007.
 
Lyondell also conducts transactions with Houston Refining which, prior to Lyondell’s August 16, 2006 purchase of its partner’s 41.25% interest in Houston Refining (see Note 8), represented an equity investment.  These transactions are continuing; however, subsequent to August 16, 2006, these transactions are eliminated in the Consolidated Financial Statements of Lyondell.  Subsequent to August 16, 2006, transactions between Houston Refining and Occidental in the Predecessor period are reported as Lyondell related party transactions.

Houston Refining makes purchases of product from Occidental.
 
Product Transactions with Occidental—Lyondell’s subsidiary, Equistar Chemicals, LP (together with its consolidated subsidiaries, “Equistar”), and Occidental, previously one of the partners in the Equistar joint venture, entered into an ethylene sales agreement on May 15, 1998, which was amended effective April 1, 2004, pursuant to which Occidental agreed to purchase a substantial amount of its ethylene raw material requirements from Equistar.  Either party has the option to “phase down” volumes over time.  However, a “phase down” cannot begin until January 1, 2014 and the annual minimum requirements cannot decline to zero prior to December 31, 2018, unless certain specified force majeure events occur.  In addition to the sales of ethylene, from time to time Equistar has made sales of ethers and glycols to Occidental, and Equistar has purchased various other products from Occidental, all at market-related prices.  Lyondell’s subsidiary, Millennium, also purchases sodium silicate, and Houston Refining purchases caustic soda from Occidental.  All of these agreements are on terms generally representative of prevailing market prices.
 
Product Transactions with Houston Refining—Lyondell has various service and cost sharing arrangements with Houston Refining.  Lyondell’s subsidiary, Equistar, has product sales and raw material purchase agreements with Houston Refining.  Certain ethylene co-products are sold by Equistar to Houston Refining for processing into gasoline and certain refined products are sold by Houston Refining to Equistar as raw materials.  Equistar also has processing and storage arrangements with Houston Refining and provides certain marketing services for Houston Refining.  All of these agreements are on terms generally representative of prevailing market prices.
 

105
LYONDELL CHEMICAL COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS―(Continued)
 

7.       Related Party Transactions – (Continued)
 
Current Account Agreements with Subsidiary of the Basell Group—On December 20, 2007, Lyondell and the Basell Group entered into two unsecured current account agreements for an indefinite period, under which Lyondell may deposit excess cash balances with the Basell Group and have access to uncommitted revolving lines of credit in excess of deposits.  Deposits bear interest as the case may be at the London Interbank Offered Rate (“LIBOR”) 1 month rate for the U.S. dollar (“LIBOR 1 month rate for USD”) minus fifteen basis points or the LIBOR 1 month rate for USD plus 350 basis points.  Borrowings under the lines of credit bear interest at the LIBOR 1 month rate for USD plus 350 basis points.  At December 31, 2007, the balances under the two current account agreements reflected net borrowings of $717 million and net deposits of $135 million, and are reflected in the Consolidated Balance Sheets as related party accounts payable and deposits with related party , respectively.
 
Notes Receivable from Subsidiaries of the Basell Group—Lyondell advanced $166 million to the Basell Group on December 20, 2007 under an unsecured loan agreement that matures on December 20, 2014.  At the option of the Basell Group, interest is calculated in one-month, two-month, three-month or six-month periods and due on the last day of the applicable interest period.  The note bears interest at the offered quotation in Euro for LIBOR (BBA convention) rates for the U.S. dollar for the applicable interest period plus 400 basis points.
 
Pursuant to a note payable to Lyondell, the Basell Group may borrow up to $1,000 million from Lyondell on a revolving basis.  The note, which matures on December 31, 2012, bears interest at LIBOR plus 4%.  Interest is due quarterly.
 
Note Payable to Subsidiary of the Basell Group—On December 20, 2007, Lyondell received proceeds of a $7,166 million unsecured loan from the Basell Group, which were used in connection with the December 20, 2007 acquisition and refinancing transactions.  The loan, which matures in 2014, bears interest at the same rate as the Basell Group’s Interim loan plus 0.5%.  Interest is due on the last business day of the interest period, which can vary concurrent with the interest period in effect under the interim loan.  In addition, Lyondell recognized in its financial statements $834 million of the debt it has guaranteed, which includes the Interim Loan, but for which Lyondell is not the primary obligor, and $179 million of related debt issuance costs.
 
Revolving Line of Credit with Access Industries—On March 27, 2008, LyondellBasell Industries entered into a $750 million committed revolving line of credit facility with Access Industries Holdings LLC.  Borrowings under the facility are available to Lyondell and a subsidiary of the Basell Group.
 
See Note 8 for additional discussion of related party transactions with Houston Refining LP.
 

106
LYONDELL CHEMICAL COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS―(Continued)
 

7.       Related Party Transactions – (Continued)
 
Related party transactions are summarized as follows:
 
   
Successor
    
Predecessor
  
   
For the
period from
December 21
through
December 31,
    
For the
period from
January 1
through
December 20,
    
For the year ended
December 31,
  
Millions of dollars
  
2007
    
2007
    
2006
    
2005
  
                         
Lyondell billed related parties for:
                        
Sales of products and processing services–
                        
Basell Group
   $ 2     $ 32     $ - -     $ - -  
Occidental
     - -       753       782       755  
Houston Refining
     - -       - -       552       944  
                                 
Shared services and shared site agreements–
                                
Houston Refining
     - -       - -       7       6  
Basell Group
     4       - -       - -       - -  
                                 
Interest – Basell Group
     3       - -       - -       - -  
Royalties – Basell Group
     6       - -       - -       - -  
                                 
Lyondell was billed by related parties for:
                                
Purchases of products and processing services–
                                
Basell Group
   $ - -     $ 6     $ - -     $ - -  
Occidental
     - -       38       52       23  
Houston Refining
     - -       - -       514       394  
                                 
Shared services, transition and lease agreements–
                                
Occidental
     - -       7       7       7  
Houston Refining
     - -       - -       1       - -  
                                 
Interest – Basell Group
     33       - -       - -       - -  

 
 
On August 16, 2006, Lyondell purchased CITGO’s 41.25% ownership interest in Houston Refining to, among other things, take advantage of market conditions in refining and Houston Refining’s cash flows.  Prior to the acquisition, Lyondell held a 58.75% equity-basis investment in Houston Refining and, as a result of the acquisition, Houston Refining became a wholly owned, consolidated subsidiary of Lyondell from August 16, 2006.  Houston Refining owns and operates a full conversion refinery located in Houston, Texas, which has the ability to process approximately 268,000 barrels per day of lower cost, heavy, high sulfur crude oil.
 

107
LYONDELL CHEMICAL COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS―(Continued)
 

8.       Equity Interest and Acquisition of Houston Refining LP – (Continued)
 
Lyondell’s acquisition of CITGO’s 41.25% interest was financed using $2,601 million of the proceeds of a $2.65 billion seven-year term loan (see Note 15).  The $2,601 million consisted of $43 million of debt issue costs and $2,558 million of cash payments consisting of: $1,629 million for acquisition of the 41.25% interest in Houston Refining, the acquisition of working capital of $145 million, $445 million to repay and terminate Houston Refining’s $450 million term loan facility, including accrued interest of $4 million, $39 million to repay a loan payable to CITGO, including $4 million of accrued interest, and $300 million related to the termination of the previous crude supply agreement.  As part of the transaction, Houston Refining and PDVSA Petróleo, S.A. (“PDVSA Oil”) terminated the previous crude supply agreement and entered into a new crude oil contract for 230,000 barrels per day of heavy crude oil, which runs through 2011 and year to year thereafter (see Note 20).  During the first quarter of 2007, Lyondell reimbursed CITGO, as provided for in the transaction agreement, for $94 million of taxes, which Lyondell previously estimated to be $97 million, resulting in a $3 million reduction to the purchase price.
 
The unaudited pro forma combined historical results of Lyondell and Houston Refining for the years ended December 31, 2006 and 2005, giving effect to the purchase as though the transaction were consummated and the new crude oil contract had been in place as of the beginning of each period presented, are as follows:
 
Millions of dollars
  
2006
    
2005
  
Sales and other operating revenues
   $ 25,631     $ 22,655  
Income from continuing operations
     980       673  
Net income
     430       664  

 
Pro forma results for all periods presented above include a pretax charge of $300 million, or $195 million after tax, for the cost of terminating the crude supply agreement.  Lyondell’s actual results for the year ended December 31, 2006 include a pretax charge of $176 million, or $114 million after tax, representing Lyondell’s 58.75% share of the $300 million cost of terminating the crude supply agreement.
 
The pro forma data presented above are not necessarily indicative of the results of operations of Lyondell that would have occurred had such transaction actually been consummated as of the beginning of each period presented, nor are they necessarily indicative of future results.
 
Lyondell’s acquisition of CITGO’s 41.25% interest in Houston Refining was accounted for as a step-acquisition.  Therefore, 41.25% of each Houston Refining asset and liability was recorded at fair value as of August 16, 2006 and Lyondell’s previous 58.75% interest in each Houston Refining asset and liability was reflected at its historical carrying value.
 
The following table provides information regarding the components of the purchase price for acquisition of CITGO’s 41.25% interest in Houston Refining:
 
Millions of dollars
      
Base purchase price of 41.25% interest
   $ 1,629  
Working capital acquired
     145  
Preliminary total cash purchase price of 41.25% interest
     1,774  
2007 reimbursement of CITGO taxes
     94  
Total cash purchase price of 41.25% interest
   $ 1,868  

 

108
LYONDELL CHEMICAL COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS―(Continued)
 

8.       Equity Interest and Acquisition of Houston Refining LP – (Continued)
 
The components of the step acquisition of Houston Refining were as follows:
 
Millions of dollars
      
Historical carrying value of Lyondell’s previous net investment:
      
Investment in Houston Refining
   $ (144 )
Receivable from Houston Refining and accrued interest
     1,040  
Purchase price of 41.25% interest
     1,868  
Total purchase price of Houston Refining
   $ 2,764  

 
The total purchase price of Houston Refining was allocated to the assets and liabilities acquired as follows:
 
Millions of dollars
      
Cash and cash equivalents
   $ 53  
Other current assets
     647  
Property, plant and equipment
     2,764  
Other assets
     101  
Current liabilities
     (735 )
Other liabilities
     (66 )
Total allocated purchase price of Houston Refining
   $ 2,764  

 
The following represent the elements of cash flow for the two-year period ended December 31, 2007 for the transactions related to the acquisition of Houston Refining:
 
Millions of dollars
      
Preliminary cash purchase price of 41.25% interest
   $ 1,774  
Related payments – advances to Houston Refining:
        
To fund termination of crude supply agreement
     300  
To fund repayment of bank loan and accrued interest
     445  
To fund repayment of CITGO partner loan and accrued interest
     39  
Total cash payments
     2,558  
Cash and cash equivalents acquired
     (53 )
Acquisition of Houston Refining and related payments, net of cash acquired:
        
For the year ended December 31, 2006
     2,505  
Payments for taxes in 2007
     94  
Total
   $ 2,599  

 
Prior to the acquisition, Lyondell held a 58.75% interest in Houston Refining and because the partners jointly controlled certain key management decisions, including approval of the strategic plan, capital expenditures and annual budget, issuance of debt and the appointment of executive management of the partnership, Lyondell accounted for its investment in Houston Refining using the equity method.
 

109
LYONDELL CHEMICAL COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS―(Continued)
 

8.       Equity Interest and Acquisition of Houston Refining LP – (Continued)
 
Summarized financial information for Houston Refining follows for certain periods prior to the consolidation of Houston Refining:
 
Millions of dollars
  
For the period
January 1
through
August 15,
2006
    
For the year
ended
December 31,
2005
  
STATEMENTS OF INCOME
            
Sales and other operating revenues
   $ 5,710     $ 6,741  
Cost of sales
     5,223       6,458  
Termination of crude supply agreement
     300       - -  
Selling, general and administrative expenses
     42       51  
Operating income
     145       232  
Interest expense, net
     (31 )     (38 )
Net income
   $ 114     $ 194  

 
Lyondell’s income from its investment in Houston Refining prior to August 16, 2006 consisted of Lyondell’s share of Houston Refining’s net income and accretion of Lyondell’s investment in Houston Refining up to its underlying equity in Houston Refining’s net assets.  As a partnership, Houston Refining is not subject to federal income taxes.
 
Lyondell’s equity in earnings of Houston Refining for the year ended December 31, 2006 was reduced by a $176 million charge representing its 58.75% share of the $300 million cost to terminate Houston Refining’s previous crude supply agreement.  For the year ended December 31, 2006, Lyondell’s income also included $74 million in “Other income, net” representing net payments received by Lyondell, including reimbursement of legal fees and expenses from Houston Refining, in settlement of all disputes among Lyondell, CITGO and Petróleos de Venezuela, S.A. (“PDVSA”) and their respective affiliates.  Houston Refining’s selling, general and administrative expenses for the period ended August 15, 2006 included an $8 million charge representing reimbursement to Lyondell of legal fees and expenses paid by Lyondell on behalf of Houston Refining in connection with the settlement.
 
 
 
Lyondell, together with Bayer AG and Bayer Corporation (collectively “Bayer”), share ownership in a U.S. propylene oxide (“PO”) manufacturing joint venture (the “U.S. PO Joint Venture”) and a separate joint venture for certain related PO technology.  Bayer’s ownership interest represents ownership of 1.6 billion pounds of annual in-kind PO production of the U.S. PO Joint Venture.  Lyondell takes in kind the remaining PO production and all co-product (styrene monomer (“SM” or “styrene”) and tertiary butyl ether (“TBA”)) production from the U.S. PO Joint Venture.
 
A separate manufacturing joint venture (the “European PO Joint Venture”), which includes a world-scale PO/SM plant at Maasvlakte near Rotterdam, The Netherlands, is owned 50% by Bayer and, through December 20, 2007, 50% by Lyondell.  Concurrent with the December 20, 2007 acquisition of Lyondell by LyondellBasell Industries, Lyondell sold certain non-U.S. subsidiaries to the Basell Group, including Lyondell’s subsidiaries that owned Lyondell’s investment in the European PO Joint Venture.
 

110
LYONDELL CHEMICAL COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS―(Continued)
 

9.       Investment in PO Joint Ventures – (Continued)
 
Lyondell and Bayer do not share marketing or product sales under the U.S. PO Joint Venture.  Lyondell operates the U.S. PO Joint Venture’s plants and arranges and coordinates the logistics of product delivery.  The partners share in the cost of production and logistics based on their product offtake.  Similar arrangements prevailed through December 20, 2007 with respect to the European PO Joint Venture.
 
Lyondell reports the cost of its product offtake as inventory and cost of sales in its consolidated financial statements.  Related cash flows are reported in the operating cash flow section of the consolidated statements of cash flows.  Lyondell’s investment in the PO joint ventures is reduced through recognition of its share of the depreciation and amortization of the assets of the joint ventures, which is included in cost of sales.  Other changes in the investment balance are principally due to additional capital investments by Lyondell in the PO joint ventures and to revaluation of the investment to reflect the values assigned in LyondellBasell Industries’ accounting for the acquisition of Lyondell.  Lyondell’s contributions to the PO joint ventures are reported as “Contributions and advances to affiliates” in the consolidated statements of cash flows.
 
Total assets of the PO joint ventures, primarily property, plant and equipment, were $1,320 million and $1,661 million at December 31, 2007 and 2006, respectively.
 
Changes in Lyondell’s investment in 2007 and 2006 are summarized as follows:
 
Millions of dollars
  
U.S. PO
Joint Venture
    
European PO
Joint Venture
    
Total PO
Joint Ventures
  
Investment in PO joint ventures – January 1, 2006
   $ 518     $ 258     $ 776  
Cash contributions, net
     22       - -       22  
Depreciation and amortization
     (36 )     (13 )     (49 )
Effect of exchange rate changes
     - -       29       29  
Investment in PO joint ventures – December 31, 2006
     504       274       778  
Cash contributions, net
     19       26       45  
Depreciation and amortization
     (33 )     (14 )     (47 )
Effect of exchange rate changes
     - -       25       25  
Sale of investment to the Basell Group
     - -       (405 )     (405 )
Revaluation of investment
     73       94       167  
Investment in PO joint ventures – December 20, 2007
     563     $ - -       563  
Cash contributions, net
     2               2  
Depreciation and amortization
     (1 )             (1 )
Investment in U.S. PO joint venture – December 31, 2007
   $ 564             $ 564  

 
Lyondell’s investment in the PO joint ventures reflects a revaluation to the value assigned to the investment in LyondellBasell Industries’ accounting for the purchase of Lyondell.
 

111
LYONDELL CHEMICAL COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS―(Continued)
 

 
Lyondell sells its products primarily to other industrial concerns in the petrochemicals and refining industries.  Lyondell performs ongoing credit evaluations of its customers’ financial condition and, in certain circumstances, requires letters of credit from them.  Lyondell’s allowance for doubtful accounts receivable, which is reflected in the Consolidated Balance Sheets as a reduction of accounts receivable, totaled $7 million and $8 million at December 31, 2007 and 2006, respectively.  The Consolidated Statements of Income included provisions for doubtful accounts of $2 million and $5 million, respectively, in 2006 and 2005 and a credit to income of $1 million in 2007.
 
On December 20, 2007, as part of the acquisition of Lyondell by LyondellBasell Industries, Lyondell entered into a five-year $1,150 million Accounts Receivable Securitization Facility and terminated the $150 million and $600 million accounts receivable sales facilities, maintained by Lyondell Chemical Company (without its consolidated subsidiaries, “LCC”) and its wholly owned subsidiary, Equistar, respectively.
 
The new facility currently permits the sale of up to $1,150 million of total interest in the domestic accounts receivable of Lyondell and its subsidiaries, Equistar and Houston Refining, subject to a combined minimum unused availability requirement of $100 million under the facility and the new $1,000 million inventory-based credit facility.  The Accounts Receivable Securitization Facility contains restrictive covenants, including covenants that establish maximum levels of annual capital expenditures, that are substantially similar to the new Senior Secured Credit Facility (see Note 15).  In addition, the new facility provides that if for any period of four consecutive fiscal quarters the Fixed Charge Coverage Ratio, as defined, of LyondellBasell Industries, on a consolidated basis, is less than 1.1:1, then during the next quarter, total excess availability under both facilities may not be less than $200 million for five consecutive business days or more, unless, on each such day, total excess availability is at least $150 million and total collateral availability is at least $275 million (see Note 15).
 
Pursuant to the new facility, Lyondell sells, through a wholly owned, bankruptcy-remote subsidiary, on an ongoing basis and without recourse, interests in a pool of domestic accounts receivable to financial institutions participating in the facility.  Lyondell is responsible for servicing the receivables.  The amount of the interest in the pool of receivables permitted to be sold is determined by formula.  Upon termination of the facility, cash collections related to accounts receivable then in the pool would first be applied to the respective outstanding interests sold.
 
Accounts receivable in the Consolidated Balance Sheets are reduced by the sales of interests in the pool.  Increases and decreases in the amounts sold are reflected in operating cash flows in the Consolidated Statements of Cash Flows, representing collections of sales revenue.  Fees related to the sales are included in “Selling, general and administrative expenses” in the Consolidated Statements of Income.  The amount of outstanding receivables sold under the new facility was $1,000 million as of December 31, 2007.  At December 31, 2006, the aggregate amount of outstanding receivables sold under the previous facilities was $100 million.
 
Prior to January 2006, discounts were offered to certain customers for early payment for product.  As a result, some receivable amounts were collected in December 2005 that otherwise would have been expected to be collected in January 2006.  This included collections of $84 million in December 2005 related to receivables from Occidental.
 

112
LYONDELL CHEMICAL COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS―(Continued)
 

 
Inventories consisted of the following components at December 31:
 
   
Successor
    
Predecessor
  
Millions of dollars
  
2007
    
2006
  
Finished goods
   $ 1,856     $ 1,093  
Work-in-process
     245       156  
Raw materials
     1,019       445  
Materials and supplies
     234       183  
Total inventories
   $ 3,354     $ 1,877  

 
The increase in inventory primarily reflects the revaluation of inventory at December 20, 2007 to reflect the values assigned in accounting for the acquisition of Lyondell by LyondellBasell Industries.
 
At December 31, 2007, approximately 95% of inventories, excluding materials and supplies, were valued using the LIFO method.
 
The excess of the current replacement cost over book value of those inventories that are carried at cost using the LIFO method was approximately $18 million and $1,022 million at December 31, 2007 and 2006, respectively.
 
 
 
The components of property, plant and equipment, at cost, and the related accumulated depreciation were as follows at December 31:
 
   
Successor
    
Predecessor
  
Millions of dollars
  
2007
    
2006
  
Land
   $ 82     $ 104  
Manufacturing facilities and equipment
     12,141       12,124  
Construction in progress
     310       362  
Total property, plant and equipment
     12,533       12,590  
Less accumulated depreciation
     (29 )     (4,048 )
Property, plant and equipment, net
   $ 12,504     $ 8,542  

 
The increases in property, plant and equipment, goodwill and other assets in 2007 primarily reflect the revaluation of the related assets to reflect the values assigned in accounting for the acquisition of Lyondell by LyondellBasell Industries.
 
On December 20, 2007, concurrent with the acquisition of Lyondell by LyondellBasell Industries, Lyondell sold certain of its non-U.S. subsidiaries to LyondellBasell Industries for fair value of $1,288 million (see Note 3).
 
Maintenance and repair expenses were $18 million and $630 million, respectively, in the 2007 Successor and Predecessor periods and $488 million and $409 million in 2006 and 2005, respectively.  No interest was capitalized to property, plant and equipment during the three-year period ended December 31, 2007.
 

113
LYONDELL CHEMICAL COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS―(Continued)
 

12.       Property, Plant and Equipment, Goodwill and Other Assets – (Continued)
 
The following table summarizes the changes to Lyondell’s goodwill during 2006 and 2007 by reportable segment (see Notes ‎1 and 24):
 
Millions of dollars
  
Chemicals
    
Fuels
    
Polymers
    
Total
  
Goodwill at January 1, 2006
   $ 1,352     $ - -     $ - -     $ 1,352  
Settlement of income tax issues related to
acquisitions
     (20 )     - -       - -       (20 )
Goodwill at December 31, 2006
   $ 1,332     $ - -     $ - -     $ 1,332  
Recognition of uncertain tax positions
related to application of FIN No. 48
     41       - -       - -       41  
Settlement of income tax
issues related to acquisitions
     (70 )     - -       - -       (70 )
Predecessor goodwill at December 20, 2007
   $ 1,303     $ - -     $ - -     $ 1,303  
Elimination of predecessor goodwill
     (1,303 )     - -       - -       (1,303 )
Purchase price allocation related to the
December 20, 2007 acquisition of Lyondell
     2,697       2,300       250       5,247  
Successor goodwill at December 31, 2007
   $ 2,697     $ 2,300     $ 250     $ 5,247  

 
The components of other assets, at cost, and the related accumulated amortization were as follows at December 31:
 
   
Successor
    
Predecessor
    
   
2007
    
2006
    
Millions of dollars
  
Cost
    
Accumulated
Amortization
    
Net
    
Cost
    
Accumulated
Amortization
    
Net
Identifiable intangible assets:
                                  
Emission credits
   $ 723     $ - -     $ 723     $ 49     $ - -     $ 49  
Technology, patent and
license costs
     508       (1 )     507       119       (78 )     41  
Turnaround costs
     342       (4 )     338       556       (261 )     295  
Various contracts
     329       (2 )     327       6       (1 )     5  
Debt issuance costs
     363       (6 )     357       192       (96 )     96  
Software costs
     55       - -       55       208       (152 )     56  
Catalyst costs
     39       - -       39       68       (45 )     23  
Other
     52       - -       52       163       (96 )     67  
Total intangible assets
   $ 2,411     $ (13 )     2,398     $ 1,361     $ (729 )     632  
Precious metals
                     84                       44  
Company-owned life insurance
                     59                       151  
Pension assets
                     36                       29  
Other
                     8                       8  
Total other assets, net
                   $ 2,585                     $ 864  

 
Amortization of these identifiable intangible assets for the next five years is expected to be $454 million in 2008, $229 million in 2009, $199 million in 2010, $175 million in 2011, and $142 million in 2012.

114
LYONDELL CHEMICAL COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS―(Continued)
 
 
12.           Property, Plant and Equipment, Goodwill and Other Assets – (Continued)
 
Depreciation and amortization expense is summarized as follows:
 
   
Successor
    
Predecessor
  
   
For the
period from
December 21
through
December 31,
    
For the
period from
January 1
through
December 20,
    
For the year ended
December 31,
  
Millions of dollars
  
2007
    
2007
    
2006
    
2005
  
Property, plant and equipment
   $ 29     $ 669     $ 530     $ 463  
Investment in PO joint ventures
     1       47       49       45  
Turnaround costs
     4       85       63       56  
Technology, patent and license costs
     1       6       6       1  
Software costs
     - -       23       29       29  
Other
     4       38       34       37  
Total depreciation and amortization
   $ 39     $ 868     $ 711     $ 631  

 
In addition to the depreciation and amortization expense shown above, amortization of debt issuance costs included in interest expense in the Consolidated Statements of Income was $6 million and $15 million, respectively, for the Successor and Predecessor periods in 2007, $16 million in 2006 and $15 million in 2005.
 
The increases in maintenance and repair expenses as well as depreciation and amortization expense in 2007 and 2006 reflected the consolidation of Houston Refining from August 16, 2006 (see Note 8).
 
Lyondell believes that there are asset retirement obligations associated with some of its facilities, but that the present value of those obligations normally is not material in the context of an indefinite expected life of the facilities.  Lyondell continually reviews the optimal future alternatives for its facilities.  Any decision to retire one or more facilities would result in an increase in the present value of such obligations.  At December 31, 2007 and 2006, the liabilities that had been recognized for all asset retirement obligations were $16 million and $12 million, respectively.
 

115
LYONDELL CHEMICAL COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS―(Continued)
 

 
Accounts payable at December 31, 2007 and 2006 included liabilities in the amounts of $17 million and $19 million, respectively, for checks issued in excess of associated bank balances but not yet presented for collection.
 
 
 
Accrued liabilities consisted of the following components at December 31:
 
   
Successor
    
Predecessor
  
Millions of dollars
  
2007
    
2006
  
Payroll and benefits
   $ 303     $ 307  
Taxes other than income taxes
     147       138  
Interest
     29       163  
Estimated 2007 CITGO tax reimbursement
     - -       97  
Product sales rebates
     48       55  
Income taxes
     33       54  
Deferred revenues
     37       47  
Other
     128       119  
Total accrued liabilities
   $ 725     $ 980  

 
The carrying amounts of existing accrued liabilities were not changed in accounting for the acquisition of Lyondell by LyondellBasell Industries.
 

116
LYONDELL CHEMICAL COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS―(Continued)
 

 
Lyondell’s long-term debt includes debt obligations of Lyondell’s wholly owned subsidiaries, Equistar and Millennium, and of Lyondell Chemical Company without its consolidated subsidiaries (“LCC”).
 
Loans, notes, debentures and other long-term debt due to banks and other unrelated parties consisted of the following at December 31:
 
   
Successor
    
Predecessor
  
Millions of dollars
  
2007
    
2006
  
Bank credit facilities:
            
Lyondell senior secured credit facility:
            
Term loan A due 2013
   $ 1,500     $ - -  
Term loan B due 2014 ($75 million of discount)
     7,475       - -  
Term loan due 2013
     - -       1,771  
$1,000 million revolving credit facility
     - -       - -  
Lyondell $1,000 million inventory-based credit facility
     100       - -  
                 
LCC notes and debentures:
                
Senior Secured Notes due 2012, 11.125%
     - -       277  
Senior Secured Notes due 2013, 10.5%
     - -       325  
Debentures due 2010, 10.25% ($4 million of premium)
     104       100  
Debentures due 2020, 9.8% ($3 million of discount)
     222       224  
Senior Unsecured Notes due 2014, 8%
     3       875  
Senior Unsecured Notes due 2016, 8.25%
     1       900  
Senior Subordinated Notes due 2009, 10.875%
     - -       500  
                 
Equistar notes and debentures:
                
Senior Notes due 2008, 10.125%
     8       716  
Senior Notes due 2011, 10.625%
     4       727  
Debentures due 2026, 7.55% ($21 million of discount)
     129       135  
Notes due 2009, 8.75%
     15       599  
                 
Millennium notes and debentures:
                
Senior Notes due 2008, 9.25%
     - -       393  
Senior Debentures due 2026, 7.625% ($72 million of discount)
     170       249  
Convertible Senior Debentures due 2023, 4%
     158       163  
Total
     9,889       7,954  
Less current maturities
     (435 )     (18 )
Long-term debt – banks and other unrelated parties
   $ 9,454     $ 7,936  

 
In addition to the long-term debt in the preceding table, on December 20, 2007 Lyondell entered into a note payable with LyondellBasell Industries and received proceeds of $7,166 million.  The note matures in 2014.  In addition, Lyondell recognized in its financial statements $834 million of push-down debt for which Lyondell is not the primary obligor, but which it has guaranteed, and which was used by LyondellBasell Industries in the acquisition of Lyondell.  Combined, these represent the $8,000 million of Long-Term Debt – Related Parties in the Consolidated Balance Sheet.  See Note 7 for additional information about this and other related party transactions.
 

117
LYONDELL CHEMICAL COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS―(Continued)
 

15.       Long-Term Debt – (Continued)
 
Aggregate maturities of all long-term debt during the next five years are $435 million in 2008, $147 million in 2009, $325 million in 2010, $301 million in 2011, $413 million in 2012 and $8,268 million thereafter.
 
On December 20, 2007, in connection with the acquisition of Lyondell by LyondellBasell Industries, Lyondell and other subsidiaries of the Basell Group entered into a Senior Secured Credit Facility.  The Senior Secured Credit Facility consists of a six-year $2,000 million term loan A facility due 2013, a seven-year $7,550 million and €1,300 million term loan B facility due 2014 and a six-year $1,000 million multicurrency revolving credit facility due 2013.  Lyondell borrowed $1,500 million and $7,550 million, respectively, under the term loans A and B facilities and none under the revolving credit facility.  At Lyondell’s option, loans under the Senior Secured Credit Facility bear interest at rates equal to adjusted LIBOR plus the applicable margin or the higher of the federal funds rate plus 0.5% and the prime rate plus the applicable margin.
 
Lyondell, together with its wholly owned subsidiaries Equistar and Houston Refining and a U.S.-based subsidiary of the Basell Group, also entered into a five-year $1,000 million senior secured inventory-based credit facility, which matures in December 2012.  Loans under this facility bear interest, at the option of the borrower, of the applicable margin plus the alternate base rate, as defined, or the current LIBO rate, as defined.
 
Amounts available under the revolving credit facility under the Senior Secured Credit Facility, which was undrawn at December 31, 2007, are reduced to the extent of outstanding borrowings by Lyondell and another subsidiary of the Basell Group and outstanding letters of credit provided under the credit facility, which totaled $20 million as of December 31, 2007.
 
The Senior Secured Credit Facility contains covenants that, subject to certain exceptions, restrict, among other things, debt incurrence, lien incurrence, investments, certain payments on indebtedness, sales of assets and mergers, amendment of terms of certain indebtedness and material obligations, alter the conduct of business, and affiliate transactions or transactions limiting LyondellBasell Industries’ and certain of its subsidiaries’ ability to make distributions or to incur or permit liens.  In addition, the new credit facility contains covenants that establish maximum levels of annual capital expenditures and require LyondellBasell Industries to maintain specified financial ratios:  (1) the First Lien Secured Leverage Ratio, as defined, may not exceed 3:75:1 on a consolidated basis and (2) the Consolidated Debt Service Ratio, as defined, may not be less than 1.1:1.
 
In addition, the $1,000 million senior secured inventory-based credit facility contains restrictive covenants and covenants that establish maximum levels of capital expenditures, all of which are substantially similar to the Senior Secured Credit Facility.  The inventory-based credit facility also provides that if for any period of four consecutive quarters the Fixed Charge Coverage Ratio, as defined, of LyondellBasell Industries, on a consolidated basis, is less than 1.1:1, then during the next quarter, total excess availability may not be less than $200 million for five consecutive business days or more, unless, on each such day, total excess availability is at least $150 million and total collateral availability is at least $275 million.  The proceeds of loans under the inventory-based credit facility may not be used to make certain dividends or distributions by LCC in the event that the daily average total excess availability fails to exceed $225 million on any of the five consecutive business days prior to the date of the dividend or distribution.
 

118
LYONDELL CHEMICAL COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS―(Continued)
 

15.       Long-Term Debt – (Continued)
 
The Senior Secured Credit Facility is secured by first priority interests in all material assets including, but not limited to, material fee-owned property and equipment, general intangibles, investment and intellectual property, and proceeds of the foregoing, as well as share capital of certain subsidiaries, of all borrowers and guarantors under the facility, except Millennium.
 
LCC and certain of its subsidiaries are guarantors of certain debt of the Basell Group, including an $8,000 million Interim loan, 8.375% High Yield Notes due 2015, comprising borrowings of $615 million and €500 million ($736 million), and amounts borrowed by the Basell Group under the Senior Secured Credit Facility, consisting of $500 million borrowed under term loan A and €1,287 million ($1,894 million) under term loan B.  The Interim loan is secured by a second priority interest over the collateral securing the Senior Secured Credit Facility.  The Interim loan, together with the proceeds from other borrowings, was used to finance the acquisition of Lyondell.  If not repaid prior to the 12 months tenure, the Interim Loan converts to a senior secured loan in December 2008 and is due December 2015.  Accordingly, Lyondell recognized in its financial statements $834 million of this debt, for which it is not the primary obligor.  In addition, certain subsidiaries of LCC are guarantors under the inventory-based credit facility.  LCC also guarantees Equistar’s 7.55% Debentures due 2026 in the principal amount of $150 million.
 
Approximately 97% of Lyondell’s long-term debt including debt of LCC, totaling $9,405 million can be redeemed prior to maturity.  The remainder of the debt is redeemable beginning in 2008, at prices ranging from 105.3% to 100% of the principal amount, with the price declining to 100% at maturity.  Other than untendered debt, Equistar and Millennium debt cannot be redeemed prior to maturity.
 
LCC long-term debt—On December 20, 2007, LCC retired $1,753 million principal amount outstanding under its $2.65 billion senior secured term loan and terminated its then-existing senior secured credit facility, including the term loan and a $1,055 million revolving credit facility.
 
Pursuant to tender offers, in December 2007, LCC repaid $2,605 million principal amount of debt, comprising $899 million of its 8.25% Senior Unsecured Notes due 2016, $872 million of its 8% Senior Unsecured Notes due 2014, $510 million of its 6.875% Senior Unsecured Notes due 2017 and $324 million of its 10.5% Senior Secured Notes due 2013, paying premiums totaling $418 million.  In conjunction with the tender offers, on December 5, 2007, LCC obtained consents from holders of the tendered notes to effect certain proposed amendments to the indentures governing the notes, including the elimination of substantially all the restrictive covenants.
 
LCC called and repaid the remaining principal amounts of $1 million of its 8.25% Senior Secured Notes due 2016 and $3 million of its 8% Senior Unsecured Notes due 2014 in February 2008, paying premiums totaling $1 million.
 
Also during 2007, Lyondell repaid $278 million principal amount of LCC’s 11.125% Senior Secured Notes due 2012, paying premiums totaling $18 million, and $18 million principal amount of the $2.65 billion LCC term loan due 2013.  Lyondell also obtained consents to a proposed amendment of a restrictive provision of the indenture related to its 10.5% Senior Secured Notes due 2013, which required Lyondell to refinance subordinated debt with new subordinated debt.  The amendment permitted the refinancing of subordinated debt with senior debt.  As a result, Lyondell issued $510 million principal amount of LCC 6.875% Senior Unsecured Notes due 2017, paying debt issuance costs of $8 million, and repaid, at par, the outstanding $500 million principal amount of LCC’s 10.875% Senior Subordinated Notes due 2009.
 

119
LYONDELL CHEMICAL COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS―(Continued)
 

15.           Long-Term Debt – (Continued)
 
LCC’s Debentures are equally and ratably secured with the property held directly by LCC that secures the Senior Secured Credit Facilities and the Interim Loan, including four operating plants (the propylene glycol (PG) and propylene glycol ethers (PGE) plants at LCC’s Bayport facility and the butanediol (BDO) and methyl tertiary butyl ether (MTBE) plants at LCC’s Channelview facility) and the capital stock of LCC’s directly owned subsidiaries.
 
On August 16, 2006, in connection with the acquisition of CITGO’s 41.25% ownership interest in Houston Refining (see Note 8), LCC entered into its previous senior secured credit facility that included a $2.65 billion, seven-year term loan and an $800 million, five-year revolving credit facility, which was increased to $1,055 million.
 
During 2006, LCC completed a public offering of $1,775 million of Senior Unsecured Notes, using a portion of the proceeds to repay $875 million of the $2.65 billion term loan due 2013 and to purchase the remaining $899 million principal amount of its 9.625% Series A, Senior Secured Notes due 2007, paying a premium of $20 million; and prepaid the remaining $430 million of 9.5% Senior Secured Notes due 2008, paying a premium of $10 million.
 
During 2006, LCC amended its former senior secured revolving credit facility and amended its indentures to, among other things, provide for additional subsidiary guarantors and other collateral, limit the pledge of equity interests and other securities in certain circumstances and exclude Millennium from certain events-of-default provisions.
 
During 2005, LCC prepaid $300 million of its 9.5% Senior Secured Notes due 2008 and the remaining $700 million of the 9.875% Senior Secured Notes, Series B, due 2007; paid an aggregate of $36 million in prepayment premiums; purchased $1 million of its 9.625% Senior Secured Notes, Series A, due 2007; and paid, at maturity, $100 million of its 9.375% Debentures due 2005.
 
Equistar long-term debt—Equistar’s Debentures due 2026 are secured equally and ratably with the Senior Secured Credit Facility and the Interim loan generally by liens on any Equistar plant for the production of petrochemicals and ownership interests in entities with such plants.
 
On December 20, 2007, Equistar repaid $300 million principal amount outstanding under its $400 million inventory-based revolving credit facility and repurchased the $575 million amount of outstanding receivables sold under its $600 million accounts receivable sales facility (see Note 10) and terminated both facilities.
 
Pursuant to tender offers, in December 2007, Equistar repaid $1,373 million principal amount of debt, comprising $585 million of Equistar’s 8.75% Notes due 2009, $396 million of Equistar’s 10.625% Senior Notes due 2011 and $392 million of Equistar’s 10.125% Senior Notes due 2008, paying premiums totaling $71 million.  In conjunction with the tender offers, on December 5, 2007, Equistar obtained consents from holders of the tendered notes to effect certain proposed amendments to the indentures governing the notes, including the elimination of substantially all the restrictive covenants.
 
Also during 2007, Equistar repaid $300 million principal amount of its 10.125% Senior Notes due 2008 and $300 million principal amount of its 10.625% Senior Notes due 2011, paying premiums totaling $32 million.
 
In February 2008, Equistar called and repaid the remaining principal amounts of $15 million of Equistar’s 8.75% Notes due 2009, $4 million of Equistar’s 10.625% Senior Notes due 2011 and $8 million of Equistar’s 10.125% Senior Notes due 2008, paying premiums totaling $1 million.

120
LYONDELL CHEMICAL COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS―(Continued)
 

15.           Long-Term Debt – (Continued)
 
During 2006, Equistar repaid the $150 million of 6.5% Notes outstanding, which matured in February 2006.‎
 
The indenture for Equistar’s 7.55% Senior Notes due 2026 contains covenants that, subject to exceptions, restrict, among other things, lien incurrence, sale and leaseback transactions and mergers.
 
Millennium long-term debt—In 2007, prior to Lyondell’s acquisition by LyondellBasell Industries, $106 million principal amount of the 4% Convertible Senior Debentures due 2023 was repaid using a combination of Lyondell common stock and cash valued at $385 million.  Pursuant to the indenture governing the Debentures due 2023 and subsequent to the acquisition, the Debentures were convertible at a conversion rate of 75.7633 shares of Lyondell common stock per one thousand dollar principal amount of the Debentures.  The $44 million principal amount of the Debentures outstanding at December 31, 2007 was converted into cash of $158 million and paid in January 2008.
 
Also during 2007, Millennium repaid the remaining $373 million principal amount of its 9.25% Senior Notes due 2008, paying a premium of $13 million, and $4 million principal amount of its 7.625% Senior Debentures due 2026.
 
Also during 2006, a U.K. subsidiary of Millennium entered into a new €60 million, five-year, revolving credit facility, which, subject to permitted liens, was generally secured by the subsidiary’s inventory, accounts receivable and certain other assets.  At December 31, 2006, there was no outstanding borrowing, and there were no outstanding letters of credit under the facility.  The U.K. subsidiary was part of the inorganic chemicals business and any borrowing under the facility was repaid and terminated by Millennium during 2007, as required, using proceeds of the sale of that business.
 
During 2006, Millennium purchased $158 million principal amount of its 7% Senior Notes due 2006, paying a premium of $2 million, and purchased $85 million principal amount of the 9.25% Senior Notes due 2008, paying a premium of $5 million.
 
During 2005, Millennium purchased $342 million principal amount of its 7% Senior Notes due 2006, $13 million of the 9.25% Senior Notes due 2008 and $1 million of the 7.625% Senior Debentures due 2026, paying total premiums of $10 million.
 
Millennium’s former $125 million senior secured revolving credit facility in the U.S. and $25 million senior secured revolving credit facility and $100 million senior secured term loan in Australia, all of which matured in August 2010 were variously secured by equity interests in and assets of Lyondell’s worldwide inorganics chemicals business, and were repaid and terminated by Millennium, as required, using proceeds of the sale of that business. At December 31, 2006, the outstanding balance under the Australian term loan was $70 million.  There were $22 million of outstanding letters of credit under the U.S. revolving credit facility and none outstanding under the Australian revolving credit facility as of December 31, 2006.  There was no outstanding borrowing under either revolving credit facility as of December 31, 2006.  See Note 4 for debt of discontinued operations.
 
121
LYONDELL CHEMICAL COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS―(Continued)
 
‎
15.           Long-Term Debt – (Continued)
 
Also in 2005, Millennium obtained an amendment to its previous $150 million senior secured credit facility to allow for the unrestricted repurchase of indebtedness in the form of bonds, debentures, notes or similar instruments.  On February 2, 2005, as a result of certain adjustments and charges related to the February 2005 restatement of Millennium’s financial statements, Millennium entered into an amendment and waiver to its previous $150 million credit facility, which amended the credit facility definition of EBITDA and waived any and all defaults or events of default that may have occurred on or prior to the amendment and waiver.
 
The indenture for Millennium’s 7.625% Senior Debentures contains covenants that, subject to exceptions, restrict, among other things, debt incurrence by subsidiaries, lien incurrence, sale and leaseback transactions and mergers.  Millennium is no longer prohibited from making certain restricted payments, including dividends to Lyondell, nor is it required to maintain financial ratios as a result of the repayment of its 9.25% Senior Notes due 2008.
 
Millennium’s 7.625% Senior Debentures were issued by Millennium America Inc. (“Millennium America”), a subsidiary of Millennium and are fully and unconditionally guaranteed by Millennium.  Millennium’s 4% Convertible Senior Debentures were issued by Millennium and were guaranteed fully and unconditionally by Millennium America while outstanding.
 
 
 
Lyondell leases various facilities and equipment under noncancelable operating lease arrangements for varying periods.  Operating leases include leases of railcars used in the distribution of products in Lyondell’s business.  As of December 31, 2007, future minimum lease payments for the next five years and thereafter, relating to all noncancelable operating leases with terms in excess of one year were as follows:
 
Millions of dollars
      
2008
   $ 257  
2009
     212  
2010
     159  
2011
     118  
2012
     67  
Thereafter
     499  
Total minimum lease payments
   $ 1,312  

 
Net rental expense for the 2007 Successor and Predecessor periods combined was $300 million and for 2006 and 2005 was $209 million and $179 million, respectively.  The increases in net rental expenses in 2007 and 2006 were primarily due to the consolidation of Houston Refining from August 16, 2006 (see Note ‎8).
 
 
 
Lyondell is exposed to market risks, such as changes in commodity pricing, currency exchange rates and interest rates.  To manage the volatility related to these exposures, Lyondell selectively enters into derivative transactions pursuant to Lyondell’s policies.  Designation of the derivatives as fair-value or cash-flow hedges is performed on a specific exposure basis.  Hedge accounting may not be elected with respect to certain short-term exposures. The changes in fair value of these hedging instruments are offset in part or in whole by corresponding changes in the fair value or cash flows of the underlying exposures being hedged.
 

122
LYONDELL CHEMICAL COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS―(Continued)
 

17.       Financial Instruments and Derivatives – (Continued)
 
Commodity Price Risk Management—Lyondell is exposed to commodity price volatility related to anticipated purchases of natural gas, crude oil and other raw materials and sales of its products.  Lyondell selectively uses commodity swap, option, and futures contracts with various terms to manage the volatility related to these risks.  Such contracts are generally limited to durations of one year or less.  Cash-flow hedge accounting is normally elected for these derivative transactions; however, in some cases, when the duration of a derivative is short, hedge accounting is not elected.  When hedge accounting is not elected, the changes in fair value of these instruments are recorded in earnings.  When hedge accounting is elected, gains and losses on these instruments are deferred in accumulated other comprehensive income (“AOCI”) until the underlying transaction is recognized in earnings.
 
Lyondell entered into futures contracts in 2007 and 2006, with respect to purchases of crude oil and sales of gasoline and heating oil.  These futures transactions were not designated as hedges, and the changes in the fair value of the futures contracts were recognized in earnings.  During 2007 and 2006, Lyondell settled futures positions of 1,330 million gallons and 148 million gallons, respectively, of gasoline and heating oil, which resulted in net gains of $53 million and $1 million, respectively.  Lyondell also settled futures contracts of 4 million barrels of crude oil during 2007, resulting in a net gain of $3 million.
 
At December 31, 2007, futures contracts for 20 million gallons of gasoline and heating oil in the notional amount of $25 million, maturing in February and March of 2008, were outstanding.  At December 31, 2006, futures contracts for 12 million gallons of gasoline in the notional amount of $20 million and 900 thousand barrels of crude oil in the notional amount of $56 million, maturing in February and March 2007, were outstanding.  The fair value, based on quoted market prices, resulted in net payables of less than $1 million and $3 million, respectively, at December 31, 2007 and 2006.
 
Earnings included net gains of $60 million in 2007 and net losses of $1 million and $5 million in 2006 and 2005, respectively.
 
Also during 2007, Lyondell entered into futures contracts designated as cash flow hedges to offset the effect of changes in the price of silver used as catalyst in the production process.  At December 31, 2007, futures contracts for 1 million troy ounces of silver in the notional amount of $15 million, maturing in September 2008, were outstanding.  Gains, related to these cash flow hedges, of less than $1 million were deferred in AOCI as of December 31, 2007.
 
In 2006, Lyondell also entered into futures contracts designated as cash flow hedges to offset the changes in the price of natural gas.  At December 31, 2007 and 2006, futures contracts for 680,000 mmbtu and none, respectively, of natural gas in the notional amounts of $5 million and none, respectively, were outstanding.  Losses of less than $1 million related to these contracts, which matured in January and February 2008, were deferred in AOCI as of December 31, 2007.
 
Foreign Currency Exposure Management—Lyondell manufactures and markets its products in a number of countries throughout the world and, as a result, is exposed to changes in currency exchange rates.  Costs in some countries are incurred, in part, in currencies other than the applicable functional currency.  Lyondell selectively utilizes forward, swap and option derivative contracts with terms normally lasting less than three months to protect against the adverse effect that currency exchange rate fluctuations may have on foreign currency denominated trade receivables and trade payables.  These derivatives generally are not designated as hedges for accounting purposes.  There were no outstanding foreign currency forward, swap or option contracts at December 31, 2007 and 2006.
 

123
LYONDELL CHEMICAL COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS―(Continued)
 

17.       Financial Instruments and Derivatives – (Continued)
 
In addition, Lyondell selectively utilizes currency forward and swap contracts that qualify as cash-flow hedges.  These are intended to offset the effect of exchange rate fluctuations on forecasted or committed sales and purchases.  Gains and losses on these instruments are deferred in AOCI until the underlying transaction is recognized in earnings.  The gains or losses are reported either in sales and other operating revenues or cost of sales to match the underlying transaction being hedged.  There were no amounts related to foreign exchange cash-flow hedges deferred in AOCI at December 31, 2007 and 2006.
 
As a result of foreign currency transactions, Lyondell had a net gain of $41 million in 2007 and net losses of $7 million and $5 million, respectively, in 2006 and 2005.  The net gain in 2007 primarily related to intercompany loans and reflected the significant increase in value of the euro compared to the U.S. dollar during 2007 and the determination that certain outstanding intercompany debt will be repaid in the foreseeable future.
 
Interest Rate Risk Management—Lyondell selectively used derivative instruments to manage the ratio of fixed-to variable-rate debt at Millennium.  At December 31, 2006, there were outstanding interest rate swap agreements in the notional amount of $175 million, which were designated as fair-value hedges of underlying fixed-rate obligations.  The fair value of these interest rate swap agreements was an obligation of $3 million at December 31, 2006, resulting in a decrease in the carrying value of long-term debt and the recognition of a corresponding liability.  The net gains and losses resulting from adjustment of both the interest rate swaps and the hedged portion of the underlying debt to fair value are recorded in interest expense.  In 2007, Lyondell terminated all of its outstanding interest rate swap agreements upon repayment of the underlying debt and recorded a loss of $2 million.  Accordingly, at December 31, 2007, there were no outstanding interest rate swap agreements.
 
Pursuant to the Senior Secured Credit Facility (see Note 15), the borrowers are required to enter into hedging arrangements to reduce interest rate risk exposure.  The hedging arrangements are to cover at least 50% of LyondellBasell Industries total debt, with certain exclusions, for at least three years.  Therefore, Lyondell and other subsidiaries of the Basell Group that are borrowers under the Senior Secured Credit Facility will in the future enter into and maintain the required hedging arrangements.  As of December 31, 2007, there were not yet any hedging arrangements in place.
 
The carrying value and the estimated fair value of Lyondell’s non-current, non-derivative financial instruments as of December 31, 2007 and 2006 are shown in the table below:
 
   
Successor
    
Predecessor
  
   
2007
    
2006
  
Millions of dollars
  
Carrying
Value
    
Fair
Value
    
Carrying
Value
    
Fair
Value
  
Long-term debt, including current maturities
   $ 9,889     $ 9,904     $ 7,954     $ 8,302  

 
Long-term debt, including amounts due within one year, was valued based upon the borrowing rates currently available to Lyondell for debt with terms and average maturities similar to Lyondell’s debt portfolio except that, for the 4% Convertible Senior Debentures, the converted cash value was used.  The fair value of all nonderivative financial instruments included in current assets and current liabilities, including cash and cash equivalents, accounts receivable and accounts payable, approximated their carrying value due to their short maturity.
 

124
LYONDELL CHEMICAL COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS―(Continued)
 

 
Lyondell has defined benefit pension plans which cover employees in the United States and a number of other countries.  Retirement benefits are generally based on years of service and the employee’s highest compensation for any consecutive 36-month period during the last 120 months of service or other compensation measures as defined under the respective plan provisions.  Lyondell funds the plans through contributions to pension trust funds, generally subject to minimum funding requirements as provided by applicable law.  Lyondell also has unfunded supplemental nonqualified retirement plans, which provide pension benefits for certain employees in excess of the U.S. tax-qualified plans’ limits.  In addition, Lyondell sponsors unfunded postretirement benefit plans other than pensions for U.S. employees, which provide medical and life insurance benefits.  The postretirement medical plans are contributory, while the life insurance plans are generally noncontributory.  The life insurance benefits under certain plans are provided to employees who retired before July 1, 2002.
 

125
LYONDELL CHEMICAL COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS―(Continued)
 

18.       Pension and Other Postretirement Benefits – (Continued)
 
The following table provides a reconciliation of projected benefit obligations, plan assets and the funded status of Lyondell’s U.S. and non-U.S. pension plans for continuing and discontinued operations, including the pension plans of Houston Refining as a result of Lyondell’s August 16, 2006 acquisition of CITGO’s 41.25% interest in Houston Refining (see Note 8):
 
   
2007
    
2006
  
Millions of dollars
  
U.S.
    
Non-U.S.
    
U.S.
    
Non-U.S.
  
Change in benefit obligation:
                        
Benefit obligation, January 1
   $ 1,601     $ 274     $ 1,606     $ 474  
Acquisition of Houston Refining
     - -       - -       169       - -  
Service cost
     53       11       52       19  
Interest cost
     91       14       88       23  
Actuarial gain
     (83 )     (41 )     (80 )     (27 )
Benefits paid
     (192 )     (5 )     (111 )     (16 )
Foreign exchange effects
     - -       24       - -       58  
Sale of non-U.S. subsidiaries
     - -       (236 )     - -       - -  
Other
     - -       4       - -       3  
Benefit obligation, December 31
     1,470       45       1,724       534  
Less benefit obligation
of discontinued operations, December 31
     - -       - -       123       260  
Benefit obligation of continuing operations, December 31
     1,470       45       1,601       274  
Change in plan assets:
                                
Fair value of plan assets, January 1
     1,244       252       1,055       344  
Acquisition of Houston Refining
     - -       - -       93       - -  
Actual return on plan assets
     113       1       136       26  
Company contributions
     242       22       174       36  
Benefits paid
     (192 )     (5 )     (111 )     (16 )
Foreign exchange effects
     - -       26       - -       44  
Sale of non-U.S. subsidiaries
     - -       (252 )     - -       - -  
Other
     3       1       - -       3  
Fair value of plan assets, December 31
     1,410       45       1,347       437  
Less fair value of plan assets
of discontinued operations, December 31
     - -       - -       103       185  
Fair value of plan assets
of continuing operations, December 31
     1,410       45       1,244       252  
Funded status of continuing operations, December 31
     (60 )     - -       (357 )     (22 )
Amounts not recognized in benefit costs of continuing operations:
                                
Actuarial and investment loss
     - -       - -       237       47  
Prior service cost (benefit)
     - -       - -       (7 )     1  
Transition obligation
     - -       - -       - -       2  
Net amount recognized in benefit costs of continuing operations
   $ (60 )   $ - -     $ (127 )   $ 28  
                                 

126
LYONDELL CHEMICAL COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS―(Continued)
 

18.       Pension and Other Postretirement Benefits – (Continued)
 
   
2007
    
2006
  
Millions of dollars
  
U.S.
    
Non-U.S.
    
U.S.
    
Non-U.S.
  
Amounts recognized in the Consolidated Balance Sheets relating
to continuing operations consist of:
                        
Prepaid benefit cost
   $ 34     $ 2     $ 29     $ - -  
Accrued benefit liability, current
     (11 )     - -       (6 )     - -  
Accrued benefit liability, long-term
     (83 )     (2 )     (380 )     (22 )
Funded status, December 31
     (60 )     - -       (357 )     (22 )
Accumulated other comprehensive loss – pretax
     - -       - -       230       50  
Net amount recognized in benefit costs of
continuing operations
   $ (60 )   $ - -     $ (127 )   $ 28  

 
The following additional information is presented for U.S. and non-U.S. pension plans of Lyondell’s continuing operations:
 
   
2007
    
2006
  
Millions of dollars
  
U.S.
    
Non-U.S.
    
U.S.
    
Non-U.S.
  
Accumulated benefit obligation
for defined benefit plans, December 31
   $ 1,267     $ 43     $ 1,366     $ 215  
Increase (decrease) in minimum liability, prior to
application of SFAS No. 158, included in
other comprehensive loss
     - -       - -       (85 )     2  

 

127
LYONDELL CHEMICAL COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS―(Continued)
 

18.       Pension and Other Postretirement Benefits – (Continued)
 
The following table provides a reconciliation of benefit obligations of Lyondell’s unfunded other postretirement benefit plans for continuing and discontinued operations, which are provided for U.S. employees:
 
Millions of dollars
  
2007
    
2006
  
Change in benefit obligation:
            
Benefit obligation, January 1
   $ 262     $ 229  
Acquisition of Houston Refining
     - -       57  
Service cost
     5       5  
Interest cost
     15       13  
Plan amendments
     - -       (10 )
Actuarial gain
     (11 )     (11 )
Benefits paid
     (16 )     (13 )
Benefit obligation, December 31
     255       270  
Less benefit obligation of discontinued operations, December 31
     1       8  
Benefit obligation of continuing operations, December 31
     254       262  
Funded status of continuing operations, December 31
     (254 )     (262 )
Amounts not recognized in benefit costs of continuing operations:
                
Actuarial loss
     - -       (2 )
Prior service benefit
     - -       31  
Net amount recognized in benefit costs of continuing operations
   $ (254 )   $ (233 )
Amounts recognized in the Consolidated Balance Sheets
relating to continuing operations consist of:
                
Accrued benefit liability, current
   $ (18 )   $ (14 )
Accrued benefit liability, long-term
     (236 )     (248 )
Funded status, December 31
     (254 )     (262 )
Accumulated other comprehensive income - pretax
     - -       29  
Net amount recognized in benefit costs of continuing operations
   $ (254 )   $ (233 )

 
The estimated benefit obligations and assets related to the discontinued operations at December 31, 2007 are as follows:
 
Millions of dollars
  
U.S.
    
Non-U.S.
  
Pension benefit plans:
            
Projected benefit obligations
   $ 117     $ 260  
Accumulated benefit obligations
     115       213  
Fair value of plan assets
     100       185  
Other postretirement benefit plans – projected benefit obligations
     9       - -  

 
As a result of the sale of the inorganic chemicals business, pension and other postretirement benefit obligations and assets related to the discontinued operations totaling $386 million and $285 million, respectively, were transferred from Lyondell’s plans to the buyer’s plans in 2007.
 

128
LYONDELL CHEMICAL COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS―(Continued)
 

18.       Pension and Other Postretirement Benefits – (Continued)
 
Pension plans of continuing operations with projected benefit obligations in excess of the fair value of assets are summarized as follows at December 31:
 
   
2007
    
2006
  
Millions of dollars
  
U.S.
    
Non-U.S.
    
U.S.
    
Non-U.S.
  
Projected benefit obligations
   $ 1,382     $ 2     $ 1,568     $ 269  
Fair value of assets
     1,287       - -       1,182       248  

 
Pension plans of continuing operations with accumulated benefit obligations in excess of the fair value of assets are summarized as follows at December 31:
 
   
2007
    
2006
  
Millions of dollars
  
U.S.
    
Non-U.S.
    
U.S.
    
Non-U.S.
  
Accumulated benefit obligations
   $ 27     $ 1     $ 1,188     $ 42  
Fair value of assets
     - -       - -       1,024       35  

 
The following table provides the components of net periodic pension costs allocated to continuing operations:
 
   
Successor
    
Predecessor
  
   
For the period
from December 21
through
December 31,
    
For the period
from January 1
through
December 20,
    
For the year ended December 31,
  
   
2007
    
2007
    
2006
    
2005
  
Millions of dollars
  
U.S.
    
Non-U.S.
    
U.S.
    
Non-U.S.
    
U.S.
    
Non-U.S.
    
U.S.
    
Non-U.S.
  
Net periodic pension cost:
                                                
Service cost
   $ 2     $ - -     $ 51     $ 11     $ 50     $ 12     $ 44     $ 10  
Interest cost
     3       - -       88       14       81       11       77       11  
 
Actual return on plan assets
     (5 )     - -       (108 )     (1 )     (122 )     (12 )     (64 )     (28 )
Less- return in excess of
(less than) expected return
     1       - -       10       (15 )     45       - -       (6 )     17  
Expected return on plan assets
     (4 )     - -       (98 )     (16 )     (77 )     (12 )     (70 )     (11 )
 
Prior service cost (benefit)
amortization
     - -       - -       (1 )     - -       (1 )     1       (2 )     - -  
Actuarial and investment loss
amortization
     - -       - -       15       1       25       3       23       4  
Net periodic benefit cost
   $ 1     $ - -     $ 55     $ 10     $ 78     $ 15     $ 72     $ 14  

 

129
LYONDELL CHEMICAL COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS―(Continued)
 

18.       Pension and Other Postretirement Benefits – (Continued)
 
The following table provides the components of net periodic other postretirement benefit costs allocated to continuing operations:
 
   
Predecessor
  
   
For the
period from
January 1
through
December 20,
    
For the year ended
December 31,
  
Millions of dollars
  
2007
    
2006
    
2005
  
Net periodic other postretirement benefit costs:
                  
Service cost
   $ 5     $ 5     $ 5  
Interest cost
     15       13       13  
Prior service benefit amortization
     (7 )     (4 )     - -  
Recognized actuarial loss
     - -       1       - -  
Net periodic benefit cost
   $ 13     $ 15     $ 18  

 
Amounts for the Successor period from December 20 to December 31, 2007 were immaterial.
 
The above net periodic pension and other postretirement benefit costs include Houston Refining prospectively from August 16, 2006.
 
The assumptions used in determining the net benefit liabilities for Lyondell’s pension and other postretirement benefit plans were as follows at December 31:
 
   
2007
    
2006
  
   
U.S.
    
Non-U.S.
    
U.S.
    
Non-U.S.
  
Weighted-average
assumptions as of December 31:
                        
Discount rate
     6.25 %     4.82 %     5.75 %     4.99 %
Rate of compensation increase
     4.50 %     4.53 %     4.50 %     4.39 %

 
The assumptions used in determining net benefit costs for Lyondell’s pension and other postretirement benefit plans were as follows for the year ended December 31:
 
   
2007
    
2006
    
2005
  
   
U.S.
    
Non-U.S.
    
U.S.
    
Non-U.S.
    
U.S.
    
Non-U.S.
  
Weighted-average
assumptions for the year:
                                    
Discount rate
     5.75 %     4.21 %     5.50 %     4.59 %     5.75 %     5.09 %
Expected return on plan assets
     8.00 %     5.53 %     8.00 %     5.82 %     8.00 %     6.43 %
Rate of compensation increase
     4.50 %     4.44 %     4.50 %     4.28 %     4.50 %     4.33 %

 

130
LYONDELL CHEMICAL COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS―(Continued)
 

18.       Pension and Other Postretirement Benefits – (Continued)
 
The assumed annual rate of increase in the per capita cost of covered health care benefits as of December 31, 2007 was 9% for 2008, decreasing 1% per year to 5% in 2012 and thereafter.  At December 31, 2007, similar cost escalation assumptions were used.  The health care cost trend rate assumption does not have a significant effect on the amounts reported due to limits on Lyondell’s maximum contribution level to the medical plan.  To illustrate, increasing or decreasing the assumed health care cost trend rates by one percentage point in each year would change the accumulated other postretirement benefit liability as of December 31, 2007 by $2 million and would not have a material effect on the aggregate service and interest cost components of the net periodic other postretirement benefit cost for the year then ended.
 
Management’s goal is to manage pension investments over the long term to achieve optimal returns with an acceptable level of risk and volatility.  Lyondell’s targeted asset allocations for the U.S. plans of 55% U.S. equity securities, 15% non-U.S. equity securities, 25% fixed income securities and 5% investments in real estate are based on recommendations by Lyondell’s independent pension investment advisor.  Lyondell’s expected long-term rate of return on plan assets of 8% is based on the average level of earnings that its independent pension investment advisor has advised could be expected to be earned over time on such allocation.  Investment policies prohibit investments in securities issued by Lyondell or investment in speculative derivative instruments.  The investments, except for real estate, are marketable securities that provide sufficient liquidity to meet expected benefit obligation payments.
 
Lyondell’s pension plan weighted-average asset allocations by asset category for its U.S. pension plans generally are as follows at December 31:
 
Asset Category
  
2007 Policy
    
2007
    
2006
  
U.S. equity securities
     55 %     56 %     56 %
Non-U.S. equity securities
     15 %     16 %     17 %
Fixed income securities
     25 %     24 %     27 %
Real estate investments
     5 %     4 %     - -  
Total
     100 %     100 %     100 %

 
Required contributions to Lyondell’s pension plans for continuing operations are expected to be approximately $11 million in 2008.
 
As of December 31, 2007, future expected benefit payments by the plans for continuing operations, which reflect expected future service, as appropriate, were as follows:
 
Millions of dollars
  
Pension
Benefits
    
Other
Benefits
  
2008
   $ 109     $ 18  
2009
     102       18  
2010
     103       19  
2011
     103       20  
2012
     111       20  
2013 through 2017
     583       100  

 
Lyondell also maintains voluntary defined contribution savings plans for eligible employees.  Contributions to these plans by Lyondell were $32 million in 2007, $26 million in 2006 and $24 million in 2005.  Houston Refining’s plans are included prospectively from August 16, 2006.
 

131
LYONDELL CHEMICAL COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS―(Continued)
 

 
The significant components of the provision for income taxes relating to continuing operations were as follows:
 
   
Successor
    
Predecessor
  
   
For the
period from
December 21
through
December 31,
    
For the
period from
January 1
through
December 20,
    
For the year ended
December 31,
  
Millions of dollars
  
2007
    
2007
    
2006
    
2005
  
Current:
                        
Federal
   $ - -     $ 46     $ 298     $ 27  
Non-U.S.
     - -       63       45       35  
State
     - -       6       8       (5 )
Total current
     - -       115       351       57  
Deferred:
                                
Federal
     (9 )     (10 )     88       126  
Non-U.S.
     (6 )     (8 )     (35 )     27  
State
     (8 )     (11 )     6       (17 )
Total deferred
     (23 )     (29 )     59       136  
Provision for (benefit from) income taxes before
tax effects of other comprehensive income
     (23 )     86       410       193  
                                 
Tax effects of elements of other comprehensive
income:
                                
Cumulative translation adjustment
     5       16       19       (17 )
Minimum pension liability
     - -       - -       23       - -  
Total income tax expense in comprehensive income
   $ (18 )   $ 102     $ 452     $ 176  

 
Substantially all of Lyondell’s current provisions for U.S. federal income tax expense for 2005 and a portion of the provision for 2006 were offset by the benefit of net operating loss carryforwards.  In each period, the resulting reduction in the current tax provision was offset by an increase in the deferred tax provision.
 
Income tax expenses related to discontinued operations are discussed in Note 4.
 

132
LYONDELL CHEMICAL COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS―(Continued)
 

19.       Income Taxes – (Continued)
 
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, as well as the net tax effects of operating loss carryforwards.  Significant components of Lyondell’s deferred tax liabilities and assets were as follows as of December 31:
 
   
Successor
    
Predecessor
  
Millions of dollars
  
2007
    
2006
  
Deferred tax liabilities:
            
Accelerated tax depreciation
   $ 3,371     $ 1,758  
Investments in joint venture partnerships
     534       300  
Goodwill
     131       103  
Inventory
     677       86  
Other intangible assets
     299       3  
Other
     15       11  
Total deferred tax liabilities
     5,027       2,261  
Deferred tax assets:
                
Net operating loss carryforwards
     141       125  
Employee benefit plans
     150       330  
AMT credits
     208       89  
Fair value of debt acquired
     - -       19  
U.S. tax benefit of deferred non-U.S. taxes
     122       61  
Deferred charges and revenues
     81       135  
Environmental remediation liabilities
     - -       62  
Other
     96       94  
Total deferred tax assets
     798       915  
Deferred tax asset valuation allowances
     (86 )     (89 )
Net deferred tax assets
     712       826  
Net deferred tax liabilities
   $ 4,315     $ 1,435  
                 
Balance sheet classifications:
                
Deferred tax assets
   $ - -     $ 102  
Deferred income taxes – current
     431       - -  
Deferred income taxes – long term
     3,884       1,537  
Net deferred tax liabilities
   $ 4,315     $ 1,435  

 
Substantially all of the deferred tax assets relate to the U.S.  During 2007, Lyondell generated U.S. federal tax net operating loss carryforward benefits of $48 million for which no valuation allowance has been provided.  The remaining net operating loss carryforward tax benefit of $93 million as of December 31, 2007, related to certain French tax loss carryforwards, was reduced by the valuation allowance of $86 million, representing tax loss carryforwards that management believes are more likely than not to expire unutilized.  The valuation allowances were reduced by $13 million in 2007 due to the utilization of net operating loss carryforwards and increased $8 million in 2006, primarily for additional net operating loss carryforwards.  Other changes in the valuation allowances reflected the effects of foreign currency translation.  The valuation allowance was $77 million as of December 31, 2005.  The net operating loss carryforwards in the U.S. expire in 2027, while the French net operating loss carryforwards and the federal AMT credits of $208 million have no expiration date.
 

133
LYONDELL CHEMICAL COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS―(Continued)
 

19.       Income Taxes – (Continued)
 
Certain income tax returns of Lyondell and various of its subsidiaries are under examination by the Internal Revenue Service (“IRS”) and various other non-U.S. and state tax authorities.  In many cases, these audits may result in proposed assessments by the tax authorities.  Lyondell believes that its tax positions comply with applicable tax law and intends to defend its positions through appropriate administrative and judicial processes.
 
Tax benefits totaling $179 million relating to uncertain tax positions taken in prior years, including $44 million pertaining to discontinued operations, were unrecognized as of January 1, 2007 (see Note 2).  The following table presents a reconciliation of the beginning and ending amounts of unrecognized tax benefits for the year ended December 31, 2007:
 
Millions of dollars
      
Balance at January 1, 2007
   $ 179  
Reductions for tax positions of prior years
     (46 )
Settlements
     (118 )
Balance at December 31, 2007
   $ 15  

 
As a result of the sale of the inorganic chemicals business, unrecognized tax benefits for tax positions in prior years decreased by $44 million. 
 
A substantial portion of the uncertainties at January 1, 2007 were related to passive foreign income for the years 1997 to 2001 and resulting capital loss benefits that were subsequently recognized.  IRS audit examination and appeal of the matter was completed during 2007, and resulted in the $118 million decrease in the amount of unrecognized tax benefits during 2007, consisting of payments of $10 million and reversals of $108 million, which reduced goodwill by $34 million and deferred tax assets by $74 million.
 
The remaining amount of unrecognized tax benefits, if recognized, would not affect the effective tax rate.  Lyondell is no longer subject to any significant income tax examinations by tax authorities for years prior to 2005.
 
Lyondell recognizes interest related to uncertain income tax positions in interest expense.  During 2006, Lyondell reduced the accrual for interest by $4 million and in 2005, Lyondell accrued $9 million of interest expense.  Lyondell’s accrued liability for interest expense was $17 million and $86 million at December 31, 2007 and 2006, respectively. During the year ended December 31, 2007, Lyondell paid interest of $26 million related to the settlements and reduced accrued interest by $43 million, which was recognized as a $36 million reduction in goodwill and a $7 million reduction of interest expense.
 
There were no undistributed earnings of foreign subsidiaries on which deferred income taxes were not provided at December 31, 2007.
 

134
LYONDELL CHEMICAL COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS―(Continued)
 

19.       Income Taxes – (Continued)
 
The domestic and non-U.S. components of income (loss) before income taxes and a reconciliation of the income tax provision (benefit) to theoretical income tax computed by applying the U.S. federal statutory tax rate are as follows:
 
   
Successor
    
Predecessor
  
   
For the
period from
December 21
through
December 31,
    
For the
period from
January 1
through
December 20,
    
For the year ended
December 31,
  
Millions of dollars
  
2007
    
2007
    
2006
    
2005
  
Income (loss) before income taxes:
                        
Domestic
   $ (157 )   $ (77 )   $ 1,153     $ 662  
Non-U.S.
     (12 )     247       (7 )     71  
Total
   $ (169 )   $ 170     $ 1,146     $ 733  
Theoretical income tax at U.S. statutory rate
   $ (59 )   $ 60     $ 401     $ 257  
Increase (reduction) resulting from:
                                
Purchased in-process R&D
     33       - -       - -       - -  
Acquisition-related costs
     - -       14       - -       - -  
Redemption of life insurance
     - -       10       - -       - -  
Decrease in non-U.S. statutory tax rates
     - -       - -       (19 )     (5 )
Other effects of non-U.S. operations
     1       2       24       10  
Changes in estimates for prior year items
     - -       4       - -       (61 )
State income taxes, net of federal
     - -       (8 )     9       (14 )
Domestic manufacturing deduction
     - -       - -       (6 )     - -  
Other, net
     2       4       1       6  
Income tax provision (benefit)
   $ (23 )   $ 86     $ 410     $ 193  
Effective income tax rate
     13.6 %     50.6 %     35.8 %     26.3 %

 
 
Commitments—Lyondell has various purchase commitments for materials, supplies and services incident to the ordinary conduct of business, generally for quantities required for its businesses and at prevailing market prices.  These commitments are designed to assure sources of supply and are not expected to be in excess of normal requirements.  Also included in purchase obligations is a commitment to reimburse Rhodia for the costs of operating the TDI facility at Pont de Claix, France, through March 2016.  The Rhodia obligations, denominated in euros, include fixed and variable components.  The actual future obligation will vary with fluctuations in foreign currency exchange rates, market prices of raw materials and other variable cost components such as utility costs.  Approximately 18% to 23% of the annual payments shown in the table below are subject to such variability.
 

135
LYONDELL CHEMICAL COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS―(Continued)
 

20.           Commitments and Contingencies – (Continued)
 
At December 31, 2007, estimated future minimum payments under these contracts with noncancelable contract terms in excess of one year were as follows:
 
Millions of dollars
      
2008
   $ 724  
2009
     659  
2010
     648  
2011
     645  
2012
     636  
Thereafter through 2023
     3,278  
Total minimum contract payments
   $ 6,590  

 
Lyondell’s total purchases under these agreements were $1,054 million, $1,253 million and $1,177 million in 2007, 2006 and 2005, respectively.
 
‎Environmental Remediation—Lyondell’s accrued liability for future environmental remediation costs at current and former plant sites and other remediation sites totaled $207 million and $176 million as of December 31, 2007 and 2006, respectively.  The remediation expenditures are expected to occur over a number of years, and not to be concentrated in any single year.  In the opinion of management, there is no material estimable range of reasonably possible loss in excess of the liabilities recorded for environmental remediation.  However, it is possible that new information about the sites for which the accrual has been established, new technology or future developments such as involvement in investigations by regulatory agencies, could require Lyondell to reassess its potential exposure related to environmental matters.
 
The following table summarizes the activity in Lyondell’s accrued environmental liability for the following  periods:
 
   
Successor
    
Predecessor
  
Millions of dollars
  
Period from
December 21
through
December 31,
2007
    
Period from
January 1
through
December 20,
2007
    
Year ended
December 31,
2006
  
Balance at beginning of period
   $ 207     $ 176     $ 171  
Additional provisions
     - -       52       17  
Amounts paid
     - -       (21 )     (12 )
Balance at end of period
   $ 207     $ 207     $ 176  

 
The additional provisions in 2005 for estimated environmental remediation costs were $2 million.  The liabilities for individual sites range from less than $1 million to $145 million.  The $145 million liability relates to the Kalamazoo River Superfund Site.
 

136
LYONDELL CHEMICAL COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS―(Continued)
 

20.           Commitments and Contingencies – (Continued)
 
A Millennium subsidiary has been identified as a Potential Responsible Party (“PRP”) with respect to the Kalamazoo River Superfund Site.  The site involves cleanup of river sediments and floodplain soils contaminated with polychlorinated biphenyls, cleanup of former paper mill operations, and cleanup and closure of landfills associated with the former paper mill operations.
 
In 2000, the Kalamazoo River Study Group (the “KRSG”), of which the Millennium subsidiary and other PRPs are members, submitted to the State of Michigan a Draft Remedial Investigation and Draft Feasibility Study, which evaluated a number of remedial options for the river.  The estimated costs for these remedial options ranged from $0 to $2.5 billion.  Although the KRSG study identified a broad range of remedial options, not all of those options would represent reasonably possible outcomes.  Management does not believe that any single remedy among those options represented the highest-cost reasonably possible outcome.
 
In 2004, Lyondell recognized a liability representing Millennium’s interim allocation of 55% of the $73 million total of estimated cost of riverbank stabilization, recommended as the preferred remedy in 2000 by the KRSG study, and of certain other costs.
 
At the end of 2001, the U.S. Environmental Protection Agency (“EPA”) took lead responsibility for the river portion of the site at the request of the State of Michigan.  In 2004, the EPA initiated a confidential process to facilitate discussions among the agency, the Millennium subsidiary, other PRPs, the Michigan Departments of Environmental Quality and Natural Resources, and certain federal natural resource trustees about the need for additional investigation activities and different possible approaches for addressing the contamination in and along the Kalamazoo River.  As these discussions have continued, management has obtained new information about regulatory oversight costs and other remediation costs, including a proposed remedy to be applied to a specific portion of the river, and has been able to reasonably estimate anticipated costs for certain other segments of river, based in part on experience to date with the remedy currently being applied to the one portion of the river.  As a result, Lyondell recognized $47 million in 2007 and $2 million in 2006 for additional estimated probable future remediation costs.
 
As of December 31, 2007, the probable additional future remediation spending associated with the river cannot be determined with certainty, but the amounts accrued are believed to be the current best estimate of future costs, based on information currently available.  At December 31, 2007, the balance of the liability related to the river was $98 million.
 
In addition Lyondell has recognized a liability primarily related to Millennium’s estimated share of remediation costs for two former paper mill sites and associated landfills, which are also part of the Kalamazoo River Superfund Site.  At December 31, 2007, the balance of the liability was $47 million.  Although no final agreement has been reached as to the ultimate remedy for these locations, Millennium has begun remediation activity related to these sites.
 
Millennium’s ultimate liability for the Kalamazoo River Superfund Site will depend on many factors that have not yet been determined, including the ultimate remedies selected, the determination of natural resource damages, the number and financial viability of the other PRPs, and the determination of the final allocation among the PRPs.
 
The balance, at December 31, 2007, of Lyondell remediation liabilities related to Millennium sites other than the Kalamazoo River Superfund Site was $36 million.
 

137
LYONDELL CHEMICAL COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS―(Continued)
 

20.           Commitments and Contingencies – (Continued)
 
Litigation—On April 12, 2005, BASF Corporation (“BASF”) filed a lawsuit in New Jersey against Lyondell asserting various claims relating to alleged breaches of a PO sales contract and seeking damages in excess of $100 million.  Lyondell denies it breached the contract.  Lyondell believes the maximum refund due to BASF is $22.5 million on such PO sales and has paid such amount to BASF.  On August 13, 2007, the jury returned a verdict in favor of BASF in the amount of approximately $170 million (which includes the above $22.5 million).  On October 3, 2007, the judge determined that prejudgment interest on the verdict would be $36 million.  Lyondell is  appealing this verdict and has posted a bond, which is collateralized by a $200 million letter of credit.  Lyondell does not expect the verdict to result in any material adverse effect on its business, financial position, liquidity or results of operations.
 
Together with alleged past manufacturers of lead-based paint and lead pigments for use in paint, Millennium has been named as a defendant in various legal proceedings alleging personal injury, property damage, and remediation costs allegedly associated with the use of these products.  The majority of these legal proceedings assert unspecified monetary damages in excess of the statutory minimum and, in certain cases, seek equitable relief such as abatement of lead-based paint in buildings.  Legal proceedings relating to lead pigment or paint are in various trial stages and post-dismissal settings, some of which are on appeal.
 
One legal proceeding relating to lead pigment or paint was tried in 2002.  On October 29, 2002, the judge in that case declared a mistrial after the jury declared itself deadlocked.  The sole issue before the jury was whether lead pigment in paint in and on Rhode Island buildings constituted a “public nuisance.”  The re-trial of this case began on November 1, 2005.  On February 22, 2006, a jury returned a verdict in favor of the State of Rhode Island finding that the cumulative presence of lead pigments in paints and coatings on buildings in the state constitutes a public nuisance; that a Millennium subsidiary, Millennium Holdings, LLC, and other defendants either caused or substantially contributed to the creation of the public nuisance; and that those defendants, including the Millennium subsidiary, should be ordered to abate the public nuisance.  On February 28, 2006, the judge held that the state could not proceed with its claim for punitive damages.  On February 26, 2007, the court issued its decision denying the post-verdict motions of the defendants, including Millennium, for a mistrial or a new trial.  The court concluded that it would enter an order of abatement and appoint a special master to assist the court in determining the scope of the abatement remedy.  On March 16, 2007, the court entered a final judgment on the jury’s verdict.  On March 20, 2007, Millennium filed its notice of appeal with the Rhode Island Supreme Court.  On December 18, 2007, the trial court appointed two special masters to serve as “examiners” and to assist the trial court in the proposed abatement proceedings.
 
Millennium’s defense costs to date for lead-based paint and lead pigment litigation largely have been covered by insurance.  Millennium has insurance policies that potentially provide approximately $1 billion in indemnity coverage for lead-based paint and lead pigment litigation.  Millennium’s ability to collect under the indemnity coverage would depend upon, among other things, the resolution of certain potential coverage defenses that the insurers are likely to assert and the solvency of the various insurance carriers that are part of the coverage block at the time of such a request.
 
While Lyondell believes that Millennium has valid defenses to all the lead-based paint and lead pigment proceedings and is vigorously defending them, litigation is inherently subject to many uncertainties.  Any liability that Millennium may ultimately incur, net of any insurance or other recoveries, cannot be estimated at this time.
 

138
LYONDELL CHEMICAL COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS―(Continued)
 

20.           Commitments and Contingencies – (Continued)
 
Indemnification—Lyondell and its joint ventures are parties to various indemnification arrangements, including arrangements entered into in connection with acquisitions, divestitures and the formation of joint ventures.  For example, Lyondell entered into indemnification arrangements in connection with the transfer of assets and liabilities from Atlantic Richfield Company to Lyondell prior to Lyondell’s initial public offering and in connection with Lyondell’s acquisition of the outstanding shares of ARCO Chemical Company; Equistar and its owner companies (including Lyondell and Millennium) entered into indemnification arrangements in connection with the formation of Equistar; and Millennium entered into indemnification arrangements in connection with its demerger from Hanson plc.  Pursuant to these arrangements, Lyondell and its joint ventures provide indemnification to and/or receive indemnification from other parties in connection with liabilities that may arise in connection with the transactions and in connection with activities prior to completion of the transactions.  These indemnification arrangements typically include provisions pertaining to third party claims relating to environmental and tax matters and various types of litigation.  As of December 31, 2007, Lyondell has not accrued any significant amounts for such indemnification obligations, and is not aware of other circumstances that would be likely to lead to significant future indemnification claims against Lyondell.  Lyondell cannot determine with certainty the potential amount of future payments under the indemnification arrangements until events arise that would trigger a liability under the arrangements.
 
Other—Lyondell and its joint ventures are, from time to time, defendants in lawsuits and other commercial disputes, some of which are not covered by insurance.  Many of these suits make no specific claim for relief.  Although final determination of any liability and resulting financial impact with respect to any such matters cannot be ascertained with any degree of certainty, management does not believe that any ultimate uninsured liability resulting from these matters will, individually or in the aggregate, have a material adverse effect on the financial position, liquidity or results of operations of Lyondell.
 
General—In the opinion of management, the matters discussed in this note are not expected to have a material adverse effect on the financial position or liquidity of Lyondell.  However, the adverse resolution in any reporting period of one or more of these matters could have a material impact on Lyondell’s results of operations for that period, which may be mitigated by contribution or indemnification obligations of others, or by any insurance coverage that may be available.
 
 
 
On December 20, 2007, LyondellBasell Industries indirectly acquired the outstanding common shares of Lyondell.  Accordingly, from December 20, 2007, Lyondell’s consolidated financial statements reflect a revaluation of Lyondell’s assets and liabilities, to reflect the values assigned in LyondellBasell Industries’ accounting for the purchase of Lyondell.  In addition, Lyondell recognized in its financial statements $834 million of push-down debt for which Lyondell is not the primary obligor, but which it has guaranteed, and which was used by LyondellBasell Industries in the acquisition of Lyondell. Prior to the acquisition on December 20, 2007, Lyondell’s stockholders’ equity was $3,129 million, representing equity of Lyondell acquired through sources other than financing of the acquisition.
 

139
LYONDELL CHEMICAL COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS―(Continued)
 

21.       Stockholders’ Equity – (Continued)
 
Lyondell’s stockholders’ equity at December 20, 2007 reflecting the new basis of accounting gives effect to the following revaluations and transactions:
 
Millions
      
Predecessor basis
   $ 3,129  
Allocation of excess purchase price to net assets
     3,388  
Allocation of excess purchase price to goodwill
     5,247  
Purchase and cancellation of Lyondell common stock
     (11,257 )
Successor basis
   $ 507  

 
Preferred Stock—Prior to Lyondell’s acquisition by LyondellBasell Industries, Lyondell’s had authorized shares of $.01 par value preferred stock, of which none had been issued at December 20, 2007 and December 31, 2006.  In connection with the December 20, 2007 acquisition of Lyondell by LyondellBasell Industries, Lyondell’s Certificate of Incorporation was amended and restated to eliminate the authorized preferred stock.
 
Common Stock—As a result of the acquisition of Lyondell by LyondellBasell Industries on December 20, 2007, each issued and outstanding share of common stock was converted into a right to receive $48 in cash.  In connection with the acquisition, Lyondell’s Certificate of Incorporation was amended and restated to reduce the amount of authorized common stock to 1,000 shares with a par value of $0.01.  At December 31, 2007, all 1,000 shares of authorized common stock were outstanding.
 
Series B Common Stock and Warrant—Lyondell’s Certificate of Incorporation was amended and restated in connection with the acquisition of Lyondell by LyondellBasell Industries to, among other things, eliminate the Series B common stock, of which there was none outstanding.
 
Prior to January 2007, Occidental Chemical Holding Corporation, a subsidiary of Occidental (“OCHC”), held a warrant to purchase 5 million shares of Lyondell common stock for $25 per share.  In January 2007, OCHC notified Lyondell that it was exercising the warrant.  The terms of the warrant provided that Lyondell could elect to settle the exercise net by delivering that number of shares of Lyondell common stock having a market value equal to the difference between the exercise price and the market price.  In February 2007, pursuant to the terms of the warrant, OCHC received a net payment of 682,210 shares of Lyondell common stock, having a value of $20 million.  Subsequently, OCHC sold its remaining shares of Lyondell common stock.
 

140
LYONDELL CHEMICAL COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS―(Continued)
 

21.       Stockholders’ Equity – (Continued)
 
Accumulated Other Comprehensive Income (Loss)—The components of accumulated other comprehensive income (loss) were as follows:
 
Millions of dollars
  
Continuing
Operations
    
Discontinued
Operations
    
Total
  
Successor
                  
December 31, 2007
                  
Foreign currency translation
   $ 10     $ - -     $ 10  
Predecessor
                        
December 31, 2006
                        
Foreign currency translation
   $ 154     $ 17     $ 171  
Pension and postretirement liabilities
after application of SFAS No. 158
     (167 )     38       (129 )
Total
   $ (13 )   $ 55     $ 42  

 
Rights to Purchase Common Stock—Prior to Lyondell’s acquisition by LyondellBasell Industries, Lyondell had issued rights, each of which would have entitled the holder to purchase from the Company one share of common stock at a specified purchase price.  In connection with entering into the merger agreement with LyondellBasell Industries, Lyondell amended the Rights Agreement to provide that none of the execution, delivery or performance of the merger agreement and the completion of the merger would trigger the provisions of the Rights Agreement.  Pursuant to that amendment, the rights expired automatically upon the effectiveness of the acquisition.
 
Convertible Debentures—As a result of Lyondell’s acquisition by LyondellBasell Industries on December 20, 2007, Millennium amended the indenture governing its 4% Convertible Senior Debentures, as required, to reflect a conversion amount for each $1,000 principal amount of Debentures equal to the consideration to be issued in the acquisition to holders of Lyondell common stock; and, pursuant to the indenture, the Debentures were convertible at a conversion rate of $3,636.6384 per one thousand dollar principal amount of the Debentures.  During 2007, $106 million principal amount of the Debentures was repaid using a combination of Lyondell common stock and cash valued at $385 million.  The remaining $44 million principal amount outstanding as of December 31, 2007 was converted into $158 million cash and paid in January 2008.
 
 
 
Under Lyondell’s Amended and Restated 1999 Incentive Plan (the “Incentive Plan”), Lyondell granted awards of performance units, restricted stock and stock options to certain employees.  Restricted stock, restricted stock units and stock option awards were also made to directors under other incentive plans.  In addition, Lyondell issued phantom restricted stock, phantom stock options and performance units to certain other employees under still other incentive plans.  As a result of the acquisition of Lyondell by LyondellBasell Industries, on December 20, 2007, all outstanding awards under these plans were settled for $319 million.  At December 31, 2007, $49 million was unpaid.  Lyondell has discontinued use of these incentive plans.
 
These awards resulted in compensation expense of $200 million, $53 million and $72 million for 2007, 2006 and 2005, respectively.  The after-tax amounts were $130 million, $34 million and $47 million, respectively, for 2007, 2006 and 2005.  The compensation expense reflected awards vesting during the periods and changes in valuation of previously vested awards other than stock options.
 

141
LYONDELL CHEMICAL COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS―(Continued)
 

22.       Share-Based Compensation – (Continued)
 
Performance Units—Performance units represented the right to a cash amount, unless Lyondell’s Board of Directors determined to pay the performance units under the Incentive Plan in shares of common stock, equal to the market value at payout of a target number of shares of Lyondell common stock, adjusted for performance.  The actual payout could have ranged from 0% to 200% of the target number of performance units based on Lyondell’s three-year cumulative total shareholder return (common stock price growth plus dividends) relative to a chemical industry peer group.  Performance units were accounted for as a liability award with compensation cost recognized over the performance period.  As a result of change-in-control provisions, all performance units under Lyondell’s plans immediately vested and were converted into the right to receive a single lump sum payment equal to $48 per equivalent share of common stock, resulting in an obligation of $116 million, of which $21 million was outstanding at December 31, 2007.  The following table summarizes performance unit activity in thousands of units for the years ended December 31:
 
   
2007
    
2006
  
Outstanding at beginning of year
     2,701       3,271  
Granted
     949       885  
Paid
     - -       (1,412 )
Settled pursuant to acquisition
     (3,540 )     - -  
Forfeited
     (110 )     (43 )
Outstanding at end of year
     - -       2,701  

 
Cash payments of $174 million, $68 million and $79 million were distributed to participants during 2007, 2006 and 2005.
 
Stock Options—Stock options were granted with an exercise price of at least 100% of market value, had a contractual term of ten years and vested at a rate of one-third per year over three years, with accelerated vesting upon death, disability, retirement or change of control.  On December 20, 2007 in connection with the acquisition of Lyondell by LyondellBasell Industries, all outstanding options of Lyondell became fully exercisable and were cancelled in exchange for a lump sum payment, in cash, of the excess of $48 over the exercise price of the stock option, resulting in an obligation of $110 million, of which less than $1 million was outstanding at December 31, 2007.
 
The following table summarizes activity, in thousands of shares and the weighted average exercise price per share, relating to stock options.
 
   
2007
    
2006
    
2005
  
   
Shares
    
Price
    
Shares
    
Price
    
Shares
    
Price
  
Outstanding at beginning of year
     7,172     $ 16.80       8,336     $ 15.66       11,186     $ 14.93  
Granted
     779       31.97       665       24.52       454       28.56  
Forfeiture
     (1 )     36.71       - -       - -       - -       - -  
Exercised
     (3,902 )     15.85       (1,801 )     14.37       (3,279 )     14.91  
Settled pursuant to acquisition
     (4,048 )     20.62       - -       - -       - -       - -  
Cancelled
     - -       - -       (28 )     19.71       (25 )     19.52  
Outstanding at end of year
     - -       - -       7,172       16.80       8,336       15.66  
                                                 
Exercisable at end of year
     - -       - -       6,204       15.39       7,882       14.92  

 

142
LYONDELL CHEMICAL COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS―(Continued)
 

22.       Share-Based Compensation – (Continued)
 
The total intrinsic value of options exercised during the years ended December 31, 2007 and 2006, was $62 million and $20 million, respectively, and the related tax benefits were $20 million and $7 million.
 
The fair value of each option award was estimated, based on several assumptions, on the date of grant using a Black-Scholes option valuation model.  Upon adoption of SFAS No. 123 (revised), Lyondell modified its methods used to determine these assumptions prospectively based on the Securities and Exchange Commission’s Staff Accounting Bulletin No. 107.  The fair value and the assumptions used for the stock option grants are shown in the table below.  The expected volatility assumption was based on historical and implied volatility.
 
   
2007
    
2006
    
2005
  
Fair value per share of options granted
   $ 9.15     $ 6.23     $ 9.64  
Fair value assumptions:
                        
Dividend yield
     3.60 %     3.43 %     3.11 %
Expected volatility
     35.09 %     39.80 %     35.21 %
Risk-free interest rate
     4.73 %     4.53 %     4.24 %
Expected term, in years
     6       6       10  

 
Stock options were accounted for as equity instruments, and compensation cost was recognized using graded vesting over the three-year vesting period for years prior to 2007.  As a result of the December 20, 2007 acquisition of Lyondell, all stock options vested and were settled in cash for an amount equal to $48 per share less the stock option exercise price.  As a result, there was no unrecognized compensation cost related to stock options at December 20 and December 31, 2007.  There was $2 million of unrecognized cost at December 31, 2006.
 
Restricted Stock—Lyondell’s restricted stock arrangements under the Incentive Plan were divided equally into a restricted stock grant and an associated deferred cash payment.  These restricted stock arrangements typically vested at a rate of one-third per year over three years, with accelerated vesting upon death, disability, retirement or change in control.  The associated deferred cash award, paid when the shares of restricted stock vested, was equal to the fair market value of the restricted stock issued on the vesting date.  Restricted stock was accounted for as an equity award, while the deferred cash component was accounted for as a liability award.  Compensation expense, based on the market price of Lyondell stock at the date of the grant for the restricted stock and, for the deferred cash components, the market price at the earlier of the vesting date or the balance sheet date, was recognized using graded-vesting over the three-year vesting period for years prior to 2007.  The 2005 deferred cash awards vested and $3 million was paid out as a result of the November 20, 2007 special meeting of shareholders approving the acquisition of Lyondell by LyondellBasell Industries.  On December 20, 2007, as part of the acquisition of Lyondell by LyondellBasell Industries, the remaining deferred cash awards vested and each outstanding share of restricted stock under Lyondell’s restricted stock plans and long-term incentive plans was converted into a right to receive $48 in cash, resulting in a total obligation of $15 million, which was paid in 2007.
 
Phantom Awards—Phantom awards were accounted for as liability awards and compensation cost was recognized using graded-vesting over the three-year vesting period for years prior to 2007.  In connection with the acquisition of Lyondell by LyondellBasell Industries, outstanding phantom awards were converted into a right to receive $48 in cash, resulting in an obligation of $76 million, of which $28 million was outstanding at December 31, 2007.
 

143
LYONDELL CHEMICAL COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS―(Continued)
 

 
Supplemental cash flow information is summarized as follows:
 
   
Successor
    
Predecessor
  
   
For the
period from
December 21
through
December 31,
    
For the
period from
January 1
through
December 20,
    
For the year ended
December 31,
  
Millions of dollars
  
2007
    
2007
    
2006
    
2005
  
                         
Interest paid
   $ - -     $ 736     $ 587     $ 673  
Net income taxes paid
   $ - -     $ 240     $ 238     $ 35  

 
Interest and income tax cash activity includes Houston Refining prospectively from August 16, 2006.
 

144
LYONDELL CHEMICAL COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS―(Continued)
 

 
At the time of the acquisition of Lyondell by LyondellBasell Industries, Lyondell established new business segments through which its operations are managed as part of LyondellBasell Industries.  Lyondell’s operations are primarily in three of these segments:
 
·  
Chemicals, primarily manufacturing and marketing of ethylene; its co-products, including propylene, butadiene and aromatics; ethylene derivatives, including ethylene oxide (“EO”), ethylene glycol, and other EO derivatives, as well as ethanol; acetyls, including vinyl acetate monomer, acetic acid and methanol; PO; PO co-products, including styrene and tertiary butyl alcohol (“TBA”), TBA derivative isobutylene; PO derivatives, including propylene glycol, propylene glycol ethers and butanediol; TDI and fragrance and flavors chemicals;
 
·  
Polymers, including manufacturing and marketing of polyethylene, including high density polyethylene, low density polyethylene and linear low density polyethylene, and polypropylene; and
 
·  
Fuels, primarily manufacturing and marketing of refined petroleum products, including gasoline, ultra low sulfur diesel, jet fuel, lubricants (“lube oils”), aromatics, and gasoline blending components, such as MTBE, ETBE and alkylate.

On May 15, 2007 Lyondell completed the sale of its worldwide inorganic chemicals business (see Note 4), and, as a result, substantially all of the inorganic chemicals business was reclassified as a discontinued operation.
 
Through August 15, 2006, the fuels segment included Lyondell’s equity investment in Houston Refining (see Note 8).  The operations of Houston Refining are consolidated prospectively from August 16, 2006, and include the effects of Lyondell’s acquisition from that date.
 
The accounting policies of the segments are the same as those described in “Summary of Significant Accounting Policies” (see Note 2) except that segment operating results reported to management reflect cost of sales determined under the first-in, first-out (“FIFO”) method of accounting for inventory.  These FIFO-basis operating results are reconciled to LIFO-basis operating results in the following table.  Sales between segments are made primarily at prices approximating prevailing market prices, with the exception of sales of MTBE and ETBE sourced from PO co-products, representing approximately 75% of MTBE/ETBE capacity, which are sold by the chemicals segment to the fuels segment at a formula-based cost.
 
No customer accounted for 10% or more of Lyondell’s consolidated sales during any year in the three-year period ended December 31, 2007.  However, prior to August 16, 2006, under the terms of Houston Refining’s previous agreement with CITGO, CITGO purchased substantially all of the refined products of the fuels segment.
 

145
LYONDELL CHEMICAL COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS―(Continued)
 

24.       Segment and Related Information – (Continued)
 
Summarized financial information concerning reportable segments is shown in the following table for the periods presented.
 
Millions of dollars
  
Chemicals
    
Fuels
    
Polymers
    
Other
    
Total
  
2007
                              
Sales and other operating revenues:
                              
Customers
   $ 12,661     $ 12,438     $ 3,495     $ 9     $ 28,603  
Intersegment
     2,432       1,009       - -       (3,441 )     - -  
      15,093       13,447       3,495       (3,432 )     28,603  
                                         
Segment operating income (loss)
     672       1,360       155       (156 )     2,031  
Adjustment to LIFO basis
                                     (869 )
Operating income
                                     1,162  
                                         
Income from equity investments
     2       - -       - -       - -       2  
Capital expenditures
     279       210       19       9       517  
Depreciation and amortization expense
     534       294       63       16       907  
                                         
2006
                                        
Sales and other operating revenues:
                                        
Customers
   $ 12,751     $ 4,698     $ 3,424     $ 9     $ 20,882  
Intersegment
     2,228       427       - -       (2,655 )     - -  
      14,979       5,125       3,424       (2,646 )     20,882  
                                         
Segment operating income (loss)
     1,001       684       137       (16 )     1,806  
Adjustment to LIFO basis
                                     (166 )
Operating income
                                     1,640  
                                         
Income from equity investments
     5       73       - -       - -       78  
Capital expenditures
     209       113       19       5       346  
Depreciation and amortization expense
     519       115       64       13       711  
                                         
2005
                                        
Sales and other operating revenues:
                                        
Customers
   $ 12,111     $ 2,025     $ 3,110     $ 11     $ 17,257  
Intersegment
     2,125       - -       - -       (2,125 )     - -  
      14,236       2,025       3,110       (2,114 )     17,257  
                                         
Segment operating income (loss)
     911       333       52       (3 )     1,293  
Adjustment to LIFO basis
                                     (45 )
Operating income
                                     1,248  
                                         
Income from equity investments
     1       123       - -       - -       124  
Capital expenditures
     174       5       12       5       196  
Depreciation and amortization expense
     525       29       62       15       631  
‎
 
Sales and other operating revenues and operating income (loss) in the “Other” column above include elimination of intersegment transactions and businesses that are not reportable segments in 2007, 2006 and 2005.  Other segment operating loss in the 2007 Successor period includes IPR&D charges of $95 million.
 

146
LYONDELL CHEMICAL COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS―(Continued)
 

24.       Segment and Related Information – (Continued)
 
The 2007 data above comprises the following:
 
   
Successor
    
Predecessor
    
Total
  
Millions of dollars
  
For the
period from
December 21
through
December 31,
2007
    
For the
period from
January 1
through
December 20,
2007
    
For the year
ended
December 31,
2007
  
Sales and other operating revenues
   $ 929     $ 27,674     $ 28,603  
Operating income (loss)
     (126 )     1,288       1,162  
Capital expenditures
     22       495       517  
Depreciation and amortization
     39       868       907  

 
In 2006, the operating income of the chemicals segment included a $106 million charge for impairment of the net book value of the Lake Charles, Louisiana ethylene facility; and in the fuels segment, Lyondell had a loss from its equity investment in Houston Refining due to its 58.75% share, or $176 million, of the $300 million cost to terminate Houston Refining’s previous crude supply agreement.  The operating income of the chemicals segment for 2005 included a $195 million charge for impairment of the net book value of the Lake Charles, Louisiana, TDI plant (see Note 5).
 
Long-lived assets of continuing operations, including goodwill, are summarized and reconciled to consolidated totals in the following table.  The assets of the PO joint ventures are primarily property, plant and equipment.
 
Millions of dollars
  
Chemicals
    
Polymers
    
Fuels
    
Other
    
Total
  
2007
                              
Property, plant and equipment, net
   $ 6,379     $ 596     $ 5,446     $ 83     $ 12,504  
Investment in PO joint ventures
     564       - -       - -       - -       564  
Goodwill
     2,618       250       2,300       - -       5,168  
                                         
2006
                                        
Property, plant and equipment, net
   $ 4,814     $ 631     $ 3,043     $ 54     $ 8,542  
Investment in PO joint ventures
     778       - -       - -       - -       778  
Goodwill
     1,332       - -       - -       - -       1,332  
                                         
2005
                                        
Property, plant and equipment, net
   $ 5,009     $ 646     $ 207     $ 55     $ 5,917  
Investments in PO joint ventures
     776       - -       - -       - -       776  
Goodwill
     1,352       - -       - -       - -       1,352  


147
LYONDELL CHEMICAL COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS―(Continued)
 

24.       Segment and Related Information – (Continued)
 
Property, plant and equipment, net, included in the “Other” column above primarily includes assets related to corporate and support functions.
 
The following geographic data for revenues are based upon the delivery location of the product and for long-lived assets, the location of the assets.
 
   
Revenues
  
Millions of dollars
  
2007
    
2006
    
2005
  
United States
   $ 22,907     $ 16,580     $ 13,193  
Non-U.S.
     5,696       4,302       4,064  
Total
   $ 28,603     $ 20,882     $ 17,257  

 
   
Long-Lived Assets
  
Millions of dollars
  
2007
    
2006
    
2005
  
United States
   $ 12,561     $ 7,776     $ 5,245  
Non-U.S.:
                        
The Netherlands
     - -       801       751  
France
     506       468       434  
Other non-U.S.
     1       275       263  
Total non-U.S.
     507       1,544       1,448  
Total
   $ 13,068     $ 9,320     $ 6,693  

 
Concurrent with the acquisition of Lyondell by LyondellBasell Industries on December 20, 2007, Lyondell sold certain of its non-U.S. subsidiaries that owned, among other things, a 50% interest in the European PO Joint Venture (see Note 9), to the Basell Group.  The European PO joint venture includes a world-scale PO/SM plant at Maasvlakte near Rotterdam, The Netherlands.
 

LYONDELL-CITGO REFINING LP
 
 
             
   
For the three months
ended June 30,
    
For the six months
ended June 30,
  
Millions of dollars
  
2006
    
2005
    
2006
    
2005
  
Sales and other operating revenues
   $ 2,411     $ 1,563     $ 4,505     $ 3,099  
Operating costs and expenses:
                                
Cost of sales:
                                
Crude oil and feedstock
     2,038       1,339       3,753       2,584  
Operating and other expenses
     194       176       394       337  
Selling, general and administrative expenses
     16       11       33       23  
      2,248       1,526       4,180       2,944  
Operating income
     163       37       325       155  
Interest expense
     (12 )     (9 )     (24 )     (17 )
Interest income
     - -       - -       1       - -  
Income before income taxes
     151       28       302       138  
Provision for income taxes
     8       - -       8       - -  
Net income
   $ 143     $ 28     $ 294     $ 138  
 
See Notes to Financial Statements.
 

LYONDELL-CITGO REFINING LP
 
 
Millions of dollars
  
June 30,
2006
    
December 31,
2005
  
ASSETS
            
Current assets:
            
Cash and cash equivalents
   $ 95     $ 5  
Accounts receivable:
                
Trade, net
     98       79  
Related parties
     231       185  
Inventories
     147       144  
Prepaid expenses and other current assets
     5       5  
Total current assets
     576       418  
Property, plant and equipment, net
     1,386       1,328  
Other assets, net
     95       86  
Total assets
   $ 2,057     $ 1,832  
LIABILITIES AND PARTNERS’ CAPITAL
                
Current liabilities:
                
Accounts payable:
                
Trade
   $ 227     $ 239  
Related parties
     485       431  
Distribution payable to Lyondell Partners
     105       32  
Distribution payable to CITGO Partners
     74       23  
Current maturities of long-term debt
     441       5  
Accrued liabilities
     90       75  
Total current liabilities
     1,422       805  
Long-term debt
     - -       439  
Loan payable to Lyondell Partners
     229       229  
Loan payable to CITGO Partners
     35       35  
Other liabilities
     125       113  
Total long-term liabilities
     389       816  
Commitments and contingencies
                
Partners’ capital:
                
Partners’ accounts
     270       235  
Accumulated other comprehensive loss
     (24 )     (24 )
Total partners’ capital
     246       211  
Total liabilities and partners’ capital
   $ 2,057     $ 1,832  
 
See Notes to Financial Statements.


LYONDELL-CITGO REFINING LP
 
 
   
For the six months
ended June 30,
  
Millions of dollars
  
2006
    
2005
  
Cash flows from operating activities:
            
Net income
   $ 294     $ 138  
Adjustments to reconcile net income to
net cash provided by operating activities:
                
Depreciation and amortization
     62       56  
Other
     2       1  
Changes in assets and liabilities that provided (used) cash:
                
Accounts receivable
     (65 )     (28 )
Inventories
     (3 )     (39 )
Accounts payable
     43       73  
Other, net
     4       (38 )
Cash provided by operating activities
     337       163  
Cash flows from investing activities:
                
Expenditures for property, plant and equipment
     (109 )     (83 )
Cash used in investing activities
     (109 )     (83 )
Cash flows from financing activities:
                
Proceeds from bank loan
     - -       45  
Contributions from Lyondell Partners
     42       45  
Contributions from CITGO Partners
     30       31  
Distributions to Lyondell Partners
     (122 )     (134 )
Distributions to CITGO Partners
     (86 )     (94 )
Payment of current maturities of long-term debt
     (2 )     (2 )
Cash used in financing activities
     (138 )     (109 )
Increase (decrease) in cash and cash equivalents
     90       (29 )
Cash and cash equivalents at beginning of period
     5       45  
Cash and cash equivalents at end of period
   $ 95     $ 16  
 
See Notes to Financial Statements.
 

LYONDELL-CITGO REFINING LP
 
 
TABLE OF CONTENTS
 
 
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152
LYONDELL-CITGO REFINING LP
 
NOTES TO FINANCIAL STATEMENTS—(Continued)
 
 
The accompanying financial statements are unaudited and have been prepared from the books and records of LYONDELL-CITGO Refining LP (“LCR” or the “Partnership”) in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X for interim financial information.  Accordingly, they do not include all of the information and notes required by generally accepted accounting principles for complete financial statements.  In the opinion of management, all adjustments, consisting only of normal recurring adjustments, considered necessary for a fair presentation have been included.  For further information, refer to the audited LCR financial statements and notes thereto included in the Lyondell Chemical Company (“Lyondell”) Annual Report on Form 10-K for the year ended December 31, 2005.
 
 
 
LYONDELL-CITGO Refining LP was formed on July 1, 1993 by subsidiaries of Lyondell and CITGO Petroleum Corporation (“CITGO”) primarily in order to own and operate a refinery (“Refinery”) located on the Houston Ship Channel in Houston, Texas.  Lyondell and CITGO had ownership interests of 58.75% and 41.25%, respectively.  In August 2006, Lyondell purchased CITGO’s 41.25% interest, and as a result, Lyondell owns 100% of LCR.  See Note 11.
 
 
 
In July 2006, the Financial Accounting Standards Board (“FASB”) issued FASB Interpretation (“FIN”) No. 48, Accounting for Uncertainty in Income Taxes – An Interpretation of FASB Statement No. 109, which clarifies the accounting for uncertain income tax positions.  FIN No. 48 prescribes, among other things, a recognition threshold and measurement attribute for the financial statement recognition and measurement of an uncertain tax position.  The provisions of FIN No. 48 will apply to LCR beginning in 2007.  As a partnership, LCR is not subject to federal income taxes and FIN No. 48 is not expected to have a significant impact on its financial statements.
 
Effective April 1, 2006, LCR adopted the provisions of Emerging Issues Task Force (“EITF”) Issue No. 04-13, Accounting for Purchases and Sales of Inventory with the Same Counterparty.  EITF Issue No. 04-13 requires that inventory purchases and sales transactions with the same counterparty that are entered into in contemplation of one another be combined for purposes of applying Accounting Principles Board Opinion No. 29, Accounting for Nonmonetary Transactions.  The effect was to reduce reported revenues and cost of sales for affected transactions.
 
LCR’s application of EITF Issue No. 04-13 had no material effect on its financial statements.
 
 
 
Inventories consisted of the following:
 
   
June 30,
    
December 31,
  
Millions of dollars
  
2006
    
2005
  
Finished goods
   $ 53     $ 59  
Raw materials
     78       71  
Materials and supplies
     16       14  
Total inventories
   $ 147     $ 144  

153
LYONDELL-CITGO REFINING LP
 
NOTES TO FINANCIAL STATEMENTS—(Continued)
 

 
The components of property, plant and equipment, at cost, and the related accumulated depreciation were as follows:
 
   
June 30,
    
December 31,
  
Millions of dollars
  
2006
    
2005
  
Land
   $ 2     $ 2  
Manufacturing facilities and equipment
     2,620       2,556  
Construction in progress
     302       268  
Total property, plant and equipment
     2,924       2,826  
Less accumulated depreciation
     (1,538 )     (1,498 )
Property, plant and equipment, net
   $ 1,386     $ 1,328  

 
Depreciation and amortization expense is summarized as follows:
 
   
For the three months
ended June 30,
    
For the six months
ended June 30,
  
Millions of dollars
  
2006
    
2005
    
2006
    
2005
  
Property, plant and equipment
   $ 24     $ 22     $ 47     $ 45  
Turnaround costs
     4       3       8       6  
Software costs
     1       1       2       2  
Other
     2       2       5       3  
Total depreciation and amortization
   $ 31     $ 28     $ 62     $ 56  


 
Accounts payable at June 30, 2006 and December 31, 2005 included liabilities in the amount of $7 million and $6 million, respectively, for checks issued in excess of associated bank balances but not yet presented for collection.
 
 
 
In August 2006, Lyondell purchased CITGO’s 41.25% interest in LCR, and repaid the CITGO owner loans and repaid and terminated LCR’s existing bank facility.  See Note 11.
 
154
LYONDELL-CITGO REFINING LP
 
NOTES TO FINANCIAL STATEMENTS—(Continued)
 

 
Net periodic pension benefit costs included the following components:
 
   
For the three months ended
    
For the six months ended
  
   
June 30,
    
June 30,
  
   
2006
    
2005
    
2006
    
2005
  
Millions of dollars
                        
Service cost
   $ 2     $ 2     $ 4     $ 4  
Interest cost
     2       2       4       4  
Recognized return on plan assets
     (2 )     (1 )     (4 )     (3 )
Amortization
     2       1       3       2  
Net periodic pension benefit cost
   $ 4     $ 4     $ 7     $ 7  


Net periodic postretirement benefit costs included the following components:
 
   
For the three months ended
    
For the six months ended
  
   
June 30,
    
June 30,
  
   
2006
    
2005
    
2006
    
2005
  
Millions of dollars
                        
Service cost
   $ - -     $ - -     $ - -     $ - -  
Interest cost
     1       1       2       2  
Net periodic other postretirement benefit cost
   $ 1     $ 1     $ 2     $ 2  


 
Crude Supply Agreement—PDVSA Petróleo, S.A. (“PDVSA Oil”) and LCR are parties to a Crude Supply Agreement (“CSA”).  Under the CSA, generally, PDVSA Oil is required to sell and LCR is required to purchase 230,000 barrels per day of heavy, high sulfur crude oil, which constitutes approximately 86% of LCR’s refining capacity of 268,000 barrels per day of crude oil.
 
From 1998 through 2002, PDVSA Oil, from time to time, declared itself in a force majeure situation and subsequently reduced deliveries of crude oil.  Such reductions in deliveries were purportedly based on announced OPEC production cuts.  At such times, PDVSA Oil informed LCR that the Venezuelan government, through the Ministry of Energy and Mines, had instructed that production of certain grades of crude oil be reduced.  In certain circumstances, PDVSA Oil made payments to LCR under a different provision of the CSA in partial compensation for such reductions.  More recently, LCR has been receiving crude oil under the CSA at or above contract volumes.
 
LCR has consistently contested the validity of the reductions in deliveries by PDVSA Oil and Petróleos de Venezuela, S.A. (“PDVSA”) under the CSA.  In February 2002, LCR filed a lawsuit against PDVSA and PDVSA Oil in connection with the force majeure declarations.  PDVSA filed a subsequent lawsuit against LCR in October 2005 in the same court, related to that action, which alleged breach of the CSA.  On April 6, 2006, the parties announced the settlement of these disputes and other disputes among the parties and the respective affiliates, and on April 10, 2006, the lawsuits were dismissed.  In August 2006, Lyondell purchased CITGO’s 41.25% interest in LCR.  As part of the transaction, the existing CSA was terminated, and the parties entered into a new crude oil contract.  See Note 11 for a description of the transaction and the new crude oil contract.
 
155
LYONDELL-CITGO REFINING LP
 
NOTES TO FINANCIAL STATEMENTS—(Continued)
 
 
9.      Commitments and Contingencies - (Continued)
 
Environmental Remediation—With respect to liabilities associated with the Refinery, Lyondell generally has retained liability for events that occurred prior to July 1, 1993 and certain ongoing environmental projects at the Refinery.  LCR generally is responsible for liabilities associated with events occurring after June 30, 1993 and ongoing environmental compliance inherent to the operation of the Refinery.
 
LCR’s policy is to be in compliance with all applicable environmental laws.  LCR is subject to extensive national, state and local environmental laws and regulations concerning emissions to the air, discharges onto land or waters and the generation, handling, storage, transportation, treatment and disposal of waste materials.  Many of these laws and regulations provide for substantial fines and potential criminal sanctions for violations.  Some of these laws and regulations are subject to varying and conflicting interpretations.  In addition, the Partnership cannot accurately predict future developments, such as increasingly strict environmental laws, inspection and enforcement policies, as well as higher compliance costs therefrom, which might affect the handling, manufacture, use, emission or disposal of products, other materials or hazardous and non-hazardous waste.  Some risk of environmental costs and liabilities is inherent in particular operations and products of the Partnership, as it is with other companies engaged in similar businesses, and there is no assurance that material costs and liabilities will not be incurred.  In general, however, with respect to the capital expenditures and risks described above, the Partnership does not expect that it will be affected differently than the rest of the refining industry where LCR is located.
 
LCR estimates that it has a liability of approximately $6 million at June 30, 2006 related to future assessment and remediation costs.  Lyondell has a contractual obligation to reimburse LCR for a portion of this liability, which is currently estimated to be approximately $5 million.  Accordingly, LCR has reflected a current liability of approximately $1 million for the portion of this liability that will not be reimbursed by Lyondell.  In the opinion of management, there is currently no material estimable range of loss in excess of the amount recorded.  However, it is possible that new information associated with this liability, new technology or future developments such as involvement in investigations by regulatory agencies could require LCR to reassess its potential exposure related to environmental matters.
 
Other—LCR is, from time to time, a defendant in lawsuits and other commercial disputes, some of which are not covered by insurance.  Many of these suits make no specific claim for relief.  Although final determination of any liability and resulting financial impact with respect to any such matters cannot be ascertained with any degree of certainty, management does not believe that any ultimate uninsured liability resulting from these matters in which LCR is involved will individually or in the aggregate, have a material adverse effect on the financial position or liquidity of LCR.  However, the adverse resolution in any reporting period of one or more of these matters discussed in this note could have a material impact on LCR’s results of operations for that period, which may be mitigated by contribution or indemnification obligations of others, or by any insurance coverage that may be available.
 
 
 
The components of comprehensive income were as follows:
 
   
For the three months ended
    
For the six months ended
  
   
June 30,
    
June 30,
  
   
2006
    
2005
    
2006
    
2005
  
Millions of dollars
                        
Net income
   $ 143     $ 28     $ 294     $ 138  
Other comprehensive income (loss)
     - -       - -       - -       - -  
Comprehensive income
   $ 143     $ 28     $ 294     $ 138  

156
LYONDELL-CITGO REFINING LP
 
NOTES TO FINANCIAL STATEMENTS—(Continued)
 

 
In August 2006, Lyondell purchased CITGO’s 41.25% interest in LCR, effective as of July 31, 2006.  As a result, Lyondell owns 100% of LCR.  The transaction included repayment of CITGO owner loans of $40 million and repayment of $444 million outstanding under LCR’s existing bank facility, which was terminated.
 
Also as part of the transaction, the existing CSA was terminated for a payment by LCR to PDVSA of $300 million, and the parties entered into a new crude oil contract.  The new crude oil contract, which provides for the purchase and supply of 230,000 barrels per day of heavy, high sulfur crude oil, will extend through 2011 and year to year thereafter.  The contract contains market-based pricing, which is determined using a formula reflecting published market indices.  The pricing is designed to be consistent with published prices for similar grades of crude oil.
 

 

 
To the Partnership Governance Committee
of LYONDELL-CITGO Refining LP:
 
In our opinion, the accompanying balance sheets and the related statements of income, of partners’ capital and of cash flows present fairly, in all material respects, the financial position of LYONDELL-CITGO Refining LP (the “Partnership”) at December 31, 2005 and 2004, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2005, in conformity with accounting principles generally accepted in the United States of America.  These financial statements are the responsibility of the Partnership’s management. Our responsibility is to express an opinion on these financial statements based on our audits.  We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.
 
 
/s/  PricewaterhouseCoopers LLP
 
 
PRICEWATERHOUSECOOPERS LLP
Houston, Texas
February 24, 2006
 

LYONDELL-CITGO REFINING LP
 
 
   
For the year ended December 31,
  
Millions of dollars
  
2005
    
2004
    
2003
  
Sales and other operating revenues
   $ 6,741     $ 5,603     $ 4,162  
Operating costs and expenses:
                        
Cost of sales:
                        
Crude oil and feedstock
     5,715       4,383       3,209  
Operating and other expenses
     743       645       633  
Selling, general and administrative expenses
     51       59       56  
      6,509       5,087       3,898  
Operating income
     232       516       264  
Interest expense
     (40 )     (31 )     (37 )
Interest income
     2       1       1  
Other income
     - -       14       - -  
Net income
   $ 194     $ 500     $ 228  
 
See Notes to Financial Statements.
 

LYONDELL-CITGO REFINING LP
 
 
   
December 31,
  
Millions of dollars
  
2005
    
2004
  
ASSETS
            
Current assets:
            
Cash and cash equivalents
   $ 5     $ 45  
Accounts receivable:
                
Trade, net
     79       65  
Related parties
     185       145  
Inventories
     144       99  
Prepaid expenses and other current assets
     5       5  
Total current assets
     418       359  
Property, plant and equipment, net
     1,328       1,227  
Other assets, net
     86       61  
Total assets
   $ 1,832     $ 1,647  
LIABILITIES AND PARTNERS’ CAPITAL
                
Current liabilities:
                
Accounts payable:
                
Trade
   $ 239     $ 132  
Related parties and affiliates
     431       253  
Distribution payable to Lyondell Partners
     32       78  
Distribution payable to CITGO Partners
     23       55  
Current maturities of long-term debt
     5       5  
Accrued liabilities
     75       65  
Total current liabilities
     805       588  
Long-term debt
     439       443  
Loan payable to Lyondell Partners
     229       229  
Loan payable to CITGO Partners
     35       35  
Other liabilities
     113       112  
Total long-term liabilities
     816       819  
Commitments and contingencies
                
Partners’ capital:
                
Partners’ accounts
     235       263  
Accumulated other comprehensive loss
     (24 )     (23 )
Total partners’ capital
     211       240  
Total liabilities and partners’ capital
   $ 1,832     $ 1,647  
 
See Notes to Financial Statements.
 
 
LYONDELL-CITGO REFINING LP
 
 
   
For the year ended December 31,
  
Millions of dollars
  
2005
    
2004
    
2003
  
Cash flows from operating activities:
                  
Net income
   $ 194     $ 500     $ 228  
Adjustments to reconcile net income to
                        
cash provided by operating activities:
                        
Depreciation and amortization
     116       115       113  
Net loss on disposition of assets
     1       10       27  
Changes in assets and liabilities that provided (used) cash:
                        
Accounts receivable
     (55 )     (37 )     (19 )
Inventories
     (45 )     (1 )     (5 )
Accounts payable
     263       79       14  
Other assets and liabilities
     (35 )     1       16  
Cash provided by operating activities
     439       667       374  
Cash flows from investing activities:
                        
Expenditures for property, plant and equipment
     (176 )     (71 )     (46 )
Other
     - -       (1 )     - -  
Cash used in investing activities
     (176 )     (72 )     (46 )
Cash flows from financing activities:
                        
Distributions to Lyondell Partners
     (303 )     (385 )     (253 )
Distributions to CITGO Partners
     (213 )     (271 )     (178 )
Contributions from Lyondell Partners
     128       44       30  
Contributions from CITGO Partners
     90       30       21  
Payment of debt issuance costs
     - -       (9 )     (6 )
Payment of current maturities of long-term debt
     (5 )     (2 )     - -  
Cash used in financing activities
     (303 )     (593 )     (386 )
Increase (decrease) in cash and cash equivalents
     (40 )     2       (58 )
Cash and cash equivalents at beginning of period
     45       43       101  
Cash and cash equivalents at end of period
   $ 5     $ 45     $ 43  
 
See Notes to Financial Statements.


LYONDELL-CITGO REFINING LP
 
 
                     
Accumulated
        
   
Partners’ Accounts
    
Other
        
   
Lyondell
    
CITGO
          
Comprehensive
    
Comprehensive
  
Millions of dollars
  
Partners
    
Partners
    
Total
    
Income (Loss)
    
Income (Loss)
  
Balance at January 1, 2003
   $ (22 )   $ 454     $ 432     $ (29 )      
Net income
     144       84       228       - -     $ 228  
Cash contributions
     30       21       51       - -       - -  
Other contributions
     10       7       17       - -       - -  
Distributions to Partners
     (168 )     (118 )     (286 )     - -       - -  
Other comprehensive income
                                        
minimum pension liability
                             10       10  
Comprehensive income
                                   $ 238  
Balance at December 31, 2003
     (6 )     448       442       (19 )        
Net income
     304       196       500       - -     $ 500  
Cash contributions
     44       30       74       - -       - -  
Distributions to Partners
     (442 )     (311 )     (753 )     - -       - -  
Other comprehensive loss-
                                        
minimum pension liability
                             (4 )     (4 )
Comprehensive income
                                   $ 496  
Balance at December 31, 2004
     (100 )     363       263       (23 )        
Net income
     123       71       194       - -     $ 194  
Cash contributions
     128       90       218       - -       - -  
Distributions to Partners
     (258 )     (182 )     (440 )     - -       - -  
Other comprehensive loss -
                                        
minimum pension liability
                             (1 )     (1 )
Comprehensive income
                                   $ 193  
Balance at December 31, 2005
   $ (107 )   $ 342     $ 235     $ (24 )        
 
See Notes to Financial Statements.

162
LYONDELL-CITGO REFINING LP
 
NOTES TO FINANCIAL STATEMENTS
 

 
LYONDELL-CITGO Refining LP (“LCR” or the “Partnership”) was formed on July 1, 1993 by subsidiaries of Lyondell Chemical Company (“Lyondell”) and CITGO Petroleum Corporation (“CITGO”) primarily in order to own and operate a refinery (“Refinery”) located on the Houston Ship Channel in Houston, Texas.
 
Lyondell owns its interest in the Partnership through wholly owned subsidiaries, Lyondell Refining Partners, LP  (“Lyondell LP”) and Lyondell Refining Company LP (“Lyondell GP”).  Lyondell LP and Lyondell GP are collectively known as Lyondell Partners.  CITGO holds its interest through CITGO Refining Investment Company (“CITGO LP”) and CITGO Gulf Coast Refining, Inc. (“CITGO GP”), both wholly owned subsidiaries of CITGO.  CITGO LP and CITGO GP are collectively known as CITGO Partners.  Lyondell Partners and CITGO Partners are collectively known as the Partners.  LCR will continue in existence until it is dissolved under the terms of the Limited Partnership Agreement (the “Agreement”).
 
The Partners have agreed to allocate cash distributions based on an ownership interest that was determined by certain contributions instead of allocating such amounts based on their capital account balances.  Based upon these contributions, Lyondell Partners and CITGO Partners had ownership interests of 58.75% and 41.25%, respectively, as of December 31, 2005.  Net income as shown on the statements of partners’ capital is made up of two components which are allocated to the Partners on different bases: depreciation expense, which is allocated to each partner in proportion to contributed assets and net income other than depreciation expense, which is allocated to each partner based on ownership interests.
 
 
2.      Summary of Significant Accounting Policies
 
Revenue Recognition—Revenue from product sales is recognized at the time of transfer of title and risk of loss to the customer, which usually occurs at the time of shipment.  Revenue is recognized at time of delivery if LCR retains risks of loss during shipment.  For products that are shipped on a consignment basis, revenue is recognized when the customer uses the product.  Costs incurred in shipping products sold are included in costs of sales.  Billings to customers for shipping costs are included in sales revenue.
 
Under the terms of a long-term product sales agreement, CITGO buys substantially all of the gasoline, jet fuel, low sulfur diesel, heating oils, coke and sulfur produced at the Refinery, which represents over 70% of LCR’s revenues, at market-based prices.
 
Cash and Cash Equivalents—Cash equivalents consist of highly liquid debt instruments such as certificates of deposit, commercial paper and money market accounts.  Cash equivalents include instruments with maturities of three months or less when acquired.  Cash equivalents are stated at cost, which approximates fair value.  The Partnership’s policy is to invest cash in conservative, highly rated instruments and to limit the amount of credit exposure to any one institution.  LCR has no requirements for compensating balances in a specific amount at a specific point in time.  LCR does maintain compensating balances for some of its banking services and products.  Such balances are maintained on an average basis and are solely at LCR’s discretion.
 
Allowance for Doubtful Accounts—LCR establishes provisions for doubtful accounts receivable based on management’s estimates of amounts that it believes are unlikely to be collected.  Collectability of receivables is reviewed and the allowance for doubtful accounts is adjusted, if needed, at least quarterly, based on aging of specific accounts and other available information about the associated customers.
 
163
LYONDELL-CITGO REFINING LP
 
NOTES TO FINANCIAL STATEMENTS—(Continued)
 

2.      Summary of Significant Accounting Policies - (continued)
 
Inventory exchange transactions, which involve fungible commodities and do not involve the payment or receipt of cash, are not accounted for as purchases and sales.  Any resulting volumetric exchange balances are accounted for as inventory in accordance with the normal LIFO valuation policy.
 
Property, Plant and Equipment—Property, plant and equipment are recorded at cost.  Depreciation is computed using the straight-line method over the estimated useful asset lives, generally, 24 years for major manufacturing equipment, 24 to 30 years for buildings, 5 to 10 years for light equipment and instrumentation, 10 years for office furniture and 5 years for information system equipment.  Upon retirement or sale, LCR removes the cost of the asset and the related accumulated depreciation from the accounts and reflects any resulting gain or loss in the Statement of Income.  LCR’s policy is to capitalize interest cost incurred on debt during the construction of major projects exceeding one year.
 
Long-Lived Asset Impairment—LCR evaluates long-lived assets, including identifiable intangible assets, for impairment whenever events or changes in circumstances indicate that a carrying amount of an asset may not be recoverable.  When it is probable that undiscounted future cash flows will not be sufficient to recover an asset’s carrying amount, the asset is written down to its estimated fair value.  Long-lived assets to be disposed of are reported at the lower of carrying amount or estimated fair value less costs to sell the assets.
 
Identifiable Intangible Assets—Costs to purchase and to develop software for internal use are deferred and amortized on a straight-line basis over a period of 3 to 10 years.
 
Costs of maintenance and repairs exceeding $5 million incurred as part of turnarounds of major units at the Refinery are deferred and amortized using the straight-line method over the period until the next planned turnaround, generally 4 to 6 years.  These costs are necessary to maintain, extend and improve the operating capacity and efficiency rates of the production units.
 
Other intangible assets are carried at amortized cost and primarily consist of deferred debt issuance costs.  These assets are amortized using the straight-line method over their estimated useful lives or over the term of the related agreement, if shorter.
 
Environmental Remediation Costs—Anticipated expenditures related to investigation and remediation of contaminated sites, which include operating facilities and other remediation sites, are accrued when it is probable a liability has been incurred and the amount of the liability can reasonably be estimated.  Only ongoing operations and monitoring costs, the timing of which can be determined with reasonable certainty, are discounted to present value.  Future legal costs associated with such matters, which generally are not estimable are not included in these liabilities.
 
Legal Costs—Legal costs, including those to be incurred in connection with loss contingencies, are expensed as incurred.
 
Income Taxes—The Partnership is not subject to federal income taxes as income is reportable directly by the individual partners; therefore, there is no provision for federal income taxes in the accompanying financial statements.
 
Use of Estimates—The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.
 
164
LYONDELL-CITGO REFINING LP
 
NOTES TO FINANCIAL STATEMENTS—(Continued)
 

2.      Summary of Significant Accounting Policies - (continued)
 
Inventories—Inventories are stated at the lower of cost or market.  Cost is determined using the last-in, first-out (“LIFO”) method for substantially all inventories, except for materials and supplies, which are valued using the average cost method.
 
Accounting and Reporting Changes—Effective October 1, 2005, LCR implemented Financial Accounting Standards Board (“FASB”) Interpretation (“FIN”) No. 47, Accounting for Conditional Asset Retirement Obligations, which clarifies the term conditional asset retirement obligation as used in Statement of Financial Accounting Standard (“SFAS”) No. 143, Accounting for Conditional Asset Retirement Obligations, as an obligation that is conditional only as to timing and amount.  LCR’s application of this interpretation had no material impact on its financial statements.
 
Effective July 1, 2005, LCR implemented SFAS No. 153, Exchanges of Nonmonetary Assets, which amends Accounting Principles Board (“APB”) Opinion No. 29, Accounting for Nonmonetary Transactions, to replace the exception to fair value recognition for nonmonetary exchanges of similar productive assets with a general exception for exchanges of nonmonetary assets that do not have commercial substance.  LCR’s application of SFAS No. 153 had no material impact on its financial statements.
 
In September 2005, the Emerging Issues Task Force (“EITF”) of the FASB reached consensus on one issue of EITF Issue No. 04-13, Accounting for Purchases and Sales of Inventory with the same Counterparty, that inventory purchase and sales transactions with the same counterparty that are entered into in contemplation of one another should be combined for purposes of applying APB No. 29, Accounting for Nonmonetary Transactions.  The effect would be to reduce the reported revenues and costs of sales for affected transactions.  The consensus on this issue would apply to transactions entered into beginning in the second quarter of 2006.  LCR is evaluating the impact of EITF 04-13 on its financial statements.
 
Reclassifications—Certain previously reported amounts have been reclassified to conform to classifications adopted in 2005.
 
 
3.      Hurricane Effects
 
During 2005, two major hurricanes impacted the refining and related industries in the coastal and off-shore regions of the Gulf of Mexico.  Net income in 2005 reflected charges totaling $15 million, representing LCR’s exposure to industry losses expected to be underwritten by industry insurance consortia, primarily resulting from hurricane damages in the third quarter of 2005.
 
As a result of Hurricane Rita, LCR incurred various costs that are subject to insurance reimbursements.  Such costs included those incurred in conjunction with suspending operations at the Refinery, minor damage to facilities and costs to restore operations.  At LCR, such costs totaled approximately $18 million.  LCR experienced problems in restarting a major production unit that was shut down in connection with the hurricane, resulting in a significant reduction in crude oil processing rates during the fourth quarter 2005 until the unit was restored to normal operations in December 2005.  LCR’s hurricane-related business interruption claims and costs are subject to a total deductible of at least $50 million under the relevant insurance policies. LCR has not recognized any benefit from insurance reimbursements in 2005.
 
165
LYONDELL-CITGO REFINING LP
 
NOTES TO FINANCIAL STATEMENTS—(Continued)
 

4.      Related Party Transactions
 
LCR is party to agreements with the following related parties:
 
·  
CITGO
·  
CITGO Partners
·  
Equistar Chemicals, LP (“Equistar”)
·  
Lyondell
·  
Lyondell Partners
·  
Petróleos de Venezuela, S.A. (“PDVSA”), the national oil company of the Bolivarian Republic of Venezuela
·  
PDVSA Petróleo, S.A. (“PDVSA Oil”)
·  
TCP Petcoke Corporation
 
LCR has a long-term crude supply agreement (“Crude Supply Agreement” or “CSA”) with PDVSA Oil, an affiliate of CITGO (see “Crude Supply Agreement” section of Note 14).  The CSA, which expires on December 31, 2017, incorporates formula prices to be paid by LCR for the crude oil supplied based on the market value of a slate of refined products deemed to be produced from each particular crude oil or raw material, less:  (1) certain deemed refining costs, adjustable for inflation and energy costs; (2) certain actual costs; and (3) a deemed margin, which varies according to the grade of crude oil or other raw material delivered.  The actual refining margin earned by LCR may vary from the formula amount depending on, among other things, timing differences in incorporating changes in refined product market values and energy costs into the CSA’s deemed margin calculations and the efficiency with which LCR conducts its operations.  Although LCR believes that the CSA reduces the volatility of LCR’s earnings and cash flows over the long-term, the CSA also limits LCR’s ability to enjoy higher margins during periods when the market price of crude oil is low relative to then-current market prices of refined products.  In addition, if the actual yields, costs or volumes of the LCR Refinery differ substantially from those contemplated by the CSA, the benefits of this agreement to LCR could be substantially diminished, and could result in lower earnings and cash flow for LCR.  Furthermore, there may be periods during which LCR’s costs for crude oil under the CSA may be higher than might otherwise be available to LCR from other sources.  A disparate increase in the market price of heavy crude oil relative to the prices of heavy crude oil under the CSA has the tendency to make continued performance of its obligations under the CSA less attractive to PDVSA Oil.
 
Under the terms of a long-term product sales agreement, CITGO buys substantially all of the finished gasoline, jet fuel, low sulfur diesel, heating oils, coke and sulfur produced at the Refinery at market-based prices.
 
LCR is party to a number of raw materials, product sales, processing and storage arrangements and administrative service agreements with Lyondell, CITGO and Equistar.  These include a hydrogen take-or-pay contract with Equistar (see Note 14).  In addition, a processing agreement provides for the production of alkylate and methyl tertiary butyl ether for the Partnership at Equistar’s Channelview, Texas petrochemical complex.  All of these agreements are on terms generally representative of prevailing market prices.
 
Under the terms of a lubricant facility operating agreement, CITGO operated the lubricant blending and packing facility in Birmingport, Alabama while the Partnership retained ownership.  During 2003, a decision was made to discontinue the lubes blending and packaging operations at the facility in Birmingport, Alabama and the facility was permanently shut down.  Lubes blending and packaging operations are now conducted at CITGO or other locations.  Under the terms of the lubricant sales agreements, CITGO buys paraffinic lubricants base oil, naphthenic lubricants, white mineral oils and specialty oils from the Partnership, at market based prices.
 
166
LYONDELL-CITGO REFINING LP
 
NOTES TO FINANCIAL STATEMENTS—(Continued)
 

4.      Related Party Transactions - (continued)
 
Related party transactions are summarized as follows:
 
   
For the year ended December 31,
  
Millions of dollars
  
2005
    
2004
    
2003
  
LCR billed related parties for the following:
                  
Sales of products:
                  
CITGO
   $ 5,072     $ 4,141     $ 3,010  
Equistar
     394       425       227  
TCP Petcoke Corporation
     40       1       33  
Services and cost sharing arrangements:
                        
Equistar
     1       1       - -  
Lyondell
     - -       - -       1  
Related parties billed LCR for the following:
                        
Purchase of products:
                        
CITGO
   $ 196     $ 108     $ 201  
Equistar
     922       725       445  
Lyondell
     - -       14       4  
PDVSA
     3,314       2,594       1,742  
Transportation charges:
                        
CITGO
     1       1       1  
Equistar
     4       4       4  
Services and cost sharing arrangements:
                        
CITGO
     6       6       6  
Equistar
     22       23       21  
Lyondell
     2       3       2  


See Note 10 for information regarding LCR master notes payable to Lyondell Partners and CITGO Partners.


5.      Accounts Receivables
 
The Partnership sells its products primarily to CITGO and to other industrial concerns in the petrochemical and refining industries.  The Partnership performs ongoing credit evaluations of its customers’ financial condition and in certain circumstances, requires letters of credit from them.  The Partnership’s allowance for doubtful accounts receivable, which is reflected in the Balance Sheets as a reduction of accounts receivable-trade, totaled $25,000 at both December 31, 2005 and 2004.
 
167
LYONDELL-CITGO REFINING LP
 
NOTES TO FINANCIAL STATEMENTS—(Continued)
 

6.      Inventories
 
Inventories consisted of the following components at December 31:
 
Millions of dollars
  
2005
    
2004
  
Finished goods
   $ 59     $ 16  
Raw materials
     71       70  
Materials and supplies
     14       13  
Total inventories
   $ 144     $ 99  

In 2005 and 2004, all inventory, excluding materials and supplies, were valued using the LIFO method.
 
The excess of the current replacement cost over book value of those inventories that are carried at cost using the LIFO method was approximately $395 million at December 31, 2005.


7.      Property, Plant and Equipment and Other Assets
 
The components of property, plant and equipment, at cost, and the related accumulated depreciation were as follows at December 31:
 
Millions of dollars
  
2005
    
2004
  
Land
   $ 2     $ 2  
Manufacturing facilities and equipment
     2,556       2,528  
Construction in progress
     268       105  
Total property, plant and equipment
     2,826       2,635  
Less accumulated depreciation
     (1,498 )     (1,408 )
Property, plant and equipment, net
   $ 1,328     $ 1,227  


Maintenance and repair expenses were $83 million, $50 million and $52 million for the years ended December 31, 2005, 2004 and 2003 respectively.

The components of other assets, at cost, and the related accumulated amortization were as follows at December 31:

   
2005
    
2004
  
 
Millions of dollars
  
Cost
    
Accumulated Amortization
    
Net
    
Cost
    
Accumulated Amortization
    
Net
  
Intangible assets:
                                    
Turnaround costs
   $ 79     $ (41 )   $ 38     $ 59     $ (39 )   $ 20  
Software costs
     29       (18 )     11       40       (26 )     14  
Debt issuance costs
     24       (20 )     4       24       (17 )     7  
Catalyst costs
     29       (13 )     16       11       (5 )     6  
Other
     3       - -       3       3       - -       3  
Total intangible assets
   $ 164     $ (92 )   $ 72     $ 137     $ (87 )   $ 50  
Company-owned life insurance
                     6                       6  
Other
                     8                       5  
Total other assets
                   $ 86                     $ 61  

168
LYONDELL-CITGO REFINING LP
 
NOTES TO FINANCIAL STATEMENTS—(Continued)
 

7.      Property, Plant and Equipment and Other Assets - (continued)
 
Amortization of these intangible assets for the next five years is expected to be $28 million in 2006, $14 million in 2007, $12 million in 2008, $6 million in 2009 and $3 million in 2010.
 
Depreciation and amortization expense is summarized as follows:
 
   
For the year ended December 31,
  
Millions of dollars
  
2005
    
2004
    
2003
  
Property, plant and equipment
   $ 91     $ 91     $ 90  
Turnaround costs
     14       12       12  
Software costs
     4       5       5  
Other
     7       7       6  
Total depreciation and amortization
   $ 116     $ 115     $ 113  


In addition to the depreciation and amortization shown above, amortization of debt issuance costs of $3 million, $6 million and $11 million in 2005, 2004 and 2003, respectively, is included in interest expense in the Statements of Income.
 
 
8.      Accounts Payable
 
Accounts payable at December 31, 2005 included liabilities in the amount of $6 million for checks issued in excess of associated bank balances but not yet presented for collection.
 
 
9.      Accrued Liabilities
 
Accrued liabilities consisted of the following components at December 31:
 
Millions of dollars
  
2005
    
2004
  
Payroll and benefits
   $ 18     $ 25  
Taxes other than income taxes
     20       26  
Interest
     16       6  
Other
     21       8  
Total accrued liabilities
   $ 75     $ 65  

 
10.           Financing Arrangements
 
In May 2004, LCR refinanced its credit facilities with a new facility, consisting of a $450 million senior secured term loan and a $100 million senior secured revolver, which matures in May 2007.  The term loan requires quarterly amortization payments of $1.125 million, which began in September 2004.  The new facility replaced LCR’s $450 million term loan and $70 million revolving credit facilities, which were scheduled to mature in June 2004.
 
169
LYONDELL-CITGO REFINING LP
 
NOTES TO FINANCIAL STATEMENTS—(Continued)
 

10.           Financing Arrangements – (Continued)
 
In October 2005, LCR exercised its right under the credit facility to increase its senior secured revolver by $50 million to $150 million.  The credit facility is secured by substantially all of the assets of LCR and contains covenants that, subject to exceptions, restrict, among other things, lien incurrence, investments, certain other payments, affiliate transactions, restrictive agreements, sales of assets and mergers.  In addition, the credit facility contains covenants that require LCR to maintain specified financial ratios.
 
At December 31, 2005, $444 million was outstanding under the senior secured term loan with a weighted-average interest rate of 5.2%.  Interest for this facility was determined by base rates or Eurodollar rates at the Partnership’s option.  The $150 million senior secured revolver is utilized for general business purposes and for letters of credit.  At December 31, 2005, no amount was outstanding under the senior secured revolver.  At December 31, 2005, LCR had outstanding letters of credit totaling $12 million.
 
As part of the May 2004 refinancing, Lyondell Partners and CITGO Partners extended the maturity of the loans payable to the Partners from July 2005 to January 2008. In 2003, Lyondell Partners and CITGO Partners contributed additional capital to LCR by converting $10 million and $7 million, respectively, of accrued interest on these loans to partners’ capital.  At December 31, 2005 and 2004, Lyondell Partners and CITGO Partners loans were $229 million and $35 million, respectively.  The weighted-average interest rates for both loans were based on Eurodollar rates and were 3.7% in 2005 and 2.0% in 2004.  Interest to both Partners was paid at the end of each calendar quarter through June 30, 1999, and, by mutual agreement of the Partners, is now deferred.


11.           Lease Commitments
 
LCR leases crude oil storage facilities, computer equipment, office equipment and other items under noncancelable operating lease arrangements for varying periods.  As of December 31, 2005, future minimum lease payments for the next five years and thereafter, relating to all noncancelable operating leases with terms in excess of one year were as follows:
 
Millions of dollars
      
2006
   $ 57  
2007
     29  
2008
     19  
2009
     15  
2010
     15  
Thereafter
     76  
Total minimum lease payments
   $ 211  


Net rental expenses for the years ended December 31, 2005, 2004 and 2003 were approximately $73 million, $90 million and $63 million, respectively.
 
 
12.           Financial Instruments
 
The fair value of all financial instruments included in current assets and current liabilities, including cash and cash equivalents, accounts receivable, and accounts payable, approximated their carrying value due to their short maturity.  The fair value of long-term loans payable approximated their carrying value because of their variable interest rates.
 
170
LYONDELL-CITGO REFINING LP
 
NOTES TO FINANCIAL STATEMENTS—(Continued)
 

13.           Pension and Other Postretirement Benefits
 
LCR has defined benefit pension plans, which cover full-time regular employees.  Retirement benefits are based on years of service and the employee’s highest three consecutive years of compensation during the last ten years of service.  LCR funds the plans through periodic contributions to pension trust funds as required by applicable law.  LCR also has one unfunded supplemental nonqualified retirement plan, which provides pension benefits for certain employees in excess of the U.S. tax-qualified plans’ limit.  In addition, LCR sponsors unfunded postretirement benefit plans other than pensions, which provide medical and life insurance benefits.  The postretirement medical plan is contributory, while the life insurance plan is generally noncontributory.  The measurement date for LCR’s pension and other postretirement benefit plans is December 31, 2005.
 
The following table provides a reconciliation of benefit obligations, plan assets and the funded status of the plans:
 
         
Other Postretirement
  
   
Pension Benefits
    
Benefits
  
   
2005
    
2004
    
2005
    
2004
  
Millions of dollars
                        
Change in benefit obligation:
                        
Benefit obligation, January 1
   $ 147     $ 125     $ 48     $ 39  
Service cost
     8       6       1       1  
Interest cost
     8       8       3       3  
Participant contributions
     - -       - -       1       - -  
Plan amendments
     - -       - -       1       10  
Actuarial (gain) loss
     8       15       3       (2 )
Benefits paid
     (6 )     (7 )     (3 )     (3 )
Benefit obligation, December 31
     165       147       54       48  
                                 
Change in plan assets:
                                
Fair value of plan assets, January 1
     78       51                  
Actual return on plan assets
     5       7                  
Partnership contributions
     17       27                  
Benefits paid
     (6 )     (7 )                
Fair value of plan assets, December 31
     94       78                  
                                 
Funded status
     (71 )     (69 )     (54 )     (48 )
Unrecognized actuarial and investment loss
     57       52       14       12  
Unrecognized prior service cost (benefit)
     1       2       (1 )     (4 )
Net amount recognized
   $ (13 )   $ (15 )   $ (41 )   $ (40 )
                                 
Amounts recognized in the Balance Sheet consist of:
                                
Accrued benefit liability
   $ (38 )   $ (40 )   $ (41 )   $ (40 )
Intangible asset
     1       2       - -       - -  
Accumulated other comprehensive loss
     24       23       - -       - -  
Net amount recognized
   $ (13 )   $ (15 )   $ (41 )   $ (40 )
                                 
 
171
LYONDELL-CITGO REFINING LP
 
NOTES TO FINANCIAL STATEMENTS—(Continued)
 

13.           Pension and Other Postretirement Benefits - (Continued)
 
   
Pension Benefits
  
   
2005
    
2004
  
Millions of dollars
            
Additional information:
            
Accumulated benefit obligation for defined
            
benefit plans, December 31
   $ 132     $ 116  
Increase (decrease) in minimum liability
                
included in other comprehensive loss
     1       4  
                 


Pension plans with projected benefit obligations and accumulated benefit obligations in excess of the fair value of assets are summarized as follows at December 31:
 
   
Pension Benefits
  
   
2005
    
2004
  
Millions of dollars
            
Projected benefit obligations
   $ 165     $ 147  
Accumulated benefit obligations
     132       116  
Fair value of assets
     94       78  
                 


Net periodic pension and other postretirement benefit costs included the following components:

         
Other Postretirement
  
   
Pension Benefits
    
Benefits
  
   
2005
    
2004
    
2003
    
2005
    
2004
    
2003
  
Millions of dollars
                                    
Components of net periodic benefit cost
                                    
Service cost
   $ 8     $ 6     $ 7     $ 1     $ 1     $ 1  
Interest cost
     8       8       7       3       3       2  
                                                 
Actual (gain) loss on plan assets
     (6 )     (7 )     (10 )     - -       - -       - -  
Less unrecognized gain (loss)
     - -       3       6       - -       - -       - -  
Recognized gain on plan assets
     (6 )     (4 )     (4 )     - -       - -       - -  
                                                 
Prior service costs amortization
     - -       - -       - -       (1 )     (2 )     (3 )
Actuarial loss amortization
     4       4       4       1       1       1  
Net effect of settlements
     - -       2       - -       - -       - -       - -  
Net periodic benefit cost
   $ 14     $ 16     $ 14     $ 4     $ 3     $ 1  
 
172
LYONDELL-CITGO REFINING LP
 
NOTES TO FINANCIAL STATEMENTS—(Continued)
 

13.           Pension and Other Postretirement Benefits - (Continued)
 
The weighted-average assumptions used in determining net benefit liabilities were as follows at December 31:
 
   
Pension
    
Other Postretirement
  
   
Benefits
    
Benefits
  
   
2005
    
2004
    
2005
    
2004
  
Discount rate
     5.50 %     5.75 %     5.50 %     5.75 %
Rate of compensation increase
     4.50 %     4.50 %     - -       - -  


The weighted-average assumptions used in determining net periodic benefit cost were as follows for the year ended December 31:
 
         
Other Postretirement
  
   
Pension Benefits
    
Benefits
  
   
2005
    
2004
    
2003
    
2005
    
2004
    
2003
  
Discount rate
     5.75 %     6.25 %     6.50 %     5.75 %     6.50 %     6.50 %
Expected return on plan assets
     8.00 %     8.00 %     8.00 %     - -       - -       - -  
Rate of compensation increase
     4.50 %     4.50 %     4.50 %     - -       - -       - -  


The assumed annual rate of increase in the per capita cost of covered health care benefits as of December 31, 2005 was 10% for 2006 through 2007, grading down to 5% in 2011 and 5% thereafter.  At December 31, 2004, similar cost escalation assumptions were used.  The health care cost trend rate assumption does not have a significant effect on the amounts reported due to limits on LCR’s maximum contribution level to the medical plan.  To illustrate, increasing or decreasing the assumed health care cost trend rates by one percentage point in each year would change the accumulated postretirement benefit liability as of December 31, 2005 by less than $1 million and would not have a material effect on the aggregate service and interest cost components of the net periodic postretirement benefit cost for the year then ended.
 
Management’s goal is to manage pension investments over the long term to achieve optimal returns with an acceptable level of risk and volatility.  Targeted asset allocations of 55% U.S. equity securities, 15% non-U.S. equity securities and 30% fixed income securities were adopted in 2003 for the plans based on recommendations by LCR’s independent pension investment advisor.  Investment policies prohibit investments in securities issued by an affiliate, such as Lyondell, or investment in speculative, derivative instruments.  The investments are marketable securities that provide sufficient liquidity to meet expected benefit obligation payments.
 
LCR’s expected long-term rate of return on plan assets of 8% is based on the average level of earnings that its independent pension investment advisor has advised could be expected to be earned over time, using the expected returns for the above-noted asset allocation of 55% U.S. equity securities, 15% non-U.S. equity securities and 30% fixed income securities, recommended by the advisor, and adopted for the plans.
 
LCR’s pension plan weighted-average asset allocations by asset category were as follows at December 31:
 
Asset Category:
  
2005 Policy
    
2005
    
2004
  
U.S. equity securities
     55 %     54 %     57 %
Non-U.S. equity securities
     15 %     16 %     15 %
Fixed income securities
     30 %     30 %     28 %
Total
     100 %     100 %     100 %
 
173
LYONDELL-CITGO REFINING LP
 
NOTES TO FINANCIAL STATEMENTS—(Continued)
 

13.           Pension and Other Postretirement Benefits - (Continued)
 
LCR expects to contribute approximately $2 million to its pension plans in 2006.
 
The Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the “Act”) was enacted in December 2003. The effect of the Act was not significant to the LCR’s financial statements and was recognized in the December 31, 2004 accumulated other postretirement benefit obligation.  The effect of the subsidy on the net periodic benefit cost for 2005 was not significant.
 
As of December 31, 2005, future expected benefit payments, which reflect expected future service, as appropriate, were as follows:
 
 
Millions of dollars
  
Pension
Benefits
    
Other
Benefits
  
2006
   $ 7     $ 3  
2007
     9       3  
2008
     10       4  
2009
     12       4  
2010
     14       4  
2011 through 2015
     90       21  


LCR also maintains voluntary defined contribution savings plans for eligible employees.  Contributions to the plans by LCR were $5 million in each of the three years ended December 31, 2005.
 
 
14.           Commitments and Contingencies
 
Commitments—LCR has various purchase commitments for materials, supplies and services incident to the ordinary conduct of business, generally for quantities required for LCR’s business and at prevailing market prices.  LCR is party to various unconditional purchase obligation contracts as a purchaser for products and services, principally take-or-pay contracts for hydrogen, electricity and steam. These commitments are designed to assure sources of supply and are not expected to be in excess of normal requirements. At December 31, 2005, future minimum payments under these contracts with noncancelable contract terms in excess of one year and fixed minimum payments were as follows:
 
Millions of dollars
      
2006
   $ 37  
2007
     35  
2008
     30  
2009
     30  
2010
     33  
Thereafter through 2021
     188  
Total minimum contract payments
   $ 353  


Total LCR purchases under these agreements were $126 million, $134 million and $107 million during 2005, 2004 and 2003, respectively.  A substantial portion of the future minimum payments and purchases were related to a hydrogen take-or-pay agreement with Equistar (see Note 4).
 
174
LYONDELL-CITGO REFINING LP
 
NOTES TO FINANCIAL STATEMENTS—(Continued)
 

14.           Commitments and Contingencies - (Continued)
 
Crude Supply Agreement—Under the CSA, generally PDVSA Oil is required to sell, and LCR is required to purchase 230,000 barrels per day of extra heavy, high sulfur Venezuelan crude oil, which constitutes approximately 86% of the Refinery’s refining capacity of 268,000 barrels per day of crude oil (see Note 4).  From 1998 through 2002, PDVSA Oil, from time to time, declared itself in a force majeure situation and subsequently reduced deliveries of crude oil.  Such reductions in deliveries were purportedly based on announced OPEC production cuts.  At such times, PDVSA Oil informed LCR that the Venezuelan government, through the Ministry of Energy and Mines, had instructed that production of certain grades of crude oil be reduced.  In certain circumstances, PDVSA Oil made payments under a different provision of the CSA in partial compensation for such reductions.  More recently, LCR has been receiving crude oil under the CSA at or above contract volumes.
 
LCR has consistently contested the validity of PDVSA Oil’s and PDVSA’s reductions in deliveries under the CSA.  The parties have different interpretations of the provisions of the contracts concerning the delivery of crude oil.  The contracts do not contain dispute resolution procedures and the parties have been unable to resolve their commercial dispute.  As a result, in February 2002, LCR filed a lawsuit against PDVSA and PDVSA Oil in connection with the force majeure declarations, which LCR is continuing to litigate.  PDVSA filed a subsequent lawsuit against LCR in October 2005 in the same court, related to this action, which alleges breach of the CSA.  LCR believes it has defenses to such claims and is vigorously defending this lawsuit.  LCR does not expect the resolution of the October 2005 lawsuit to result in any material adverse effect on the financial condition, liquidity or results of operation.
 
From time to time, Lyondell and PDVSA have had discussions covering both a restructuring of the CSA and a broader restructuring of the LCR partnership.  LCR is unable to predict whether changes in either arrangement will occur. Subject to the rights of first offer and first refusal, the Partners each have a right to transfer their interests in LCR to unaffiliated third parties in certain circumstances.  If neither CITGO, PDVSA Oil nor their affiliates were a partner in LCR, PDVSA Oil would have an option to terminate the CSA. Depending on then-current market conditions, any modification, breach or termination of the CSA, or any interruption in this source of crude oil, would require LCR to purchase all or a portion of its crude oil in the merchant market, could subject LCR to significant volatility and price fluctuations and could aversely affect the Partnership.
 
Environmental Remediation—With respect to liabilities associated with the Refinery, Lyondell generally has retained liability for events that occurred prior to July 1, 1993 and certain ongoing environmental projects at the Refinery under the Contribution Agreement, retained liability section.  LCR generally is responsible for liabilities associated with events occurring after June 30, 1993 and ongoing environmental compliance inherent to the operation of the Refinery.
 
LCR’s policy is to be in compliance with all applicable environmental laws.  LCR is subject to extensive national, state and local environmental laws and regulations concerning emissions to the air, discharges onto land or waters and the generation, handling, storage, transportation, treatment and disposal of waste materials.  Many of these laws and regulations provide for substantial fines and potential criminal sanctions for violations.  Some of these laws and regulations are subject to varying and conflicting interpretations.  In addition, the Partnership cannot accurately predict future developments, such as increasingly strict environmental laws, inspection and enforcement policies, as well as higher compliance costs therefrom, which might affect the handling, manufacture, use, emission or disposal of products, other materials or hazardous and non-hazardous waste.   Some risk of environmental costs and liabilities is inherent in particular operations and products of the Partnership, as it is with other companies engaged in similar businesses, and there is no assurance that material costs and liabilities will not be incurred.  In general, however, with respect to the capital expenditures and risks described above, the Partnership does not expect that it will be affected differently than the rest of the refining industry where LCR is located.
 
175
LYONDELL-CITGO REFINING LP
 
NOTES TO FINANCIAL STATEMENTS—(Continued)
 

14.           Commitments and Contingencies  - (Continued)
 
LCR estimates that it has a liability of approximately $6 million at December 31, 2005 related to future assessment and remediation costs.  Lyondell has a contractual obligation to reimburse LCR for approximately $5 million.  Accordingly, LCR has reflected a current liability for the remaining portion of this liability that will not be reimbursed by Lyondell.  In the opinion of management, there is currently no material estimable range of loss in excess of the amount recorded.  However, it is possible that new information associated with this liability, new technology or future developments such as involvement in investigations by regulatory agencies, could require LCR to reassess its potential exposure related to environmental matters.
 
Clean Air Act—Under the Clean Air Act, the eight-county Houston/Galveston region has been designated a severe non-attainment area for ozone by the U.S. Environmental Protection Agency (“EPA”).  Emission reduction controls must be installed at the Refinery in the Houston/Galveston region prior to November 2007.
 
Also, under the Clean Air Act, the EPA adopted new standards for gasoline that required refiners to produce a low sulfur gasoline by 2006 and ultra low sulfur diesel by the end of 2009.
 
LCR currently estimates environmentally related capital expenditures will be approximately $127 million for 2006 and $38 million for 2007.  In the years ended December 31, 2005, 2004 and 2003, environmentally related capital expenditures were $106 million, $31 million and $16 million, respectively.
 
Other—LCR is,  from time to time,  a defendant in lawsuits and other commercial disputes, some of which are not covered by insurance.  Many of these suits make no specific claim for relief.  Although final determination of any liability and resulting financial impact with respect to any such matters cannot be ascertained with any degree of certainty, management does not believe that any ultimate uninsured liability resulting from these matters in which LCR is involved (directly or indirectly) will individually or in the aggregate, have a material adverse effect on the financial position, liquidity or results of operations of LCR.
 
General—In the opinion of management, the matters discussed in this note are not expected to have a material adverse effect on the financial position or liquidity of LCR.  However, the adverse resolution in any reporting period of one or more of these matters discussed in this note could have a material impact on LCR’s results of operations for that period, which may be mitigated by contribution or indemnification obligations of others, or by any insurance coverage that may be available.


15.           Supplemental Cash Flow Information
 
At December 31, 2005, 2004 and 2003, construction in progress included approximately $38 million, $22 million and $5 million, respectively, of non-cash additions which related to accounts payable accruals and accrued liabilities.
 
During 2005, 2004 and 2003, LCR paid interest of $27 million, $18 million and $20 million, respectively.
 
In June 2003, the Partners agreed to contribute part of the outstanding accrued interest payable to the respective Partners’ capital accounts based on their relative ownership interests of 58.75% for Lyondell Partners and 41.25% for CITGO Partners.  Accordingly, $10 million and $7 million of Lyondell Partners and CITGO Partners accrued interest, respectively, was reclassified to the respective Partners’ capital accounts.
 

 
None.
 
 
Lyondell Chemical Company performed an evaluation, under the supervision and with the participation of its management, including the President and Chief Executive Officer (principal executive officer) and the Chief Financial Officer (principal financial officer), of the effectiveness of the Lyondell disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as of December 31, 2007.  Based upon that evaluation, the President and Chief Executive Officer and the Chief Financial Officer concluded that the Lyondell disclosure controls and procedures are effective.
 
On December 20, 2007, Lyondell was acquired by LyondellBasell Industries.  There were no changes in Lyondell’s internal control over financial reporting that occurred during Lyondell’s last fiscal quarter (the fourth quarter 2007) that have materially affected, or are reasonably likely to materially affect, Lyondell’s internal control over financial reporting.
 
Lyondell management’s report on internal control over financial reporting appears on page 81 of this Annual Report on Form 10-K.  The effectiveness of Lyondell’s internal control over financial reporting as of December 31, 2007 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm as stated in their report which appears herein.
 
 
None.
 

 
 
Executive Officers and Directors of the Registrant
 
As a result of LyondellBasell Industries’ December 20, 2007 acquisition of Lyondell, Lyondell is an indirect wholly owned subsidiary of LyondellBasell Industries.  As a privately held company, all of the members of Lyondell’s Board of Directors are selected by its sole shareholder, an indirect wholly owned subsidiary of LyondellBasell Industries, and the Lyondell Board of Directors no longer has standing committees of the Board of Directors.  For the same reason, the policy previously adopted by Lyondell’s Board of Directors pursuant to which shareholders could submit director candidates to the Corporate Responsibility and Governance Committee of Lyondell’s Board of Directors for consideration is no longer in effect.
 
All of Lyondell’s executive officers and directors also are officers of LyondellBasell Industries and, with the exception of Mr. Bayer, are members of the Management Board of Basell AFGP S.à r.l., in its capacity as Manager of LyondellBasell Industries.  LyondellBasell Industries and Basell AFGP S.à r.l. are controlled by the Access Industries group of companies (the “Access Group”), a privately held, U.S.-based industrial group founded in 1986 by Leonard Blavatnik, its principal shareholder.
 
Set forth below are the executive officers and directors of Lyondell Chemical Company as of March 1, 2008.  The By-Laws of Lyondell Chemical Company provide that each officer and director shall hold office until his or her successor is elected and qualified or until his or her earlier resignation or removal.
 
Name, Age and Present
Position with Lyondell Chemical Company
 
Business Experience During Past
Five Years and Period Served as Officer(s)
Morris Gelb, 61 .
President, Chief Executive Officer and Director
 
Mr. Gelb was appointed President and Chief Executive Officer of Lyondell Chemical Company effective January 1, 2008, and Executive Vice President of LyondellBasell Industries AF S.C.A. effective December 20, 2007.  Prior to this, Mr. Gelb held the position of Executive Vice President and Chief Operating Officer of Lyondell Chemical Company since December 1998.  Previously, he served as Senior Vice President, Manufacturing, Process Development and Engineering of Lyondell Chemical Company from July 1998 to December 1998.  He was named Vice President for Research and Engineering of ARCO Chemical in 1986 and Senior Vice President of ARCO Chemical in July 1997.  Mr. Gelb also has served as a member of the Board of Directors of Lyondell Chemical Company since December 20, 2007.
 
    Alan Bigman, 40 .
    Chief Financial Officer and Director
 
 
Mr. Bigman was appointed Chief Financial Officer of Lyondell Chemical Company effective January 1, 2008, and Executive Vice President and Chief Financial Officer of LyondellBasell Industries AF S.C.A. effective December 20, 2007.  Prior to this, Mr. Bigman held the position of Chief Financial Officer of Basell since January 2006.  Mr. Bigman was Senior Vice President for Access Industries from 2004 until 2006, with responsibility for managing the financing activities of Access Industries and for the strategic management of major Access Industries’ assets.  From 1998 to 2004, he served in several Access Industries portfolio companies, including the positions of Director of Corporate Finance at Tyumen Oil Company in Moscow and Vice President, Finance at SUAL in Moscow.  Mr. Bigman originally joined Access Industries in 1996 as Vice President, U.S. and International Investments.  Mr. Bigman also has served as a member of the Board of Directors of Lyondell Chemical Company since December 20, 2007.
 


Name, Age and Present
Position with Lyondell Chemical Company
 
Business Experience During Past
Five Years and Period Served as Officer(s)
    Edward J. Dineen, 53
    Senior Vice President and Director
 
 
Mr. Dineen was appointed Senior Vice President of Lyondell Chemical Company effective January 1, 2008, and President, Chemicals Division of LyondellBasell Industries AF S.C.A. effective December 20, 2007.  Prior to this, Mr. Dineen held the position of Senior Vice President, Chemicals and Polymers of Lyondell Chemical Company since May 2002.  Mr. Dineen served as Senior Vice President, Intermediates and Performance Chemicals of Lyondell from May 2000 until May 2002.  Prior to this position, he served as Senior Vice President, Urethanes and Performance Chemicals of Lyondell Chemical Company since July 1998.  He served as Vice President, Performance Products and Development for ARCO Chemical beginning in June 1997, and served as Vice President, Planning and Control for ARCO Chemical European Operations from 1993 until his appointment as Vice President, Worldwide CoProducts and Raw Materials in 1995.  Mr. Dineen has also served as a member of the Board of Directors of Lyondell Chemical Company since December 20, 2007.  Mr. Dineen is also a member of the Board of Spartech Corporation.
 
    James W. Bayer, 52
    Senior Vice President
 
 
Mr. Bayer was appointed Senior Vice President of Lyondell Chemical Company effective January 1, 2008, and Senior Vice President, Global Engineering and Chemicals Manufacturing of LyondellBasell Industries AF S.C.A. effective December 20, 2007.  Mr. Bayer held the position of Senior Vice President, Manufacturing and Health, Safety and Environment of Lyondell Chemical Company from May 2006 until December 2007, the position of Senior Vice President, Manufacturing from October 2000 until May 2006 and, prior to that, was Vice President of Health, Safety, Environmental and Engineering of Lyondell Chemical Company.  From December 1997 to July 1999 he was Director, Gulf Coast Manufacturing for ARCO Chemical. Prior to December 1997, Mr. Bayer served as Channelview Plant Manager for ARCO Chemical.
 
    C. Bart de Jong, 50
    Senior Vice President, Human Resources
 
Mr. de Jong was appointed Senior Vice President, Human Resources of Lyondell Chemical Company effective January 1, 2008, and Senior Vice President, Human Resources of LyondellBasell Industries AF S.C.A. effective December 20, 2007.  Prior to this, Mr. de Jong held the position of Vice President, Technology of Lyondell Chemical Company since May 2007 and Vice President of Lyondell Chemical Company responsible for Lyondell’s inorganic chemicals business from December 2004 until May 2007.  From May 2002 until December 2004, Mr. de Jong served as Vice President, Corporate Development of Lyondell Chemical Company.  Prior thereto, Mr. de Jong served as Director, Business Analysis & Planning.  Prior to joining Lyondell Chemical Company in 2001 as Director, Business Analysis & Planning, Mr. de Jong was Chief Financial Officer of eLink Commerce, Inc., an early stage information technology company. From 1995 to 2000, he held a variety of finance and business development positions with ARCO, including Vice President, Finance in ARCO's corporate headquarters in Los Angeles.
 
Cees Los, 51
Senior Vice President and General Counsel
 
 
Mr. Los was appointed Senior Vice President, General Counsel of Lyondell Chemical Company effective January 1, 2008, and Senior Vice President and General Counsel of LyondellBasell Industries AF S.C.A. effective December 20, 2007.  Prior to this, Mr. Los held the position of General Counsel of Basell since October 2000.  From 1998 until 2000, Mr. Los held the position of head of the legal department of Elenac, a joint venture of Shell and BASF and one of the predecessor companies of Basell. Mr. Los originally joined Shell in 1984 as a member of the corporate legal department.  From 1988 until 1991, Mr. Los was Manager of Legal Affairs to IBIS (a biotechnology joint venture partly owned by Shell); from 1991 until 1995 he was Senior Legal Advisor for Shell Japan and Showa Shell (a joint venture of Shell in Japan); and from 1995 until 1998, he was Corporate Planning Manager for Shell Netherlands.
 



Name, Age and Present
Position with Lyondell Chemical Company
 
Business Experience During Past
Five Years and Period Served as Officer(s)
    W. Norman Phillips, Jr., 53
    Senior Vice President
 
 
Mr. Phillips was appointed Senior Vice President of Lyondell Chemical Company effective January 1, 2008, and President, Fuels Division of LyondellBasell Industries AF S.C.A. effective December 20, 2007.  Prior to this, Mr. Phillips held the position of Senior Vice President, Fuels and Pipelines of Lyondell Chemical Company from August 2006 to December 2007 and Senior Vice President, Fuels and Raw Materials of Lyondell Chemical Company from 2002 until 2006.  Mr. Phillips was Senior Vice President, Polymers of Equistar Chemicals, LP (which was then a joint venture of Lyondell) from 1998 to 2002.  He was previously Vice President, Petrochemicals of Equistar Chemicals, LP from December 1997 to August 1998.  Mr. Phillips also has served as Senior Vice President of Lyondell Chemical Company since October 2000.  He previously served as Vice President, Polymers of Lyondell from January 1997 to December 1997, and as Vice President of Lyondell with responsibilities in the areas of marketing and operations from 1993 to January 1997.

 
Audit Committee Financial Expert Determinations
 
After LyondellBasell Industries’ acquisition of Lyondell, Lyondell no longer has a separately designated Audit Committee.  However, Lyondell’s Board has determined that Lyondell has at least one “audit committee financial expert,” as defined in Item 407(d) of Regulation S-K, serving on Lyondell’s Board of Directors.  The Board has determined that Mr. Bigman qualifies as an audit committee financial expert.  Although Lyondell no longer has securities listed on a national securities exchange, for purposes of compliance with Item 407(d) of Regulation S-K, Lyondell’s Board has determined that, because Mr. Bigman is an officer of Lyondell and LyondellBasell Industries, Mr. Bigman would not qualify as independent under the New York Stock Exchange’s listing standards.
 
Section 16(A) Beneficial Ownership Reporting Compliance
 
Before LyondellBasell Industries acquired all of Lyondell’s outstanding common stock on December 20, 2007, Section 16(a) of the Securities Exchange Act of 1934, as amended, required Lyondell's directors and executive officers, and persons who owned more than ten percent of a registered class of Lyondell's equity securities, to file with the SEC and the New York Stock Exchange initial reports of ownership and reports of changes in ownership of common stock of Lyondell.
 
To Lyondell's knowledge, based solely on review of the copies of such reports furnished to Lyondell and written representations that such reports accurately reflect all reportable transactions and holdings, with respect to the fiscal year ended December 31, 2007, all Section 16(a) filing requirements applicable to its officers, directors and greater than ten-percent beneficial owners were complied with.
 
Code of Ethics
 
Lyondell has adopted a “code of ethics,” as defined in Item 406(b) of Regulation S-K.  Lyondell’s code of ethics, known as its Business Ethics and Conduct Policy, applies to all officers and employees of Lyondell, including its principal executive officer, principal financial officer, principal accounting officer and controller.  A copy of the Business Ethics and Conduct Policy is available at www.lyondellbasell.com free of charge.  In addition, Lyondell intends to satisfy the disclosure requirements of Item 5.05 of Form 8-K regarding any amendment to, or waiver from, a provision of the Business Ethics and Conduct Policy that applies to Lyondell’s principal executive officer, principal financial officer, principal accounting officer or controller and relates to any element of the definition of code of ethics set forth in Item 406(b) of Regulation S-K by posting such information on its website, www.lyondellbasell.com.
 

 
Compensation Committee Report
 
Prior to Lyondell’s December 20, 2007 acquisition by LyondellBasell Industries, the Compensation and Human Resources Committee of Lyondell’s Board of Directors oversaw the compensation of Lyondell executive officers and was composed of five independent directors.  At the effective time of the acquisition, all of the members of Lyondell’s previous Board of Directors ceased serving as directors and the current members of the Board began to serve as directors.  Also upon the effectiveness of the acquisition, Lyondell’s Board of Directors ceased to have any standing committees.  Accordingly, this report is of the entire Board of Directors.  However, after the acquisition, all decisions regarding the compensation for Lyondell’s executive officers are made by its parent company, LyondellBasell Industries, rather than by the Lyondell Board.
 
Lyondell’s Board of Directors has reviewed and discussed the Compensation Discussion and Analysis, as provided below, with Lyondell’s management.  Based on its review and discussions, the Board of Directors approved the inclusion of the Compensation Discussion and Analysis in this Annual Report on Form 10-K.
 
 
Respectfully submitted,
 
Alan Bigman
Edward J. Dineen
Morris Gelb
The Board of Directors of Lyondell Chemical Company
 
Pursuant to SEC rules, the foregoing Report is not deemed “filed” with the SEC.
 
 
COMPENSATION DISCUSSION AND ANALYSIS
 
Introduction
 
Prior to Lyondell’s December 20, 2007 acquisition by LyondellBasell Industries, the Compensation and Human Resources Committee of Lyondell’s Board of Directors, which is referred to in this section of the Annual Report as the Committee, oversaw the compensation of Lyondell executive officers.  In connection with the acquisition, executive officers received compensation in the form of payouts of awards and amounts under various plans as a result of the occurrence of a change-in-control and pursuant to the terms of the Merger Agreement and, in some cases, under the Executive Severance Pay Plan.  After the acquisition, all decisions regarding the compensation of executive officers of Lyondell are made by Lyondell’s parent company, LyondellBasell Industries, rather than by the Lyondell Board.  In addition, since all current Lyondell executive officers also are officers of LyondellBasell Industries, compensation of Lyondell executive officers is with regard to their services for LyondellBasell Industries and its subsidiaries as a whole and is not allocated among entities.  Accordingly, the information provided below primarily describes Lyondell’s compensation objectives, policies and plans under the oversight of the Committee as they existed before the acquisition and as they related to the compensation of Lyondell’s named executive officers for 2007, and summarizes payments made to the named executive officers in connection with the acquisition.  None of the members of Lyondell’s current Board of Directors were members of the Committee.  Accordingly, references in this Compensation Discussion and Analysis to the views, beliefs and determinations of the Committee are based on the Compensation Discussion and Analysis approved by the Committee for use in Lyondell’s proxy statement for the May 3, 2007 Annual Meeting, minutes of the Committee’s meetings, management’s understanding of the Committee’s views, beliefs and determinations, and other relevant materials.
 
Overview and Objectives of Lyondell’s Pre-Acquisition Executive Compensation Program
 
Before the acquisition, the Committee was responsible for establishing and administering the compensation objectives, policies and plans for Lyondell’s officers.  All of Lyondell’s officers were compensated pursuant to the same executive compensation program.  Both the compensation program and the officers’ compensation were approved by the Committee.  None of Lyondell’s officers had employment contracts.


The Committee based its decisions concerning specific compensation elements and total compensation paid or awarded to Lyondell’s officers on several different objectives.  The objectives of Lyondell’s executive compensation program were to:
 
·  
provide compensation that was competitive with compensation in a broad group of companies that were similar in revenue size to Lyondell and were in similar markets for executive talent;
 
·  
foster a team orientation and a high degree of cooperation and coordination among top management;
 
·  
encourage both short-term and long-term performance focus, promoting shareholder value through strategic business decisions and achievement of performance objectives;
 
·  
provide incentive compensation designed to vary with Lyondell’s performance, while appropriately moderating the impact of the cyclical nature of Lyondell's businesses; and
 
·  
facilitate ownership of Lyondell's common stock by its officers through equity-based incentives so that management interests were closely aligned with those of shareholders in terms of both risk and reward.
 
To ensure alignment with Lyondell’s executive compensation objectives described above, over the course of several meetings throughout the year, the Committee conducted annual evaluations of all components of the executive compensation program, including base salary, incentive compensation (bonus and long-term incentives), retirement and other post-termination compensation and other benefits, as well as projected payout obligations under various scenarios such as termination, retirement and change-in-control.  The Committee also periodically conducted more in-depth reviews of the executive compensation program.  For example, in 2005 the Committee conducted an extensive review of the executive compensation program and considered a wide range of alternative programs for future implementation.  In response to the Committee’s direction, management retained a consultant to analyze Lyondell’s implementation of the then-existing executive compensation program and to examine the elements of Lyondell’s executive compensation program and various alternative compensation programs.  As part of the analysis, the consultant also interviewed all Committee members, the Chairman of the Board, the Chief Executive Officer, the Senior Vice President of Human Resources, and other members of management to gain a better understanding of the effectiveness of Lyondell’s executive compensation program and objectives from their perspectives.  Over the course of several meetings, the Committee assessed the findings from the consultant’s analysis, considered several alternative compensation arrangements and made modifications to certain elements of Lyondell’s executive compensation program as described later in this Compensation Discussion and Analysis.  The Committee determined that the compensation program, as intended, was consistent with competitive market levels as represented by the practices at a broad range of companies that were considered comparable to Lyondell and in similar markets for executive talent.  The Committee also determined that, overall, Lyondell’s existing executive compensation program was the most effective to meet Lyondell’s objectives.
 
The elements of Lyondell’s pre-acquisition executive compensation program, as well as the specific objectives considered by the Committee when determining the elements of the pre-acquisition executive compensation program, are further described below.
 

Elements of Lyondell’s Pre-Acquisition Executive Compensation Program
 
Total Direct Compensation
 
Before the acquisition, a Lyondell executive officer’s total direct compensation consisted of (1) base salary and (2) incentive compensation.  Incentive compensation included an annual cash bonus and long-term incentive compensation, consisting of stock options, restricted stock and associated cash payments, and performance units.  As mentioned above, one objective of Lyondell’s executive compensation program was to offer compensation that was competitive with compensation for similar positions in the broad group of companies against which Lyondell competed for executive talent.  The Committee set total direct compensation for Lyondell’s officers (as well as the base salary, annual cash bonus award and aggregate long-term incentive compensation elements of total direct compensation) in amounts that were designed to reflect the fiftieth percentile of market levels; however, actual payouts under incentive compensation awards could vary with company performance.  In addition, while total direct compensation generally was designed to reflect median compensation levels, to the extent it deemed appropriate, the Committee had the ability to vary each officer’s compensation based on other factors discussed below.
 
Annually, the Committee assessed the competitive position of, and the market levels for, the total direct compensation for Lyondell’s officers and the base salary, annual cash bonus award and long-term incentive compensation elements of their total direct compensation by reviewing published compensation survey data with respect to companies comparable in revenue size to Lyondell.  Lyondell’s human resources department provided the Committee with the published survey data, which the human resources department obtained by subscribing to a compensation consultant’s executive compensation database.  The survey data from the consultant database reflected the most recent compensation information that was available for the more than 150 publicly-traded companies that were included in the database with annual revenues of greater than $10 billion.  For 2006 (the data used in connection with setting 2007 compensation), those companies had average revenues of $23 billion.  The survey data provided to the Committee by the human resources department included appropriate market data for total direct compensation, including base salary, annual cash bonus and overall long-term incentive compensation for each officer position (taking into account the scope of individual officer responsibilities within Lyondell).  The market data was computed by averaging (1) the median for each of those items for relevant officer positions across all companies in the database that had annual revenues exceeding $10 billion with (2) the median amount for each of those items for that same officer position determined through a regression analysis of that compensation.  The revenue size of the companies in the database that Lyondell used for comparison increased over time to reflect the increases in Lyondell’s size.  The group of companies included in the above survey data was not limited to other chemical industry companies because Lyondell competes with the broader group of similarly-sized companies when trying to attract and retain executive talent.  In addition, periodically at the request of the Committee, the human resources department also provided market data for total direct compensation, base salary, annual cash bonus and long-term incentive compensation for the named executive officer positions computed by conducting a regression analysis of that compensation for each comparable officer position at the chemical companies included in Lyondell’s peer group used for the performance units described below, based on data provided through another compensation consultant’s database.  This was most recently done in anticipation of the Committee’s consideration of executive compensation for 2007.  The review of the market data showed that the total direct compensation, which includes base salary, annual cash bonus and long-term incentive compensation, for the named executive officer positions were similar for the chemical company peer group and the broader group of similarly-sized companies.  As the Committee deemed appropriate, while it reviewed total direct compensation against the competitive data in setting direct compensation, the Committee also considered the scope of each officer’s job responsibilities at Lyondell, level of experience, tenure at Lyondell, advancement potential within Lyondell and strength as part of the overall management team, as well as executive compensation trends and market volatility.  Because the survey of market level was based on reported data, the market levels used for reference might lag the actual market compensation levels.
 

In addition, each year, the Chief Executive Officer, with the Board and the Committee, developed corporate goals and objectives for the Chief Executive Officer.  Over the course of the year, the Committee evaluated the performance of the Chief Executive Officer in light of those corporate goals and objectives with input from all non-employee directors and considered this evaluation as it reviewed compensation for the Chief Executive Officer.  In 2007, the Committee conducted its annual review of the Chief Executive Officer’s 2006 performance and, following discussion with the non-employee members of the Board, reviewed the findings with Mr. Smith.  In considering Mr. Smith’s personal and corporate accomplishments, the Committee noted that in 2006, under his leadership, Lyondell made significant progress in continuing to integrate Lyondell and Millennium, reviewing Houston Refining LP’s value options and subsequently acquiring and re-integrating the refinery, and achieving other milestones.  The Committee commended Mr. Smith on his excellent leadership of Lyondell.  No review was completed with respect to 2007 performance because Mr. Smith ceased to serve as Lyondell’s Chief Executive Officer as of January 1, 2008 as a result of Lyondell’s acquisition by LyondellBasell Industries.  For a description of Mr. Smith’s compensation, see the tables included in the “Executive Compensation” section of this Annual Report.  Throughout each year as part of the Board’s general management succession planning process, the Chief Executive Officer and the Senior Vice President of Human Resources also reviewed with the Board the potential development opportunities for other officers.
 
To facilitate the Committee’s annual review of total direct compensation described above, Lyondell’s Senior Vice President of Human Resources and Lyondell’s human resources department provided the Committee with:
 
·  
data from the published compensation survey databases referenced above;
 
·  
historical breakdowns of the total direct compensation component amounts approved by the Committee for Lyondell’s officers;
 
·  
recommendations for Lyondell performance targets under the annual cash bonus award and the performance units; and
 
·  
recommendations for the prospective total direct compensation component amounts and the methodology for calculating the amounts for all of Lyondell’s officers, other than the Chief Executive Officer.
 
Lyondell’s human resources department used external executive compensation consultants and surveys, as appropriate, to assist with the preparation of these materials.  The Committee also had the authority to retain independent, outside counsel or other professional services, including compensation consultants, as it deemed necessary.
 
Base Salary
 
The Committee assessed the competitive nature of executive base salaries as part of its annual review of Lyondell’s total direct compensation, as described above.  After its annual review, the Committee adjusted officer salaries as necessary so that salaries for Lyondell’s officers generally reflected median market levels over time, although the Committee considered other factors as well, as described above.  As Lyondell has grown significantly, in an effort to gradually move executive compensation closer to the median competitive salary for companies of similar revenue size and in recognition of the development of incumbents in their jobs, all of Lyondell’s executive officers received base salary increases in 2006 and in 2007.


Incentive Compensation
 
Before the acquisition, Lyondell provided a variety of incentive compensation opportunities designed to vary with Lyondell’s performance.  The cyclical nature of the chemical industry generally leads to significant swings in financial results.  However, since Lyondell competed with companies in less cyclical industries for executive talent, the Committee provided incentive compensation opportunities that reward both Lyondell’s absolute performance and Lyondell’s relative performance compared to other chemical industry companies.  This approach moderated the impact of the volatility of the cycle on executive compensation in order to effectively attract, retain and reward executive talent throughout the course of the cycle.  Lyondell’s incentive compensation program reflected Lyondell’s focus on long-term performance by encouraging growth in economic value and shareholder value creation over the long term while moderating the effect of the cycle on compensation.
 
The Committee used an annual cash bonus, stock options, a restricted stock program and performance units to provide incentive compensation to officers.  The specific objectives of each element of incentive compensation, the methods used by the Committee to allocate value between types of incentive compensation awards, and the timing of any Lyondell stock measurements related to incentive compensation awards are further described below.
 
Management used the same allocations of value between types of awards, the same timing of any Lyondell stock measurements related to awards, the same exercise price and grant date and, except for the form of payment (as described below), the same general terms of awards to provide incentive compensation to senior managers who were not Lyondell officers as the Committee used for awards to officers.  However, senior manager awards were payable only in cash in order to minimize shareholder dilution from incentive compensation.
 
Incentive compensation consisted of an annual cash bonus award and long-term incentive awards.  Annually, the Committee established amounts equal to percentages of each officer’s base salary that would be paid to each officer through (1) the annual cash bonus award and (2) long-term incentive compensation awards, if the objective performance measures for Lyondell established in advance by the Committee are satisfied.  The Committee used the annual reviews described above to determine the amounts to allocate to the annual cash bonus award and the long-term incentive awards.  As described above, the base salary, annual cash bonus award and long-term incentive compensation elements of total direct compensation were designed to reflect the median level at companies comparable in revenue size to Lyondell.  The Committee also considered the potential dilution to shareholders that might have resulted from equity incentive compensation awards, as well as volatility in market compensation levels.
 
The Committee did not have a program, plan or practice of selecting grant dates for awards to officers in coordination with the release of material, non-public information.  In addition, as discussed under “Stock Options” below, Lyondell did not grant in-the-money stock options and did not reprice stock options.  The Committee historically granted annual incentive compensation awards to officers at a Committee meeting during the first quarter of each year.  The dates for regular meetings were set more than a year in advance, and the regularly-scheduled matters to be considered at each Committee meeting for the next year (including annual grants to officers) were approved by the Committee before the beginning of the year.  On February 23, 2006, the Committee approved a variety of incentive compensation matters, including incentive compensation awards for officers, the performance measures for the annual cash bonus awards and performance units, and the administrative procedures related to the annual cash bonus awards for officers.  Similarly, for 2007, the Committee granted incentive awards to officers on February 22, 2007 in connection with its determination of performance measures for the annual cash bonus awards and performance units, and the administrative procedures related to the annual cash bonus awards for officers.
 
Historically, the Committee used the same process described above to determine the amounts of incentive compensation awards for officers promoted or hired during the course of the year.  Any incentive awards for newly-hired or promoted officers were granted at the Committee meeting that occurred in connection with the Board’s approval of that officer’s promotion or at the next Committee meeting after a new officer began employment with Lyondell, as applicable.  Management granted incentive compensation awards to new senior leaders that were not officers as soon as administratively feasible after their employment began with Lyondell, using the closing price of Lyondell’s common stock on the grant date as the exercise price for any phantom option grants.
 

Annual Cash Bonus Award
 
The annual cash bonus award rewarded management for economic value over a three-year performance period, as determined by the objective criteria established in advance by the Committee.  The Committee believed that the use of a single performance measure for all officers facilitated teamwork and cooperation among the officers.
 
Economic value, as defined below, was used as a measure of Lyondell’s cash flow performance over the three-year period in relation to a return on Lyondell’s invested capital.  The capital charge reflected a measure of the capital invested in Lyondell multiplied by Lyondell’s weighted average cost of capital for the three-year period, as defined below.
 
The formula for the economic value calculation was:  economic cash flow – (economic capital invested x weighted average cost of capital).  The elements of the economic value calculation are summarized below:
 
·  
Lyondell’s economic cash flow was calculated by adding: net income, depreciation and amortization, certain other non-cash items, non-cash income tax expense, after-tax interest (net) and the implicit interest (after-tax) on significant operating leases.
 
·  
The economic capital invested in Lyondell was calculated by adding: shareholder’s equity, the current portion of Lyondell’s long-term debt, other non-current liabilities, deferred taxes (net), accumulated depreciation and the capitalized value of significant operating leases.
 
·  
The weighted average cost of capital for Lyondell was the sum of:
 
o  
Debt—the after-tax cost of long-term debt (including the current portion of long-term debt), multiplied by its proportion relative to the total capital structure (debt ÷ (debt + equity)), and
 
o  
Equity—the proportion of equity (based on market value at the end of the year) relative to the total capital structure (equity ÷ (debt + equity)) multiplied by the cost of equity as determined under the capital asset pricing model.
 
The formula also contains some adjustments to reflect the previous joint venture status of Lyondell’s refinery operations.  Lyondell filed the formula used for its economic value calculation for the 2006 awards with the SEC on a Form 8-K on February 27, 2006.  The Committee revised the formula in February 2007 for the awards beginning in 2007 to reflect Lyondell’s August 2006 acquisition of 100% ownership of the refinery operations, of which Lyondell previously owned a 58.75% equity interest, and to reflect the impact of changes in working capital.  Lyondell filed the revised formula with the SEC on a Form 8-K on February 26, 2007.
 

The Committee believed that economic value was an appropriate measure to use for Lyondell’s annual cash bonus because it encouraged growth in value over time while requiring Lyondell to first cover its cost of capital (including the cost of Lyondell’s debt).  The Committee had the discretion to reduce any annual cash bonus award payment.  In calculating economic value, the Committee also had the discretion to spread the impact of extraordinary corporate events, such as major acquisitions, divestitures or recapitalizations, over a period of three years beginning in the year the event occurs.  The Committee used this discretion in 2005, and determined that it was appropriate to spread the impact of the charges associated with Lyondell’s 2005 shut down of its Lake Charles, Louisiana toluene di-isocyanate facility over three years since the benefits associated with reducing the losses at the facility would similarly be realized over time.  The impact on the payments under the annual cash bonus from spreading these charges was minimal.  Consistent with the Committee’s treatment of previous acquisitions by Lyondell, the Committee recognized the impact of the charges associated with Lyondell’s August 2006 acquisition of the remaining interest in the refining operations during the year of acquisition (rather than using its discretion to spread the impact over three years) since Lyondell received immediate benefits from the acquisition.  This decision did not impact the payment amounts under the annual cash bonus awards for 2006 because, based on the calculation formula, the awards would have paid out at the maximum allowed 200% of the target amount whether the impact was recognized in the year of acquisition or was spread over three years.  With respect to the annual cash bonus awards for 2007, the Merger Agreement governing Lyondell’s acquisition by LyondellBasell Industries, which was approved by Lyondell’s Board and Lyondell’s shareholders, provided that the bonus would not be affected in any way by the expenses or balance sheet changes on or after the effective time of the acquisition that resulted from or related to the acquisition.
 
For awards beginning in 2006, the Committee based annual cash bonus award amounts on a rolling three-year average of economic value rather than the rolling five-year average used in 2005 and prior years.  The Committee reviewed the potential impact on payouts that could result from changing from a rolling five-year average to a rolling three-year average, and determined that the change would not result in significantly different payments under the annual cash bonus award over the long term.  The Committee believed that using a rolling three-year average of economic value, rather than a five-year average, tied the annual cash bonus more closely to Lyondell’s recent performance, while still reflecting Lyondell’s compensation objectives of encouraging growth in economic value over the long term and dampening the effect of earnings cyclicality in the chemical industry.  Since the formula used a rolling multi-year average to dampen the effects of cyclicality, the formula could have resulted in lower bonuses being paid in years where Lyondell substantially increases economic value and also could have resulted in bonuses being paid in years where Lyondell incurs losses in economic value.
 
For the 2007 annual cash bonus awards, the Committee set Lyondell’s performance target for the period from January 1, 2005 through December 31, 2007 to maintain Lyondell’s economic value (0% change in economic value).  Maintaining economic value historically has represented median market performance.  At that target level of performance, the annual cash bonus award would pay out at 100%.  If economic value was reduced by 2% over the performance period, no bonus would be paid.  If economic value was increased by 2% over the performance period, the bonus would pay out at 200%.  For economic value performance between -2% and 2%, the percentage of bonus paid would be correspondingly interpolated between 0% and 200%.  The Committee determined that these percentage changes in economic value appropriately reflected the difficulty of maintaining economic value in commodity businesses in a mature industry.
 
For the 2007 awards, Lyondell’s weighted average cost of capital for the 2005-2007 period was calculated to be 7.4% pursuant to the weighted average cost of capital formula described above.  Based on Lyondell’s performance as determined by the economic value calculation, the annual cash bonuses paid to executive officers for 2007 were 200% of the bonus amounts initially allocated for each officer by the Committee because economic value increased by more than 2%.  The 2007 awards were not affected by the occurrence of the acquisition and were paid out in accordance with their original terms and conditions except that expenses and balance sheet changes in connection with the acquisition were disregarded in accordance with the terms of the Merger Agreement, as described above.  For additional information regarding the annual cash bonus awards for the named executive officers in 2007 and the amounts paid under those awards, see the Grants of Plan-Based Awards table and the Summary Compensation Table in this Annual Report.
 

For the 2006 annual cash bonus awards, the Committee adopted the same economic value targets as described above for 2007.  For the 2006 awards, Lyondell’s weighted average cost of capital for the 2004-2006 period was calculated to be 7.466% pursuant to the weighted average cost of capital formula described above.  Based on Lyondell’s performance as determined by the economic value calculation, the annual cash bonuses paid to executive officers for 2006 were 200% of the bonus amounts initially allocated for each officer by the Committee because economic value increased by more than 2%.  For additional information regarding the annual cash bonus awards for the named executive officers in 2006 and the amounts paid under those awards, see the Summary Compensation Table in this Annual Report.
 
The Committee first began using economic value as a performance measure in connection with the annual cash bonus in 1995 after the Committee had retained a compensation consultant to evaluate several alternative compensation programs.  As part of this evaluation and to assist the Committee in its determination of the appropriate percentage changes in economic value, the consultant provided the Committee with an analysis of the historical returns on capital invested in the chemical industry.  The Committee periodically reviewed updated analyses of the long-term historical chemical industry returns on capital to verify the continued appropriateness of the percentage changes in economic value.  The Committee reviewed an updated in-depth analysis in 2001, and again discussed the appropriate percentage changes in economic value as part of its 2005 review of Lyondell’s executive compensation program.
 
Long-Term Incentive Awards
 
As described above, as part of its annual review of total direct compensation, the Committee established annually an amount equal to a portion of each officer’s base salary to be paid to each officer through long-term incentive awards.  The monetary value of the corresponding long-term incentive awards for each officer was split equally between (1) awards designed to measure Lyondell’s absolute performance and (2) awards designed to measure Lyondell’s relative performance compared to similar companies in the chemical industry.  The Committee believed that this division reflected the equal importance of absolute and relative performance and provided a balanced set of incentives aligning officer focus with shareholder interest.  In addition, since Lyondell competed with similarly-sized companies in less cyclical industries for executive talent, the Committee believed that equally balancing absolute performance awards with relative performance awards moderated the impact of the volatility of the cycle on executive compensation, allowing Lyondell to effectively attract, retain and reward officers throughout the cycle.
 
The value of the awards that were designed to measure Lyondell’s absolute performance was equally split between (1) stock options and (2) restricted stock and the associated cash payments.  The Committee divided the absolute performance awards in this manner to balance the goals of providing competitive compensation to retain executive talent, mitigating dilution to shareholders, aligning interests of management with shareholders and encouraging officer focus on Lyondell’s long-term performance rather than the short-term volatility in Lyondell’s stock price.  Performance units were used for awards designed to measure Lyondell’s relative performance.  Each type of award was linked directly to shareholder return and Lyondell’s compensation objectives, as further described in the following paragraphs.
 
Upon completion of the acquisition, Lyondell discontinued the use of these long-term incentive awards for officers and compensation is determined by LyondellBasell Industries.
 
Stock Options.  Stock option awards were designed to measure Lyondell’s absolute performance.  Stock options were directly linked to shareholder value creation and provided an incentive to participants to increase Lyondell’s share price over time because the value of the shareholders’ investment in Lyondell must have appreciated before an option holder received any financial benefit from the option.  The Committee believed that granting stock options annually was important to ensure varied exercise prices throughout the chemical industry cycle, reflecting the volatility in Lyondell’s stock price throughout the cycle.
 

On February 23, 2006 and February 22, 2007, the Committee granted stock options to officers.  The number of shares of Lyondell common stock subject to stock options was calculated using the dollar value allocated by the Committee to each officer’s stock option award during the Committee’s annual review described above and a fair value ratio similar to the Black-Scholes model.  The stock options were scheduled to vest in one-third annual increments beginning one year after grant, with accelerated vesting upon death, disability, retirement or change-in-control.  The acquisition, or in some cases the Lyondell shareholder approval of the acquisition, constituted a change-in-control under the stock options granted in 2005, 2006 and 2007 and, accordingly, all outstanding stock options became fully vested.  Pursuant to the terms of the Merger Agreement, at the effective time of the acquisition, all outstanding options were cancelled in exchange for a cash payment. Each option holder received a payment equal to $48.00 times the number of shares subject to each option, less the aggregate exercise price of the option.  See “Payments in Connection With the Acquisition” below for more information regarding the payments to named executive officers in respect of stock options in connection with the acquisition.
 
For additional information regarding stock options awarded to the named executive officers in 2006 and 2007 and the assumptions underlying the value of those awards, see the Summary Compensation Table and the Grants of Plan-Based Awards table in this Annual Report.
 
Also, as part of its 2005 review of Lyondell’s executive compensation program and after considering the analysis management received from its consultant regarding Lyondell’s executive compensation program and market trends, the Committee refined the terms of Lyondell’s stock option awards granted beginning in 2006.  The changes eliminated accelerated vesting of stock options where Lyondell’s stock price is more than twice the exercise price and extended the time to exercise stock options upon retirement to the lesser of five years after retirement or the remaining term of the stock option award.  As provided in Lyondell’s incentive plan, the exercise price for stock options could not be less than the fair market value of Lyondell’s common stock on the grant date because the exercise price would be the higher of (1) the average closing price of a share of Lyondell common stock during the first ten trading days of the year or (2) the closing price on the grant date.  The Committee believed that this formula ensured that the option exercise price was not unduly influenced by events that may occur immediately before the grant date while still ensuring that the exercise price was never less than the closing price on the grant date.  For the February 2006 grants, the exercise price of $24.52 per share was the average closing price of a share of Lyondell’s common stock during the first ten trading days of 2006 because that value was greater than the closing price on the grant date.  For the February 2007 grants, the exercise price of $31.97 per share was the closing price of a share of Lyondell’s common stock on the grant date because that value was greater than the average closing price of a share of Lyondell’s common stock during the first ten trading days of 2007.  Lyondell’s incentive plan also does not permit the repricing of stock options.
 
Restricted Stock Program.  The restricted stock program also was designed to measure Lyondell’s absolute performance.  The restricted stock program was divided equally into a grant of restricted stock and an associated cash payment to facilitate ownership of Lyondell’s stock by officers while at the same time providing a cash payment designed to allow officers to satisfy their taxes with respect to the restricted stock as it vested without selling the stock.  In addition, the restricted stock program was linked to shareholder value because the value of the restricted stock and associated cash payment fluctuated with the price of Lyondell’s common stock.
 

On February 23, 2006 and February 22, 2007, the Committee granted restricted stock and associated cash payment awards to officers.  The restricted stock and associated cash payment awards were scheduled to vest in one-third annual increments beginning one year after grant, with accelerated vesting upon death, disability, retirement or change-in-control.  The acquisition, or in some cases the Lyondell shareholder approval of the acquisition, constituted a change-in-control under the restricted stock and, accordingly, all restricted stock, including the associated cash payment awards, became fully vested in connection with the acquisition.  Pursuant to the terms of the Merger Agreement, each restricted stock award granted in 2006 and 2007 and the respective associated cash payment awards were converted upon effectiveness of the acquisition into the right to receive a payment equal to $48.00 times the sum of the number of shares of restricted stock and the number of shares associated with the cash payment award.  The restricted stock granted in 2005 became fully vested upon Lyondell shareholder approval of the acquisition and, as with all other outstanding shares of Lyondell common stock, was converted upon effectiveness of the acquisition into the right to receive a payment equal to $48.00 times the number of shares of restricted stock.  The associated cash payment awards granted in 2005 were converted into the right to receive a payment equal to the closing price of Lyondell common stock on November 20, 2007, the date of shareholder approval of the acquisition.  See “Payments in Connection With the Acquisition” below for more information regarding the payments to named executive officers in respect of restricted stock in connection with the acquisition.  Prior to the acquisition, participants received cash dividend equivalent payments on shares of unvested restricted stock at the same rate that shareholders received dividends.
 
The number of shares awarded as restricted stock was calculated by dividing the dollar amount of the restricted stock portion of the award by the closing price of a share of Lyondell’s common stock on the last trading day of the year before the year when the grant was made.  The amount of the associated cash payment equaled the closing price of a share of Lyondell’s common stock on the date the restricted stock vested, multiplied by the number of shares of restricted stock vesting.  The associated cash payment was made when and if the shares of restricted stock vested.  The two components of the restricted stock program were designed to work together to encourage officers to retain an ownership interest in Lyondell in accordance with the Stock Ownership Guidelines in effect before the acquisition, to align their interests with those of the shareholders and to increase Lyondell’s share price over time.  In addition, because the opportunity for officers to realize value from the restricted stock program was less at risk than with stock options since Lyondell’s stock did not have to reach a specified price for the restricted stock program to have value, the Committee believed that combining the restricted stock program with stock options provided an efficient way for the Committee to deliver incentive opportunities to officers while minimizing shareholder dilution from incentive compensation.
 
For additional information regarding the restricted stock and associated cash payment awards for the named executive officers made in 2006 and 2007 and the assumptions underlying the value of those awards, see the Summary Compensation Table and the Grants of Plan-Based Awards table in this Annual Report.
 
Performance Units.  The performance units were designed to measure Lyondell’s relative shareholder return performance compared to similar companies in the cyclical chemical industry.  Under the performance units, officers earned a cash amount equal to the value of a specified number of shares of Lyondell common stock, unless the Committee specifically determined that the performance units would be paid in shares of Lyondell common stock.
 
The performance units directly linked the participant’s incentive compensation opportunities to Lyondell’s performance relative to the performance of other chemical industry companies, and provided incentive to the participants to improve Lyondell's total shareholder return performance compared to comparable companies throughout the chemical industry cycle.  The Committee believed that the use of a single performance measure for all officers facilitated teamwork and cooperation among the officers.
 
On February 22, 2007, the Committee granted performance unit awards to officers related to Lyondell’s target performance over the three-year period from January 1, 2007 through December 31, 2009.  On February 23, 2006, the Committee granted performance unit awards to officers related to Lyondell’s target performance over the three-year period from January 1, 2006 through December 31, 2008.
 

The number of performance units that would have been payable if target performance had been achieved was calculated by dividing the award value determined by the Committee during its annual review described above by the average closing price of a share of Lyondell’s common stock during the last ten trading days of the year before the grant date.  Using the average closing price during the period helped minimize the impact of the day-to-day volatility in the stock price.  The actual payout of the number of units was intended to be based on Lyondell's three-year cumulative total shareholder return (common stock price growth plus reinvested dividends, measured over the course of the three-year performance cycle) relative to a chemical industry peer group.  The peer group consisted of the entities that were in the S&P 500 Chemicals Index and the entities that were in the S&P Mid Cap 400 Chemicals Index.
 
For awards made in 2007, as in past years, for officers to receive a payment at 100% of the number of units awarded by the Committee, Lyondell would have been required to achieve a total shareholder return during the three-year period equal to at least the fiftieth percentile, as compared to the companies in its peer group.  Performance unit awards would have paid out at the percentages set forth below, based on Lyondell’s corresponding total shareholder return during the three-year period:
 
Lyondell’s Total Shareholder Return
Percentage of Award Received
Below 30th percentile
 0%
30th percentile
20%
50th percentile
100%
80th percentile or above
200%

For shareholder returns between the thirtieth and fiftieth percentiles and the fiftieth and eightieth percentiles, the number of units was to be correspondingly interpolated between the values above.  The actual value received by an officer would have been determined by multiplying the number of units earned by the average closing price of a share of Lyondell’s common stock during the last ten trading days of the three-year performance period.  If a participant’s employment were to terminate due to death, disability or retirement during the performance cycle, the award would have been pro-rated based on the number of days of employment during the performance cycle and paid at the end of the cycle.
 
Although the payout could have ranged from 0% to 200% of the number of performance units awarded based on Lyondell’s relative shareholder return performance during the three-year performance period, under the terms of the performance units, if a change-in-control occurred during the performance cycle, the award was to be paid at the 100% level within 60 days after the change-in control.  The acquisition, or in some cases the Lyondell shareholder approval of the acquisition, constituted a change-in-control under the performance units granted in 2005, 2006 and 2007 and, accordingly, all such performance units were paid out at the 100% level.  See “Payments in Connection With the Acquisition” below for more information regarding the payments to named executive officers in respect of the performance units in connection with the acquisition.
 
For additional information regarding the performance units awarded to the named executive officers in 2006 and 2007 and the assumptions underlying the value of those awards, see the Summary Compensation Table and the Grants of Plan-Based Awards table in this Annual Report.
 

Other Compensation
 
Executive Supplementary Savings Plan
 
Lyondell’s qualified 401(k) plan contains limits that do not allow Lyondell to provide a matching contribution under the 401(k) plan for employees with compensation above a specified level.  Lyondell’s Executive Supplementary Savings Plan, referred to as the ESSP, provides those employees with a payment equal to the amount that they otherwise would have been eligible to receive under the 401(k) plan absent plan limits.  This payment is provided to ESSP participants regardless of whether they participate in the 401(k) plan.  The Committee believed that the ESSP was an important element to ensure that Lyondell’s executive compensation program remained competitive because the ESSP restores the employer contributions limited by the 401(k) plan terms.  To provide participants with an opportunity to defer the benefit until retirement comparable to a 401(k) plan, participants are permitted to defer their ESSP benefit under the Executive Deferral Plan described below. If a participant does not defer the benefits, the participant’s ESSP benefits for a year are paid in a single cash payment no later than 30 days after the end of each calendar year upon approval by Lyondell’s Benefits Administrative Committee.  The Benefits Administrative Committee includes officers and other employees of Lyondell.  ESSP participants have an unsecured commitment by Lyondell to pay the amounts due under the ESSP.  ESSP benefit information with respect to each named executive officer is disclosed in connection with the Summary Compensation Table and the All Other Compensation Table included in the notes to the Summary Compensation Table included in this Annual Report.  The acquisition had no effect on the ESSP.  For administrative simplicity, the Lyondell executive officers who continued as executive officers of Lyondell and became executive officers of LyondellBasell Industries after the acquisition (sometimes referred to as legacy Lyondell executive officers) continue to receive their compensation through the Lyondell payroll system.  Accordingly, participation by those executive officers in the ESSP has continued to date in 2008.
 
Retirement and Other Post-Termination Compensation
 
Executive Deferral Plan and Supplementary Executive Retirement Plan
 
In addition to Lyondell’s tax qualified retirement and 401(k) plans applicable to employees generally, officers and other senior managers are eligible to defer compensation under Lyondell’s non-qualified deferred compensation plan, referred to as the Lyondell Executive Deferral Plan, as well as to participate in Lyondell’s non-qualified supplemental executive retirement plan, referred to as the Supplementary Executive Retirement Plan or Lyondell SERP.  Both the Lyondell Executive Deferral Plan and the Lyondell SERP are subject to payout upon the occurrence of a change-in-control.  Accordingly, following the completion of the acquisition, the full amount of contributions and earnings accrued or credited to each executive officer under Lyondell’s Executive Deferral Plan on the date immediately before the completion of the acquisition was distributed in a single lump sum payment.  In addition, under Lyondell’s SERP, following the acquisition, a lump sum amount was paid out to each executive officer.  See “Payments in Connection With the Acquisition” below for more information regarding the payments to named executive officers in connection with the acquisition pursuant to Lyondell’s Executive Deferral Plan and SERP.  Although lump sum payments occurred under the terms of the plans as a result of the acquisition, Lyondell’s Executive Deferral Plan and SERP have not been modified or terminated.  Accordingly, they have continued in effect in accordance with their terms since the acquisition.  Pending any change in these arrangements, legacy Lyondell executive officers continue to accrue benefits under the plans, as they did prior to the acquisition.
 
Except in connection with a change-in-control, as occurred as a result of the acquisition, amounts under Lyondell’s Executive Deferral Plan and SERP generally are not paid until termination of a participant’s employment, and the amounts are taxable to the employee upon termination.  Furthermore, except in connection with a change-in-control, participants generally are not eligible to receive payment of benefits under Lyondell’s SERP if they leave before retirement.  Accordingly, the Committee believed that both Lyondell’s Executive Deferral Plan and SERP encouraged long-term employment with Lyondell and were effective and competitive retention tools.  The benefits under both Lyondell’s Executive Deferral Plan and SERP may be paid through a grantor trust.  However, although the trust was funded as required after the acquisition and the payments triggered by the change-in-control were made from the trust, Lyondell does not fund the trust on an ongoing basis, and participants have an unsecured commitment by Lyondell to pay the amounts due under the plans.
 

Under Lyondell’s Executive Deferral Plan, officers and senior managers may elect to defer up to 50% of their annual base salary (similar to the deferral limit available under Lyondell’s 401(k) plan), 100% of their annual cash bonus award and 100% of any amounts contributed by Lyondell under the ESSP described above each year.  Since the amounts in Lyondell’s Executive Deferral Plan are unfunded and unsecured, to more accurately reflect Lyondell’s cost of borrowing, beginning in 2006 the amounts under Lyondell’s Executive Deferral Plan accrue interest using the previous monthly average of the closing yield to maturity (as reported by Bloomberg) of Lyondell’s most junior publicly traded debt as of December 1 of the previous plan year.  Deferral information and the lump sum payments following the acquisition with respect to each named executive officer and other information regarding Lyondell’s Executive Deferral Plan are disclosed under “Payments in Connection With the Acquisition” below and in connection with the Nonqualified Deferred Compensation table in this Annual Report.
 
Lyondell’s SERP restores retirement benefits limited by qualified plan compensation rules under the Internal Revenue Code.  Compensation used to calculate the SERP benefit includes base salary and the annual cash bonus, including deferred amounts.  Other than the inclusion of the annual cash bonus and deferred amounts in the SERP calculations, accruals under the SERP are calculated using the same methodology as Lyondell’s general retirement plan described under the Pension Benefits table, and officers in the SERP do not accrue any extra years of service under the SERP.  Upon termination in connection with a change-in-control, participants that also are covered by the Executive Severance Pay Plan are eligible for an additional benefit as described below under “Severance and Change-in-Control Arrangements.”  In the case of those individuals who had been determined to have had a qualified termination under the Executive Severance Pay Plan, the amounts of the additional benefits are discussed below under “Payments in Connection With the Acquisition.” In 2006, Lyondell’s SERP was amended to ensure compliance with the requirements of Section 409A of the Internal Revenue Code.
 
In addition to his benefits under Lyondell’s Executive Deferral Plan and SERP, Mr. Hollinshead has one year of credited service under the Equistar supplemental executive retirement plan (the “Equistar SERP”) and has a deferral balance under Equistar’s non-qualified deferred compensation plan (the “Equistar Deferral Plan”), reflecting his previous service with Equistar, a subsidiary of Lyondell.  The terms of the Equistar SERP and the Equistar Deferral Plan are substantially the same as the Lyondell SERP and Executive Deferral Plan described above.  The Equistar SERP and the Equistar Deferral Plan were amended in 2007 and 2005, respectively, to ensure compliance with the requirements of Section 409A of the Internal Revenue Code.  Unlike the Lyondell plans, no payments were made pursuant to the Equistar SERP or the Equistar Deferral Plan as a result of Lyondell’s acquisition by LyondellBasell Industries.
 
Accrued benefit information with respect to each named executive officer, the assumptions with respect to the present value of the current accrued benefits and the lump sum payments following the acquisition, as well as other information regarding the Lyondell SERP and the Equistar SERP, are disclosed in connection with the Pension Benefits table in this Annual Report.  Retirement and post-termination compensation also is discussed under the “Potential Post-Employment and Change-in-Control Payments” heading in this Annual Report.
 
Severance and Change-in-Control Arrangements
 
All employees, including the officers, of Lyondell and designated subsidiaries immediately before the acquisition are covered under Lyondell’s Special Termination Plan.  The purpose of the Special Termination Plan is to provide severance benefits to all employees to compensate for the loss of employment due to job elimination.  The maximum amount payable under the Special Termination Plan is one year’s annual base salary.
 

In the case of a termination after a change-in-control, Lyondell’s officers, as well as certain other senior managers of Lyondell and its subsidiaries, as designated by the Chief Executive Officer of Lyondell prior to the change-in-control, are covered by Lyondell’s Executive Severance Pay Plan, or ESPP, instead of Lyondell’s Special Termination Plan.  A change-in-control for purposes of the ESPP generally is defined as (1) ownership of Lyondell changing by 50% or more or (2) a person or entity acquiring more than a 20% ownership interest in Lyondell.  The acquisition constituted a change-in-control for the purposes of the ESPP.  Accordingly, by its terms, the ESPP will continue for a period of at least two years after December 20, 2007 for participants in the plan on that date.  If an employee covered under the ESPP is terminated without cause or terminates his or her employment for good reason (in either case, a “qualified termination”) within two years after December 20, 2007, the employee is entitled to receive the following:
 
·  
a payment equal to one times to three times annual earnings (base salary and annual cash bonus award target amount);
 
·  
payment of an additional amount equal to the difference between the unvested and vested retirement benefit, if any, and the difference between the vested and early retirement benefit;
 
·  
continuation of welfare benefit coverages for 24 months after termination;
 
·  
retiree coverage provided under the applicable medical plan (which is the executive medical plan in the case of all Lyondell officers) after the above 24-month continuation period, regardless of age and service at termination;
 
·  
up to $40,000 of outplacement services for a period of one year through one of the third-party outplacement service providers offered by Lyondell; and
 
·  
a gross-up payment for the amount of any excise tax liability imposed pursuant to Section 4999 of the Internal Revenue Code (or similar excise tax) with respect to any benefits paid in connection with the acquisition.
 
Certain pre-acquisition executive officers of Lyondell, including Mr. Smith, Mr. DeNicola, Mr. Hollinshead and Ms. Galvin, have been determined to have been subject to a qualified termination under the ESPP following the acquisition.  See “Payments in Connection With the Acquisition” below for more information regarding the payments made, or to be made, to those former officers under the ESPP.  In the case of Mr. Gelb, his termination benefits are determined in part by an agreement entered into on January 23, 2008 (the “Gelb Agreement”), pursuant to which Lyondell acknowledged and agreed that, as a result of the change in Mr. Gelb’s position following the December 20, 2007 acquisition of Lyondell by LyondellBasell Industries, he would have grounds for a constructive termination for good reason under the terms of the ESPP.  The Gelb Agreement provides that, in order to induce Mr. Gelb to continue to serve Lyondell, Lyondell agrees that in the event of Mr. Gelb’s termination of employment for any reason, without limitation, during the two year period beginning on December 20, 2007, Lyondell will provide Mr. Gelb with all of the severance benefits set forth under the ESPP (other than the vesting of stock options, all of which vested and were exchanged for cash in connection with the acquisition).  The Gelb Agreement provides that, while it is anticipated that Mr. Gelb will remain employed with Lyondell for the two year period beginning on December 20, 2007, the parties acknowledge that Mr. Gelb is not obligated to remain employed with Lyondell and Lyondell is not obligated to continue his employment for any specified period.  Under the Gelb Agreement, Mr. Gelb waived his right to participate separately in the ESPP and agreed that the provisions of the Gelb Agreement (including any provisions of the ESPP incorporated by reference) are controlling.  The potential payments to Mr. Gelb upon a termination of employment, as well as other information regarding the material terms of the ESPP and the Gelb Agreement, are disclosed under the “Potential Post-Employment and Change-in-Control Payments” heading in this Annual Report.
 

The ESPP provides the officers and senior managers whose jobs would generally be at the greatest risk in a change-in-control with a greater level of financial security in the event of a change-in-control. The Committee believed that the additional level of security provided by the ESPP was effective and necessary to ensure that these officers and senior managers remained focused on Lyondell’s performance and the creation of shareholder value through the successful execution of a change-in-control transaction rather than on the potential uncertainties associated with their own employment.
 
During 2005 and 2006, the Committee reviewed Lyondell’s executive severance and change-in-control arrangements and amended the change-in-control provisions to protect against unintentional triggering of a change-in-control as well as to comply with Section 409A of the Internal Revenue Code.  All of Lyondell’s change-in-control arrangements now use the same definition of change-in-control as described above in connection with the ESPP, except for Lyondell’s Executive Deferral Plan and SERP, which use the Section 409A-required definition.  Consistent with Section 409A of the Internal Revenue Code, Lyondell’s Executive Deferral Plan and SERP benefits are only paid out on a change-in-control in which there is more than a 50% ownership change of Lyondell or a replacement of a majority of the Board of Directors within a 12 month period.  The Committee believed that Lyondell’s severance and change-in-control arrangements (including the change-in-control triggers) were competitive and were generally representative of typical executive severance pay packages.
 
Other Benefits
 
As described under the Summary Compensation Table heading in this Annual Report, officers are eligible to receive reimbursement for a deminimis amount of tax preparation, estate planning and financial counseling services, as well as a tax gross-up payment related to the reimbursement.  They also are eligible to participate in an executive medical plan, an executive disability plan and an executive life insurance program, which provide a level of enhanced medical, disability and life insurance coverage beyond the levels available under Lyondell’s regular medical, disability and life insurance plans.  The Committee reviewed the costs of these additional benefits and did not consider their costs to be significant.  The Committee believed that these benefits provided officers with a level of convenience and financial security that was competitive, encouraged their long-term employment with Lyondell and allowed the officers to remain focused on the long-term performance of Lyondell and the creation of shareholder value.
 
Lyondell also maintains other programs available to employees generally, including the named executive officers.  For example, Lyondell maintains a corporate airplane and pays for club memberships for employees.  Use of the corporate airplane and the club memberships is primarily for business purposes.  Use of the corporate airplane allows employees to efficiently use their time and to conduct confidential business discussions during their travel and also facilitates business travel to Lyondell’s facilities in remote locations.  The club memberships provide a convenient location for business meals and entertainment near Lyondell’s offices and facilities.  Employees are required to reimburse Lyondell for the incremental cost of any personal use of the club memberships.  Limited personal use of the corporate airplane by employees and any non-employees who travel with them is permitted, and is imputed as income to the employee in accordance with applicable regulations.  In addition, in May 2007, the Committee approved a form of time sharing agreement to use for officers with respect to the corporate airplane to ensure continued compliance with applicable regulations related to personal use of the corporate airplane. The incremental cost of any personal use of the corporate airplane by the named executive officers is reflected in the Summary Compensation Table and the All Other Compensation Table.  The Committee did not consider the cost of these programs to be significant.
 
The acquisition had no effect on the other benefits described above and to date these benefits have not been modified or amended.  Pending any change in these arrangements, legacy Lyondell executive officers continue to have these benefits, as they did prior to the acquisition.  See the Summary Compensation Table and the All Other Compensation Table included in the notes to the Summary Compensation Table in this Annual Report for additional disclosure regarding these benefits.
 

Stock Ownership Guidelines
 
The Committee previously had adopted stock ownership guidelines for officers as a way to align more closely the interests of the officers with those of the shareholders.  However, because Lyondell is no longer a publicly traded company with stock listed on a national stock exchange and officers no longer have the opportunity to own Lyondell common stock, the guidelines no longer apply.
 
Tax Considerations
 
Section 409A of the Internal Revenue Code imposes requirements for certain executive compensation and benefits arrangements considered to be deferred compensation arrangements.  During 2005 and 2006, management analyzed and reviewed with the Committee all Lyondell plans and policies that required revision to ensure compliance with Section 409A and the related regulations.  Based on that analysis, as described further above under “Retirement and Other Post-Termination Compensation” and in the narrative disclosures following the tables in this Annual Report, the Committee modified many of Lyondell’s executive compensation arrangements to conform to the provisions of Section 409A.
 
As described above under “Severance and Change-in-Control Arrangements,” participants in the ESPP that have a qualified termination within two years after the December 20, 2007 acquisition are entitled to receive a gross-up payment for the amount of any excise tax liability imposed pursuant to Section 4999 of the Internal Revenue Code (or similar excise tax) with respect to any benefits paid in connection with the acquisition.  See “Payments in Connection with the Acquisition” below for information regarding the payments made, or to be made, to Mr. Smith, Mr. DeNicola, Mr. Hollinshead and Ms. Galvin under the ESPP.
 
While certain components of compensation may not be deductible for various reasons, the Committee retained the discretion to pay such amounts if it was in the best interests of Lyondell and its shareholders.  For example, before the acquisition, Section 162(m) of the Omnibus Budget Reconciliation Act of 1993 limited the deductibility of compensation, including the restricted stock and associated cash payment awards, in excess of $1 million paid to Lyondell's Chief Executive Officer and the next four highest paid officers during any fiscal year, unless the compensation met certain requirements.  Lyondell’s performance-based compensation was intended to conform with Section 162(m) and, unless the Committee determined otherwise at the time an award was granted, the Committee was guided by Section 162(m) when interpreting incentive compensation arrangements.  After the acquisition, because Lyondell no longer has publicly held equity, the restrictions of Section 162(m) no longer apply, beginning with respect to 2007 compensation.
 
For 2007 and 2006, $822,425 and $4,356,169, respectively, in compensation for named executive officers and other amounts was not deductible.
 
Payments in Connection With the Acquisition
 
Upon the completion of the acquisition, a change-in-control occurred for purposes of change-in-control arrangements and various benefit and incentive plans in which Lyondell’s pre-acquisition executive officers were participants.  In addition, in the case of some awards, the approval of the acquisition by shareholders constituted a change-in-control.  The change-in-control resulted in the triggering, accelerating or vesting of certain rights under those plans and arrangements.  In addition, Mr. Smith, Mr. DeNicola, Mr. Hollinshead and Ms. Galvin have been determined to have a qualified termination under the ESPP following the acquisition and, therefore, are receiving or will receive in 2008 benefits under that plan.
 

Stock Options
 
The vesting of all stock options outstanding under Lyondell’s incentive plans was accelerated upon completion of the acquisition (or, in some cases, upon the approval of the acquisition by shareholders).  Upon completion of the acquisition, options to acquire shares of Lyondell common stock that were outstanding under Lyondell’s incentive plans immediately prior to the effective time of the acquisition were cancelled as of the effective time of the acquisition in exchange for a cash payment.  Pursuant to the Merger Agreement, each option holder received a payment equal to $48.00 times the number of shares subject to each option, less the aggregate exercise price of the option. Payments made in respect of options were subject to applicable withholding taxes.
 
The table below sets forth, for each of Lyondell’s named executive officers:
 

·  
the number of those shares of Lyondell common stock subject to options vested prior to the change-in-control, the weighted average exercise price of those vested options and the value of those vested options;
 
·  
the number of options that vested upon the change-in-control, the weighted average exercise price of those options and the value of those options; and
 
·  
the aggregate number of shares subject to all options (both options vested prior to the change-in-control and options that vested as a result of the change-in-control), the weighted average exercise price of those options and the aggregate value of all options.
 
   
Options Vested Prior to the
Change-in-Control
    
Options Vested as a Result of the
Change-in-Control
    
All Options
  
Name
  
Shares
Underlying
Options (#)
    
Weighted
Average
Exercise
Price of
Options
($)
    
Value of
Options ($)
(a)
    
Shares
Underlying
Options (#)
    
Weighted
Average
Exercise
Price of
Options ($)
    
Value of
Options ($)
(a)
    
Aggregate
Shares
Subject to
Options (#)
    
Weighted
Average
Exercise
Price of
Options ($)
    
Value
of
Options ($)
(a)
  
Dan F. Smith
     1,130,923       16.16       36,012,150       457,421       29.10       8,644,121       1,588,344       19.89       44,656,271  
T. Kevin DeNicola
     265,955       16.71       8,321,740       107,166       29.10       2,025,428       373,121       20.27       10,347,168  
Morris Gelb
     - -       - -       - -       180,458       29.07       3,415,209       180,458       29.07       3,415,209  
Kerry A. Galvin
     102,639       18.46       3,031,465       77,010       29.08       1,457,022       179,649       23.02       4,488,487  
John A. Hollinshead
     156,103       16.10       4,979,931       50,055       29.11       945,686       206,158       19.26       5,925,616  
 

(a)
The value (without regard to deductions for income taxes) is calculated by multiplying (1) the excess of the $48.00 per share merger consideration over the per share exercise price of the option by (2) the number of shares subject to the options.
 

Lyondell Restricted Stock
 
Prior to the acquisition, executive officers had awards of (1) restricted stock and (2) an associated cash payment which tracked the market value of Lyondell’s common stock. The associated cash payment was payable upon vesting of the shares of restricted stock.  Upon the change-in-control, all of the restricted stock became vested.  In the case of a majority of the restricted stock awards, the effectiveness of the acquisition constituted the change-in-control, with the approval of the shareholders of the acquisition constituting the change-in-control for purposes of the balance of the awards.  All shares of restricted stock were converted on the same basis as all other shares of common stock outstanding at the effective time of the acquisition into the right to receive the $48.00 per share consideration.  The associated cash payments were made based on the time the relevant shares of restricted stock became vested.  In the case of restricted stock which vested upon the effectiveness of the acquisition, the associated cash payment was equal to $48.00 times the number of shares of restricted stock associated with the cash payment award.  In the case of restricted stock which vested upon the approval of shareholders of the acquisition, the associated cash payment was equal to $46.52, the closing price of the common stock on November 20, 2007, the date of the shareholders’ meeting, times the number of shares of restricted stock associated with the cash payment award.  Payments made in respect of awards of associated cash payments, as well as restricted stock, were subject to applicable withholding taxes.  The table below sets forth for each of Lyondell’s named executive officers:
 
·  
the number of shares of restricted stock that vested as a result of the change-in-control, and the value of such restricted stock (based on the $48.00 per share merger consideration);
 
·  
the notional number of shares represented by the associated cash payment awards that vested as a result of the change-in-control, and the total actual cash payments made with respect to such vesting of the awards of associated cash payment (based on the $48.00 or $46.52 per share consideration, as applicable); and
 
·  
the total value of the restricted stock that vested and actual cash payments that were made as a result of the change-in-control.
 
   
Restricted Stock that
Vested as a Result of the Change-in-Control
    
Associated Cash Payments Made With
Respect to Vesting of the Restricted Stock
        
Name
  
Shares (#)
    
Value ($)
    
Shares (#)
    
Value ($)
    
Total Value ($)
  
Mr. Smith
     63,110       3,029,280       63,110       3,017,076       6,046,356  
Mr. DeNicola
     14,803       710,544       14,803       707,556       1,418,100  
Mr. Gelb
     24,986       1,199,328       24,986       1,193,888       2,393,216  
Ms. Galvin
     10,649       511,152       10,649       508,941       1,020,093  
Mr. Hollinshead
     6,916       331,968       6,916       330,550       662,518  
 

Performance Units
 
Upon the change-in-control, all outstanding performance units, which were denominated in shares of Lyondell common stock, were paid out at 100% of the target performance level.  In the case of a majority of the performance unit awards, the effectiveness of the acquisition constituted the change-in-control, with the approval of the shareholders of the acquisition constituting the change-in-control for purposes of the balance of the awards.  In the case of the performance units for which the approval of shareholders constituted the change-in-control, in accordance with the terms of the awards, holders received a payment of $47.01 (which was the average closing price of Lyondell’s common stock for the ten trading days through November 20, 2007, the date of shareholder approval of the acquisition) times the number of performance units.   Pursuant to the terms of the Merger Agreement, each holder of a performance unit for which the effectiveness of the acquisition constituted the change-in-control received a payment equal to $48.00 times the number of performance units.  Payments made in respect of performance units were subject to applicable withholding taxes. The table below sets forth for each of Lyondell’s named executive officers:
 
·  
the number of performance units held that became payable as a result of the change-in-control; and
 
·  
the total cash payments made with respect to those performance units (based on the $48.00 or $47.01 per unit consideration, as applicable).
 
   
Performance Units Paid as a Result of the
Change-in-Control
  
Name
  
Units (#)
    
Cash Payment ($)
  
Mr. Smith                                                                                              
     362,143       17,284,563  
Mr. DeNicola                                                                                              
     85,553       4,082,475  
Mr. Gelb                                                                                              
     146,481       6,987,266  
Ms. Galvin                                                                                              
     61,888       2,952,824  
Mr. Hollinshead                                                                                              
     40,067       1,911,793  
 

Executive Deferral Plan
 
Following completion of the acquisition, the full amount of contributions and earnings accrued or credited to each executive officer under Lyondell’s Executive Deferral Plan on the date immediately before the completion of the acquisition was distributed in a lump sum form. Payments made were subject to applicable withholding taxes. The following table sets forth such lump sum payments for each named executive officer:
 
 
Name
  
Value under
Deferral Plan ($)
  
Mr. Smith                                                                                                    
     571,292  
Mr. DeNicola                                                                                                                     
     478,083  
Mr. Gelb                                                                                                                     
     5,346,259  
Ms. Galvin                                                                                                                     
     451,745  
Mr. Hollinshead                                                                                                                     
     3,047,452  
 

Supplemental Executive Retirement Plan
 
Following completion of the acquisition, a lump sum amount was paid out to each executive officer under Lyondell’s SERP.  For participants who were eligible for retirement on December 20, 2007, the payments were equal to the lump sum that would have been payable in the event of actual termination.  For participants who were not eligible for retirement on December 20, 2007, the payments were equal to the difference between the total benefit actuarially reduced from age 65 to current age and the present value of the benefit available to the participant under the qualified retirement plan.  The assumptions used in calculating these payments were a 5.07% interest rate and a fixed blend of 50% male and 50% female mortality rates under the 1994 Group Annuity Reserving Table projected to 2002.  Payments were subject to applicable withholding taxes. The following table sets forth the amount of such lump sum payment for each named executive officer:
 
Name
  
Value of SERP
Benefit ($)
  
Mr. Smith                                                                                                                     
     15,358,749  
Mr. DeNicola                                                                                                                     
     983,380  
Mr. Gelb                                                                                                                     
     6,788,100  
Ms. Galvin                                                                                                                     
     621,499  
Mr. Hollinshead                                                                                                                     
     1,861,130  

 
Executive Severance Pay Plan
 
In the case of a termination after a change-in-control, Lyondell’s executive officers are covered by Lyondell’s ESPP, which provides severance benefits to compensate for the loss of employment.  If, within two years after a change-in-control, an executive officer covered under the ESPP is terminated without cause or terminates his or her employment for good reason, the executive officer is entitled to receive the benefits under the ESPP described in more detail under “Severance and Change-in-Control Arrangements” above.  Mr. Smith, Mr. DeNicola, Mr. Hollinshead and Ms. Galvin have been determined to have been subject to a qualified termination under the ESPP following the acquisition and either began receiving or will receive benefits under the ESPP in 2008.  Set forth below are the amounts paid or payable and the estimated value of benefits being provided pursuant to the terms of the ESPP for Mr. Smith, Mr. DeNicola, Mr. Hollinshead and Ms. Galvin.  Under the Gelb Agreement, if Mr. Gelb’s employment is terminated for any reason prior to December 20, 2009, he will receive all of the severance benefits provided for under the ESPP (other than the vesting of stock options, all of which vested and were exchanged for cash in connection with the acquisition).  The potential payments to Mr. Gelb are disclosed under the “Potential Post-Employment and Change-in-Control Payments” heading in this Annual Report.
 
Name
  
Salary and Annual
Cash Award (a)($)
    
Welfare
Benefits (b)($)
    
Outplacement
Services (c)($)
    
Additional Payment
In Respect of
Retirement Benefits
(d)($)
    
Excise Tax
Gross-Up (e)($)
  
Mr. Smith                        
     8,910,000       401,422       40,000       - -       - -  
Mr. DeNicola                        
     2,862,803       474,059       40,000       430,428       2,721,785  
Ms. Galvin                        
     2,446,330       544,097       40,000       248,978       2,084,058  
Mr. Hollinshead
     1,897,888       440,310       40,000       - -       1,305,550  
 
(a)  
The payment amount is equal to three times the sum of each executive officer’s base salary plus target annual cash bonus award in effect on the date of termination of employment.
 
(b)  
Amounts shown represent an estimate of the value of welfare benefits. The executive medical plan amounts were valued assuming a discount rate of 6.25% and active medical premium amounts for two years.  The values for Mr. Smith and Mr. Hollinshead include a liability for pre-65 retiree life insurance using Statement of Financial Accounting Standards No. 106 methods and assumptions.  Values for Mr. DeNicola and Ms. Galvin include 24 months of life insurance premiums.  All values include 24 months of executive long term disability premium payments.
 

(c)  
Amounts shown represent the maximum amount payable for outplacement services if the executive officer uses one of the outplacement service providers offered by Lyondell.
 
(d)  
Amounts shown for Mr. DeNicola and Ms. Galvin represent the payments to them of the actuarial equivalent of amounts otherwise payable at age 55.  The table does not reflect an additional payment for Mr. Smith or Mr. Hollinshead because Mr. Smith and Mr. Hollinshead were vested and eligible for early retirement on the date of their respective terminations of employment, and Mr. Smith and Mr. Hollinshead received payment of their respective actual retirement benefits as described in connection with the Pension Benefits table in this Annual Report.
 
(e)  
The gross-up for the excise and other taxes is with respect to the cash severance award, $40,000 in outplacement services, present value of continued life, medical and disability coverages, stock options and restricted stock that vested upon the change-in-control, payment of the performance unit awards at 100% of the target performance level and any additional payment in respect of retirement benefits.
 

Compensation of Lyondell Executive Officers Following the Acquisition
 
After the acquisition, all legacy Lyondell executive officers continuing with Lyondell also began serving as officers of LyondellBasell Industries and all decisions regarding the compensation of executive officers are made by LyondellBasell Industries. As discussed above, pending any change in arrangements, legacy Lyondell executive officers continue to receive certain historical Lyondell benefits, including the ESSP, Lyondell’s Executive Deferral Plan and Lyondell’s SERP and, for Mr. Hollinshead, Equistar’s Deferral Plan and Equistar’s SERP.  Legacy Lyondell executive officers also continue to be covered by the ESPP.  However, compensation of Lyondell executive officers, including legacy Lyondell executive officers, is with regard to their services for LyondellBasell Industries and its subsidiaries as a whole and is not allocated among entities.  No compensation decisions are made by the Lyondell Board and no compensation is with regard to Lyondell and its subsidiaries on a separate basis.  Senior management of LyondellBasell Industries will be compensated on the basis of a fixed salary plus a bonus based on financial and qualitative performance objectives.  In addition, they will receive medium-term incentive pay based on a rolling three-year performance cycle.  Senior management also may receive equity linked (with regard to equity of a subsidiary of Access Industries) long-term compensation vesting after three years.
 
 
EXECUTIVE COMPENSATION

The following tables set forth information regarding the Chief Executive Officer and Chief Financial Officer of Lyondell during all of 2007 and the three other most highly compensated executive officers of Lyondell for 2007, all of whom were serving as such at December 31, 2007 (collectively, the “named executive officers”).  The titles set forth below relate to the positions held by each individual during 2007.  Effective January 1, 2008, Mr. Smith, Mr. DeNicola, Mr. Hollinshead and Ms. Galvin ceased to serve as officers of Lyondell and Mr. Gelb assumed the position with Lyondell described above under “Executive Officers and Directors of the Registrant” in this Annual Report. The notes to the tables set forth additional explanatory information regarding the compensation described in the tables.
 
Summary Compensation Table
 
Name and
Principal
Position
Year
  
Salary
($) (a)
    
Stock
Awards
($) (b)
    
Option
Awards
($) (c)
    
Non-Equity
Incentive
Plan
Compensation
($) (d)
    
Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
($) (e)
    
All Other
Compensation
($) (f)
    
Total
($)
  
Dan F. Smith
Chairman, President
and Chief Executive
Officer
2007
     1,348,077       19,652,387       2,521,044       3,240,000       23,294       31,772,425       58,557,227  
2006
     1,250,000       7,125,048       1,870,864       3,000,000       2,205,473       166,817       15,618,202  
T. Kevin DeNicola
Senior Vice President,
Chief Financial
Officer
2007
     577,119       4,814,611       753,649       751,847       19,539       9,186,744       16,103,509  
2006
     514,644       1,590,088       277,122       669,037       435,616       63,210       3,549,717  
Morris Gelb
Executive Vice
President and Chief
Operating Officer
2007
     801,708       7,903,971       985,699       1,284,275       394,875       9,690,383       21,060,911  
2006
     752,544       3,229,580       755,915       1,204,070       2,896,141       90,324       8,928,574  
Kerry A. Galvin
Senior Vice President
and General
Counsel
2007
     509,029       3,475,775       539,828       611,582       18,460       7,187,469       12,342,143  
2006
     477,256       1,182,089       201,817       572,707       267,129       55,017       2,756,015  
John A. Hollinshead
Senior Vice President,
Human Resources
2007
     407,526       2,169,645       275,795       448,963       122,327       6,347,528       9,771,784  
2006
     375,804       846,504       205,962       413,384       630,128       68,490       2,540,272  

 
(a)
See the “Overview and Objectives of Lyondell’s Pre-Acquisition Executive Compensation Program” and “Elements of Lyondell’s Pre-Acquisition Executive Compensation Program” sections of the Compensation Discussion and Analysis for information on base salary.
 
(b)
The Stock Awards column shows the compensation cost for each of 2007 and 2006 of awards granted in each such year and prior periods under the Lyondell Chemical Company Amended and Restated 1999 Incentive Plan, referred to as the Incentive Plan.  The compensation cost shown in the Stock Awards column, as set forth in the following table and described below, relates to grants of (1) restricted stock and associated cash payments and (2) performance units (and performance shares, which were granted before 2005).  These amounts reflect the effect of the acceleration of awards in connection with the change-in-control, as discussed in more detail below.
 

Name
Year
  
Restricted Stock ($)
    
Associated Cash Payment with Respect to the Vesting of the Restricted Stock ($)
    
Performance Units and Performance Shares ($)
    
Total Reflected in Stock Awards Column ($)
  
Mr. Smith
2007
    
1,158,234
      
2,526,308
      
15,967,845
      
19,652,387
  
 
2006
    
1,063,436
      
1,256,478
         4,805,134         7,125,048  
Mr. DeNicola
2007
    
   352,330
          693,452         3,768,829         4,814,611  
 
2006
    
   175,840
          209,265         1,204,983         1,590,088  
Mr. Gelb
2007
    
  454,358
        1,009,256         6,440,357          7,903,971  
 
2006
    
  443,973
            527,161         2,258,446          3,229,580  
Ms. Galvin
2007
    
 252,534
            499,225         2,724,016          3,475,775  
 
2006
      128,983            153,606             899,500          1,182,089  
Mr. Hollinshead
2007
      126,864            278,157         1,764,624          2,169,645  
 
2006
       118,791            140,569      
     587,144
      
     846,504
  
 
 
Grants of Restricted Stock and Associated Cash Payments
 
The amounts shown in the Stock Awards column and the above table reflect the 2007 and 2006 compensation cost, respectively, recognized for financial statement reporting purposes computed in accordance with Statement of Financial Accounting Standards No. 123R (“SFAS 123R”), but excluding any impact of estimated forfeiture rates as required by SEC regulations, associated with:
 
·  
the portion of grants made in 2007 or 2006 of restricted stock and associated cash payments recognized in the year of grant; and
 
·  
the portion of all other outstanding grants of shares of restricted stock and associated cash payments, recognized during 2007 or 2006.
 
Restricted stock was accounted for as an equity award, while the associated cash component was accounted for as a liability award.  Lyondell recognized compensation cost using graded-vesting over the three-year vesting period; however, due to the acceleration of vesting of awards in connection with the change-in-control, all remaining compensation cost was recognized in 2007.  Equity awards were measured using the closing price of Lyondell common stock at the date of grant while liability awards were measured using the closing price of Lyondell common stock at the end of each reporting period.  For retirement eligible officers, beginning with the 2006 awards, compensation cost also included the full grant date fair value of the restricted stock awards and the total fair value of the associated cash payments at year-end.  Mr. Smith, Mr. Gelb and Mr. Hollinshead were retirement eligible in 2006 and 2007.  See also Note 22 to Lyondell’s Consolidated Financial Statements included in this Annual Report for assumptions made in the valuation.  See also the Grants of Plan-Based Awards table and the “Restricted Stock Program” section of the Compensation Discussion and Analysis of this Annual Report for a description of the restricted stock and associated cash payments.  In connection with the acquisition, all restricted stock, including the associated cash payment awards, became fully vested.  As a result of the accelerated vesting, the compensation cost for 2007 set forth in the table above includes (1) in the case of restricted stock (equity awards), the vesting of which was accelerated, all amounts that in the absence of the acquisition would have been expected to be recognized in periods subsequent to 2007, and (2) in the case of the associated cash payments (liability awards) that were accelerated, amounts equal to the number of notional shares represented thereby multiplied by the $48.00 per share merger consideration (or $46.52 in the case of the awards that vested upon shareholder approval), less the compensation cost recognized in respect of those awards in prior periods.  See the “Payments in Connection With the Acquisition” section of Compensation Discussion and Analysis for information regarding the payments to named executive officers in respect of restricted stock in connection with the acquisition.
 

Performance Unit Grants
 
The amounts shown in the Stock Awards column and the above table also reflect the 2007 and 2006 compensation cost, respectively, recognized for financial statement reporting purposes computed in accordance with SFAS 123R, but excluding any impact of estimated forfeiture rates as required by SEC regulations, associated with:
 
·  
the portion of performance unit awards made in 2007 and 2006 recognized in the year of grant; and
 
·  
the portion of all other outstanding performance units and performance shares, recognized during 2007 or 2006.
 
Performance shares and performance units were accounted for as a liability award, with compensation cost recognized ratably over the three-year performance period; however, due to the acceleration of performance units in connection with the change-in-control, all remaining compensation cost was recognized in 2007.  See also Note 22 to Lyondell’s Consolidated Financial Statements included in this Annual Report for assumptions made in the valuation.  See also the Grants of Plan-Based Awards table and the “Performance Units” section of the Compensation Discussion and Analysis in this Annual Report for a description of the performance units.  In connection with the acquisition, all performance units were paid out in cash at the 100% level.  As a result of the accelerated vesting, the compensation cost for 2007 set forth in the table above includes an amount equal to the number of performance units multiplied by the $48.00 per share merger consideration (or $47.01 in the case of awards that vested upon shareholder approval), less the compensation cost recognized in respect of those awards in prior periods.  See the “Payments in Connection With the Acquisition” section of Compensation Discussion and Analysis for information regarding the payments to named executive officers in respect of the performance units in connection with the acquisition.
 
(c)  
The amounts shown in the Option Awards column reflect the 2007 and 2006 compensation cost, respectively, recognized for financial statement reporting purposes computed in accordance with SFAS 123R, but excluding any impact of estimated forfeiture rates as required by SEC regulations, associated with:
 
·  
the portion of grants made in 2007 or 2006 of stock options recognized in the year of grant; and
 
·  
the portion of all other outstanding stock options, recognized during 2007 or 2006.
 
The fair value of each option award was estimated, based on several assumptions, on the date of grant using a Black-Scholes option valuation model.  Upon adoption of SFAS 123R, beginning with 2006 awards, Lyondell modified its methods used to determine these assumptions based on the SEC’s Staff Accounting Bulletin No. 107.  The fair value and the assumptions used for all outstanding unvested grants are shown below:
 
   
2003
    
2004
    
2005
    
2006
    
2007
  
Fair value per share of options granted                                                          
   $ 3.02     $ 3.38     $ 9.64     $ 6.23     $ 9.15  
Fair value assumptions:                                                          
                                        
Dividend yield                                                      
     6.37 %     6.38 %     3.11 %     3.43 %     3.60 %
Expected volatility                                                      
     42.16 %     34.93 %     35.21 %     39.80 %     35.09 %
Risk-free interest rate                                                      
     4.23 %     4.58 %     4.24 %     4.53 %     4.73 %
Expected term, in years                                                      
     10       10       10       6       6  
 

Stock options were accounted for as equity instruments, with compensation cost recognized using graded-vesting over the three-year vesting period; however, due to the acceleration of vesting of stock options in connection with the change-in-control, all remaining compensation cost was recognized in 2007.  For retirement eligible officers, beginning with the 2006 stock option awards, compensation cost also included the full grant date fair value of the stock options granted.  Mr. Smith, Mr. Gelb and Mr. Hollinshead were retirement eligible in 2006 and 2007. See also Note 22 to Lyondell’s Consolidated Financial Statements included in this Annual Report for assumptions made in the valuation.  See also the Grants of Plan-Based Awards table and the “Stock Options” section of the Compensation Discussion and Analysis in this Annual Report for a description of the stock options.  In connection with the acquisition, all options were cancelled in exchange for a cash payment.  As a result of the accelerated vesting, the compensation cost for 2007 set forth in the table above includes, with respect to options accelerated as a result of the change-in-control, all amounts that in the absence of the acquisition would have been expected to be recognized in periods subsequent to 2007.  See the “Payments in Connection With the Acquisition” section of Compensation Discussion and Analysis for information regarding the payments to named executive officers in respect of stock options in connection with the acquisition.
 
(d)
Lyondell’s annual cash bonus award meets the SEC’s definition of a non-equity incentive plan.  Accordingly, the Non-Equity Incentive Plan Compensation column shows the amounts paid in 2008 with respect to the 2007 annual cash bonuses and the amounts paid in 2007 with respect to the 2006 annual cash bonuses.  See the Grants of Plan-Based Awards table, and the “Overview and Objectives of Lyondell’s Pre-Acquisition Executive Compensation Program” and “Elements of Lyondell’s Pre-Acquisition Executive Compensation Program” sections of the Compensation Discussion and Analysis in this Annual Report for information on the annual cash bonus.
 
(e)
The Change in Pension Value and Nonqualified Deferred Compensation Earnings column for 2006 includes:
 
·  
the increases during 2006 in the actuarial present values of the Lyondell Retirement Plan and the Lyondell Supplementary Executive Retirement Plan (SERP) and, for Mr. Hollinshead, the Equistar Retirement Plan and the Equistar SERP; and
 
·  
the above market earnings during 2006 on account balances under (1) Lyondell’s Executive Deferral Plan and Executive Supplementary Savings Plan (ESSP), (2) for Mr. Hollinshead, the Equistar Deferral Plan, and, (3) for Mr. Gelb, the AYCO Trust, which is described in footnote (d) to the Nonqualified Deferred Compensation table in this Annual Report.
 
Set forth below are the change in pension value and above market earnings on nonqualified deferred compensation for 2007 and 2006 for each of the named executive officers.  For Mr. Hollinshead, amounts reflect both the Lyondell plans and comparable Equistar plans.  Following completion of the acquisition, a lump sum amount was paid out during 2007 to each executive officer under the Lyondell SERP.  For participants who were eligible for retirement on December 20, 2007, the payments were equal to the lump sum that would have been payable in the event of actual termination.  For participants who were not eligible for retirement on December 20, 2007, the payments were equal to the difference between the total benefit actuarially reduced from age 65 to current age and the present value of the benefit available to the participant under the qualified retirement plan.  The assumptions used in calculating these payments were a 5.07% interest rate and a fixed blend of 50% male and 50% female mortality rates under the 1994 Group Annuity Reserving Table projected to 2002.  As a result of the 2007 payments, the change in SERP values reported below, as well as the total change in pension value reported below, are negative numbers.  As required by SEC regulations, the negative amounts reflected in the table below for the total change in pension value are not presented in the Summary Compensation Table.
 
 
     
Change in Pension Value ($)
    
Above-Market
Nonqualified Deferred
Compensation
Earnings under
    
Above-Market
Nonqualified Deferred
Compensation
  
Name
Year
  
Retirement Plan
    
SERP
    
Total Change in
Pension Value
    
Executive Deferral
Plan and ESSP ($)
    
Earnings in AYCO
Trust ($)
  
Mr. Smith                      
2007
    
63,627
       (6,502,065)       (6,438,438)        23,294      
- -
  
2006
     54,670       2,130,132       2,184,802         20,671      
- -
  
Mr. DeNicola                      
2007
     15,378          (446,648)          (431,270)         19,539      
- -
  
2006
     23,575          394,743          418,318         17,298      
- -
  
Mr. Gelb                      
2007
     69,237       (2,601,871)       (2,532,634)      
217,985
       176,890  
2006
     59,267       2,431,132        2,490,399        193,441       212,301  
Ms. Galvin                      
2007
     3,751          (316,285)          (312,534)          18,460      
- -
  
2006
     14,617           237,271          251,888          15,241      
- -
  
Mr. Hollinshead
2007
     18,027           (693,480)          (675,453)        122,327      
- -
  
2006
     13,300           527,036          540,336         89,792      
- -
  

 
See the Pension Benefits table in this Annual Report for a description of the plan provisions and assumptions used to calculate the present value of pension benefits at
December 31, 2007.
 
The present value of each participant’s accumulated benefits at December 31, 2006 was calculated on the same basis as that used in Note 18 to Lyondell’s Consolidated Financial Statements included in Lyondell’s Annual Report on Form 10-K for the year ended December 31, 2006, with the exception that each participant was assumed to continue to be actively employed by Lyondell until age 65 (earliest unreduced retirement age) and to immediately commence his or her benefit at that time.  Also, the 2006 amounts were calculated using the same assumptions as described in footnote (c) to the Pension Benefits table, with the following exceptions:
 
·  
a discount rate of 5.75%;

·  
future interest rates for conversion of annuities to lump sums assumed to be 4.75%, applicable to years before the lump sum conversion basis is changed by the Pension Protection Act of 2006 (“PPA”);

·  
the future segmented yield curve used for conversion of annuities to lump sums assumed to be equivalent to a single interest rate of 5.50%, applicable to years after the lump sum conversion basis is changed by the PPA, with the change phased in over five years;  and

·  
forthcoming Treasury Department regulations assumed to specify that the mortality table used for conversion of annuities to lump sums will be a fixed blend of 50% of the male and 50% of the female RP-2000 healthy annuitant tables (no blue or white collar adjustment), applicable to years after the lump sum conversion basis is changed by the PPA.

The present value of each participant’s accumulated benefits at December 31, 2005 was calculated on the same basis as that used in Note 18 to Lyondell’s Consolidated Financial Statements included in Lyondell’s Annual Report on Form 10-K for the year ended December 31, 2005, with the exception that each participant was assumed to continue to be actively employed by Lyondell until age 65 (earliest unreduced retirement age) and immediately commence his or her benefit at that time.  Also, the 2005 amounts were calculated using the same assumptions as described in footnote (c) to the Pension Benefits table, with the following exceptions:

 
·  
the same post-retirement mortality table was used but with no projections;
 
·  
a discount rate of 5.50%;
 
·  
future interest rates for conversion of annuities to lump sums assumed to be 4.50%, applicable to all future years; and
 

·  
the PPA had not been passed as of December 31, 2005, and therefore no changes resulting from the PPA were anticipated as of December 31, 2005.
 
In addition, Mr. Hollinshead has one year of credited service under the Equistar Retirement Plan and the Equistar SERP, reflecting his previous service with Equistar.  The terms of the Equistar Retirement Plan and the Equistar SERP are substantially the same as the Lyondell Retirement Plan and the Lyondell SERP, respectively, except that the Equistar Retirement Plan defines a lump sum as a percentage of final average earnings.  In Mr. Hollinshead’s case, the age 65 lump sum is based on 15% of his final average earnings as of December 31, 2007.  All of the assumptions noted above with respect to the Lyondell plans are the same as those used for the Equistar plans, and the basis for converting the Equistar lump sum to an annuity is the same as the basis for converting the Lyondell annuity to a lump sum.
 
See also the “Potential Post-Employment and Change-in-Control Payments” section of this Annual Report for a description of Lyondell’s retirement arrangements.  A description of Lyondell’s Executive Deferral Plan and ESSP and Equistar’s Deferral Plan is provided in connection with the Nonqualified Deferred Compensation table in this Annual Report.  See also the “Retirement and Other Post-Termination Compensation” section of the Compensation Discussion and Analysis in this Annual Report.  Following the acquisition, lump sum payments were made to each participant under Lyondell’s Executive Deferral Plan.  See the “Payments in Connection With the Acquisition” section of the Compensation Discussion and Analysis for information regarding the payments to named executive officers under Lyondell’s Executive Deferral Plan.
 
(f)
The All Other Compensation column includes:
 
·  
payments by Lyondell during 2007 and 2006 for tax preparation, estate planning and financial counseling and related tax reimbursements;
 
·  
contributions by Lyondell during 2007 and 2006 to the ESSP;
 
·  
the Executive Medical Plan premiums, Executive Life Insurance Plan premiums and Executive Long-Term Disability Plan premiums paid by Lyondell during 2007 and 2006;
 
·  
the 2007 and 2006 incremental cost of personal use of the corporate airplane (as described below in footnote (f) to the All Other Compensation table); and
 
·  
change-in-control/severance payments in connection with the acquisition (as described below in footnote (g) to the All Other Compensation table)
 
See the All Other Compensation Table set forth below for more information regarding these items.
 
In addition, Lyondell pays for club memberships for employees, including executive officers.  Use of the club memberships is primarily for business purposes.  Employees are required to reimburse Lyondell for the incremental cost of any personal use of the club memberships.  Thus, there is no incremental cost to Lyondell for the personal use by employees of the club memberships. None of the named executive officers have club memberships, with the exception of Mr. Smith who had a membership with a dining club.  See the “Other Benefits” section of the Compensation Discussion and Analysis in this Annual Report.
 

All Other Compensation Table
 
Name
Year
  
Tax, Estate
Planning
and
Financial
Counseling
Reimbursement
($) (a)
    
Tax, Estate Planning and Financial Counseling Tax Reimbursement
($) (a)
    
ESSP
($) (b)
    
Medical
Plan
Premium
($) (c)
    
Life
Insurance
Premiums
($) (d)
    
Long-Term
Disability
Plan
Premiums
($) (e)
    
Personal
Use of
Corporate
Airplane
($) (f)
    
Change-in-
Control/
Severance
Payments
($) (g)
    
Total
Reflected in
All Other
Compensation
Column
($)
  
Mr. Smith
2007
     18,849       11,309       80,885       22,496       - -       9,963       - -       31,628,923       31,772,425  
2006
     4,000       2,400       74,885       19,133       - -       9,958       56,441       - -       166,817  
Mr. DeNicola
2007
     - -       - -       34,627       18,994       6,062       9,874       - -       9,117,187       9,186,744  
2006
     4,000       2,400       30,787       16,153       - -       9,870       - -       - -       63,210  
Mr. Gelb
2007
     9,103       5,462       48,102       29,995       8,412       9,963       - -       9,579,346       9,690,383  
2006
     6,113       3,668       45,075       25,510       - -       9,958       - -       - -       90,324  
Ms. Galvin
2007
     3,000       1,800       30,542       9,998       - -       8,927       - -       7,133,202       7,187,469  
2006
     5,645       3,387       28,564       8,499       - -       8,922       - -       - -       55,017  
Mr. Hollinshead
2007
     7,254       4,353       24,452       29,995       - -       10,460       - -       6,271,014       6,347,528  
2006
     6,662       3,997       22,518       25,510       - -       9,803       - -       - -       68,490  
 

 
 
(a)
See “Compensation Discussion and Analysis – Other Benefits” for a description of the tax preparation, estate planning and financial counseling and related tax reimbursements provided by Lyondell.
 
(b)
The officers of Lyondell may defer all or a portion of their ESSP amounts under Lyondell’s Executive Deferral Plan, which is described in connection with the Nonqualified Deferred Compensation table in this Annual Report. Mr. Hollinshead and Ms. Galvin deferred their ESSP amounts shown in the table for 2006, and Messrs. DeNicola and Hollinshead and Ms. Galvin deferred their ESSP amounts shown in the table for 2007. A description of Lyondell’s ESSP and Lyondell’s Executive Deferral Plan is provided under “Compensation Discussion and Analysis” in this Annual Report.
 
(c)
See “Potential Post-Employment and Change-in-Control Payments” and the “Other Benefits” section of the Compensation Discussion and Analysis in this Annual Report for a description of Lyondell’s Executive Medical Plan.
 
(d)
See “Potential Post-Employment and Change-in-Control Payments” and the “Other Benefits” section of the Compensation Discussion and Analysis in this Annual Report for a description of Lyondell’s Executive Life Insurance Program.  Mr. Smith, Mr. Hollinshead and Ms. Galvin have elected to participate in Lyondell’s self-insurance program and Messrs. DeNicola and Gelb have elected to participate in Lyondell’s group term life insurance plan.
 
(e)
See “Potential Post-Employment and Change-in-Control Payments” and the “Other Benefits” section of the Compensation Discussion and Analysis in this Annual Report for a description of Lyondell’s Executive Long-Term Disability Plan.
 
(f)
Use of the corporate airplane is primarily for business purposes.  The amount in the table represents the incremental cost of personal use of the corporate airplane by Mr. Smith in 2006 calculated based on the variable operating costs to Lyondell. Variable operating costs include fuel costs, trip-related maintenance, landing/ramp fees, on-board catering and other miscellaneous variable costs.  Fixed costs which do not change based on usage, such as pilots’ salaries and training, the lease costs of Lyondell’s airplane, and the airplane management contract, are excluded.  For 2007, Mr. Smith reimbursed Lyondell for the entire incremental cost of personal use of the corporate airplane.
 


(g)
Upon the completion of the acquisition, a change-in-control occurred for purposes of change-in-control arrangements and various benefit and incentive plans in which Lyondell’s executive officers are participants.  In addition, in the case of some awards, the approval of the acquisition by shareholders constituted a change-in-control.  The change-in-control resulted in the triggering, accelerating or vesting of certain rights under those plans and arrangements.  In addition, Mr. Smith, Mr. DeNicola, Mr. Hollinshead and Ms. Galvin have been determined to have a qualified termination under the Executive Severance Pay Plan, or ESPP, following the acquisition and therefore either are receiving or will receive in 2008 benefits under that plan.
 
The table below sets forth, for each of Lyondell’s named executive officers, the following amounts:
 
·  
the value of unvested options that vested as a result of the change-in-control (calculated by multiplying (1) the excess of the $48.00 per share consideration over the per share exercise price of the option by (2) the number of shares subject to the options), less the compensation costs recognized in 2006 and 2007 in connection with those options and included in the amounts set forth under column (c) of the Summary Compensation Table;
 
·  
the value of the shares of restricted stock and associated cash payments that vested as a result of the change-in-control based on (1) in the case of all restricted stock grants and in the case of all associated cash payments other than those with respect to the 2005 awards, the $48.00 per share consideration multiplied by the sum of the number of shares of restricted stock and the notional number of shares represented by such cash payment awards that vested in connection with the acquisition and (2) in the case of the associated cash payments related to the 2005 restricted stock grants, $46.52 (the closing price of the common stock on November 20, 2007, the date of shareholder approval of the acquisition and the date that those shares vested) multiplied by the number of shares of restricted stock vesting on November 20, 2007, in each case, less the compensation costs recognized in 2006 and 2007 in connection with those awards and included in the amounts set forth under column (b) of the Summary Compensation Table;
 
·  
the cash payments made with respect to the performance units that became payable as a result of the change-in-control, which were $48.00 per unit for units that vested upon the effectiveness of the acquisition and $47.01 per unit for units that vested on November 20, 2007, less the compensation costs recognized in 2006 and 2007 in connection with those awards and included in the amounts set forth under column (b) of the Summary Compensation Table;
 
·  
amounts paid in respect of the Lyondell SERP as a result of the change-in-control; and
 
·  
in the case of Mr. Smith, Mr. DeNicola, Mr. Hollinshead and Ms. Galvin, for whom it has been determined that a qualified termination has occurred under the ESPP, amounts paid or payable and the estimated value of benefits being provided pursuant to the terms of the ESPP.
 
See the “Payments in Connection With the Acquisition” section of Compensation Discussion and Analysis for additional information regarding the payments set forth below to named executive officers in connection with the acquisition, including the valuation of the amounts paid or payable under the ESPP.
 
Change-in-Control/Severance Payments
 
                       
Executive Severance Pay Plan
        
Name
  
Unvested
Options ($)
  
Unvested
Restricted
Stock and
Associated
Cash ($)
  
Performance
Units ($)
    
SERP
Payout ($)
    
Salary and
Annual Cash
Award ($)
    
Welfare
Benefits ($)
    
Additional
Payment
In Respect of Retirement Benefits ($)
    
Excise Tax
Gross-Up ($)
    
Total ($)
  
Mr. Smith                       
     5,028,173     1,402,776     527,803       15,358,749       8,910,000       401,422       - -       - -       31,628,923  
Mr. DeNicola                       
     1,185,148     330,352     129,232       983,380       2,862,803       474,059       430,428       2,721,785       9,117,187  
Mr. Gelb                       
     1,993,456     562,497     235,293       6,788,100       - -       - -       - -       - -       9,579,346  
Ms. Galvin                       
     854,094     238,572     95,574       621,499       2,446,330       544,097       248,978       2,084,058       7,133,202  
Mr. Hollinshead                       
     550,283     154,522     61,331       1,861,130       1,897,888       440,310       - -       1,305,550       6,271,014  


Grants of Plan-Based Awards
 
     
Estimated Possible Payouts
Under Non-Equity Incentive Plan Awards (a)
    
Estimated Future Payouts
Under Equity Incentive Plan Awards (b)
    
All Other
Stock
Awards:
Number of
Shares of
Stock or
    
All Other
Option
Awards:
Number of
Securities
Underlying
    
Exercise
or Base
Price of
Option
    
Grant
Date Fair
Value of
Stock and
Option
  
Name
Grant
Date
  
Threshold
($)
  
Target
($)
    
Maximum
($)
    
Threshold
(#)
    
Target
(#)
    
Maximum
(#)
    
Units
(#) (c)
    
Options
(#) (d)
    
Awards
($/Sh) (d)
    
Awards
($) (e)
  
Mr. Smith                     
2/22/2007
     - -       1,620,000       3,240,000       26,430       132,148       264,296       65,996       254,529       31.97       8,663,604  
Mr. DeNicola                     
2/22/2007
     - -       375,924       751,847       6,159       30,795       61,590       15,380       59,314       31.97       2,018,938  
Mr. Gelb                     
2/22/2007
     - -       642,138       1,284,275       10,214       51,071       102,142       25,506       98,367       31.97       3,348,225  
Ms. Galvin                     
2/22/2007
     - -       305,791       611,582       4,390       21,951       43,902       10,962       42,279       31.97       1,439,081  
Mr. Hollinshead
2/22/2007
     - -       224,481       448,963       2,877       14,383       28,766       7,182       27,702       31.97       942,906  

 
(a)  
Amounts set forth in these columns relate to the 2007 annual cash bonus awards granted to Messrs. Smith, DeNicola, Gelb and Hollinshead and to Ms. Galvin pursuant to the Incentive Plan. See the “Annual Cash Bonus Award” section of the Compensation Discussion and Analysis in this Annual Report for a description of the annual cash bonus awards.  The amounts set forth above provide the threshold, target and maximum amounts at which the 2007 annual cash bonus awards could have been paid under the terms of the awards.  Lyondell’s performance and actual payouts under these awards were calculated in January 2008 and the amounts of the actual bonus payments made are set forth in the Summary Compensation Table under the Non-Equity Incentive Plan Compensation column in this Annual Report.
 
(b)  
Amounts set forth in these columns relate to the 2007 performance unit awards granted to Messrs. Smith, DeNicola, Gelb and Hollinshead and to Ms. Galvin pursuant to the Incentive Plan.  See the “Performance Units” section of the Compensation Discussion and Analysis for a description of the performance unit awards.  In connection with the acquisition, all performance units, including the 2007 grants in this table, were paid out at 100% of the target performance level.  See the “Payments in Connection With the Acquisition” section of Compensation Discussion and Analysis for information regarding the actual payments to named executive officers in respect of all outstanding performance units in connection with the acquisition.
 
(c)  
Amounts set forth in this column relate to the grants of restricted stock and associated cash payments that Messrs. Smith, DeNicola, Gelb and Hollinshead and Ms. Galvin received in 2007 pursuant to the Incentive Plan, which consist of (1) 32,998 shares, 7,690 shares, 12,753 shares, 3,591 shares and 5,481 shares of restricted stock, respectively, and (2) an associated cash payment payable at the vesting of those shares of restricted stock equal to the market value of the number of shares vesting. Since the amount of the associated cash payment was based on the closing price of the stock, the cash payment was denominated in shares for purposes of this table. See the “Restricted Stock Program” section of the Compensation Discussion and Analysis for a description of the restricted stock and associated cash payments.  In connection with the acquisition, (1) all outstanding unvested shares of restricted stock and associated cash payment awards vested, including the 2007 grants in this table, (2) each restricted stock award was paid out in an amount equal to the $48.00 per share merger consideration multiplied by the number of shares of restricted stock vesting and (3) the associated cash payments were paid out based on the closing price on the date of shareholder approval ($46.52) or the $48.00 per share merger consideration, as applicable.  See the “Payments in Connection With the Acquisition” section of Compensation Discussion and Analysis for information regarding the actual payments to named executive officers in respect of all outstanding restricted stock and associated cash payment awards in connection with the acquisition.
 

(d)  
This column relates to the 2007 grants of stock options to Messrs. Smith, DeNicola, Gelb and Hollinshead and to Ms. Galvin pursuant to the Incentive Plan. See the “Stock Options” section of the Compensation Discussion and Analysis for a description of the stock options.  As provided in Lyondell’s Incentive Plan, the exercise price for stock options could not be less than the closing price of Lyondell’s common stock on the grant date.  The exercise price for the grant of options to the executive officers in 2007 was $31.97, which was the closing price of Lyondell’s common stock on the date of grant.  In connection with the acquisition, unvested options to acquire shares of Lyondell common stock (including the 2007 grants in this table) that were outstanding immediately before the acquisition vested and all outstanding options were cancelled in exchange for a cash payment equal to $48.00 multiplied by the number of shares subject to each option, less the aggregate exercise price of the option.  See the “Payments in Connection With the Acquisition” section of Compensation Discussion and Analysis for information regarding the actual payments to named executive officers in respect of all outstanding stock options in connection with the acquisition.
 
(e)  
The full grant date fair value of each award of restricted stock, the associated cash payment with respect to the vesting of the restricted stock, the stock options and the performance units granted on February 22, 2007, computed in accordance with SFAS 123R, is as follows:
 
Name
  
Restricted Stock
($)
    
Associated Cash
Payment with
Respect to the
Vesting of the
Restricted Stock
($)
    
Stock Options
($)
    
Performance Units
($)
    
Total Reflected in Grant Date Fair Value Column
($)
  
Mr. Smith
     1,054,946       1,054,946       2,328,940       4,224,772       8,663,604  
Mr. DeNicola
     245,849       245,849       542,723       984,517       2,018,938  
Mr. Gelb
     407,713       407,713       900,059       1,632,740       3,348,225  
Ms. Galvin
     175,227       175,227       386,853       701,774       1,439,081  
Mr. Hollinshead
     114,804       114,804       253,473       459,825       942,906  

 
Outstanding Equity Awards at Fiscal Year-End
 
In connection with the acquisition, (1) all outstanding Lyondell stock options vested and were cancelled and exchanged for a cash payment, (2) all unvested shares of Lyondell restricted stock and the associated cash payment awards vested and were converted into a cash payment and (3) all outstanding Lyondell performance units were paid out in cash.  See the “Payments in Connection With the Acquisition” section of Compensation Discussion and Analysis for information regarding these payments to named executive officers in connection with the acquisition.  As a result of the acquisition and these payments, Lyondell had no outstanding equity awards at December 31, 2007.
 
Option Exercises and Stock Vested
 
The following table provides information regarding exercises of stock options and the vesting of restricted stock during 2007, as well as information concerning the cancellation and payment of cash for outstanding stock options and the vesting and payment of cash for restricted stock in connection with the acquisition.
 
   
Option Awards (a)
    
Stock Awards (b)
  
Name
  
Number of Shares Acquired on Exercise (#)
    
Value Realized on Exercise ($)
    
Number of Shares Acquired on Vesting (#)
    
Value Realized on Vesting ($)
  
Mr. Smith                                          
     2,269,137       52,992,932       208,154       8,498,997  
Mr. DeNicola                                          
     575,942       13,727,331       50,890       2,055,908  
Mr. Gelb                                          
     549,242       8,401,607       87,852       3,526,815  
Ms. Galvin                                          
     489,723       10,017,866       37,080       1,492,948  
Mr. Hollinshead                                          
     291,158       7,204,616       23,430       949,685  
 

(a)  
With respect to options exercised before the acquisition, the value realized represents the difference between the actual market price at the time of exercise and the option exercise price. With respect to options outstanding immediately prior to the effective time of the acquisition, the value realized represents the cash payment that each option holder received in connection with the acquisition, which amount was equal to $48.00 per share multiplied by the number of shares subject to each option, less the aggregate purchase price of the option.  See the “Payments in Connection With the Acquisition” section of Compensation Discussion and Analysis for information regarding the payments to named executive officers in respect of stock options in connection with the acquisition.
 
The table set forth below reflects, of the shares acquired on exercise:
 
·  
those which were acquired pursuant to stock options exercised before the acquisition;
 
·  
those which were cancelled and paid out in connection with the acquisition; and
 
·  
the aggregate values realized on exercise or cancellation, as applicable.
 
   
Options Exercised
    
Options Cancelled
    
Total
  
Name
  
Shares (#)
    
Value ($)
    
Shares (#)
    
Value ($)
    
Shares (#)
    
Value ($)
  
Mr. Smith                    
     680,793       8,336,661       1,588,344       44,656,271       2,269,137       52,992,932  
Mr. DeNicola                    
     202,821       3,380,163       373,121       10,347,168       575,942       13,727,331  
Mr. Gelb                    
     368,784       4,986,398       180,458       3,415,209       549,242       8,401,607  
Ms. Galvin                    
     310,074       5,529,379       179,649       4,488,487       489,723       10,017,866  
Mr. Hollinshead
     85,000       1,279,000       206,158       5,925,616       291,158       7,204,616  

 
Of the shares shown as options exercised in the table above, all of Mr. Smith’s, Mr. Gelb’s, Mr. Hollinshead’s and Ms. Galvin’s shares, and 59,702 of Mr. DeNicola’s shares, were acquired and sold during 2007 pursuant to pre-established Rule 10b5-1(c) trading plans.
 
(b)  
The amounts represent:
 
·  
shares of restricted stock that:
 
o  
vested in January and February 2007 pursuant to their normal vesting schedules;
 
o  
vested in connection with shareholder approval of the acquisition on November 20, 2007; and
 
o  
vested in connection with the closing of the acquisition on December 20, 2007; and
 
·  
in each case, an associated cash payment with respect to those shares.
 
The amount of the associated cash payment equals the value of the stock at vesting and, accordingly, the cash payment is denominated in shares of Lyondell common stock for purposes of this table.
 
As a result of the closing of the acquisition, all shares of restricted stock were converted on the same basis as all other shares of common stock outstanding into the right to receive the $48.00 per share consideration.  The value of the associated cash payments is based on the time that the relevant shares of restricted stock became vested.
 
The amount of the associated cash payments equals:
 
·  
for the shares that vested in January and February 2007, the market value of the stock on the date of vesting multiplied by the number of shares vesting;
 

·  
for the shares that vested in connection with shareholder approval of the acquisition on November 20, 2007, $46.52 (the closing price on the date of shareholder approval) multiplied by the number of shares vesting; and
 
·  
for the shares that vested in connection with the closing of the acquisition on December 20, 2007, the $48.00 per share consideration multiplied by the number of shares vesting.
 
See the “Payments in Connection With the Acquisition” section of Compensation Discussion and Analysis for information regarding the payments to named executive officers in respect of restricted stock in connection with the acquisition.
 
The table set forth below reflects, of the shares (including the associated cash payments) acquired on vesting:
 
·  
those which vested in January and February 2007 pursuant to their normal vesting schedules;
 
·  
those which vested and were paid out in connection with the acquisition; and
 
·  
in each case, the aggregate values realized on vesting.
 
 
Normal Vesting Schedule
  
Vested With the Acquisition
  
Total
Name
Shares (#)
  
Value ($)
  
Shares (#)
  
Value ($)
  
Shares (#)
  
Value ($)
Mr. Smith
81,934
  
2,452,641
  
126,220
  
6,046,356
  
208,154
  
8,498,997
Mr. DeNicola
21,284
  
637,809
  
29,606
  
1,418,100
  
50,890
  
2,055,909
Mr. Gelb
37,880
  
1,133,600
  
49,972
  
2,393,216
  
87,852
  
3,526,816
Ms. Galvin
15,782
  
472,855
  
21,298
  
1,020,093
  
37,080
  
1,492,948
Mr. Hollinshead
9,598
  
287,167
  
13,832
  
662,518
  
23,430
  
949,685

 
Pension Benefits
 
Name
Plan Name
(a)
  
Number of Years
Credited Service
(#) (b)
    
Present Value of
Accumulated
Benefit
($) (c)
    
Payments During
Last Fiscal Year
($) (d)
  
Mr. Smith                       
Lyondell Chemical Company Retirement Plan
    
33
          976,371               - -  
Lyondell Chemical Company Supplementary
Executive Retirement Plan
    
33
       4,554,698       15,358,749  
Mr. DeNicola                       
Lyondell Chemical Company Retirement Plan
    
17
          307,886           - -  
Lyondell Chemical Company Supplementary
Executive Retirement Plan
    
17
          363,397          983,380  
Mr. Gelb                       
Lyondell Chemical Company Retirement Plan
    
38
       1,145,177           - -  
Lyondell Chemical Company Supplementary
Executive Retirement Plan
    
38
       2,239,389       6,788,100  
Ms. Galvin                       
Lyondell Chemical Company Retirement Plan
    
18
          215,863           - -  
Lyondell Chemical Company Supplementary
Executive Retirement Plan
     18          203,442          621,499  
Mr. Hollinshead                       
Lyondell Chemical Company Retirement Plan
     28          629,285           - -  
Lyondell Chemical Company Supplementary
Executive Retirement Plan
     28          436,672       1,861,130  
Equistar Chemicals, LP Retirement Plan
     1            22,050           - -  
Equistar Chemicals, LP Supplementary
Executive Retirement Plan
     1            54,885      
    - -
  
 

(a)  
Active full-time or part-time employees of Lyondell or its participating subsidiaries who are paid in U.S. dollars are eligible to participate in Lyondell’s Retirement Plan upon completion of one year of credited service. Some employees are excluded from participation, including casual and project employees, leased employees, collectively bargained employees (unless the Lyondell Retirement Plan benefits were subject to negotiation), students, contract employees and participants in another company-sponsored pension plan.  Participants become fully vested after completing five years of membership service (which, as described below in footnote (b), includes credited service with subsidiaries and affiliates and predecessor companies not participating in the Lyondell Retirement Plan), or upon death or normal retirement age of 65, if earlier.
 
Upon retirement on or after the normal retirement age, a participant is entitled to a benefit using the following formula:  1.45% x final average pay (as described below) x credited service.  Through June 30, 2002, different formulas were used to calculate benefits under multiple pension plans, which are now included in the Lyondell Retirement Plan.  The Lyondell Retirement Plan benefit under the new formula will never be less than the benefit earned as of June 30, 2002, but all benefits after that date are based on the formula provided above. Final average pay under the Lyondell Retirement Plan benefit calculation is the average of the participant’s highest 36 consecutive months of base salary during the last 120 months of employment.  However, the final average pay amount used under the Lyondell Retirement Plan will not exceed the Internal Revenue Service, or IRS, compensation limit for qualified plans.  In 2007, the IRS annual compensation limit was $225,000.
 
Benefits are normally payable as a life annuity with five years of guaranteed payments (normal form).  Participants may choose to convert their retirement payment to another optional form, including joint and survivor and period certain annuities and lump sum payments.  Lump sum payments are calculated on the actuarial equivalent basis to determine the minimum lump sum payable under Internal Revenue Code Section 417(e). The PPA changed this basis effective January 1, 2008, with a five-year phase-in of the impact of the change in interest rates and use of the 2008 Applicable Mortality Table for Lump Sums.  In general, this change will decrease the value of lump sum payments.
 
A participant who is at least 55 with 10 or more years of membership service at termination may elect to begin payment before age 65, with the benefit reduced for early retirement. Benefits are calculated as follows:
 
·  
benefits paid as annuities are reduced for early retirement using the current plan (after June 30, 2002) reductions from the amounts payable at age 65, which are reductions of 4% per year between ages 60 and 65, and 3% per year between ages 55 and 60; however, the portion of the benefit attributable to credited service through June 30, 2002 (but using final average pay as of termination) is reduced for early retirement using the prior plan (through June 30, 2002) reductions:
 
o  
benefits are not reduced if the participant is at least age 60 at commencement and
 
    o  
benefits are reduced 5% per year from the benefit payable at age 60 when commencing before age 60; and
 
·  
lump sum payments are actuarially equivalent to the participant’s normal form benefit at age 65, but the lump sum benefit will never be less than actuarially equivalent to the participant’s early retirement normal form benefit accrued as of June 30, 2002; additionally, special provisions apply to transition participants (participants who had attained age 50 with 5 years of membership service as of June 30, 2002); for transition participants, the lump sum payment is actuarially equivalent to the normal benefit form at age 65 for benefits attributable to service after June 30, 2002 and actuarially equivalent to the early retirement benefit attributable to service through June 30, 2002 and final average pay as of termination.
 

A participant who has at least 10 years of membership service but has not yet attained age 55 at termination may elect to begin payment at any time between ages 55 and 65, with the benefit reduced for early commencement. Benefits are calculated as follows:
 
·  
benefits paid as annuities are reduced for early commencement using reductions based on actuarial equivalence using the 1983 Group Annuity Mortality unisex table at an interest rate of 7.00%; however, the benefit amount will never be less than the benefit accrued as of June 30, 2002, reduced for early retirement using the prior plan reductions; additionally, special provisions apply to transition participants.  Under these provisions, the portion of the benefit attributable to credited service through June 30, 2002 (but using final average pay as of termination date) is reduced using the prior formula reductions; and
 
·  
lump sum payments are actuarially equivalent to the participant’s normal form benefit accrued as of June 30, 2002 payable immediately upon commencement, and any residual benefit in excess of the June 30, 2002 benefit can only be received as an annuity; additionally, for transition participants, the lump sum payment is actuarially equivalent to the normal form benefit at age 65 for benefits attributable to service after June 30, 2002 and actuarially equivalent to the early retirement benefit for service through June 30, 2002.
 
In addition, Mr. Hollinshead has one year of credited service under the Equistar Retirement Plan, reflecting his previous services with Equistar.  The terms of the Equistar Retirement Plan are substantially the same as the Lyondell Retirement Plan, except that the Equistar Retirement Plan defines a lump sum as a percentage of final average earnings.  In Mr. Hollinshead’s case, the age 65 lump sum is based on 15% of his final average earnings as of December 31, 2007.  All of the provisions noted above with respect to the Lyondell Retirement Plan are the same as those used for the Equistar Retirement Plan, and the basis for converting the Equistar lump sum to an annuity is the same as the basis for converting the Lyondell annuity to a lump sum.
 
Messrs. Smith, Gelb and Hollinshead are eligible for early retirement, and if they were to have elected early retirement and receive lump sum payment of their retirement plan benefits, the lump sum payments would have been $1,325,075, $1,572,940 and $1,042,670 (including $29,153 for Mr. Hollinshead under the Equistar Retirement Plan), respectively, as of December 31, 2007.  Messrs. Smith, Gelb and Hollinshead are the only named executive officers who are transition participants.  Mr. Smith retired effective February 1, 2008 and his lump sum payment amount was $1,325,526, and Mr. Hollinshead retired effective March 1, 2008 and his lump sum payment amounts were $1,023,701 and $29,153 under the Lyondell Retirement Plan and the Equistar Retirement Plan, respectively.
 
The Lyondell Supplementary Executive Retirement Plan, referred to as the Lyondell SERP, applies to all officers of Lyondell as well as certain senior managers.  The Lyondell SERP provides participants with supplementary retirement benefits not provided under the Lyondell Retirement Plan. The Lyondell SERP uses the same formula and rules applied under the Lyondell Retirement Plan as described above, with the exception of the calculation of final average pay and determination of the lump sum benefit.  Participants that are at least age 55 receive a lump sum payment calculated as the actuarial equivalent of the participant’s early retirement benefit.  Participants that are less than age 55 receive the actuarial equivalent of the age 65 benefit.  Compensation used to compute final average pay under the Lyondell SERP includes the portion of the employee’s annual base salary exceeding the IRS compensation limit ($225,000 in 2007), base salary the participant has deferred into the Lyondell Executive Deferral Plan, and the participant’s annual cash bonus.  
 

The Lyondell SERP is subject to payout upon the occurrence of a change-in-control.  Accordingly, following the completion of the acquisition, under the Lyondell SERP, an actuarially determined lump sum amount was paid out to each executive officer.  See footnote (d) below and the “Payments in Connection With the Acquisition” section of Compensation Discussion and Analysis for more information regarding the payments to named executive officers in connection with the acquisition pursuant to the Lyondell SERP.  Although lump sum payments occurred under the terms of the Lyondell SERP as a result of the acquisition, the Lyondell SERP has not been modified or terminated.  Accordingly, the Lyondell SERP has continued in effect in accordance with its terms since the acquisition.  Pending any change in this arrangement, legacy Lyondell executive officers continue to accrue benefits under the Lyondell SERP, as they did prior to the acquisition and as described above.  The Lyondell SERP benefit is reduced by the amount paid to each executive officer as a result of the change-in-control.
 
In addition, Mr. Hollinshead has one year of credited service under the Equistar SERP, reflecting his previous service with Equistar.  The terms of the Equistar SERP are substantially the same as the Lyondell SERP, except that the Equistar SERP was not subject to payout in connection with the acquisition.
 
If Messrs. Smith, Gelb and Hollinshead were to have elected early retirement and receive lump sum payments of their SERP benefits, the lump sum payment would have been $6,187,419, $3,078,447 and $777,165 (including $72,567 for Mr. Hollinshead under the Equistar SERP), respectively, as of December 31, 2007. Mr. Smith retired effective February 1, 2008 and his lump sum payment amount was $6,223,384, and Mr. Hollinshead retired effective March 1, 2008 and his lump sum payment amounts were $719,606 and $72,567 under the Lyondell SERP and the Equistar SERP, respectively.
 
In addition, due to the required offset of the ARCO Supplementary Executive Retirement Plan benefits (as described in footnote (d) to the Nonqualified Deferred Compensation table in this Annual Report), for Mr. Gelb, the Lyondell SERP benefit has been reduced by the amount of the benefit earned under the ARCO Supplementary Executive Retirement Plan prior to Lyondell’s acquisition of ARCO Chemical in 1998.  At his election, Mr. Gelb’s supplemental retirement benefits related to ARCO Chemical are provided through the AYCO Trust described in footnote (d) to the Nonqualified Deferred Compensation Table in this Annual Report.
 
(b)  
Credited service reflects all service with predecessor companies for purposes of benefit accrual under the Lyondell Retirement Plan and the Equistar Retirement Plan.  Membership service, as that term is used in this Annual Report, is used to determine vesting and early retirement eligibility under all retirement plans of Lyondell and its subsidiaries and affiliates, and includes all service with Lyondell, its subsidiaries and affiliates and its predecessor companies.  Although the Lyondell SERP and the Equistar SERP also permit Lyondell and Equistar, respectively, to grant additional credited service, that discretion has not been exercised in favor of any existing officer.
 
With respect to the Lyondell Retirement Plan and the Lyondell SERP, as well as the Equistar Retirement Plan and the Equistar SERP, upon termination in connection with a change-in-control as defined in the ESPP (as described in “Severance and Change-in-Control Arrangements” section of the Compensation Discussion and Analysis in this Annual Report), participants that also are covered by the ESPP would be eligible for an additional payment under the ESPP equal to the difference between the unvested and vested retirement benefit, if any, and the difference between the vested and early retirement benefit.  Certain executive officers of Lyondell, including Mr. Smith, Mr. DeNicola, Mr. Hollinshead and Ms. Galvin have been determined to have been subject to a qualified termination under the ESPP in connection with the acquisition.  See the “Payments in Connection With the Acquisition” section of Compensation Discussion and Analysis for more information regarding the payments made to those officers under the ESPP.  Other executive officers of Lyondell who were executive officers prior to the acquisition also could receive this additional payment if a qualified termination within the meaning of the ESPP occurs prior to December 20, 2009.
 

(c)  
The amounts shown in the Pension Benefits table are the actuarial present value of each participant’s accumulated benefits as of December 31, 2007, calculated on the same basis as that used in Note 18 to Lyondell’s Consolidated Financial Statements included in this Annual Report, with the exception that each participant was assumed to continue to be actively employed by Lyondell until age 65 (earliest unreduced retirement age) and immediately commence his or her benefit at that time.  Assumptions used to develop the amounts in Note 18 are:
 
·  
post-retirement mortality based on the RP-2000 mortality table (sex distinct, no blue or white collar adjustment) projected to 2006;
 
·  
a discount rate of 6.25%;
 
·  
80% of transition participants who terminate after eligibility for early retirement will elect a lump sum form of payment and 20% will elect an annuity;
 
·  
60% of non-transition participants who terminate after eligibility for early retirement will elect a lump sum form of payment and 40% will elect an annuity;
 
·  
future interest rates for conversion of annuities to lump sums assumed to be 5.25%, with a segmented yield curve under the PPA phasing in over five years after 2007; the PPA segmented yield curve was equivalent to a single interest rate of approximately 6.00% as of December 31, 2007; and
 
·  
the mortality table used for conversion of annuities to lump sums is the 2008 Applicable Mortality Table for Lump Sums, further adjusted to reflect anticipated mortality improvements.
 
Mr. Hollinshead also has one year of credited service under the Equistar Retirement Plan and the Equistar SERP, reflecting his previous service with Equistar.  For Mr. Hollinshead, the amount shown with respect to the Equistar Retirement Plan is based on his defined lump sum at age 65, which is 15% of his final average earnings as of December 31, 2007.  All of the assumptions noted above with respect to the Lyondell plans are the same as those used for the Equistar plans, and the basis for converting the Equistar lump sum to an annuity is the same as the basis for converting the Lyondell annuity to a lump sum.
 
(d)  
The Lyondell SERP is subject to payout upon the occurrence of a change-in-control.  Accordingly, this column reflects the actuarially determined lump sum amounts paid to Messrs. Smith, DeNicola, Gelb and Hollinshead and Ms. Galvin during 2007 under the Lyondell SERP following the acquisition.  See the “Payments in Connection With the Acquisition” section of Compensation Discussion and Analysis for more information regarding the payments to named executive officers in connection with the acquisition pursuant to the Lyondell SERP.
 
Nonqualified Deferred Compensation (a)
 
Name
  
Executive
Contributions in
Last FY
($) (b)
    
Registrant
Contributions in
Last FY
($)
    
Aggregate
Earnings
in Last FY
($) (c)
    
Aggregate
Withdrawals/
Distributions
($) (e)
    
Aggregate
Balance at
Last FYE
($) (f)
  
Mr. Smith
     - -       - -       53,093       571,292       - -  
Mr. DeNicola
     34,627       - -       44,534       478,083       34,731  
Mr. Gelb (d)
     - -       - -       801,549       5,896,353       2,420,597  
Ms. Galvin
     30,542       - -       42,075       451,745       30,633  
Mr. Hollinshead (g)
     434,907       - -       280,910       3,047,452       143,873  

 


(a)  
The Lyondell Executive Deferral Plan is a non-qualified deferred compensation plan.  Under the Lyondell Executive Deferral Plan, Lyondell officers and senior managers may elect to defer up to 50% of their annual base salary, 100% of their annual cash bonus award and 100% of the amounts contributed by Lyondell under the ESSP each year.  See the “Executive Supplementary Savings Plan” section of Compensation Discussion and Analysis for a description of the ESSP. Deferral elections must be made before the year in which compensation is earned during open enrollment. To more accurately reflect Lyondell’s cost of borrowing, the Lyondell Executive Deferral Plan provides that, beginning in 2006, accounts accrue interest using the previous monthly average of the closing yield to maturity (as reported by Bloomberg) of Lyondell’s most junior publicly traded debt as of December 1 of the previous plan year.  The interest rate for 2007 ranged between 8.693% and 10.871%.  A participant may elect a form of payment at termination of either a lump sum or installment payments only for the amounts elected to be deferred during that period.  An early distribution payment may be made not less than two years from the date of the deferral.  Payments must begin at separation from service, death, disability or change-in-control.  Before the acquisition, officers generally were required to wait six months after separation from service for distributions to begin.  A change in distribution election may not take effect for at least 12 months after the date of the election change, must be made at least 12 months before the original distribution date elected, and must extend the distribution date at least five years after the original distribution date.  Distributions due to financial hardship, as determined by Lyondell’s Benefits Administrative Committee with advice of counsel, are permitted, but other unscheduled withdrawals are not allowed.  Upon separation from service or disability, payments will be made in accordance with the participant’s elections, unless the participant is not yet 55, or is 55 but with less than 10 years of service, in which case payments will be made in monthly installments over 36 months.  Deferral account balances that are less than $10,000 at the time of a participant’s separation from service or disability will be distributed as a lump sum.
 
The Lyondell Executive Deferral Plan is subject to payout upon the occurrence of a change-in-control.  Accordingly, following the completion of the acquisition, the full amount of contributions and earnings accrued or credited to each executive officer under the Lyondell Executive Deferral Plan on the date immediately before the completion of the acquisition was distributed in a single lump sum payment.  See footnote (e) below for more information regarding the payments to named executive officers in connection with the acquisition pursuant to the Lyondell Executive Deferral Plan.  Although lump sum payments occurred under the terms of the plan as a result of the acquisition, the Lyondell Executive Deferral Plan has not been modified or terminated.  Accordingly, the plan has continued in effect in accordance with its terms since the acquisition.  Pending any change in this arrangement, legacy Lyondell executive officers continue to accrue benefits under the Lyondell Executive Deferral Plan, as they did prior to the acquisition and as described above.
 
(b)  
Of the amounts in this column, the amounts set forth below also are reported in the Salary, Non-Equity Incentive Compensation and All Other Compensation columns of the Summary Compensation Table in this Annual Report.  The amounts set forth under the All Other Compensation column of the Summary Compensation Table also are reported under the ESSP column of the All Other Compensation Table.
 
   
Amounts Previously Reported in Other Tables
  
Name
  
Salary ($)
    
Non-Equity
Incentive
Compensation ($)
    
All Other
Compensation ($)
  
Mr. Smith                                                                
         - -           - -           - -  
Mr. DeNicola                                                                
         - -           - -            34,627  
Mr. Gelb                                                                
         - -           - -           - -  
Ms. Galvin                                                                
         - -           - -           30,542  
Mr. Hollinshead                                                                
        203,763          206,692           24,452  

 
(c)  
Of the amounts in this column, $23,294, $19,539, $394,875, $122,327 and $18,460 are also reported for Messrs. Smith, DeNicola, Gelb and Hollinshead and Ms. Galvin, respectively, in the Change in Pension Value and Nonqualified Deferred Compensation Earnings column of the Summary Compensation Table in this Annual Report.
 

(d)  
Amounts for Mr. Gelb also include those associated with the trust (AYCO Trust) maintained at Wilmington Trust Company and administered by the AYCO Company, L.P. for the ARCO Chemical Key Management Deferral Plan and ARCO Chemical Supplementary Executive Retirement Plan (ARCO SERP).  The AYCO Trust is an unfunded trust which was established by ARCO Chemical in connection with Lyondell’s acquisition of ARCO Chemical in 1998, which acquisition was a change-in-control under the ARCO Key Management Deferral Plan and the ARCO SERP.  All amounts payable in connection with that change-in-control were either paid to the participant at the time or further deferred into the AYCO Trust, at the participant’s election.  For Mr. Gelb, the Aggregate Earnings in Last Fiscal Year column includes $304,690, the Aggregate Withdrawals/Distributions column includes $550,094 and the Aggregate Balance at Last Fiscal Year End column includes $2,420,597 associated with the AYCO Trust.  Mr. Gelb’s balance under the AYCO Trust accrues interest at a rate determined annually by the administrator.  The interest rate for 2007 was 14.4%.   To the extent the AYCO Trust does not make the required payments to Mr. Gelb, Lyondell is responsible for payment of the benefits.
 
(e)  
The Lyondell Executive Deferral Plan is subject to payout upon the occurrence of a change-in-control.  Accordingly, this column reflects the full amount of contributions and earnings accrued or credited to each executive officer under the Lyondell Executive Deferral Plan on the date immediately before the completion of the acquisition, which amount was distributed to each executive officer in a single lump sum payment during 2007 following the acquisition.  See the “Payments in Connection With the Acquisition” section of Compensation Discussion and Analysis for more information regarding the payments to named executive officers in connection with the acquisition pursuant to the Lyondell Executive Deferral Plan.  As described in footnote (d) above, with respect to Mr. Gelb, the amount shown in this column also reflects his previously scheduled $550,094 distribution during 2007 from the AYCO Trust.
 
(f)  
Of the amounts in this column, the amounts set forth below also are reported for 2006 in the Salary, Non-Equity Incentive Compensation and All Other Compensation columns of the Summary Compensation Table in this Annual Report.  The amounts set forth for 2006 under the All Other Compensation column of the Summary Compensation Table also are reported for 2006 under the ESSP column of the All Other Compensation Table.
 
   
Amounts Previously Reported for Previous Years
  
Name
  
Salary ($)
    
Non-Equity
Incentive
Compensation ($)
    
All Other
Compensation ($)
  
Mr. Smith                                                                
         - -           - -           - -  
Mr. DeNicola                                                                
         - -           - -           - -  
Mr. Gelb                                                                
         - -           - -           - -  
Ms. Galvin                                                                
         - -           - -         28,564  
Mr. Hollinshead                                                                
       187,654           42,964         22,518  

 
(g)
Amounts for Mr. Hollinshead also include amounts associated with the Equistar Deferral Plan, which Mr. Hollinshead deferred when he was previously employed by Equistar.  For Mr. Hollinshead, the Aggregate Earnings in the Last Fiscal Year column includes $10,687 and the Aggregate Balance at Last Fiscal Year End column includes $111,476 associated with the Equistar Deferral Plan.  The terms of the Equistar Deferral Plan are substantially the same as the Lyondell Executive Deferral Plan described in footnote (a) above, except that the Equistar Deferral Plan was not subject to payout in connection with the acquisition.
 

Potential Post-Employment and Change-in-Control Payments
 
Retirement Benefits and Deferred Compensation
 
Lyondell maintains (1) the Lyondell SERP, for which the material terms and benefits for the named executive officers are described in connection with the Pension Benefits table in this Annual Report, and (2) the Lyondell Executive Deferral Plan, for which the material terms and benefits for the named executive officers are described in connection with the Nonqualified Deferred Compensation table in this Annual Report.  In addition, Mr. Gelb retains benefits in the former ARCO SERP for which the material terms and estimated benefits are described in connection with the Nonqualified Deferred Compensation table in this Annual Report.
 
See the “Payments in Connection With the Acquisition” section of Compensation Discussion and Analysis for information regarding the payments to named executive officers in connection with the acquisition pursuant to the Lyondell Executive Deferral Plan and the Lyondell SERP.  Although lump sum payments occurred under the terms of the plans as a result of the acquisition, the Lyondell Executive Deferral Plan and the Lyondell SERP have not been modified or terminated.  Accordingly, they have continued in effect in accordance with their terms since the acquisition.  Pending any change in these arrangements, legacy Lyondell executive officers continue to accrue benefits under the plans, as they did prior to the acquisition.
 
Medical, Disability and Life Insurance Benefits
 
The Executive Medical Plan provides for enhanced medical coverage to officers, including the named executive officers, beyond that available under Lyondell’s regular health care plan.  Executive Medical Plan coverage continues after retirement.
 
The Executive Long-Term Disability Plan provides coverage to officers and other senior managers of Lyondell in the case of a disabling sickness or illness.  The Executive Long-Term Disability Plan provides a higher level of monthly disability income than that available under Lyondell’s regular long-term disability plan. Benefits under the Executive Long-Term Disability Plan cease upon retirement or upon termination of employment where no disabling sickness or illness has occurred during employment.
 
The Executive Life Insurance Program provides for a higher level of life insurance coverage than that available under Lyondell’s regular basic life insurance plan and such coverage continues after retirement until age 65.
 
The acquisition had no effect on these benefits and to date these benefits have not been modified or amended.  Pending any change in these arrangements, legacy Lyondell executive officers continue to have these benefits, as they did prior to the acquisition.  For Mr. Gelb, who is a continuing legacy Lyondell executive officer, the benefits that would be provided after termination of his employment with Lyondell are disclosed in the table below.
 
Executive Severance Arrangements
 
Before the acquisition none of the named executive officers had employment contracts with Lyondell.
 
All of the named executive officers were covered by the Executive Severance Pay Plan, or ESPP, which provides for payment of benefits to covered employees upon specified terminations following a change-in-control of Lyondell, as described below.  A change-in-control for purposes of the ESPP generally is defined as (1) ownership of Lyondell changing by 50% or more or (2) a person or entity acquiring more than a 20% ownership interest in Lyondell.  The acquisition constituted a change-in-control for the purposes of the ESPP.  Accordingly, by its terms, the ESPP will continue for a period of at least two years after December 20, 2007 for participants in the plan on that date.  If an employee covered under the ESPP is terminated without cause or terminates his or her employment for good reason (in either case, a “qualified termination”) within two years after December 20, 2007, the employee is entitled to receive the following:
 
·  
a payment equal to one times to three times annual earnings (base salary and annual cash bonus award target amount);


·  
payment of an additional amount equal to the difference between the unvested and vested retirement benefit, if any, and the difference between the vested and early retirement benefit;
 
·  
continuation of welfare benefit coverages for 24 months after termination;
 
·  
retiree coverage provided under the applicable medical plan (which is the executive medical plan in the case of all Lyondell officers) after the above 24-month continuation period, regardless of age and service at termination;
 
·  
up to $40,000 of outplacement services for a period of one year through one of the third-party outplacement service providers offered by Lyondell; and
 
·  
a gross-up payment for the amount of any excise tax liability imposed pursuant to Section 4999 of the Internal Revenue Code (or similar excise tax) with respect to any benefits paid in connection with the acquisition.
 
Certain pre-acquisition executive officers of Lyondell, including Mr. Smith, Mr. DeNicola, Mr. Hollinshead and Ms. Galvin, have been determined to have been subject to a qualified termination under the ESPP in connection with the acquisition.  See the “Payments in Connection With the Acquisition” section of the Compensation Discussion and Analysis for more information regarding the payments made, or to be made, to those officers under the ESPP.  In the case of Mr. Gelb, his termination benefits are determined in part by the Gelb Agreement entered into on January 23, 2008, pursuant to which Lyondell acknowledged and agreed that, as a result of the change in Mr. Gelb’s position following the December 20, 2007 acquisition of Lyondell by LyondellBasell Industries, he would have grounds for a constructive termination for good reason under the terms of the ESPP.  The Gelb Agreement provides that, in order to induce Mr. Gelb to continue to serve Lyondell, Lyondell agrees that in the event of Mr. Gelb’s termination of employment for any reason, without limitation, during the two year period beginning on December 20, 2007, Lyondell will provide Mr. Gelb with all of the severance benefits set forth under the ESPP (other than the vesting of stock options, all of which vested and were exchanged for cash in connection with the acquisition).  The Gelb Agreement provides that, while it is anticipated that Mr. Gelb will remain employed with Lyondell for the two year period beginning on December 20, 2007, the parties acknowledge that Mr. Gelb is not obligated to remain employed with Lyondell and Lyondell is not obligated to continue his employment for any specified period.  Under the Gelb Agreement, Mr. Gelb waived his right to participate separately in the ESPP and agreed that the provisions of the Gelb Agreement (including any provisions of the ESPP incorporated by reference) are controlling.
 
Estimates of the potential payments to Mr. Gelb under the Gelb Agreement, and the related assumptions, are disclosed in the table below.  The Gelb Agreement requires a release of claims prior to payment of severance benefits.
 
Potential Payments Upon Termination or Change-in-Control
 
The Acquisition
 
Upon the completion of the acquisition, a change-in-control occurred for purposes of change-in-control arrangements and various benefit and incentive plans in which Lyondell’s executive officers were or are participants.  As described above, certain executive officers of Lyondell, including Mr. Smith, Mr. DeNicola, Mr. Hollinshead and Ms. Galvin, have been determined to have been subject to a qualified termination under the ESPP in connection with the acquisition and either are receiving or will receive in 2008 benefits under the ESPP.  See the “Payments in Connection With the Acquisition” section of Compensation Discussion and Analysis for the payments and benefits to named executive officers in connection with the acquisition.
 

Potential Payments in Connection with Future Events
 
The following narrative and table describe the potential payments or benefits in connection with future termination or other future post-employment scenarios for Mr. Gelb.  The following table does not include amounts payable pursuant to plans that are available generally to all salaried employees.  The amounts in the table show only the value of amounts payable or benefits due to enhancements in connection with each termination scenario, and do not reflect amounts otherwise payable or benefits otherwise due as a result of employment. The actual amounts to be paid out can only be determined at the time of separation from Lyondell.
 
The following assumptions apply to the tables:
 
·  
for all scenarios, the termination or death date is assumed to be December 31, 2007;
 
·  
all scenarios and amounts are calculated assuming that the Gelb Agreement was in effect on December 31, 2007;
 
·  
Executive Medical and Executive Life are available if Mr. Gelb becomes disabled and qualified for long-term disability; and
 
·  
“Lump-Sum Severance” only includes the payment equal to three times earnings under the Gelb Agreement; all other amounts and adjustments mandated by the Gelb Agreement are shown in connection with the associated other benefits included in the table.
 
SERP amounts, Lyondell Executive Deferral Plan amounts and amounts pursuant to the former ARCO SERP payable in connection with the various termination scenarios are not shown in the table below because these amounts are disclosed earlier in the Pension Benefits table and the Nonqualified Deferred Compensation table in this Annual Report.
 
However, the narrative below describes how, based on the following assumptions and rules, the potential Lyondell SERP payments would differ from the amounts shown in the Pension Benefits table if Mr. Gelb separated from Lyondell on December 31, 2007 under the various termination scenarios:
 
·  
Lyondell SERP amounts were calculated as the present value of the accrued benefits as of the termination date payable as a lump sum at the earliest commencement age allowed;
 
·  
all amounts not payable immediately have been discounted to December 31, 2007 at a rate of 6.25%;
 
·  
all lump sum amounts have been converted on the basis in effect on the date of payment;
 
·  
lump sums paid in years before 2008 will be converted at an interest rate of 5.25%, with a segmented yield curve under the PPA phasing in over five years after 2007; the PPA segmented yield curve was equivalent to a single interest rate of approximately 6.00% as of December 31, 2007;
 
·  
the mortality table used for conversion of annuities to lump sums is the 2008 Applicable Mortality Table for Lump Sums, further adjusted to reflect anticipated mortality improvements; and
 
·  
both the Lyondell SERP and the ESPP contain special payment provisions due to change-in-control; the Lyondell SERP provides that an officer who had not attained age 55 would receive a lump sum payment based on the age 65 benefit payable as an annuity converted to an immediate lump sum using the actuarial equivalence factors in accordance with the Lyondell Retirement Plan; the ESPP provisions incorporated in the Gelb Agreement provide for Mr. Gelb’s Lyondell SERP and Lyondell Retirement Plan benefits to be calculated as a lump sum as of age 55 using the lump sum calculation that would be applicable if he had terminated at age 55 with 10 or more years of service, further reduced to current age using the actuarial equivalence factors in accordance with the Lyondell Retirement Plan.
 


Based on these assumptions and rules, because Mr. Gelb is retirement eligible and his Lyondell SERP benefits would have been immediately payable on December 31, 2007, his Lyondell SERP benefits under all termination scenarios would have been $839,058 greater than the amount shown in the Pension Benefits table.
 
Mr. Gelb (a)
  
Long Term
Disability
    
Death
    
Any Other
Termination
  
Executive Medical                                                                  
   $ 276,836     $     - -     $ 283,217  
Executive Long Term Disability (b)                                                                  
   $ 1,165,840     $     - -     $ 19,926  
Executive Life Insurance Benefit (c)                                                                  
   $ 494,386     $ 2,409,000     $ 59,832  
Lump-Sum Severance (d)                                                                  
   $ 4,334,429     $ 4,334,429     $                  4,334,429  
Outplacement                                                                  
   $     - -     $     - -     $ 40,000  
Excise Tax Grossed Up (e)                                                                  
   $     - -     $     - -     $   - -  

 
(a)
Except as described in footnotes (b) and (c) below, Mr. Gelb’s benefits are provided under the Gelb Agreement in all scenarios.
 
(b)
The Executive Long Term Disability Plan is an insured plan through an unaffiliated life insurance company providing for a monthly benefit equal to the lesser of $25,000 or 60% of the executive officer’s salary plus the average of the last three years’ bonus payments.  Amounts shown are calculated without regard to any offsets. The Executive Long Term Disability amount shown in the “Long Term Disability” column reflect the present value of the disability benefit calculated in accordance with Financial Accounting Standards Board Statement of Accounting Standards No. 5 as of December 31, 2007.  This includes a discount rate of 6.25% and the disabled mortality rates used in that valuation.  Premium amounts paid by Lyondell for two years pursuant to the Gelb Agreement are reflected in the Any Other Termination column.
 
(c)
The Executive Life Insurance Plan provides executive officers who retire prior to age 65 death benefit protection until age 65, in the amount of three times base salary, rounded to the nearest thousand.  Death benefits are provided either through insurance or self-funding during the executive officer’s lifetime prior to age 65.  The Executive Life Insurance Benefit amount shown in the “Death” column show the amount of benefit payable upon death pursuant to the insurance.  Premium amounts for Mr. Gelb pursuant to the Gelb Agreement are shown in the other two columns.
 
(d)
The lump-sum severance payment under the Gelb Agreement equals annual base pay plus the annual cash bonus target amount multiplied by three.
 
(e)
The gross up for the excise tax is with respect to:
 
·  
the lump-sum severance award;
 
·  
$40,000 in outplacement services;
 
·  
present value of continued life, medical and disability coverages; and
 
·  
any additional payment in respect of retirement benefits,
 
all valued assuming a termination occurred on December 31, 2007 (following the change-in-control that actually occurred on December 20, 2007).
 
The 20% excise tax is only triggered if the total of the listed benefits is greater than three times the average of the prior five years W-2 pay, and the 20% excise tax is then
imposed on the total of the benefits listed in excess of the average of the prior five years W-2 pay.  Mr. Gelb did not trigger the 20% excise tax.
 

DIRECTOR COMPENSATION
 
Introduction
 
As a result of LyondellBasell Industries’ December 20, 2007 acquisition of Lyondell, Lyondell is an indirect wholly owned subsidiary of LyondellBasell Industries.  At the effective time of the acquisition, all of the members of Lyondell’s previous Board of Directors ceased serving as directors and the current members of Lyondell’s Board (each of whom also serves as an officer of Lyondell and of LyondellBasell Industries) began to serve as directors.  The current members of Lyondell’s Board of Directors are not paid any fees or additional compensation for service as members of Lyondell’s Board of Directors.  Accordingly, the information provided below describes the compensation of the members of Lyondell’s previous Board of Directors for 2007, and summarizes payments made to the members of Lyondell’s previous Board of Directors in connection with the acquisition.
 
Pre-Acquisition Directors’ Fees
 
Before the acquisition, Mr. Smith, as Lyondell’s Chairman, President and Chief Executive Officer, was the only member of Lyondell’s Board of Directors who also was an employee of Lyondell.  Mr. Smith was not paid any fees or additional compensation for his service as a member of Lyondell’s previous Board of Directors.
 
Pre-Acquisition Non-Employee Director Compensation
 
During 2007, the non-employee members of Lyondell’s Board of Directors received an annual cash retainer of $80,000.  Dr. Butler, who served as Lyondell’s non-employee Chairman of the Board until his retirement on May 3, 2007, received an additional $150,000 annual fee.  In addition, the non-employee directors who served as Chairs of the Compensation and Human Resources Committee (Mr. Engen though May 3, 2007 and Mr. Lesar from May 4, 2007 through December 20, 2007) and the Corporate Responsibility and Governance Committee (Dr. Spivey), each received an additional $10,000 annual fee.  Mr. Huff, the non-employee Chair of the Audit Committee, received an additional $20,000 annual fee. Each non-employee director who was a member of the Audit Committee at any point during 2007 (Ms. Anderson, Ms. Carter, Mr. Engen, Mr. Lesar, Mr. Meachin, Mr. Murphy and Dr. Spivey) received an additional $5,000 annual fee.  Mr. Engen, who was appointed as the independent, Lead Director on May 4, 2007 in connection with Dr. Butler’s retirement, received an additional $27,500 annual fee.  At the election of each non-employee director, all or a portion of the annual cash retainer, Committee chair and member fees, Chairman of the Board fee and Lead Director fee were (1) paid in cash currently, (2) deferred under the Directors’ Deferral Plan as cash or (3) deferred under the Directors’ Deferral Plan in the form of deferred stock units.  In addition, each non-employee director received an annual incentive award valued at $100,000, which value was divided equally into an award of restricted stock and an associated deferred cash payment for all directors except Dr. Butler.  The 2007 incentive award for Dr. Butler was divided equally into an award of restricted share units and an associated cash payment. For a description of the restricted stock and restricted share units, see footnote (c) to the Director Compensation Table below.  Non-employee directors were reimbursed for travel and other related expenses incurred in attending Board or Committee meetings and for expenses incurred in obtaining director continuing education.
 
The following table reflects compensation for the non-employee directors who served on Lyondell’s Board of Directors during any part of 2007:
 

Director Compensation Table
 
Name
  
Fees Earned or
Paid in Cash
($) (b)
    
Stock Awards
($) (c)
    
Change in Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($) (b)
    
All Other
Compensation
($) (d)
    
Total
($)
  
Carol. A. Anderson
     85,000       586,198       - -       285,766       956,964  
Dr. William T. Butler(a)
     230,000       133,644       57,080       301,745       722,469  
Susan K. Carter
     85,000       156,341       1,864       31,339       274,544  
Stephen I. Chazen
     80,000       586,198       - -       285,766       951,964  
Travis Engen
     117,500       612,104       92,346       406,122       1,228,072  
Paul S. Halata
     80,000       271,133       - -       77,582       428,715  
Danny W. Huff
     100,000       526,327       9,156       231,213       866,696  
David J. Lesar
     95,000       586,198       29,050       285,766       996,014  
David J.P. Meachin
     85,000       388,968       - -       122,550       596,518  
Daniel J. Murphy
     85,000       271,133       - -       77,582       433,715  
Dr. William R. Spivey
     95,000       586,198       9,470       285,766       976,434  

 
(a)  
On May 3, 2007, Dr. Butler retired from Lyondell’s Board.
 
(b)  
See “Pre-Acquisition Non-Employee Director Compensation” above for an explanation of director fees.
 
The Change in Pension Value and Nonqualified Deferred Compensation Earnings column in the Director Compensation Table shows the above-market earnings during 2007 on the Directors’ Deferral Plan, as described below.
 
The Directors’ Deferral Plan provided non-employee directors with the option to have all or a portion of the annual retainer, Committee chair, member fees, Chairman of the Board fee and Lead Director fee, which were credited annually, (1) paid in cash currently, (2) deferred under the Directors’ Deferral Plan as cash or (3) deferred under the Directors’ Deferral Plan as deferred stock units.  In the case of deferred stock units, a director’s account was credited with a number of units at the time of deferral of compensation equal to the amount being deferred divided by the closing price of the Lyondell common stock.  Deferred stock units earned dividend equivalents at the same rate that shareholders received dividends, which were credited under the Directors’ Deferral Plan as additional deferred stock units.  The deferred stock units did not carry voting rights. During 2007, the cash portion of a participant's account under the Directors’ Deferral Plan accrued interest using the previous monthly average of the closing yield to maturity, as reported by Bloomberg, of Lyondell’s most junior publicly traded debt as of December 1 of the prior plan year.  The interest rate for 2007 ranged between 8.693% and 10.871%.
 


Under the Directors’ Deferral Plan, each participant’s account is fully payable upon a change-in-control.  Accordingly, during 2007 following the completion of the acquisition, the full amount of contributions and earnings accrued or credited to each non-employee director (either as cash amounts or as deferred stock units) under the Directors’ Deferral Plan on the date immediately before the completion of the acquisition was distributed in a single lump sum payment.  The value of the deferred stock units was based on the closing price of Lyondell’s common stock on November 30, 2007 ($47.20), the last trading day of the month preceding the effective time of the acquisition.  The following table sets forth for each non-employee director such lump sum payments:
 
   
Deferred Stock Units
              
Name
  
Units (#)
    
Value ($)
    
Value of Cash
Amounts
Deferred ($)
    
Total Value
under
Deferral Plan ($)
  
Ms. Anderson
     30,301       1,430,203       - -       1,430,203  
Ms. Carter
     - -       - -       46,758       46,758  
Mr. Chazen
     1,221       57,618       - -       57,618  
Mr. Engen
     - -       - -       2,270,143       2,270,143  
Mr. Huff
     - -       - -       224,097       224,097  
Mr. Lesar
     18,164       857,326       714,884       1,572,210  
Dr. Spivey
     15,339       724,015       231,601       955,616  

 
(c)  
On February 22, 2007, as part of their compensation package, each non-employee director, other than Dr. Butler, received a grant consisting of 1,955 shares of restricted stock, and an associated cash payment payable at the vesting or forfeiture of those shares of restricted stock. On February 22, 2007, as part of his compensation package, Dr. Butler received a grant consisting of 1,955 restricted share units (described below), and an associated cash payment payable at the vesting or forfeiture of those restricted share units.   See the Grants of Plan-Based Awards to Non-Employee Directors table below.  The restricted stock and associated cash payment awards granted in years prior to 2007 (beginning in 2003) had substantially the same terms as the 2007 awards.
 
The Restricted Stock Plan was amended in February 2006 to permit the award of restricted share units in order to protect against further shareholder dilution under the terms of the plan, as well as to permit flexibility with respect to the form and timing of payments under the plan.  The exact number of shares of restricted stock or restricted share units awarded was calculated by dividing the dollar amount of the restricted portion of the annual incentive award by the closing price of a share of Lyondell’s common stock on the last trading day of the year before the year when the grant is made.  The amount of the associated cash payment equaled the closing price of a share of Lyondell’s common stock on the vesting or forfeiture date, multiplied by the number of shares of restricted stock or restricted share units vesting or being forfeited.  Unless a restricted stock award was forfeited, from the date of grant the non-employee directors had the right to vote the shares of restricted stock, received dividends on the restricted stock at the same rate that shareholders received dividends and participated in any capital adjustment applicable to all holders of Lyondell’s common stock.   Restricted share units did not carry voting rights.  Non-employee directors received cash dividend equivalent payments on restricted share units at the same rate that shareholders received dividends.
 
The restricted stock and restricted share units were subject to forfeiture until the expiration of the restricted period.  The restricted period on Dr. Butler’s restricted share units lapsed upon his retirement and the restricted period on all outstanding non-employee director restricted stock lapsed at the effective time of the acquisition, which was a change-in-control under the plan.  The definition of “change-in-control” was revised in February 2007 to be the same as the definition of change-in-control in the ESPP.
 
The amounts shown in the Stock Awards column and the table below reflect the 2007 compensation cost recognized for financial statement reporting purposes computed in accordance with SFAS 123R, but excluding any impact of estimated forfeiture rates as required by SEC regulations, associated with:
 
·  
the portion of 2007 grants of both the restricted stock and associated cash payments recognized in 2007;
 

·  
the portion of 2007 grants of both the restricted share units and associated cash payments recognized in 2007; and
 
·  
the portion of all other outstanding grants for shares of restricted stock and associated cash payments, recognized during 2007.
 
Restricted stock was accounted for as an equity award, while the associated cash payment for the restricted stock, the restricted share units and the associated cash payment for the restricted share units were accounted for as liability awards.  Lyondell recognized compensation cost using straight-line-basis over the vesting period; however, due to the acceleration of vesting of awards in connection with the change-in-control, all remaining compensation cost was recognized in 2007.  With the exception of Mr. Engen’s awards noted below, all of the awards included in the table below had a 10-year vesting period.  Equity awards were measured using the closing price of Lyondell common stock at the date of grant while liability awards were measured using the closing price of Lyondell common stock at the end of each reporting period.  For Dr. Butler, who was a retirement eligible non-employee director, compensation cost also included the total fair value of the restricted share unit awards and of the associated cash payments on May 3, 2007, the date of his retirement.  In addition, the amounts shown in the table reflect two grants of shares of restricted stock awarded to Mr. Engen (370 shares granted in 1998 and 2,731 shares granted in 2000) under the former restricted stock plan for non-employee directors, which would have vested upon his retirement from the Board.  In connection with the acquisition, all restricted stock, including the associated cash payment awards, became fully vested.  As a result of the accelerated vesting, the compensation cost for 2007 set forth in the table above includes (1) in the case of restricted stock (equity awards), the vesting of which was accelerated, all amounts that in the absence of the acquisition would have been expected to be recognized in periods subsequent to 2007, and (2) in the case of the associated cash payments (liability awards) that were accelerated, amounts equal to the number of notional shares represented thereby multiplied by the $48.00 per share merger consideration, less the compensation cost recognized in respect of those awards in prior periods.  See footnote (d) below for more information regarding the payments to non-employee directors in respect of restricted stock in connection with the acquisition.
 
2007 Compensation Cost
 
Name
  
Restricted Stock
($)
    
Associated Cash
Payment with
Respect
to the Vesting
of the
Restricted Stock
($)
    
Restricted
Share Units
($)
    
Associated Cash
Payment
with Respect to
the Vesting of the
Restricted
Share Units
($)
    
Total Reflected in
Stock Awards
Column
($)
  
Ms. Anderson
     177,891       408,307       - -       - -       586,198  
Dr. Butler
     - -       - -       66,822       66,822       133,644  
Ms. Carter
     62,501       93,840       - -       - -       156,341  
Mr. Chazen
     177,891       408,307       - -       - -       586,198  
Mr. Engen
     203,797       408,307       - -       - -       612,104  
Mr. Halata
     97,068       174,065       - -       - -       271,133  
Mr. Huff
     166,301       360,026       - -       - -       526,327  
Mr. Lesar
     177,891       408,307       - -       - -       586,198  
Mr. Meachin
     136,656       252,312       - -       - -       388,968  
Mr. Murphy
     97,068       174,065       - -       - -       271,133  
Dr. Spivey
     177,891       408,307       - -       - -       586,198  
 

Grants of Plan-Based Awards to Non-Employee Directors
 
The table below shows the 2007 grants of restricted stock and the associated cash payment, the 2007 grants of restricted share units and the associated cash payment, and their respective SFAS 123R grant date fair values.
 
     
Grant Amounts (#)
    
SFAS 123R Grant Date Fair Value ($)
  
Name
Grant
Date
  
Restricted
Stock
    
Cash
Payment
Associated
with
Restricted
Stock
    
Restricted Share Units
    
Cash
Payment
Associated
with
Restricted
Share Units
    
Restricted
Stock
    
Cash
Payment
Associated
with
Restricted
Stock
    
Restricted
Share Units
    
Cash
Payment
Associated
with
Restricted
Share Units
  
Dr. Butler                     
2/22/2007
     - -       - -       1,955       1,955       - -       - -       62,501       62,501  
Each other non-employee director (10 directors)
 
2/22/2007
     1,955       1,955       - -       - -       62,501       62,501       - -       - -  

 
Outstanding Equity Awards at Fiscal Year-End
 
In connection with the acquisition, (1) all outstanding non-employee director stock options were cancelled and exchanged for a cash payment and (2) all unvested shares of non-employee director restricted stock and the associated cash payments vested and were converted into a cash payment.  See footnote (d) below for information regarding these payments to non-employee directors in connection with the acquisition.  As a result of the acquisition and these payments, Lyondell had no outstanding equity awards to non-employee directors at December 31, 2007.
 

(d)
Upon the completion of the acquisition, a change-in-control occurred for purposes of various benefit and incentive plans in which Lyondell’s non-employee directors were participants.  The change-in-control resulted in the triggering, accelerating or vesting of certain rights under those plans.
 
The table below sets forth, for each of Lyondell’s non-employee directors:
 
·  
the number of shares of restricted stock that vested as a result of the change-in-control, and the value of such restricted stock (based on the $48.00 per share merger consideration);
 
·  
the notional number of shares represented by the associated cash payment awards that vested as a result of the change-in-control, and the total actual cash payments made with respect to such vesting of the awards of associated cash payment (based on the $48.00 per share merger consideration);
 
·  
the total value of the restricted stock that vested and the actual cash payments that were made as a result of the change-in-control;
 
·  
the compensation costs recognized in 2006 and 2007 in connection with those awards and set forth in column (c) of the Summary Compensation Table in the proxy statement for the May 3, 2007 Annual Meeting or above; and
 
·  
the net amount reported as All Other Compensation in column (d) of the Summary Compensation Table.
 
   
Change-in-Control
              
   
Restricted Stock that Vested
    
Associated Cash Payments Made with Respect to Restricted Stock Vesting
                    
Name
  
Shares (#)
    
Value ($)
    
Shares (#)
    
Value ($)
    
Total Value ($)
    
2006 and 2007 Disclosed Compensation Cost ($)
    
Total Reflected in All Other Compensation Column ($)
  
Ms. Anderson
     9,436       452,928       9,436       452,928       905,856       620,090       285,766  
Dr. Butler (a)
     - -       - -       - -       - -       - -       - -       301,745  
Ms. Carter                  
     1,955       93,840       1,955       93,840       187,680       156,341       31,339  
Mr. Chazen                  
     9,436       452,928       9,436       452,928       905,856       620,090       285,766  
Mr. Engen                  
     12,537       601,776       9,436       452,928       1,054,704       648,582       406,122  
Mr. Halata                  
     3,704       177,792       3,704       177,792       355,584       278,002       77,582  
Mr. Huff                  
     8,186       392,928       8,186       392,928       785,856       554,643       231,213  
Mr. Lesar                  
     9,436       452,928       9,436       452,928       905,856       620,090       285,766  
Mr. Meachin
     5,497       263,856       5,497       263,856       527,712       405,162       122,550  
Mr. Murphy                  
     3,704       177,792       3,704       177,792       355,584       278,002       77,582  
Dr. Spivey                  
     9,436       452,928       9,436       452,928       905,856       620,090       285,766  

 
(a)
In October 1998, the Board of Directors amended and restated the Retirement Plan for Non-Employee Directors to close the plan to new directors. With the exception of Dr. Butler, there were no members of the Board of Directors since the beginning of the last fiscal year who continued to accrue benefits under the discontinued Directors’ Retirement Plan.  Upon completion of the acquisition, Dr. Butler, who retired on May 3, 2007 and who had been receiving monthly benefit payments under the plan since June 2007, received an actuarial equivalent of his lump sum payment of $301,745 for his remaining benefits under the plan.
 


 
Ownership of Certain Beneficial Owners and Management
 
On December 20, 2007, an indirect wholly owned subsidiary of LyondellBasell Industries merged with and into Lyondell, with LyondellBasell Industries indirectly acquiring all of the outstanding shares of Lyondell’s common stock at $48.00 per share.  As a result, Lyondell is now an indirect wholly owned subsidiary of LyondellBasell Industries.  LyondellBasell Industries is controlled by the Access Group, a privately held, U.S.-based industrial group, of which Leonard Blavatnik is the principal shareholder.  All of the shares of LyondellBasell Industries and, therefore, of Lyondell, are held indirectly through a Delaware limited liability company which is a member of the Access Group.  The Access Group owns approximately 97.25% of the equity interests in such limited liability company.  Accordingly, the Access Group and Mr. Blavatnik may be deemed to indirectly have voting or dispositive control over 100% of the outstanding common stock of Lyondell, consisting of 1,000 shares of common stock.  The address of the Access Group and Mr. Blavatnik is 730 Fifth Avenue, 20th Floor, New York, New York 10019.  The remaining approximately 2.75% of the limited liability company is owned indirectly by certain members of executive management of LyondellBasell Industries, including individuals who also serve as executive officers and/or directors of Lyondell, and members of the executive management of the Access Group and professionals who work for LyondellBasell Industries and the Access Group, but these individuals do not have voting or dispositive control over any shares of Lyondell.
 
Equity Compensation Plans
 
The following table provides information about the common stock authorized for issuance pursuant to Lyondell’s equity compensation plans as of December 31, 2007.  Upon completion of Lyondell’s December 20, 2007 acquisition by LyondellBasell Industries, Lyondell no longer had publicly traded equity securities.  In addition, as a result of the acquisition, Lyondell’s certificate of incorporation only provides for 1,000 shares of authorized common stock, all of which are outstanding.  Accordingly, Lyondell has discontinued use of these equity compensation plans.
 
Plan Category
  
(1)
Number of securities to
be issued upon exercise
of outstanding options,
warrants and rights
    
(2)
Weighted average
exercise price
of outstanding options,
warrants and rights
    
(3)
Number of securities
remaining available for
Future issuance under
Equity compensation plans (excluding
securities reflected in column (1))
Equity compensation plans approved by security holders (a)                                    
     - -     $ - -      
        11,232,114   (b)
Equity compensation plans not approved by security holders
     - -       - -      
      - -
Total                                       
     - -     $ - -      
11,232,114

 
(a)  
These plans consist of the Lyondell Chemical Company 1999 Incentive Plan, the Restricted Stock Plan of Lyondell Petrochemical Company and the Lyondell Chemical Company Restricted Stock Plan for non-employee directors.
 

(b)  
The Incentive Plan currently limits the number of shares available for grant under the plan to 26 million shares of common stock.  The amount shown reflects the 11,172,918 shares remaining available for grant as of December 31, 2007 out of the 26 million share limit contained in the Incentive Plan.  Pursuant to the current terms of the Incentive Plan, the 11,172,918 shares available for grant under the Incentive Plan as of December 31, 2007 may be granted pursuant to awards of stock options, performance units, restricted stock or stock appreciation rights, as permitted by the Incentive Plan.  However, no more than 5,901,058 shares of common stock can be issued or delivered pursuant to future awards of restricted stock, performance shares, phantom stock or performance units (to the extent settled in shares of common stock), and no more than 1,000,000 shares of common stock are available for incentive stock options.  The amount shown also reflects, as of December 31, 2007, 14,329 shares available for grant pursuant to awards of restricted stock under the Restricted Stock Plan of Lyondell Petrochemical Company and 44,867 shares available for grant pursuant to awards of restricted stock under the Lyondell Chemical Company Restricted Stock Plan for non-employee directors.
 
 
 
Certain Relationships and Related Transactions
 
Occidental
 
Lyondell and Occidental have engaged in numerous transactions.  From May 1998 to August 2002, Occidental shared ownership of Equistar with Lyondell and Millennium until Lyondell purchased Occidental’s interest in Equistar in August 2002.  Lyondell financed the purchase by the sale of Lyondell equity securities to a subsidiary of Occidental, which included (1) 34 million shares of Lyondell Series B common stock and (2) a warrant to acquire five million shares of Lyondell common stock at $25 per share. The sale of these securities in the August 2002 transaction was approved by Lyondell’s Board of Directors and its shareholders.  On January 26, 2007, Occidental exercised the warrant for $25 per share.  On February 2, 2007, pursuant to the terms of the warrant, Occidental received a net payment of 682,210 shares of Lyondell common stock, having a value of $19,750,000.  Occidental beneficially owned 5.5% of Lyondell’s outstanding common stock until selling the remainder of its Lyondell common stock in open market transactions from May 2007 through July 2007.
 
As part of the stockholders agreement that Lyondell and Occidental entered into in connection with Lyondell’s August 2002 sale of shares to Occidental, Occidental agreed to cause each share of Lyondell common stock it beneficially owns, directly or indirectly, that is entitled to vote on any matter to be (1) present for the taking of any Lyondell shareholder action and (2) voted for the nominees to Lyondell’s Board of Directors that are proposed by the directors sitting on Lyondell’s Board of Directors at the time of nomination.  In addition, as a result of the August 2002 transactions described above and Occidental’s beneficial ownership, one Occidental executive, Stephen I. Chazen, Senior Executive Vice President and Chief Financial Officer, served as a member of Lyondell’s Board of Directors from August 2002 through the closing of Lyondell’s acquisition by LyondellBasell Industries on December 20, 2007.
 
During 2007, Lyondell purchased various products from Occidental, all at market-related prices.  In addition, pursuant to an ethylene sales agreement entered into on May 15, 1998, which was amended effective April 1, 2004, Occidental agreed to purchase a substantial amount of its ethylene raw material requirements from Lyondell.  Either party has the option to “phase down” volumes over time.  However, a “phase down” cannot begin until January 1, 2014 and the annual minimum requirements cannot decline to zero prior to December 31, 2018, unless certain specified force majeure events occur.  In addition to the sales of ethylene, from time to time Lyondell has made sales of other products to Occidental, all at market-related prices.  During 2007, Occidental paid Lyondell approximately $777 million for product purchases and Lyondell purchased approximately $40 million of products from Occidental.
 

Lyondell also subleases certain railcars from Occidental, for which Occidental charged Lyondell approximately $7 million in 2007.  In addition, Lyondell’s Lake Charles, Louisiana ethylene and propylene facility is leased from Occidental pursuant to a lease that expires in May 2009. Under the lease, Lyondell pays Occidental rent in an amount equal to $100,000 per year if Lyondell is operating the Lake Charles facility or $60,000 per year if Lyondell is not operating the facility.  The Lake Charles facility has been idled since the first quarter of 2001. Although Lyondell retains the physical ability to restart or sell that facility, in the third quarter of 2006 Lyondell determined that it had no expectation of resuming production at that facility.
 
Officer Services
 
Messrs. Smith, DeNicola, Gelb and Hollinshead and Ms. Galvin historically have provided services to Lyondell’s subsidiaries, Equistar and Millennium, but have not received any compensation from Equistar and Millennium.  However, in recognition of their services for 2007, Equistar and Millennium paid Lyondell $6.7 million and $1.3 million, respectively, for Mr. Smith’s services, and Equistar and Millennium paid Lyondell an aggregate of $11.7 million and $2.3 million, respectively, for the services of Mr. DeNicola, Mr. Gelb, Mr. Hollinshead and Ms. Galvin.  Similar arrangements may occur in 2008 for LyondellBasell Industries and subsidiaries.  In addition, Mr. Smith’s son-in-law is an engineer employed at one of Lyondell’s manufacturing facilities and his compensation with respect to 2007 was approximately $186,500 and is commensurate with his peers’.
 
LyondellBasell Industries
 
On December 20, 2007, an indirect wholly owned subsidiary of LyondellBasell Industries merged with and into Lyondell, with LyondellBasell Industries acquiring all of the outstanding shares of Lyondell common stock at $48.00 per share.  As a result, Lyondell is now an indirect wholly owned subsidiary of LyondellBasell Industries.  On December 20, 2007, in connection with the acquisition by LyondellBasell Industries, the shares of certain indirect wholly owned subsidiaries of Lyondell were sold to other subsidiaries of LyondellBasell Industries.  Also in connection with the acquisition on December 20, 2007, Lyondell and certain of its subsidiaries became obligors and/or provided collateral under various debt and other financial obligations of LyondellBasell Industries and its other subsidiaries and entered into or became subject to intercompany indebtedness arrangements with other subsidiaries of LyondellBasell Industries.  Proceeds from these financial instruments were used to finance the acquisition, including repayment of indebtedness of Lyondell and certain of its subsidiaries.  On March 27, 2008, Lyondell entered into a revolving credit facility as a borrower, with a member of the Access Group as a lender.  For additional information regarding the ownership of Lyondell, see “Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters – Ownership of Certain Beneficial Owners and Management.”  For additional information regarding the subsidiary sales, see “Item 1. Business – Overview of the Business.” For additional information regarding the debt and other financial obligations under which Lyondell and certain of its subsidiaries became obligors and/or provided collateral in connection with the acquisition and intercompany indebtedness arrangements, see Note 15 to Lyondell’s Consolidated Financial Statements included in this Annual Report and “Item 7.  Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.”
 
In addition, Lyondell sells products to and purchases products from various other subsidiaries of LyondellBasell Industries at market-related prices.  During 2007 and in January 2008, LyondellBasell Industries paid Lyondell approximately $50 million and $12 million, respectively, for products purchased from Lyondell, and Lyondell paid LyondellBasell Industries approximately $7 million and $1 million, respectively, for products purchased from other subsidiaries of LyondellBasell Industries that are not also subsidiaries of Lyondell.  Lyondell generally expects that commercial transactions with LyondellBasell Industries and its subsidiaries and affiliates will continue to occur during 2008.
 

Related Party Policies
 
Lyondell used multiple policies and procedures, which are described below, to monitor related party transactions.
 
Accounting Department Process
 
During the first quarter of each year before Lyondell files its Annual Report on Form 10-K and, in years before the acquisition, its Proxy Statement, Lyondell’s Accounting Department prepares a summary reflecting:
 
·  
all payments made by Lyondell and its subsidiaries to, and
 
·  
all payments received by Lyondell and its subsidiaries from,
 
the following related parties:
 
·  
any holder of 5% or more of Lyondell’s common stock (prior to the acquisition, as identified through their SEC filings) at any point since the beginning of the previous fiscal year,
 
·  
any individual who was a member of Lyondell’s Board of Directors at any point since the beginning of the previous fiscal year,
 
·  
any entity (for-profit or non-profit) with respect to which a Lyondell officer or member of Lyondell’s Board of Directors served as an officer or a member of that entity’s board of directors or equivalent governing body at any point since the beginning of the previous fiscal year, or
 
·  
any other entities with respect to which an immediate family member of a Lyondell officer or director is similarly affiliated (as identified by the individual directors and officers through their annual questionnaires),
 
during the previous fiscal year and during the period prior to filing the Annual Report on Form 10-K.
 
The Accounting Department also prepares similar summaries as necessary throughout the year to reflect additions to the related party list as provided by the Legal Department.  The Accounting Department’s procedure is in writing.  The summaries are used in connection with the review of related party disclosures, considering such factors such as whether the transaction had market-based pricing, was in the ordinary course of business and had terms no less favorable than those which can be obtained from non-related parties.
 
Related Party Transaction Approval Policy
 
Before the acquisition, Lyondell’s Related Party Transaction Approval Policy, which was in writing, required the disinterested members of Lyondell’s Audit Committee to review and approve, in advance of commitment, certain transactions that Lyondell entered into, from time to time, with the following related parties:
 
·  
holders of 5% or more of Lyondell’s common stock, or
 
·  
entities on which a Lyondell officer or Board member served as an officer or a member of that entity’s board of directors or equivalent governing body.
 

The transactions covered by the policy were those which were:
 
·  
in the ordinary course of business and have a value of $25 million or more, or
 
·  
not in the ordinary course of business, regardless of value,
 
and did not include transactions among Lyondell and its subsidiaries or joint ventures. A transaction was resubmitted to the Audit Committee for review and approval if:
 
·  
the transaction previously fell below the $25 million threshold but then became expected to exceed it,
 
·  
the transaction’s value  increased by more than 10% or $10 million, whichever is less, or
 
·  
a transaction with market-related pricing terms changed to more of a fixed-price transaction.
 
In addition, at least annually, Lyondell’s Internal Controls Department prepared a summary of all transactions and all currently proposed transactions with those related parties, including transactions that did not require pre-approval under the policy, and the summary was presented to the Audit Committee for review.  The disinterested members of the Audit Committee determined the fairness of the transactions to Lyondell by considering whether they have terms no less favorable than those which could be obtained from non-related parties.  The disinterested members of the Audit Committee also reviewed these transactions against the director independence standards.
 
Following the acquisition, Lyondell intends to continue using the same written Related Party Transaction Approval Policy, except that the policy has been modified such that transactions are no longer being reviewed for the purpose of ensuring director independence and transactions with holders (or their subsidiaries or affiliates) of 5% or more of Lyondell’s stock (even if a Lyondell officer or director serves as its officer or director) are no longer reviewed since Lyondell’s stock is no longer publicly traded.  In addition, the responsibilities previously assigned to Lyondell’s Audit Committee will be performed by Lyondell’s Board of Directors instead under the updated policy since Lyondell no longer has an Audit Committee.
 
Conflict of Interest Policy
 
Lyondell’s Conflict of Interest Policy, which is in writing, requires all employees and officers to disclose potential conflicts of interests on a disclosure form to the employee’s Human Resources manager, which is subsequently provided to the General Counsel for review.  Such conflicts of interest may include employees, officers or their immediate family who:
 
·  
are employed by or who own at least a 10% beneficial interest in an entity (other than LyondellBasell Industries or any of its affiliates) with which Lyondell transacts business, or
 
·  
are employed by any tax exempt organization to which Lyondell makes contributions.
 
The General Counsel reviews the disclosure forms to ensure that all employees are free from any interest, influence or relationship that might conflict, or appear to conflict, with the best interest of Lyondell.
 

Charitable Contributions Policy
 
Under Lyondell’s Charitable Contributions Policy, which is in writing, all employees and officers are required to make requests in writing to Lyondell’s Corporate Communications Department for approval of Lyondell’s match of employee financial contributions to non-profit, charitable organizations. Lyondell also makes its own contributions to non-profit organizations. Before the acquisition, to ensure that any potential conflicts of interest were specifically considered before a contribution was made, if a Lyondell officer or member of the Board of Directors served on the board of directors or equivalent governing body of a non-profit entity that was the subject of a request for a charitable contribution by Lyondell (other than automatic match of employee contributions), the relationship was highlighted by the Corporate Communications Department and those requests were separately discussed with and approved by the Chief Executive Officer and General Counsel.  Following the acquisition, Lyondell intends to continue using the same written Charitable Contribution Policy, except that the policy has been modified such that any potential conflicts of interest related to contributions to non-profit entities will instead be discussed with and approved by the Executive Vice President (Office of the CEO) and the Chief Financial Officer.
 
Other Procedures
 
Lyondell also monitors related party transactions based on the following:
 
·  
information received from directors and officers in their annual written director and officer questionnaires, and
 
·  
before the acquisition, under the Principles of Corporate Governance established by the previous Lyondell Board, a Board member was required to notify the Chairman of the Board and the Corporate Responsibility and Governance Committee if the Board member was considering joining an additional Board and was required to offer to resign from the Board if he or she changed employers, so that any potential conflicts or independence impacts could be considered by the Board and the Committee.
 
 
 
The following table presents fees for audit services rendered by PricewaterhouseCoopers for the audit of Lyondell’s annual financial statements for the years ended December 31, 2007 and December 31, 2006, and fees billed or expected to be billed for audit-related, tax and all other services rendered by PricewaterhouseCoopers during those periods.  The amounts also include fees for such services rendered by PricewaterhouseCoopers during those periods for Equistar and Millennium, which are wholly-owned subsidiaries of Lyondell but file reports separately with the SEC.
 
Thousands of dollars
  
2007
    
2006
  
Audit fees (a)                                                                                              
   $ 8,365     $ 10,360  
Audit-related fees (b)                                                                                              
     790       710  
Tax fees (c)                                                                                              
     100       520  
All other fees                                                                                              
     - -       - -  
Total                                                                                              
   $ 9,255     $ 11,590  
 

(a)
Audit fees consist of the aggregate fees and expenses billed or expected to be billed for professional services rendered by PricewaterhouseCoopers for the audit of Lyondell’s, Equistar’s and Millennium’s annual financial statements, the review of financial statements included in their respective Form 10-Qs or for services that are normally provided by the independent auditor in connection with statutory and regulatory filings or engagements for those fiscal years, including agreed-upon or expanded audit procedures relating to accounting records required to respond to or comply with financial, accounting or regulatory reporting matters; and consultations as to the accounting or disclosure treatment of transactions or events and/or the actual or potential impact of final or proposed rules, standards or interpretations by regulatory or standard setting bodies.  Equistar and Millennium file reports separately with the SEC. However, the amounts shown in the table include (1) $1,362,000 and $1,295,000 for Equistar for 2006 and 2007, respectively, and (2) $4,650,000 and $1,247,000 for Millennium for 2006 and 2007, respectively.  The 2006 audit fees shown in the table above reflect a reduction of $400,000 ($150,000 for Equistar and $250,000 for Millennium) related to fees that were originally estimated, but were not incurred with respect to 2006.  Of the 2006 audit fees shown in the table, $3,311,000 ($150,000 for Equistar, $684,000 for Millennium and $2,477,000 for Lyondell) represents fees and expenses billed in 2007 related to 2006 audit services.  Of the 2007 audit fees shown in the table, $2,319,000 ($315,000 for Equistar, $484,000 for Millennium and $1,520,000 for Lyondell) represents fees and expenses expected to be billed in 2008 related to 2007 audit services.
 
(b)
Audit-related fees consist of the aggregate fees billed for assurance and related services by PricewaterhouseCoopers that are reasonably related to the performance of the audit or review of the financial statements.  This category includes fees related to the performance of audits of benefit plans.  Equistar and Millennium file reports separately with the SEC. However, the amounts shown in the table include (1) $270,000 and $389,000 for Equistar for 2006 and 2007, respectively, and (2) $174,000 and $170,000 for Millennium for 2006 and 2007, respectively.  Of the 2006 audit-related fees shown in the table, $658,000 ($188,000 for Equistar, $105,000 for Millennium and $365,000 for Lyondell) represents fees billed in 2007 for 2006 audit-related services.  Of the 2007 audit-related fees shown in the table, $783,000 ($324,000 for Equistar, $103,000 for Millennium and $356,000 for Lyondell) represents fees expected to be billed in 2008 for 2007 audit-related services.
 
(c)
Tax fees consist of the aggregate fees billed for professional services rendered by PricewaterhouseCoopers for federal, state and international tax compliance and advice in 2006 and 2007.  No fees were paid for tax planning services.  Millennium files reports separately with the SEC. However, the amounts shown in the table include $300,000 and $50,000 for Millennium for 2006 and 2007, respectively.  Equistar did not have any fees in this category during 2007 and 2006.
 
 
Lyondell’s Board of Directors is directly responsible for appointing, setting compensation and overseeing the work of the independent registered public accounting firm.  In connection with the acquisition, Lyondell established a policy requiring the Board of Directors to pre-approve all audit and non-audit services to be performed for Lyondell and its subsidiaries by the independent registered public accounting firm (including affiliates or related member firms) to ensure that the provision of such services does not impair the independent registered public accounting firm’s independence.  Prior to the acquisition, Lyondell’s Audit Committee pre-approved all audit and non-audit services pursuant to the policy.
 
A centralized service request procedure is used for all requests for the independent registered public accounting firm to provide services to Lyondell or its subsidiaries.  Under this procedure, all requests for the independent registered public accounting firm to provide services to Lyondell or its subsidiaries initially are submitted to Lyondell’s Vice President and Controller.  Each such request must include a detailed description of the services to be rendered.  If the proposed services have not already been pre-approved by Lyondell’s Board of Directors, the Vice President and Controller will submit the request and a detailed description of the proposed services to Lyondell’s Board of Directors.  Requests to provide services that require pre-approval by Lyondell’s Board of Directors also must include a statement as to whether, in the view of the Vice President and Controller, the request is consistent with the SEC’s rules on independent registered public accounting firm independence.
 

The Board of Directors has designated Lyondell’s Chief Financial Officer to monitor the performance of all services provided by the independent registered public accounting firm and to review compliance with the pre-approval policy.  The Chief Financial Officer will report to the Board of Directors periodically on the results of the monitoring.
 

 
 
(a) The following exhibits are filed as a part of this report:
 
Exhibit Number
Description of Document
2.1
Agreement and Plan of Merger, dated March 28, 2004, by and among the Registrant, Millennium Chemicals Inc. and Millennium Subsidiary LLC (22)
2.2
Sale and Purchase Agreement, dated as of February 23, 2007, by and between Millennium Worldwide Holdings I Inc., Millennium US Op Co, LLC, and The National Titanium Dioxide Co. Ltd. (Cristal) and, for the limited purposes set forth therein, the Registrant (29)
2.3
Agreement and Plan of Merger, dated July 16, 2007, by and among the Registrant, Basell AF and BIL Acquisition Holdings Limited (30)
3.1
Amended and Restated Certificate of Incorporation of the Registrant dated December 20, 2007 (31)
3.2
Amended and Restated By-Laws of the Registrant dated December 20, 2007 (31)
4.1
Indenture dated as of January 29, 1996, as supplemented by a First Supplemental Indenture dated as of February 15, 1996, between the Registrant and Texas Commerce Bank, as Trustee (5)
4.1(a)
Second Supplemental Indenture dated as of December 1, 1997 among the Registrant, Equistar Chemicals, LP and Texas Commerce Bank National Association (9)
4.1(b)
Third Supplemental Indenture dated as of November 3, 2000 among the Registrant, Equistar Chemicals, LP and The Chase Manhattan Bank (15)
4.1(c)
Fourth Supplemental Indenture dated as of November 17, 2000 among the Registrant, Equistar Chemicals, LP and The Chase Manhattan Bank (15)
4.2
Senior Secured Credit Agreement dated as of December 20, 2007
4.3
Interim Loan Credit Agreement dated as of December 20, 2007
4.4
Indenture dated as of August 10, 2005 among Nell AF S.A.R., the guarantors named therein, The Bank of New York, as Trustee, Registrar, Paying Agent, Transfer Agent and Listing Agent, ABN AMRO Bank N.V., as Security Agent, and AIB/BNY Fund Management (Ireland) Limited, as Irish Paying Agent
4.4(a)
Supplemental Indenture dated as of February 2, 2006 to the Indenture dated as of August 10, 2005
4.4(b)
Second Supplemental Indenture dated as of May 11, 2007 to the Indenture dated as of August 10, 2005
4.4(c)
Third Supplemental Indenture dated as of July 26, 2007 to the Indenture dated as of August 10, 2005
4.4(d)
Fourth Supplemental Indenture dated as of December 20, 2007 to the Indenture dated as of August 10, 2005
4.5
Senior Secured Inventory-Based Credit Agreement dated as of December 20, 2007
4.6
Security Agreement dated as of December 20, 2007
4.7
Subsidiary Guaranty dated as of December 20, 2007
4.8
Receivables Purchase Agreement dated as of December 20, 2007
4.9
Undertaking Agreement dated as of December 20, 2007
4.10
Intercreditor Agreement dated as of December 20, 2007
4.11
Intercreditor Agreement dated as of December 20, 2007
4.12
Long Term Intercompany Loan Agreement dated as of February 22, 2008
4.13
Indenture dated as of June 15, 1988 between ARCO Chemical Company and Bank of New York, as Trustee (12)
4.13(a)
First Supplemental Indenture dated as of January 5, 2000 between the Registrant and Bank of New York, as Trustee (13)
4.13(b)
9.80% Debenture due 2020 issuable under the Indenture referred to in Exhibit 4.13 (12)
4.13(c)
10.25% Debenture due 2010 issuable under the Indenture referred to in Exhibit 4.13 (12)
 
 
4.14
Indenture, dated as of November 27, 1996, among Millennium America Inc. (formerly named Hanson America Inc.), Millennium Chemicals Inc. and The Bank of New York, as Trustee, in respect  to Millennium’s 7.625% Senior Debentures due November 15, 2026 (6)
4.14(a)
First Supplemental Indenture dated as of November 21, 1997 among Millennium America Inc., Millennium Chemicals Inc. and The Bank of New York, as Trustee (10)

 
The Registrant is a party to several long-term debt instruments under which the total amount of long-term debt securities authorized does not exceed 10% of the total assets of the Registrant and its subsidiaries on a consolidated basis.  Pursuant to paragraph 4(iii)(A) of Item 601(b) of Registration S-K, the Registrant agrees to furnish a copy of such instruments to the Commission upon request.
 
EXECUTIVE OFFICER AND DIRECTOR COMPENSATION:
10.1
Amended and Restated Executive Supplementary Savings Plan (16)
10.1(a)
Amendment to Executive Supplementary Savings Plan
10.2
Amended and Restated Supplementary Executive Retirement Plan (3)
10.2(a)
Amendment to Supplementary Executive Retirement Plan
10.3
Executive Medical Plan (7)
10.3(a)
Amendment No. 1 to the Executive Medical Plan (7)
10.3(b)
Amendment No. 2 to the Executive Medical Plan (7)
10.4
Lyondell Chemical Company Executive Deferral Plan (19)
10.4(a)
Amendment to Lyondell Chemical Company Executive Deferral Plan
10.5
Executive Long-Term Disability Plan (1)
10.5(a)
Amendment No. 1 to the Executive Long-Term Disability Plan (7)
10.6
Amended and Restated Executive Life Insurance Plan (8)
10.7
Amended and Restated Supplemental Executive Benefit Plans Trust Agreement (20)
10.7(a)
Amendment No. 1 dated as of March 26, 2004 to Amended and Restated Supplemental Executive Benefit Plans Trust Agreement (21)
10.7(b)
Amendment No. 2 dated as of February 23, 2006 to Amended and Restated Lyondell Chemical Company Supplemental Executive Benefit Plans Trust Agreement (19)
10.8
Restricted Stock Plan (2)
10.8(a)
Amendment No. 1 to the Restricted Stock Plan (4)
10.8(b)
Amendment No. 2 to the Restricted Stock Plan (9)
10.9
Form of Registrant’s Indemnity Agreement with Officers and Directors (28)
10.10
Lyondell Chemical Company Elective Deferral Plan for Non-Employee Directors (19)
10.11
Amended and Restated Retirement Plan for Non-Employee Directors (16)
10.11(a)
Amendment No. 1 to Amended and Restated Retirement Plan for Non-Employee Directors (18)
10.11(b)
Amendment No. 2 dated as of March 28, 2004 to Amended and Restated Retirement Plan for Non-Employee Directors (21)
10.12
Lyondell Chemical Company Restricted Stock Plan for Non-Employee Directors (19)
10.13
Amended and Restated Non-Employee Directors Benefit Plans Trust Agreement (20)
10.13(a)
Amendment No. 1 dated as of March 28, 2004 to Amended and Restated Non-Employee Directors Benefit Plans Trust Agreement (21)
10.13(b)
Amendment No. 2 dated as of February 23, 2006 to Amended and Restated Lyondell Chemical Company Non-Employee Directors Benefit Plans Trust Agreement (19)
10.14
Stock Option Plan for Non-Employee Directors (16)
10.15
Amended and Restated 1999 Incentive Plan (23)
10.16
Form of Award Agreement for the Registrant’s Amended and Restated 1999 Incentive Plan (19)
10.17
Lyondell Chemical Company Executive Severance Pay Plan (19)
10.18
Revised Annual Cash Bonus Guidelines (32)
10.19
Director Compensation (27)
10.20
Executive Compensation (11)
10.21
Form of Time Sharing Agreement (28)
10.22
Agreement dated January 23, 2008 between Morris Gelb and Registrant
 


OTHER MATERIAL CONTRACTS:
10.23
Crude Oil Sales Agreement dated August 1, 2006 by and between PDVSA Petróleo S.A. and LYONDELL-CITGO Refining LP (portions of this document have been omitted pursuant to a request for confidential treatment and filed with the SEC) (24)
10.24
Amended and Restated Master Transaction Agreement dated as of March 31, 2000 among the Registrant, Bayer AG and Bayer Corporation (14)
10.24(a)
First Amendment to Amended and Restated Master Transaction Agreement, dated as of December 18, 2000 (15)
10.25
Amended and Restated Master Asset and Stock Purchase Agreement dated as of March 31, 2000 among the Registrant, the entities set forth on Schedule 1 thereto, Bayer AG and Bayer Corporation (14)
10.26
Amended and Restated Limited Partnership Agreement of PO JV, LP dated as of March 31, 2000 (14)
10.26(a)
First Amendment to the Amended and Restated Limited Partnership Agreement of PO JV, LP (17)
10.27
Limited Partnership Interest Purchase and Sale Agreement dated as of March 31, 2000 among Lyondell SAT, INC., Lyondell POTechLP, Inc., BAYPO I LLC, BAYPO II LLC and BIPPO Corporation (14)
10.28
General Partnership Agreement dated December 18, 2000 between Bayer Polyurethanes B.V. and Lyondell PO-11 C.V. (15)
10.29
Parent Agreement dated December 18, 2000 between the Registrant and Bayer AG (15)
10.30
Tax Sharing and Indemnification Agreement, dated as of September 30, 1996, between Hanson, Millennium Overseas Holdings Ltd., Millennium America Holdings Inc. (formerly HM Anglo American Ltd.), Hanson North America Inc. and Millennium Chemicals Inc. (25)
10.31
Deed of Tax Covenant, dated as of September 30, 1996, between Hanson, Millennium Overseas Holdings Ltd., Millennium Inorganic Chemicals Limited (formerly SCM Chemicals Limited), SCMC Holdings B.V. (formerly Hanson SCMC B.V.), Millennium Inorganic Chemicals Ltd. (formerly SCM Chemicals Ltd.), and Millennium Chemicals Inc. (the “Deed of Tax Covenant”) (25)
10.31(a)
Amendment to the Deed of Tax Covenant dated January 28, 1997 (26)
12
Statement Setting Forth Detail for Computation of Ratio of Earnings to Fixed Charges
21
Subsidiaries of the Registrant
31.1
Rule 13a – 14(a)/15d – 14(a) Certification of Principal Executive Officer
31.2
Rule 13a – 14(a)/15d – 14(a) Certification of Principal Financial Officer
32.1
Section 1350 Certification of Principal Executive Officer
32.2
Section 1350 Certification of Principal Financial Officer
_________
 
(1)  
Filed as an exhibit to the Registrant’s Annual Report on Form 10-K Report for the year ended December 31, 1992 and incorporated herein by reference.
(2)  
Filed as an exhibit to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 1994 and incorporated herein by reference.
(3)  
Filed as an exhibit to Registrant’s Current Report on Form 8-K dated as of December 6, 2006 and incorporated herein by reference.
(4)  
Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1995 and incorporated herein by reference.
(5)  
Filed as an exhibit to the Registrant’s Registration Statement on Form S-3 dated as of January 31, 1996 and incorporated herein by reference.
(6)  
Filed as an exhibit to Millennium Chemical Inc.’s Registration Statement on Form S-1 (No. 333-15975) and incorporated herein by reference.
(7)  
Filed as an exhibit to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 1996 and incorporated herein by reference.
(8)  
Filed as an exhibit to Registrant’s Current Report on Form 8-K dated as of September 1, 2006 and incorporated herein by reference.
(9)  
Filed as an exhibit to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 1997 and incorporated herein by reference.


(10)  
Filed as an exhibit to Millennium Chemical Inc.’s Annual Report on Form 10-K for the year ended December 31, 1997 and incorporated herein by reference.
(11)  
Filed in Item 5.02 to Registrant’s Current Report on Form 8-K dated as of December 6, 2006 and incorporated herein by reference.
(12)  
Filed as an exhibit to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 1998 and incorporated herein by reference.
(13)  
Filed as an exhibit to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 1999 and incorporated herein by reference.
(14)  
Filed as an exhibit to the Registrant’s Current Report on Form 8-K dated as of April 14, 2000 and incorporated herein by reference.
(15)  
Filed as an exhibit to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2000 and incorporated herein by reference.
(16)  
Filed as an exhibit to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2001 and incorporated herein by reference.
(17)  
Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2002 and incorporated herein by reference.
(18)
Filed as an exhibit to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2002 and incorporated herein by reference.
(19)
Filed as an exhibit to the Registrant’s Current Report on Form 8-K dated as of February 23, 2006 and incorporated herein by reference.
(20)
Filed as an exhibit to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2003 and incorporated herein by reference.
(21)
Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2004 and incorporated herein by reference.
(22)
Filed as an exhibit to the Registrant’s Current Report on Form 8-K dated as of March 28, 2004 and incorporated herein by reference.
(23)
Filed as Annex F to the Registrant’s Registration Statement on Form S-4/A (No. 333-114877) filed on September 30, 2004 and incorporated herein by reference.
(24)
Filed as an exhibit to the Registrant’s Current Report on Form 8-K/A dated as of August 16, 2006 and incorporated herein by reference.
(25)
Filed as an exhibit to Millennium Chemical Inc.’s Registration Statement on Form 10 (No. 1-12091) and incorporated herein by reference.
(26)
Filed as an exhibit to Millennium Chemical Inc.’s Annual Report on Form 10-K for the year ended December 31, 1996 and incorporated herein by reference.
(27)
Filed as an exhibit to the Registrant’s Current Report on Form 8-K dated as of October 6, 2005 and incorporated herein by reference.
(28)
Filed as an exhibit to the Registrant’s Current Report on Form 8-K dated as of May 3, 2007 and incorporated herein by reference.
(29)
Filed as an exhibit to Registrant’s Current Report on Form 8-K dated as of February 22, 2007 and incorporated herein by reference.
(30)
Filed as an exhibit to Registrant’s Current Report on Form 8-K dated as of July 17, 2007 and incorporated herein by reference.
(31)
Filed as an exhibit to Registrant’s Current Report on Form 8-K dated as of December 20, 2007 and incorporated herein by reference.
(32)
Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2007 and incorporated herein by reference.

Copies of exhibits will be furnished upon prepayment of 25 cents per page.
 
Requests should be addressed to the Secretary.
 
(b) Consolidated Financial Statements and Financial Statement Schedules
 
(1) Consolidated Financial Statements
 

Consolidated Financial Statements filed as part of this Annual Report on Form 10-K are listed in the Index to Financial Statements on page 83.
 
(2) Financial Statement Schedules
 
Financial statement schedules are omitted because they are not applicable or the required information is contained in the Financial Statements or notes thereto.
 

SIGNATURES
 
Pursuant to the requirements of Section 13 of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
   
            LYONDELL CHEMICAL COMPANY
       
Date:
March 28, 2008
By:
  /s/  MORRIS GELB
 
     
Morris Gelb,
     
Principal and Chief Executive Officer
       
 
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on March 28, 2008.
 
 
Signature
Title
       
       
       
  /s/  MORRIS GELB  
President, Chief Executive Officer and
 
(Morris Gelb,
Director
 
Principal Executive Officer)
  
       
       
  /s/  ALAN BIGMAN   
Chief Financial Officer and
 
(Alan Bigman,
Director
 
Principal Financial Officer)
  
       
       
  /s/  EBERHARD FALLER  
Vice President, Controller and
 
(Eberhard Faller,
Chief Accounting Officer
 
Principal Accounting Officer)
  
       
       
  /s/  EDWARD J. DINEEN  
Director
 
(Edward J. Dineen)
  
 

SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED
PURSUANT TO SECTION 15(d) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES PURSUANT TO SECTION 12 OF THE ACT
 
Neither an annual report covering the Registrant’s last fiscal year nor proxy materials with respect to any annual or other meeting of security holders have been sent to security holders.
 
 
 
 
 
 EX-4.2 2 lyo10k-032808ex42.htm SENIOR SECURED CREDIT AGREEMENT DATED AS OF DECEMBER 20, 2007 lyo10k-022808ex42.htm
EXHIBIT 4.2

Dated as of December 20, 2007

among

BASELL AF S.C.A.
(to be renamed LYONDELLBASELL INDUSTRIES AF S.C.A.),
as the Company,

BIL ACQUISITION HOLDINGS LIMITED
(to be merged with and into LYONDELL CHEMICAL COMPANY
substantially concurrently with the initial Credit Extensions),
as the U.S. Borrower,

BASELL HOLDINGS B.V. and
BASELL FINANCE COMPANY B.V.,
as the Dutch Borrowers,

BASELL GERMANY HOLDINGS GmbH,
as the German Borrower,

THE OTHER NON-U.S. BORROWERS PARTY HERETO FROM TIME TO TIME,

THE SUBSIDIARY GUARANTORS PARTY HERETO FROM TIME TO TIME,

CITIBANK, N.A.,
as Administrative Agent, U.S. Swing Line Lender and Collateral Agent,

CITIBANK, N.A., LONDON BRANCH,
as European Swing Line Lender

ABN AMRO BANK, N.V.
as L/C Issuer,

THE OTHER LENDERS PARTY HERETO FROM TIME TO TIME,

CITIGROUP GLOBAL MARKETS INC.,
GOLDMAN SACHS CREDIT PARTNERS L.P.,
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,
ABN AMRO INCORPORATED and
UBS SECURITIES LLC,
as Joint Lead Arrangers and Joint Bookrunners,

GOLDMAN SACHS CREDIT PARTNERS, L.P.,
as Syndication Agent,
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,
ABN AMRO INCORPORATED and
UBS SECURITIES LLC,
as Documentation Agents,

and

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,
as Transaction Coordinator

Cahill Gordon & Reindel llp
80 Pine Street
New York, New York  10005

 
 
 
 
 
TABLE OF CONTENTS
  
     
     
   
Page
     
     
 
ARTICLE I.
  
     
 
DEFINITIONS AND ACCOUNTING TERMS
  
     
Section 1.01.
Defined Terms
2
Section 1.02.
Other Interpretive Provisions
61
Section 1.03.
Accounting Terms
62
Section 1.04.
Rounding
62
Section 1.05.
References to Agreements, Laws, Etc.
62
Section 1.06.
Times of Day
63
Section 1.07.
Timing of Payment or Performance
63
Section 1.08.
Currency Equivalents Generally
63
Section 1.09.
Change of Currency
63
Section 1.10.
Borrowers Agent
63
Section 1.11.
Luxembourg Terms
64
     
 
ARTICLE II.
  
     
 
THE COMMITMENTS AND CREDIT EXTENSIONS
  
     
Section 2.01.
The Loans
65
Section 2.02.
Borrowings, Conversions and Continuations of Loans
66
Section 2.03.
Letters of Credit
68
Section 2.04.
Swing Line Loans
76
Section 2.05.
Prepayments
79
Section 2.06.
Termination or Reduction of Commitments
83
Section 2.07.
Repayment of Loans
84
Section 2.08.
Interest
86
Section 2.09.
Fees
87
Section 2.10.
Computation of Interest and Fees
88
Section 2.11.
Evidence of Indebtedness
88
Section 2.12.
Payments Generally
89
Section 2.13.
Sharing of Payments
91
Section 2.14.
Incremental Credit Extensions
91
Section 2.15.
Currency Equivalents
93
     
 
ARTICLE III.
  
     
 
TAXES, INCREASED COSTS PROTECTION AND ILLEGALITY
  
     
Section 3.01.
Taxes
94
Section 3.02.
Illegality
96
Section 3.03.
Inability To Determine Rates
97
Section 3.04.
Increased Cost and Reduced Return; Capital Adequacy; Reserves on Eurocurrency Rate Loans
97
Section 3.05.
Funding Losses
99
Section 3.06.
Matters Applicable to All Requests for Compensation
99
 
-i-
 
Section 3.07.
Replacement of Lenders Under Certain Circumstances
100
Section 3.08.
Survival
101
Section 3.09.
Calculation of Applicable Rate
101
     
 
ARTICLE IV.
  
     
 
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
  
     
Section 4.01.
Conditions of Initial Credit Extension
102
Section 4.02.
Conditions to All Credit Extensions
104
     
 
ARTICLE V.
  
     
 
REPRESENTATIONS AND WARRANTIES
  
     
Section 5.01.
Existence, Qualification and Power; Compliance with Laws
105
Section 5.02.
Authorization; No Contravention
105
Section 5.03.
Governmental Authorization; Other Consents
105
Section 5.04.
Binding Effect
106
Section 5.05.
Financial Statements; No Material Adverse Effect
106
Section 5.06.
Litigation
107
Section 5.07.
[Reserved]
107
Section 5.08.
Ownership of Property; Liens
107
Section 5.09.
Environmental Matters
107
Section 5.10.
Taxes
108
Section 5.11.
ERISA Compliance
108
Section 5.12.
Subsidiaries; Equity Interests
109
Section 5.13.
Margin Regulations; Investment Company Act
109
Section 5.14.
Disclosure
109
Section 5.15.
[Reserved]
110
Section 5.16.
Anti-Terrorism Laws
110
Section 5.17.
Intellectual Property; Licenses, Etc.
110
Section 5.18.
Solvency
110
Section 5.19.
Use of Proceeds
110
Section 5.20.
[Reserved]
111
Section 5.21.
Security Documents
111
Section 5.22.
Works Council
111
     
 
ARTICLE VI.
  
     
 
AFFIRMATIVE COVENANTS
  
     
Section 6.01.
Financial Statements
112
Section 6.02.
Certificates; Other Information
114
Section 6.03.
Notices
114
Section 6.04.
Payment of Obligations
115
Section 6.05.
Preservation of Existence, Etc
115
Section 6.06.
Maintenance of Properties
115
Section 6.07.
Maintenance of Insurance
115
Section 6.08.
Compliance with Laws
115
 
-ii-
 
Section 6.09.
Compliance with Environmental Laws; Environmental Reports
116
Section 6.10.
Books and Records
116
Section 6.11.
Inspection Rights
116
Section 6.12.
Additional Collateral; Additional Guarantors
117
Section 6.13.
ERISA
119
Section 6.14.
Further Assurances and Post-Closing Conditions
119
Section 6.15.
Use of Proceeds
120
Section 6.16.
Interest Rate Protection
120
Section 6.17.
Know Your Customer Requests
120
     
 
ARTICLE VII.
  
     
 
NEGATIVE COVENANTS
  
     
Section 7.01.
Liens
121
Section 7.02.
Investments
125
Section 7.03.
Indebtedness
128
Section 7.04.
Fundamental Changes
131
Section 7.05.
Dispositions
132
Section 7.06.
Restricted Payments
134
Section 7.07.
Change in Nature of Business
136
Section 7.08.
Transactions with Affiliates
136
Section 7.09.
Burdensome Agreements
137
Section 7.10.
Anti-Money Laundering
139
Section 7.11.
Financial Covenants
139
Section 7.12.
Accounting Changes
140
Section 7.13.
Prepayments, Etc. of Indebtedness
140
Section 7.14.
Holding Company
141
     
 
ARTICLE VIII.
  
     
 
EVENTS OF DEFAULT AND REMEDIES
  
     
Section 8.01.
Events of Default
141
Section 8.02.
Remedies upon Event of Default
144
Section 8.03.
Application of Funds
145
Section 8.04.
Right to Cure
146
Section 8.05.
CAM Exchange
146
     
 
ARTICLE IX.
  
     
 
ADMINISTRATIVE AGENT AND OTHER AGENTS
  
     
Section 9.01.
Appointment and Authorization of Agents
147
Section 9.02.
Delegation of Duties
149
Section 9.03.
Liability of Agents
149
Section 9.04.
Reliance by Agents
149
Section 9.05.
Notice of Default
150
Section 9.06.
Credit Decision; Disclosure of Information by Agents
150
Section 9.07.
Indemnification of Agents
151
 
-iii-
 
Section 9.08.
Agents in Their Individual Capacities
152
Section 9.09.
Successor Agents
152
Section 9.10.
Administrative Agent May File Proofs of Claim
153
Section 9.11.
Collateral and Guaranty Matters
153
Section 9.12.
Other Agents; Arrangers and Managers
157
Section 9.13.
Appointment of Supplemental Agents
157
Section 9.14.
Withholding Tax
158
     
 
ARTICLE X.
  
     
 
MISCELLANEOUS
  
     
Section 10.01.
Amendments, Etc.
158
Section 10.02.
Notices and Other Communications; Facsimile Copies
161
Section 10.03.
No Waiver; Cumulative Remedies
162
Section 10.04.
Attorney Costs and Expenses
162
Section 10.05.
Indemnification by the Borrowers
163
Section 10.06.
Payments Set Aside
164
Section 10.07.
Successors and Assigns
164
Section 10.08.
Confidentiality
168
Section 10.09.
Setoff
169
Section 10.10.
Interest Rate Limitation
169
Section 10.11.
Counterparts
170
Section 10.12.
Integration
170
Section 10.13.
Survival of Representations and Warranties
170
Section 10.14.
Severability
170
Section 10.15.
GOVERNING LAW
170
Section 10.16.
WAIVER OF RIGHT TO TRIAL BY JURY
171
Section 10.17.
Binding Effect
171
Section 10.18.
Judgment Currency
171
Section 10.19.
Lender Action
172
Section 10.20.
USA Patriot Act
172
Section 10.21.
Agent for Service of Process
172
Section 10.22.
No Advisory or Fiduciary Responsibility
172
     
 
ARTICLE XI.
  
     
 
GUARANTY
  
     
Section 11.01.
The Guaranty
173
Section 11.02.
Obligations Unconditional
173
Section 11.03.
Reinstatement
175
Section 11.04.
Subrogation; Subordination
175
Section 11.05.
Remedies
175
Section 11.06.
Instrument for the Payment of Money
175
Section 11.07.
Continuing Guaranty
175
Section 11.08.
General Limitation on Guarantee Obligations
175
Section 11.09.
Release of Guarantors
176
Section 11.10.
Right of Contribution
176
Section 11.11.
Certain Dutch Matters
176
 
-iv-
 
Section 11.12.
Guaranty Limitations
177
Section 11.13.
Guaranty Limitations in Respect of Millennium Chemicals Inc.
181
Section 11.14.
Non-U.S. Guarantee Limitations.
181
Section 11.15.
Limitation on Guarantee by Additional Guarantors.
181
     
 
ARTICLE XII.
  
     
 
FOREIGN CURRENCY PARTICIPATIONS
  
     
Section 12.01.
U.S./Dutch Revolving Credit Loans; Intra-Lender Issues.
181
Section 12.02.
Settlement Procedure for Specified Foreign Currency Participations.
182
Section 12.03.
Obligations Irrevocable.
184
Section 12.04.
Recovery or Avoidance of Payments.
185
Section 12.05.
Indemnification by Lenders.
185
Section 12.06.
Specified Foreign Currency Loan Participation Fee.
185

SCHEDULES
   
1.01A
Commitments
1.01B
Unrestricted Subsidiaries
1.01C
Mandatory Cost Formulae
1.01E
Existing Letters of Credit
1.01F
Mortgaged Properties
1.01G
Certain Security Interests and Guarantees
1.01H
Guarantors
1.01I
Agreed Security Principles
1.01J
Security Agreements
1.01K
Excluded Collateral
1.01L
Swap Contracts
4.01(a)(v)(B)
Local Counsel
4.01(a)(xi)
Non-U.S. Documentation
5.05
Undisclosed Liabilities
5.08
Ownership of Property
5.09
Environmental Matters
5.12
Subsidiaries and Other Equity Investments
6.14(a)
Certain Collateral Documents
7.01(b)
Existing Liens
7.02(e)
Existing Investments
7.03(b)
Existing Indebtedness
7.05(k)
Dispositions
7.08
Existing Transactions with Affiliates
7.09
Existing Contractual Obligations
10.02
Administrative Agents Office, Certain Addresses for Notices
 
-v-
 
EXHIBITS
   
A
Form of Committed Loan Notice
B
Form of Swing Line Loan Notice
C-1
Form of Dutch Tranche A Dollar Term Note
C-2
Form of U.S. Tranche A Dollar Term Note
C-3
Form of U.S. Tranche B Dollar Term Note
C-4
Form of German Tranche B Euro Term Note
C-5
Form of Revolving Credit Note
C-6
Form of European Swing Line Note
C-7
Form of U.S. Swing Line Note
D
Form of Compliance Certificate
E
Form of Assignment and Assumption
F
Form of U.S. Security Agreement
G-1
Form of Perfection Certificate
G-2
Form of Perfection Certificate Supplement
H
Form of Opinion of Skadden, Arps, Slate, Meagher & Flom LLP
I
Form of Mortgage
J
Form of Foreign Lender Tax Certificate

 
-vi-
 

CREDIT AGREEMENT

This CREDIT AGREEMENT (this Agreement) is entered into as of December 20, 2007, among BASELL AF S.C.A. (to be renamed LYONDELLBASELL INDUSTRIES AF S.C.A.), a company existing under the laws of the Grand Duchy of Luxembourg (together with its successors and assigns, the Company), BIL ACQUISITION HOLDINGS LIMITED, a Delaware corporation and Wholly Owned Subsidiary of the Company (to be merged with and into LYONDELL CHEMICAL COMPANY substantially concurrently with the initial Credit Extensions) (Lyondell or the U.S. Borrower), BASELL HOLDINGS B.V., a Dutch corporation limited by shares (Basell Holdings), BASELL FINANCE COMPANY B.V., a Dutch corporation limited by shares (Basell Finance and, together with Basell Holdings, the Dutch Borrowers), and BASELL GERMANY HOLDINGS GmbH, a corporation organized under the laws of Germany (the German Borrower and, together with the Dutch Borrowers, the Non-U.S. Borrowers and, together with the Dutch Borrowers and the U.S. Borrower, the Borrowers), the other Non-U.S. Borrowers party hereto from time to time, the Subsidiary Guarantors party hereto from time to time, CITIBANK, N.A., as Administrative Agent, U.S. Swing Line Lender and Collateral Agent, CITIBANK, N.A., LONDON BRANCH, as European Swing Line Lender, ABN AMRO Bank N.V., as L/C Issuer (the L/C Issuer) and each lender party hereto from time to time (collectively, the Lenders and individually, a Lender).

PRELIMINARY STATEMENTS

The Borrowers have requested that the Lenders extend credit (i) to the U.S. Borrower in the form of U.S. Tranche A Dollar Term Loans in an initial aggregate amount of $1,500,000,000 and U.S. Tranche B Dollar Term Loans in an initial aggregate amount of $7,550,000,000, (ii) to Basell Holdings in the form of Dutch Tranche A Dollar Term Loans in an initial aggregate amount of $500,000,000, (iii) to the German Borrower in the form of German Tranche B Euro Term Loans in an initial aggregate amount of  1,300,000,000, (iv) to the Borrowers in the form of Primary Revolving Credit Loans in an initial aggregate amount of up to the equivalent of $800,000,000 available in Dollars and Alternative Currencies and (v) to the Dutch Borrowers in the form of Dutch Revolving Credit Loans in an initial aggregate amount of up to the equivalent of $200,000,000 available in Dollars and Alternative Currencies.  The Primary Revolving Credit Facility may include one or more Swing Line Loans and one or more Letters of Credit available in Dollars, Euros or Sterling from time to time. The Dutch Revolving Credit Facility may include one or more Letters of Credit available in Dollars or Alternative Currencies from time to time.

The proceeds of the Term Loans, together with the proceeds of loans made under the Asset Backed Credit Facilities on the Closing Date and the proceeds of the issuance of the Senior Second Lien Interim Loans, together with the proceeds of certain utilizations of the Primary Revolving Credit Facility, will be used to pay the consideration for the Acquisition (including the conversion of the Millennium 4% Convertible Debentures due 2026), refinance existing indebtedness of the Company and its Subsidiaries (including the Margin Loan) and Lyondell and its Subsidiaries and pay the Transaction Expenses.  The proceeds of the Revolving Credit Loans, Swing Line Loans and Letters of Credit will be used by the Borrowers for working capital and general corporate purposes of the Company and its Subsidiaries (including Permitted Acquisitions).

The applicable Lenders have indicated their willingness to lend, and the L/C Issuers have indicated their willingness to issue Letters of Credit, in each case, on the terms and subject to the conditions set forth herein.

In consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:

 
 

ARTICLE I.

Definitions and Accounting Terms

Section 1.01.   Defined Terms
 
As used in this Agreement, the following terms shall have the meanings set forth below:

2010 Debentures means the $100,000,000 aggregate principal amount of 10% Debentures due 2010 of Lyondell.

2015 Notes means, collectively, the $615,000,000 aggregate principal amount of 8⅜% Senior Notes due 2015 of the Company and 500,000,000 aggregate principal amount of 8⅜% Senior Notes due 2015 of the Company.

2027 Notes means the $300,000,000 aggregate principal amount of the 8.10% guaranteed notes due March 15, 2027 issued by Basell Finance (formerly known as Montell Finance Company B.V.).

ABLIntercreditor Agreement means the intercreditor agreement, dated as of the Closing Date, between the Collateral Agent, Citibank, N.A (in its capacities as agent for the secured parties under the ABF Inventory Facility and as agent for the purchasers under the ABF Receivables Facility), the Company, the U.S. Borrower and the other parties thereto from time to time, as amended, amended and restated, supplemented or otherwise modified from time to time.

Acquisition means the merger of BIL Acquisition into Lyondell pursuant to the Acquisition Agreement.

Acquisition Agreement means that certain Agreement and Plan of Merger, dated as of July 16, 2007, by and among the Company, BIL Acquisition and Lyondell.

Additional Lender has the meaning set forth in Section 2.14(c).

Administrative Agent means Citibank, N.A., in its capacity as administrative agent under any of the Loan Documents, or any successor administrative agent; it being understood that Citibank, N.A. may designate any of its Affiliates, including Citicorp International Limited, as administrative agent for Loans denominated in any Alternative Currency, and that such Affiliate shall be considered an Administrative Agent for all purposes hereunder.

Administrative Agents Office means, with respect to any currency, the Administrative Agents address and, as appropriate, account as set forth on Schedule 10.02 with respect to such currency, or such other address or account with respect to such currency as the Administrative Agent may from time to time specify (upon reasonable written notice) to the Borrowers Agent and the Lenders.

Administrative Questionnaire means an Administrative Questionnaire in a form supplied by the Administrative Agent.

Affiliate means, with respect to any specified Person, any other Person that directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such specified Person.  The term control means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise; controlling and controlled have meanings correlative of the foregoing; provided, however, that none of the Arrangers or their respective Affiliates shall be deemed an Affiliate of the Company.

 
-2-
 

Agent-Related Persons means the Agents, together with their respective Affiliates, and the officers, directors, partners, employees, agents and attorneys-in-fact of such Persons and Affiliates.

Agents means, collectively, the Administrative Agent, the Collateral Agent, the Documentation Agents, the Syndication Agent and the Supplemental Agents (if any).

Aggregate Commitments means at any time the aggregate Commitments of all the Lenders at such time.

Agreed Security Principles has the meaning set forth in Schedule 1.01I.

Agreement means this agreement, as the same may be amended, supplemented or otherwise modified from time to time.

Alternative Currency means either Euros or Sterling.

Anti-Terrorism Laws means:

(a)           the Executive Order No. 13224 of September 23, 2001, Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten To Commit, or Support Terrorism (the Executive Order);

(b)           the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56 (commonly known as the USA Patriot Act);

(c)           the Money Laundering Control Act of 1986, Public Law 99-570;

(d)           the International Emergency Economic Powers Act, 50 U.S.C. 1701 et seq., and the Trading with the Enemy Act, 50 U.S.C. App. 1 et seq., and any Executive Order or regulation promulgated thereunder and administered by the Office of Foreign Assets Control (OFAC) of the U.S. Department of the Treasury; and

(e)           any similar law enacted in the United States of America subsequent to the date of this Agreement.

Applicable Amount means, at any time (the Reference Time), an amount determined on a cumulative basis equal to, without duplication:

(a)           50% of the cumulative Consolidated Net Income, or if cumulative Consolidated Net Income shall be a loss, minus 100% of such loss, of the Company (excluding from Consolidated Net Income, for this purpose only, any amount that otherwise increased the Applicable Amount pursuant to clauses (b), (c) or (d) below) earned from January 1, 2008 through the last day of the last fiscal quarter or Fiscal Year for which financial statements have been delivered pursuant to clause (a) or (b) of Section 6.01 at the Reference Time (treating such period as a single accounting period); provided, however, that for purposes of this clause (a) only, any amounts that would constitute Consolidated Net Income but which have been used to make an Investment permitted by clauses (i) or (ii) of Section 7.02(n) shall be excluded from Consolidated Net Income, plus

 
-3-
 

(b)           100% of the aggregate net cash proceeds received by the Company or its Restricted Subsidiaries after the Closing Date and on or prior to the Reference Time from any Person (other than a Subsidiary of the Company) from any contribution (in each case other than pursuant to Sections 7.02(g)(A) and (B), 7.06(d) and 8.04) in respect of Qualified Equity Interests or from the issuance or sale (in each case other than pursuant to Sections 7.02(g)(A) and (B), 7.06(d) and 8.04) after the Closing Date and on or prior to the Reference Time to any Person (other than a Subsidiary of the Company) of Qualified Equity Interests of the Company or debt securities and Disqualified Equity Interests of the Company or its Restricted Subsidiaries that are convertible into or exchangeable for Qualified Equity Interests of the Company, but only when and to the extent such debt securities or Disqualified Equity Interests are converted into or exchanged for Qualified Equity Interests of the Company, plus

(c)           100% of the fair market value of property other than cash (but including Equity Interests) of Persons engaged in a Permitted Business or property used or useful in a Permitted Business received by the Company or its Restricted Subsidiaries after the Closing Date and on or prior to the Reference Time from any Person (other than a Subsidiary of the Company) consisting of any contribution (in each case other than pursuant to Sections 7.02(g)(A) and (B), 7.06(d) and 8.04) in respect of Qualified Equity Interests or as consideration for the issuance or sale (in each case other than pursuant to Sections 7.02(g)(A) and (B), 7.06(d) and 8.04) after the Closing Date and on or prior to the Reference Time to any Person (other than a Subsidiary of the Company) of Qualified Equity Interests of the Company or debt securities and Disqualified Equity Interests of the Company or its Restricted Subsidiaries that are convertible into or exchangeable for Qualified Equity Interests of the Company, but only when and to the extent such debt securities or Disqualified Equity Interests are converted into or exchanged for Qualified Equity Interests of the Company, plus

(d)           100% of the amounts of the type described in clauses (i) or (ii) of Section 7.02(n), but only to the extent such Net Proceeds are not utilized in accordance therewith, minus

(e)           the Applicable ECF Percentage of any amount included under clause (a) above (but only to the extent the payment is determined and paid by reference to the Applicable Amount) (i) used to make payments other than principal and interest on Indebtedness after the Closing Date and prior to the Reference Time reducing Excess Cash Flow pursuant to clause (b)(iii) of the definition thereof or (ii) deducted from Excess Cash Flow pursuant to clause (b)(vii) of the definition thereof, minus

(f)           any amount included under clauses (a) (d) above used to make Investments pursuant to Section 7.02(k) after the Closing Date and prior to the Reference Time, minus

(g)           any amount included under clauses (a) (d) above (but only to the extent the payment is determined and paid by reference to the Applicable Amount) used to pay dividends or make distributions pursuant to Section 7.06(n) after the Closing Date and prior to the Reference Time, minus

 
-4-
 

(h)           any amount included under clauses (a) (d) above (but only to the extent the payment is determined and paid by reference to the Applicable Amount) used to make Capital Expenditures pursuant to Section 7.11(c) after the Closing Date and prior to the Reference Time, minus

(i)           any amount included under clauses (a) (d) above (but only to the extent the payment is determined and paid by reference to the Applicable Amount) used to make payments in respect of Junior Financings pursuant to Section 7.13(a) after the Closing Date and prior to the Reference Time.

Applicable Amount Availability Condition means, with respect to any proposed use of the Applicable Amount, that, on a Pro Forma Basis after giving effect to the proposed transaction, (x) there shall not exist or be continuing any Event of Default and (y) the Consolidated Fixed Charge Coverage Ratio shall not be less than 2.00:1.00.

Applicable ECF Percentage means, in respect of Excess Cash Flow attributable to a Fiscal Year, (a) 50% if the First Lien Senior Secured Leverage Ratio as of the last day of such Fiscal Year is greater than or equal to 1.75 to 1.00, (b) 25% if the First Lien Senior Secured Leverage Ratio as of the last day of such Fiscal Year is less than 1.75 to 1.00 but greater than or equal to 1.00 to 1.00 and (c) 0% if the First Lien Senior Secured Leverage Ratio as of the last day of such Fiscal Year is less than 1.00 to 1.00.

Applicable Period has the meaning set forth in Section 3.09.

Applicable Rate means a percentage per annum equal to:

(a)           with respect to Tranche A Term Loans, (i) until the first full fiscal quarter commencing on or after the date that is six months after the Closing Date, (A) for Eurocurrency Rate Loans, 3.0% and (B) for Base Rate Loans, 2.0%, and (ii) thereafter, from time to time, the following percentages, based upon the First Lien Senior Secured Leverage Ratio as set forth in the then most recent Compliance Certificate received by the Administrative Agent pursuant to Section 6.02(a):

First Lien Senior Secured Leverage Ratio
  
Eurocurrency Rate Loans
  
Base Rate Loans
         
>1.625:1
  
3.0%
  
2.0%
<1.625:1
  
2.75%
  
1.75%

(b)           with respect to U.S. Tranche B Dollar Term Loans, (i) until the first full fiscal quarter commencing on or after the date that is six months after the Closing Date, (A) for Eurocurrency Rate Loans, 3.25% and (B) for Base Rate Loans, 2.25% and (ii) thereafter, from time to time, the following percentages, based upon the First Lien Senior Secured Leverage Ratio as set forth in the then most recent Compliance Certificate received by the Administrative Agent pursuant to Section 6.02(a):

 
-5-
 

First Lien Senior Secured Leverage Ratio
  
Eurocurrency Rate Loans
  
Base Rate Loans
>1.625:1
  
3.25%
  
2.25%
<1.625:1
  
3.00%
  
2.00%

(c)           with respect to German Tranche B Euro Term Loans, (i) until the first full fiscal quarter commencing on or after the date that is six months after the Closing Date, 3.25%, and (ii) thereafter, from time to time, the following percentages, based upon the First Lien Senior Secured Leverage Ratio as set forth in the then most recent Compliance Certificate received by the Administrative Agent pursuant to Section 6.02(a):

First Lien Senior Secured Leverage Ratio
  
Eurocurrency Rate Loans
>1.625:1
  
3.25%
<1.625:1
  
3.00%

(d)           with respect to Revolving Credit Loans, unused Revolving Credit Commitments and Letter of Credit fees, (i) until the first full fiscal quarter commencing on or after the date that is six months after the Closing Date, (A) for Eurocurrency Rate Loans, 3.00%, (B) for Base Rate Loans, 2.00%, (C) for Letter of Credit fees, 3.00%, and (D) for unused commitment fees, 0.75%, and (ii) thereafter, from time to time, the following percentages per annum, based upon the First Lien Senior Secured Leverage Ratio as set forth in the most recent Compliance Certificate received by the Administrative Agent pursuant to Section 6.02(a):

First Lien Senior Secured Leverage Ratio
  
Eurocurrency Rate Loans and Letter of Credit Fees
  
Base Rate Loans
  
Letter of Credit Fees
  
Unused Commitment Fees
>1.625:1
  
3.00%
  
2.00%
  
3.00%
  
0.750%
<1.625:1 but >1.000:1
  
2.75%
  
1.75%
  
2.75%
  
0.625
<1.000:1
  
2.50%
  
1.50%
  
2.50%
  
0.500

Any increase or decrease in the Applicable Rate resulting from a change in the First Lien Secured Senior Leverage Ratio shall become effective as of the first Business Day immediately following the date a Compliance Certificate is delivered pursuant to Section 6.02(a); provided that, at the option of the Administrative Agent, the highest Applicable Rate shall apply (x) as of the first Business Day after the date on which a Compliance Certificate was required to have been delivered but was not delivered, and shall continue to so apply to and including the date on which such Compliance Certificate is so delivered (and thereafter the Applicable Rate otherwise determined in accordance with this definition shall apply) and (y) as of the first Business Day after an Event of Default under Section 8.01(a) shall have occurred and be continuing, and shall continue to so apply to but excluding the date on which such Event of Default is cured or waived (and thereafter the Applicable Rate otherwise determined in accordance with this definition shall apply).

 
-6-
 

Appropriate Lender means, at any time, (a) with respect to Loans of any Class, the Lenders of such Class, (b) with respect to Letters of Credit, (i) the relevant L/C Issuers and (ii) with respect to Primary Letters of Credit, the Primary Revolving Credit Lenders and (iii) with respect to Dutch Letters of Credit, the Dutch Revolving Credit Lenders and (c) with respect to the Swing Line Facility, (i) the relevant Swing Line Lender and (ii) if any Swing Line Loans are outstanding, the Primary Revolving Credit Lenders.

Approved Bank has the meaning set forth in clause (c) of the definition of Cash Equivalents.

Approved Fund means any Fund that is administered, advised or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers, advises or manages a Lender.

Arrangers means Citigroup Global Markets Inc., Goldman Sachs Credit Partners, L.P., Merrill Lynch, Pierce, Fenner & Smith Incorporated, ABN AMRO Incorporated and UBS Securities LLC.

Asset Backed Credit Facility means (i) subject to the limitations of Section 7.03(o), the asset based revolving credit agreement dated as of the Closing Date among Lyondell Chemical Company, Equistar Chemicals, LP, Houston Refining LP, Basell USA Inc. and certain Subsidiaries of the Company party thereto as co-borrowers from time to time thereunder, the lenders and agents party thereto and Citibank, N.A., as administrative agent and collateral agent (the ABF Inventory Facility) and (ii) the receivables securitization facility established pursuant to the Receivables Sale Agreement dated as of the Closing Date among Lyondell Chemical Company and the other sellers party thereto, as sellers, LyondellBasell Receivables I, LLC, as buyer, and Lyondell Chemical Company, as buyers servicer, and the Receivables Purchase Agreement dated as of the Closing Date among LyondellBasell Receivables I, LLC as seller, Lyondell Chemical Company, as servicer, the purchasers party thereto (the ABF Receivables Facility), in each case, together with any Permitted Refinancing thereof.

Assignee has the meaning set forth in Section 10.07(a).

Assignment and Assumption means an Assignment and Assumption substantially in the form of Exhibit E.

Assignment Taxes has the meaning set forth in Section 3.01(b).

Attorney Costs means and includes all reasonable fees, reasonable out-of-pocket expenses and disbursements of Cahill Gordon & Reindel llp, Allen & Overy LLP and (without duplication) a single external local counsel to the Arrangers in each jurisdiction reasonably determined by the Administrative Agent.

Attributable Indebtedness means, on any date, in respect of any Capitalized Lease of any Person, the capitalized amount thereof of any liability that would be required to appear on a balance sheet of such Person prepared as of such date in accordance with GAAP.

Audited Financial Statements means the audited consolidated financial statements of (i) the Companys predecessor, Basell N.V. (now Basell Holdings B.V.), for the fiscal year ended December 31, 2004 and the seven-month period ended July 31, 2005 and (ii) the Company and its Subsidiaries, for the period beginning April 20, 2005 and ended December 31, 2005 and the fiscal year ended December 31, 2006.

 
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Average Brent Crude Oil Price means, for any fiscal quarter, the average specified price per barrel of Brent blend crude oil for delivery on each day of such fiscal quarter, stated in U.S. Dollars, published under the heading Crude Price Assessments:  International:  Brent (DTD) in the Platts Marketwire that reports prices effective on such dates and certified to the Administrative Agent by a Responsible Officer of the Borrowers Agent.  The calculation of the Borrowers Agent shall be conclusive absent manifest error.

BAFB has the meaning set forth in the definition of Structured Financing Transactions.

Base Rate means for any day a fluctuating rate per annum equal to the higher of (a) the Federal Funds Rate plus of 1% and (b) the rate of interest in effect for such day as publicly announced from time to time by Citibank, N.A. as its prime rate.  The prime rate is a rate set by Citibank, N.A. based upon various factors including Citibank, N.A. costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate.  Any change in such rate announced by Citibank, N.A. shall take effect at the opening of business on the day specified in the public announcement of such change.

Base Rate Loan means a Loan that bears interest based on the Base Rate.

Basel II has the meaning set forth in Section 3.04(a).

Basell Finance has the meaning set forth in the introductory paragraph to this Agreement.

Basell Funding means Basell Funding S. r.l., a socit responsabilit limite incorporated under the laws of the Grand Duchy of Luxembourg.

Basell Holdings has the meaning set forth in the introductory paragraph to this Agreement.

BIL Acquisition means BIL Acquisition Holdings Limited, a Delaware corporation and Wholly Owned Subsidiary of the Company.

Blavatnik Charitable Trust has the meaning set forth in the definition of Blavatnik Group.

Blavatnik Group means, collectively:

(1)           Mr. Leonard Blavatnik, his spouse, direct descendants, siblings, parents, children of siblings, or grandchildren, grand nieces and grand nephews, any other members of the immediate Blavatnik family, or

(2)           any trust or any entity directly or indirectly controlled by, or for the benefit of, one or more members of the Blavatnik family described above, or

(3)           any trust (a Blavatnik Charitable Trust):

(a)           for the benefit of a charity created by any member of the Blavatnik family described above, or

(b)           to which any such member of the Blavatnik family described above is a substantial donor or grantor, or

 
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(4)           the estate, executor, administrator or committee of beneficiaries of any member of the Blavatnik Group listed in clause (1) or (2) of this definition;

provided that, in the case of any Blavatnik Charitable Trust, a member of the Blavatnik Group described in clause (1) or (2) of this definition maintains control thereof.

For purposes of this definition only, control of a Blavatnik Charitable Trust means the possession of the power to direct or cause the direction of management and policies of such Blavatnik Charitable Trust in respect of the issued share capital of the Company owned by such Blavatnik Charitable Trust.

Board of Directors means, as to any Person, the board of directors (or similar governing body) of such Person (or, if such Person is a partnership and does not have a board of directors (or similar governing body), the board of directors (or similar governing body) of such Persons general partner) or, except with respect to the definition of Change of Control any duly authorized committee thereof.

Borrowers has the meaning set forth in the introductory paragraph to this Agreement.

Borrowers Agent means Basell Finance and/or such other Subsidiaries as the Company shall appoint from time to time by written notice to the Administrative Agent.

Borrowing means a Revolving Credit Borrowing, a Swing Line Borrowing, or a Term Borrowing, as the context may require.

Business Day means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Laws of, are in fact closed in, the state of New York and:

(a)           if such day relates to any interest rate settings as to a Eurocurrency Rate Loan denominated in Dollars, any fundings, disbursements, settlements and payments in Dollars in respect of any such Eurocurrency Rate Loan, or any other dealings in Dollars to be carried out pursuant to this Agreement in respect of any such Eurocurrency Rate Loan, means any such day on which dealings in deposits in Dollars are conducted by and between banks in the London interbank eurodollar market;

(b)           if such day relates to any interest rate settings as to a Eurocurrency Rate Loan denominated in Euros, any fundings, disbursements, settlements and payments in Euros in respect of any such Eurocurrency Rate Loan, or any other dealings in Euros to be carried out pursuant to this Agreement in respect of any such Eurocurrency Rate Loan, means a TARGET Day; and

(c)           if such day relates to any interest rate setting as to any funding, disbursements, settlements, payment and Loan denominated in Sterling or any other dealings in Sterling to be carried out pursuant to this Agreement in respect of any such Loan, such day shall be a day which dealings in deposits in Sterling are conducted by and between banks in the London interbank market and such banks are open for foreign exchange business in London.

CAM Exchange means the exchange of the Lenders interests provided for in Section 8.05.

CAM Exchange Date means the date on which any Event of Default referred to in Section 8.01(f) shall occur or the date on which the Company receives written notice from the Administrative Agent that any Event of Default referred to in Section 8.01(g) has occurred.

 
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CAM Percentage means, as to each Lender, a fraction, expressed as a decimal, of which (a) the numerator shall be the aggregate Dollar Amount of the Designated Obligations owed to such Lender (whether or not at the time due and payable) immediately prior to the CAM Exchange Date and (b) the denominator shall be the aggregate amount of the Designated Obligations owed to all the Lenders (whether or not at the time due and payable) immediately prior to the CAM Exchange Date.

Capital Expenditures means, for any period, any expenditure which, in accordance with GAAP, is treated as a capital expenditure in the audited consolidated financial statements of the Company and its Subsidiaries other than (i) any capital expenditure constituting an Investment permitted pursuant to clauses (e), (g), (i), (m), (n), (o) (in the case of (n) and (o), only to the extent consisting of acquisitions and Investments in Joint Ventures), (p) and (r) of Section 7.02, (ii) any expenditure made in connection with the replacement, substitution, restoration or repair of assets to the extent financed with (x) insurance proceeds paid on account of the loss of or damage to the assets being replaced, substituted, restored or repaired or (y) awards of compensation arising from the taking by eminent domain or condemnation of the assets being replaced, substituted, restored or repaired, (iii) the purchase price of equipment that is purchased simultaneously with the trade-in of existing equipment to the extent that the gross amount of such purchase price is reduced by the credit granted by the seller of such equipment for the equipment being traded in at such time, (iv) the purchase price of plant, property, equipment or software to the extent financed with the proceeds of Dispositions or Casualty Events, in each case that are not required to be applied to prepay Term Loans pursuant to Section 2.05(b) and (v) any expenditure that is accounted for as a capital expenditure by the Company or any Restricted Subsidiary and that actually is paid for by a Person other than the Company or any Restricted Subsidiary and for which neither the Company nor any Restricted Subsidiary has provided or is required to provide or incur, directly or indirectly, any consideration or obligation to such Person or any other Person (whether before, during or after such period).

Capitalized Leases means all leases which, in accordance with GAAP, are recorded as capitalized leases; provided that for all purposes hereunder the amount of principal obligations under any Capitalized Lease shall be the Attributable Indebtedness related thereto.

Carry-Forward Amount has the meaning set forth in Section 7.11(c).

Cash Collateral has the meaning set forth in Section 2.03(g).

Cash Collateral Account means a blocked account at Citibank, N.A. (or another commercial bank selected in compliance with Section 9.09) in the name of the Collateral Agent, and otherwise established in a manner reasonably satisfactory to the Collateral Agent.

Cash Collateralize has the meaning set forth in Section 2.03(g).

Cash Equivalents means any of the following types of Investments, to the extent owned by the Company or any Restricted Subsidiary:

(a)           time deposits or demand deposits in local currencies held by it from time to time in the ordinary course of business;

(b)           an obligation, maturing within two years after the date of its acquisition, issued or guaranteed by the United States of America, Australia, Switzerland, Japan, Canada or any state which was a member state of the European Union, on December 31, 2003 or an instrumentality or agency thereof,

 
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(c)           a certificate of deposit or bankers acceptance, maturing within one year after the date of its acquisition, issued by any Lender, or a U.S. national or state bank or trust company or a European, Canadian, Australian, Swiss or Japanese bank, in each case having capital, surplus and undivided profits of at least $100,000,000 and whose long-term unsecured debt has a rating of A or better by S&P or A2 or better by Moodys or the equivalent rating by any other nationally recognized rating agency (any such bank, an Approved Bank),

(d)           commercial paper, maturing within one year after the date of its acquisition, which has a rating of A1 or better by S&P or P1 or better by Moodys, or the equivalent rating by any other nationally recognized rating agency,

(e)           repurchase agreements and reverse repurchase agreements with an outstanding term not in excess of one year after the date of its acquisition with any financial institution which has been elected as a primary government securities dealer by the Federal Reserve Board or in respect of instruments set forth in clauses (c) or (d) above of the credit quality set forth in such applicable clause,

(f)           Money Market preferred stock maturing within six months after the date of its acquisition or municipal bonds issued by a corporation organized under the laws of any state of the United States, Australia, Japan, Canada, Switzerland or any state which was a member state of the European Union on December 31, 2003 or an instrumentality or agency thereof, which has a rating of A or better by S&P or Moodys or the equivalent rating by any other nationally recognized rating agency,

(g)           tax exempt floating rate option tender bonds backed by letters of credit issued by a national or state bank whose long-term unsecured debt has a rating of AA or better by S&P or Aa2 or better by Moodys or the equivalent rating by any other nationally recognized rating agency, and

(h)           shares of any fund holding assets consisting (except for de minimis amounts) of the type specified in clauses (b) through (g) above.

Cash Flow Intercreditor Agreement means the intercreditor agreement, dated as of the Closing Date, between, among others,  the Collateral Agent, Citibank, N.A., (in its capacity as agent to the secured parties under the ABF Inventory Facility), the New Notes Trustee (as defined therein), the Interim Facility Agent (as defined therein), the High Yield Notes Trustee (as defined therein), the Arco Notes Trustee (as defined therein), the Equistar Notes Trustee (as defined therein), the Company, the U.S. Borrower and the other parties thereto from time to time, as amended, amended and restated, supplemented or otherwise modified from time to time.

Casualty Event means any event that gives rise to the receipt by the Company or any Restricted Subsidiary of any insurance proceeds or condemnation awards in respect of any equipment, fixed assets or Real Property (including any improvements thereon) to replace or repair such equipment, fixed assets or Real Property.

CERCLA means the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as subsequently amended.

 
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Change in Law means, the introduction of, or any change in or in the interpretation of, any law, treaty or governmental rule, regulation or order or the compliance with any guideline, request or directive from any Governmental Authority (whether or not having the force of law).

Change of Control means the occurrence of any of the following:

(1)           the Sponsor ceases to hold legally and beneficially:

(a)           issued share capital having the right to cast at least 51% (or, following a Listing, at least 35%) of the votes capable of being cast in general meetings of the Company; or

(b)           before a Listing, the right to determine the composition of the majority of the board of directors or equivalent body of the Company;

(2)           following a Listing, any Person or group of Persons acting in concert (other than the Sponsor) owns, directly or indirectly, a greater percentage of the issued share capital or issued share capital with voting rights of the Company than the Sponsor or, at any time, otherwise acquires control of the Company; or

(3)           the replacement of a majority of the Board of Directors of the Company over a two-year period from the directors who constituted the Board of Directors of the Company at the beginning of such period, and such replacement shall not have been approved by a vote of at least a majority of the Board of Directors of the Company then still in office who either were members of such Board of Directors at the beginning of such period or whose election as a member of such Board of Directors was previously so approved; or

(4)           the adoption by the stockholders of the Company of a plan or proposal for the liquidation or dissolution of the Company, other than, in each case, a transaction complying with the covenant described in Section 7.04.

Class (a) when used with respect to Lenders, refers to whether such Lenders are Dutch Tranche A Dollar Term Lenders, U.S. Tranche A Dollar Term Lenders, U.S. Tranche B Dollar Term Lenders, German Tranche B Euro Term Lenders , Primary Revolving Credit Lenders or Dutch Revolving Credit Lenders, (b) when used with respect to Commitments, refers to whether such Commitments are Dutch Tranche A Dollar Term Commitments, U.S. Tranche A Dollar Term Commitments, U.S. Tranche B Term Commitments, German Tranche B Euro Term Commitments, Primary Revolving Credit Commitments or Dutch Revolving Credit Commitments and (c) when used with respect to Loans or a Borrowing, refers to whether such Loans, or the Loans comprising such Borrowing, are Dutch Tranche A Dollar Term Loans, U.S. Tranche A Dollar Term Loans, U.S. Tranche B Dollar Term Loans, German Tranche B Euro Term Loans, Primary Revolving Credit Loans or Dutch Revolving Credit Loans.

Clean-Up Period has the meaning set forth in Section 8.02(b).

Closing Date means the first date all the conditions precedent in Sections 4.01 and 4.02(a) are satisfied or waived.

Code means the U.S. Internal Revenue Code of 1986, as amended from time to time, and rules and regulations related thereto.

 
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Collateral means the Collateral as defined in the Security Agreements and all the Collateral, Pledged Assets, Mortgaged Property, Security or Trust Property (or similar terms with respect of Collateral Documents governed by Laws other than those of any state of the United States as defined in any other Collateral Document.

Collateral Agent means Citibank, N.A. in its capacity as collateral agent or pledgee under any of the Loan Documents, or any successor collateral agent appointed in accordance with Section 9.09.

Collateral and Guarantee Requirement means, at any time, the requirement that, subject to the Agreed Security Principles and Section 6.14(a):

(a)           the Administrative Agent shall have received each Collateral Document required to be delivered on the Closing Date pursuant to Section 4.01(a)(iii) or subsequent to the Closing Date pursuant to Sections 6.12 or 6.14 at such time, duly executed by each Loan Party party thereto;

(b)           all Obligations shall have been unconditionally guaranteed (together, the Guaranties) by (x) on the Closing Date, the Company, each Borrower and each Restricted Subsidiary set forth on Schedule 1.01H and (y) after the Closing Date, by each Material Subsidiary (each, a Guarantor), in each case to the extent permitted by applicable law, regulation and contractual provision and to the extent such guarantee would not result in a material qualification (including any going concern or like qualification) in such Guarantors audit report, in each case as reasonably determined by the Company;

(c)           the Guaranties shall have been secured by, subject to the Intercreditor Agreement, the Legal Reservations and the Perfection Requirements, a first-priority security interest to the extent legally possible and to the extent required by the Collateral Documents in all Equity Interests of (i) each Wholly Owned Domestic Subsidiary of a Guarantor domiciled in the U.S. and (ii) each material Wholly Owned Foreign Subsidiary of any Guarantor (other than the Parent Guarantor), in each instance, (other than, in each case, the Equity Interests of Basell Capital Corporation, LyondellBasell Receivables I, LLC or any other Securitization Entity)only to the extent directly owned by the relevant Guarantor;

(d)           except as set forth on Schedule 1.01K, to the extent otherwise permitted hereunder or under any Collateral Document and to the extent legally possible and to the extent required by the Collateral Documents, the Guaranties shall have been secured by a security interest in, and mortgages on, substantially all tangible and intangible assets of the Company and each other Guarantor (including accounts (other than the Equity Interests not referred to in (c) above) but excluding accounts receivable subject to Receivables Financing or any Securitization Transactions), inventory (other than inventory subject to any Asset Backed Credit Facility or Receivables Financing not prohibited by this Agreement), equipment, investment property, contract rights, intellectual property, other general intangibles, material owned or ground leased Real Property, intercompany notes and proceeds of the foregoing), in each case, subject to the Legal Reservations and the Perfection Requirements, with the priority required by the Collateral Documents; provided that security interests in Real Property shall be limited to the Mortgaged Properties;

(e)           none of the Collateral shall be subject to any Liens other than Liens permitted by Section 7.01; and

 
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(f)           the Collateral Agent shall have received (i) counterparts of a Mortgage or other appropriate security interest with respect to each owned or ground leased Real Property or Easement Instrument described on Schedule 1.01F or required to be delivered pursuant to Sections 4.01, 6.12 or 6.14 at such time (the Mortgaged Properties) duly executed and delivered by the record owner of such Real Property or, in the case of Real Property subject to a ground lease, the tenant holding the leasehold interest in such Real Property; provided, however, that with respect to any Mortgaged Property subject to a ground lease, the Loan Party holding the tenants interest therein shall not be required to deliver a Mortgage with regard to any ground lease, for which a consent must be obtained, (ii) in respect of any Mortgaged Property located in the United States other than any Excluded Easements, a Title Policy or Title Policies issued by the Title Company insuring the Lien of each such Mortgage as a valid Lien on the property described therein, free of any other Liens except as expressly permitted by Section 7.01, (iii) in respect of any Mortgaged Property located outside the United States, evidence that the Administrative Agent may reasonably request that the Mortgage or other appropriate security interest constitutes, subject to the Intercreditor Agreement, the Legal Reservations and the Perfection Requirements, a first-ranking security interest in respect of the relevant Real Property and that the record owner of such Real Property holds good title to it and (iv) such Surveys, abstracts, certificates, title documents, existing appraisals, legal opinions and other documents as the Administrative Agent may reasonably request with respect to any such Mortgaged Property, in each case in form and substance reasonably satisfactory to the Administrative Agent and Collateral Agent.  Excluded Easements means those pipeline easements and other similar Real Property owned by Equistar Chemicals, LP that are not situated within a plant or other facility that is (1) described on Schedule 1.01F and (2) with respect to which the Collateral Agent is obtaining a Title Policy as contemplated in this clause (f).

The foregoing definition shall not require the creation or perfection of pledges of or security interests in, or the obtaining of title insurance or surveys with respect to, (i) assets for which creation or perfection of security interests is not required pursuant to the Collateral Documents and (ii) assets as to which the Administrative Agent and the Borrowers Agent reasonably determine that the cost of creating or perfecting such pledges or security interests in such assets or obtaining title insurance or surveys in respect of such assets shall be excessive in relation to the benefits to be obtained by the Lenders therefrom.  The Administrative Agent shall grant extensions of time for the perfection of security interests in or the obtaining of title insurance or other items required by the Collateral and Guarantee Requirement with respect to particular assets (including extensions beyond the Closing Date for the perfection of security interests in the assets of the Loan Parties on such date) where it determines, in consultation with the Company, that perfection cannot be accomplished using commercially reasonable efforts by the time or times at which it would otherwise be required by this Agreement or the Collateral Documents.

Notwithstanding the foregoing provisions of this definition or anything in this Agreement or any other Loan Document to the contrary, Liens required to be granted from time to time pursuant to the Collateral and Guarantee Requirement shall be subject to exceptions and limitations set forth in the Collateral Documents and, to the extent appropriate in the applicable jurisdiction, as agreed between the Administrative Agent and the Company.

Collateral Documents means, collectively, each of the Security Agreements, each of the Mortgages, collateral assignments, security agreements, pledge agreements, intellectual property security agreements granting Liens or other similar agreements delivered to the Administrative Agent and the Lenders pursuant to Section 4.01, 6.12 or 6.14.

 
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Commitment means a U.S. Tranche A Dollar Term Commitment, a U.S. Tranche B Dollar Term Commitment, a Dutch Tranche A Dollar Term Commitment, a German Tranche B Euro Term Commitment or a Revolving Credit Commitment, as the context may require.

Committed Loan Notice means a notice of (a) a Borrowing, (b) a conversion of Loans from one Type to the other, or (c) a continuation of Eurocurrency Rate Loans pursuant to Section 2.02(a), which, if in writing, shall be substantially in the form of Exhibit A.

Company has the meaning set forth in the introductory paragraph to this Agreement.

Company Financial Officer means the chief financial officer, any director (or equivalent) or officer from time to time of the Company with actual knowledge of the financial affairs of the Company or the Company and its Restricted Subsidiaries (as the context may require).

Company Materials has the meaning set forth in Section 6.01.

Compensation Period has the meaning set forth in Section 2.12(c)(ii).

Compliance Certificate means a certificate substantially in the form of Exhibit D.

Consolidated Debt Service Ratio means, with respect to the Company and its Restricted Subsidiaries for any Test Period, the ratio of Consolidated EBITDA for such Test Period minus the sum, without duplication, of:

(a)           Capital Expenditures; and

(b)           all cash payments in respect of income taxes made (net of any cash refund in respect of income taxes actually received);

divided by the sum, without duplication, of

(x)           Consolidated Interest Expense; and

(y)           the principal amount of all scheduled amortization payments on all Financial Indebtedness (including the principal component of all Capitalized Leases);

provided that the Consolidated Debt Service Ratio shall be calculated for the Test Period ending (i) March 31, 2008 based on the Consolidated Interest Expense and amortization payments referred to in clauses (x) and (y) above for each full fiscal quarter ending after the Closing Date multiplied by four, (ii) June 30, 2008 based on the sum of the Consolidated Interest Expense and amortization payments referred to in clauses (x) and (y) above for each full fiscal quarter ending after the Closing Date multiplied by two and (iii) September 30, 2008 based on the sum of the Consolidated Interest Expense and amortization payments referred to in the clauses (x) and (y) above for each full fiscal quarter ending after the Closing Date multiplied by 4/3.

Consolidated EBITDA means, with respect to the Company and its Restricted Subsidiaries for any Test Period, the sum, without duplication, of:

(1)           Consolidated Net Income, and

 
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(2)           to the extent such Consolidated Net Income has been reduced thereby,
 
 
(a)           after-tax items classified as nonrecurring losses,

(b)           all income taxes paid or accrued (other than income taxes attributable to extraordinary gains or losses),

(c)           Consolidated Interest Expense,

(d)           Consolidated Non-cash Charges,

(e)           the amount of net loss resulting from the payment of any premiums, fees or similar amounts that are required to be paid under the terms of the instrument(s) governing any Indebtedness upon the repayment or other extinguishment of such Indebtedness in accordance with the terms of such Indebtedness,

(f)           nonrecurring costs and expenses paid that are related to any expense or cost reductions that have occurred or are associated with the good faith projected cost savings described in clause (3) below;

(g)           management fees and merger and acquisition advisory fees paid to the Sponsor;

(h)           any inventory write-up in connection with purchase accounting in respect of acquisitions (including the Acquisition); and

(3)           the amount of net cost savings projected by the Company in good faith to be realized by specified actions taken prior to or during such period; provided that (x) such cost savings are reasonably identifiable and factually supportable, (y) such actions have been taken or are to be taken within twelve months of the date or determination to take such action and the benefit is expected to be realized within twelve months of taking such action, and (z) the aggregate amount of such cost savings added pursuant to this clause (3) shall not exceed $150,000,000 during such Test Period.

Consolidated First Lien Senior Secured Debt means (a) Consolidated Total Debt secured by a Lien on any assets of the Company or any of its Restricted Subsidiaries (other than (i) any Indebtedness under Asset Backed Credit Facilities, Receivables Financings or Securitization Transactions not prohibited by this Agreement, (ii) any Loans subject to prepayment out of funds in the Cash Collateral Account and (iii) any Indebtedness secured by a Lien ranking junior to the Lien securing the Obligations on a basis at least as substantially favorable to the Lenders as the basis on which the Lien securing the Senior Second Interim Loans ranks junior to the Lien securing the Obligations) minus (b) Unrestricted Cash.

Consolidated Fixed Charge Coverage Ratio means, for any Test Period, the ratio of Consolidated EBITDA for such Test Period to:

(x)           Consolidated Interest Expense; plus

(y)           the sum of

 
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(a)           the amount of all dividend payments on any series of preferred stock (other than dividends paid in Qualified Equity Interests and other than dividends paid to the Company or to a Restricted Subsidiary) paid, accrued or scheduled to be paid or accrued during such Test Period, plus

(b)           tax actually paid in cash by the Company or any Restricted Subsidiary and attributable to the items referred to in paragraph (a) of this clause (y);

provided that the Consolidated Fixed Charge Coverage Ratio shall be calculated for the Test Period ending (i) March 31, 2008 based on the Consolidated Interest Expense for each full fiscal quarter ending after the Closing Date multiplied by four, (ii) June 30, 2008 based on the sum of the Consolidated Interest Expense for each full fiscal quarter ending after the Closing Date multiplied by two and (iii) September 30, 2008 based on the sum of the Consolidated Interest Expense for each full Fiscal Quarter ending after the Closing Date multiplied by 4/3.

Consolidated Interest Expense means, with respect to the Company and its Restricted Subsidiaries and for any period, without duplication:

(1)           the interest expense in respect of Financial Indebtedness, including:

(a)           any amortization of debt discount,

(b)           all capitalized interest, and

(c)           the interest portion of any deferred payment obligation,

but excluding, in each case, any amortization or write-off of deferred financing costs and fees incurred in connection with the incurrence of any Indebtedness or Securitization Transactions; plus

(2)           the net amount paid (or deducting the net amount received) by the Company and its Restricted Subsidiaries in respect of the relevant period under any Obligations in respect to Swap Contracts consisting of interest rate hedging arrangements or the interest rate component of currency hedging arrangements; plus

(3)           the interest component of Capitalized Leases paid, accrued and/or scheduled to be paid or accrued during such period,

less interest income.

Consolidated Net Income means, with respect to the Company and its Restricted Subsidiaries, for any Test Period:

(1)           net income (or loss), plus

(2)           cash dividends or distributions paid to the Company or any Restricted Subsidiary by any other Person (the Payor) other than a Restricted Subsidiary, to the extent not otherwise included in Consolidated Net Income, which have not been derived from Indebtedness of the Payor to the extent such Indebtedness is Guaranteed by the Company or a Restricted Subsidiary;

provided that there shall be excluded therefrom (but only to the extent included in the calculation of the foregoing):

 
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(a)           after-tax gains or losses from disposals, asset impairments or reversal of impairments or abandonments or reserves relating thereto (including for the avoidance of doubt and irrespective of its classification, the effect of any impairment of goodwill arising as a result of the Acquisition),

(b)           after-tax items classified as extraordinary gains or losses,

(c)           the net income (but not loss) of any Restricted Subsidiary that is not a Loan Party, to the extent that the declaration of dividends or similar distributions by that Restricted Subsidiary of that income is restricted,

(d)           the net income or loss of any Person other than a Restricted Subsidiary, except to the extent of cash dividends or distributions paid to the Company or to a Restricted Subsidiary by such Person,

(e)           any restoration to income of any contingency reserve, except to the extent that provision for such reserve was made out of Consolidated Net Income accrued at any time following the Closing Date,

(f)           income or loss attributable to discontinued operations (including operations disposed of during such period whether or not such operations were classified as discontinued),

(g)           in the case of a successor to the Company by consolidation, merger or amalgamation or as a transferee of the Companys assets, any earnings or losses of the successor corporation prior to such consolidation, merger, amalgamation or transfer of assets,

(h)           all dividends received by the Company as described in clause (4) of the second paragraph of the definition of Indebtedness to the extent the Company is obligated to apply such dividends in the repayment of such Indebtedness; and

(i)           any increase in amortization or depreciation as a result of the receipt of any insurance proceeds from damage to property.

Consolidated Net Tangible Assets means, as of any date, the total amount of assets (less applicable reserves and other properly deductible items) of the Company and its Restricted Subsidiaries, as of the last day of the then most recently ended Fiscal Year for which financial statements have been delivered pursuant to Section 6.01(a), after deducting therefrom (1) all current liabilities (excluding any thereof which are by their terms extendible or renewable at the option of the obligor thereon to a time more than 12 months after the time as of which the amount thereof is being computed and excluding current maturities of long term debt), and (2) all goodwill, IP Rights, unamortized debt discount and other like intangible assets.

Consolidated Non-cash Charges means, with respect to the Company and its Restricted Subsidiaries, for any period, the aggregate depreciation, amortization and other non-cash expenses reducing Consolidated Net Income of such Person for such period (excluding any such charges constituting an extraordinary item or loss or any such charge which requires an accrual of or a reserve for cash charges for any future period).

 
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Consolidated Total Debt means, as of any date, the principal amount of Indebtedness of the Company and its Restricted Subsidiaries that is outstanding on such date and that consists of Indebtedness (other than Indebtedness under the Structured Financing Transaction) for borrowed money (adjusted to take into account any liability or receivable arising under any Swap Contract entered into in connection with hedging any currency exposure to such Indebtedness) and Attributable Indebtedness.

Consolidated Working Capital means, as of any date, the excess of (a) the sum of all amounts (other than cash and Cash Equivalents) that would be set forth opposite the caption total current assets (or any like caption) on a consolidated balance sheet of the Company and its Restricted Subsidiaries at such date over (b) the sum of all amounts that would be set forth opposite the caption total current liabilities (or any like caption) on a consolidated balance sheet of the Company and the Restricted Subsidiaries on such date, including deferred revenue but excluding, without duplication, the current portion of any Funded Debt and the current portion of any Asset Backed Credit Facilities (whether on or off balance sheet).

Contractual Obligation means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.

Control has the meaning set forth in the definition of Affiliate.

Credit Extension means each of the following:  (a) a Borrowing, (b) an L/C Credit Extension and (c) the making of Incremental Term Loans and the effectiveness of any Revolving Commitment Increase.

Debtor Relief Laws means the Bankruptcy Code of the United States, the Dutch Bankruptcy Act (Faillissementswet), the German Insolvency Law, the Luxembourg insolvency laws and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, faillissement, surseance van betaling, onderbewindstelling, ontbinding, or similar debtor relief Laws of the United States, The Netherlands , Luxembourg or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally (including, in the case of Loan Parties incorporated or organized in England, Wales or Hong Kong, administration, administrative receivership, voluntary arrangement and schemes of arrangement).

Declined Proceeds has the meaning set forth in Section 2.05(b)(vii).

Default means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time or both would be an Event of Default.

Default Rate means, with respect to Loans under any Facility, an interest rate equal to (a) the Base Rate plus (b) the Applicable Rate, if any, applicable to Base Rate Loans made under such Facility plus (c) 2.00% per annum; provided that with respect to any Eurocurrency Rate Loan, the Default Rate means an interest rate equal to the interest rate (including any Applicable Rate and any applicable Mandatory Cost) otherwise applicable to such Loan plus 2.00% per annum, in each case to the fullest extent permitted by applicable Law.

Defaulting Lender means any Lender that (a) has failed to fund any portion of the Term Loans, Revolving Credit Loans, participations in L/C Obligations or participations in Swing Line Loans required to be funded by it hereunder within one (1) Business Day of the date required to be funded by it hereunder, unless the subject of a good faith dispute or subsequently cured (but only from when subsequently cured), (b) has otherwise failed to pay over to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder within one (1) Business Day of the date when due, unless the subject of a good faith dispute or subsequently cured (but only from when subsequently cured), or (c) has been deemed insolvent or become the subject of a bankruptcy or insolvency proceeding.

 
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Designated Obligations means all obligations of the Borrowers with respect to (a) principal of and interest on the Loans and (b) accrued and unpaid fees under the Loan Documents.

Disposition or Dispose means the sale, transfer, license, lease or other disposition (including any sale and leaseback transaction and any sale or issuance of Equity Interests) of any property by any Person, including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith.

Disqualified Equity Interests means that portion of any Equity Interest which, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event, matures or is mandatorily redeemable (other than redeemable only for Equity Interests of such Person that is not itself a Disqualified Equity Interest), pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof, on or prior to the date that is ninety-one (91) days after the latest Maturity Date of the Term Loans, provided, however, that any Equity Interest that would not constitute a Disqualified Equity Interest but for provisions thereof giving holders thereof the right to require such Person to purchase or redeem such Equity Interest upon the occurrence of a change of control occurring prior to the date that is ninety-one (91) days after the latest Maturity Date of the Term Loans shall not constitute a Disqualified Equity Interest if:

(1)           the change of control provisions applicable to such Equity Interest are not more favorable to the holders of such Equity Interest than the terms applicable to the Loans; and

(2)           any such requirement only becomes operative after compliance with such terms applicable to the Loans.

Notwithstanding the preceding sentence, only the portion of such Equity Interest which so matures or is mandatorily redeemable or is so convertible or exchangeable prior to the date that is ninety-one (91) days after the latest Maturity Date of the Term Loans shall be so deemed a Disqualified Equity Interest.  The amount of any Disqualified Equity Interest that does not have a fixed redemption, repayment or repurchase price will be calculated in accordance with the terms of such Disqualified Equity Interest as if such Disqualified Equity Interest were redeemed, repaid, converted or repurchased on any date on which the amount of such Disqualified Equity Interest is to be determined pursuant hereto; provided, however, that if such Disqualified Equity Interest could not be required to be redeemed, repaid, converted or repurchased at the time of such determination, the redemption, repayment or repurchase price will be the book value of such Disqualified Equity Interest as reflected in the most recent financial statements of such Person.

Dividend Distribution Note means the note entered into on or about the Closing Date, evidencing a liability owed by LyondellBasell Finance Company to Basell Funding.

Dollar and $ mean lawful money of the United States.

 
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Dollar Amount means, at any time:

(a)           with respect to any Loan denominated in Dollars (including, with respect to any Swing Line Loan denominated in Dollars, any funded participation therein), the principal amount thereof (or in which such participation is held);

(b)           with respect to any Loan denominated in any Alternative Currency (including, with respect to any Swing Line Loan denominated in an Alternative Currency, any funded participation therein), the principal amount thereof, converted to Dollars in accordance with Section 2.15(a); and

(c)           with respect to any L/C Obligation (or any risk participation therein), (A) if denominated in Dollars, the amount thereof and (B) if denominated in an Alternative Currency, the amount thereof converted to Dollars in accordance with Section 2.15.

Domestic Subsidiary means any Subsidiary that is organized under the Laws of the United States, any state thereof or the District of Columbia.

Dutch Borrowers has the meaning set forth in the introductory paragraph to this Agreement.

Dutch Civil Code means the Dutch Civil Code (Burgerlijk Wetboek).

Dutch L/C Advance means, with respect to each Dutch Revolving Credit Lender, such Lenders funding of its participation in any Dutch L/C Borrowing in accordance with its Pro Rata Share.

DutchL/C Borrowing means an extension of credit resulting from a drawing under any Dutch Letter of Credit which has not been reimbursed on the date when made or refinanced as a Dutch Revolving Credit Borrowing.

DutchL/C Credit Extension means, with respect to any Dutch Letter of Credit, the issuance thereof or extension of the expiry date thereof, or the renewal or increase of the amount thereof.

DutchL/C Obligations means, as at any date of determination, the aggregate undrawn amount of all outstanding Letters of Credit plus the aggregate of all Unreimbursed Amounts, including all Dutch L/C Borrowings.

Dutch Letter of Credit means a Letter of Credit issued under the Dutch Revolving Credit Facility.

Dutch Letter of Credit Sublimit means an amount equal to the lesser of (a) $50,000,000 and (b) the aggregate Dollar Amount of the Dutch Revolving Credit Commitments.  The Dutch Letter of Credit Sublimit is part of, and not in addition to, the Dutch Revolving Credit Facility.

Dutch Loan Party means a Loan Party incorporated under the laws of or established in The Netherlands.

Dutch Revolving Credit Commitment means, as to each Dutch Revolving Credit Lender, its obligation to (a) make Dutch Revolving Credit Loans to the Dutch Borrowers pursuant to Section 2.01(e)(ii), and (b) purchase participations in Dutch L/C Obligations in respect of Dutch Letters of Credit in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Lenders name on Schedule 1.01A under the caption Dutch Revolving Credit Commitment or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement (including Section 2.14).  The aggregate Dutch Revolving Credit Commitments of all Dutch Revolving Credit Lenders shall be $200,000,000 on the Closing Date.

 
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Dutch Revolving Credit Exposure means, as to each Dutch Revolving Credit Lender, the sum of the Dollar Amount of the outstanding principal amount of such Dutch Revolving Credit Lenders Dutch Revolving Credit Loans and its Pro Rata Share of the Dollar Amount of the Dutch L/C Obligations at such time.

Dutch Revolving Credit Facility means, at any time, the aggregate amount of the Dutch Revolving Credit Lenders Dutch Revolving Credit Commitments at such time.

Dutch Revolving Credit Lender means, at any time, any Lender that has a Dutch Revolving Credit Commitment at such time.

Dutch Revolving Credit Loan has the meaning specified in Section 2.01(e).

Dutch Revolving Credit Note means a promissory note of the Dutch Borrowers payable to any Dutch Revolving Credit Lender or its registered assigns, in substantially the form of Exhibit C-5, evidencing the aggregate Indebtedness of the Dutch Borrowers to such Dutch Revolving Credit Lender resulting from the Dutch Revolving Credit Loans made by such Dutch Revolving Credit Lender to the Dutch Borrowers.

Dutch Tranche A Dollar Term Commitment means, as to each Dutch Tranche A Dollar Term Lender, its obligation to make a Dutch Tranche A Dollar Term Loan to Basell Holdings pursuant to Section 2.01(c) in an aggregate amount not to exceed the amount set forth opposite such Lenders name on Schedule 1.01A under the caption Dutch Tranche A Dollar Term Commitment or in the Assignment and Assumption pursuant to which such Dutch Tranche A Dollar Term Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement (including Section 2.14).  The initial aggregate amount of the Dutch Tranche A Dollar Term Commitments is $500,000,000.

Dutch Tranche A Dollar Term Lender means, at any time, any Lender that has a Dutch Tranche A Dollar Term Commitment or a Dutch Tranche A Dollar Term Loan at such time.

Dutch Tranche A Dollar Term Loan means a Loan made pursuant to Section 2.01(c).

Dutch Tranche A Dollar Term Loan Repayment Amount has the meaning set forth in Section 2.07(c).

Dutch Tranche A Dollar Term Note means a promissory note of Basell Holdings payable to any Dutch Tranche A Dollar Term Lender or its registered assigns, in substantially the form of Exhibit C-1, evidencing the aggregate Indebtedness of Basell Holdings to such Dutch Tranche A Dollar Term Lender resulting from the Dutch Tranche A Dollar Term Loans made by such Dutch Tranche A Dollar Term Lender.

 
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Easement Instrument means any instrument, agreement or understanding pursuant to which an interest in land is created, including without limitation, each of the instruments and agreements described or referenced as relating to easements on Schedule 1.01(F).

EBITDA means the earnings before interest, tax, depreciation and amortization for a Person, calculated in the same manner as Consolidated EBITDA (without giving effect to clause (3) of the definition thereof).

EMU Legislation means the legislative measures of the European Community relating to Economic and Monetary Union.

Environment means indoor air, ambient air, surface water, groundwater, drinking water, land surface, subsurface strata, and natural resources such as wetlands, flora and fauna.

Environmental Laws means the common law and any and all Federal, state, local, and foreign statutes, Laws, regulations, ordinances, rules, judgments, orders, decrees, permits, licenses, agreements or governmental restrictions relating to pollution, the protection of the Environment, the generation, treatment, storage, transport, distribution, handling or recycling of Hazardous Materials or the presence, Release or threat of Release of Hazardous Materials and, to the extent relating to exposure to Hazardous Materials, human health and to workplace health and safety.

Environmental Liability means any liability, contingent or otherwise (including any liability for damages, costs of investigation and remediation, fines, penalties or indemnities), of the Loan Parties or any Restricted Subsidiary resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or recycling of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the Release or threatened Release of any Hazardous Materials or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

Environmental Permit means any permit, approval, identification number, license or other authorization required under any Environmental Law.

Equistar Noteholders means the holders of the Equistar Notes.

Equistar Notes means $150,000,000 7.55% Debentures due 2026 issued by Lyondell Petrochemical Company (assumed by Equistar Chemicals, LP) pursuant to the Equistar Notes Indenture, as supplemented, together with any other series of notes created under the Equistar Notes Indenture.

Equistar Notes Indenture means the indenture governing the Equistar Notes dated as of January 29, 1996 as supplemented by Supplemental Indentures dated February 15, 1996, December 1, 1997, November 3, 2000 and November 17, 2000.

Equistar Notes Secured Parties means the Equistar Notes Trustee and the Equistar Noteholders.

Equistar Notes Trustee means any entity acting as trustee under the Equistar Notes.

Equity Interests means, with respect to any Person, all of the capital stock of such Person and all warrants, options or other rights to acquire the capital stock of such Person, including any contribution from shareholders without any issuance of shares (but excluding any debt security that is convertible into, or exchangeable for, such capital stock).

 
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ERISA means the Employee Retirement Income Security Act of 1974, as amended from time to time.

ERISA Affiliate means any trade or business (whether or not incorporated) that is under common control with a Loan Party or any Restricted Subsidiary within the meaning of Section 414 of the Code or Section 4001 of ERISA.

ERISA Event means (a) a Reportable Event with respect to a Pension Plan; (b) with respect to a Pension Plan, the failure to satisfy the minimum funding standard of Section 412 of the Code and Section 302 of ERISA, whether or not waived;  (c) the failure to make by its due date a required contribution under Section 412(m) of the Code (or Section 430(j) of the Code, as amended by the Pension Protection Act of 2006) with respect to any Pension Plan or the failure to make any required contribution to a Multiemployer Plan; (d) a withdrawal by a Loan Party, any Subsidiary or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (e) a complete or partial withdrawal by a Loan Party, any Subsidiary or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (f) the filing of a notice of intent to terminate, the treatment of a Plan amendment as a termination under Section 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan or the occurrence of any event or condition which could reasonably be expected to constitute grounds under ERISA for the termination of or the appointment of a trustee to administer any Pension Plan, in each case where Plan assets are not sufficient to pay all Plan liabilities; (g) an event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; (h) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon a Loan Party, any Subsidiary or any ERISA Affiliate; or (i) the occurrence of a nonexempt prohibited transaction (within the meaning of Section 4975 of the Code or Section 406 of ERISA) which could reasonably be expected to result in liability to a Loan Party or any Restricted Subsidiary.

EURIBOR means, in relation to any Loan in Euros, (a) the percentage rate per annum determined by the Banking Federation of the European Union for the relevant period, in each case displayed on the appropriate page of the Reuters screen, and (b) if the rate referenced in the preceding clause (a) does not appear on such page or service or such page or service shall not be available for the relevant period of that Loan, the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Administrative Agent at its request quoted by three major banks selected by the Administrative Agent to leading banks in the European interbank market, at or about 11 a.m. Brussels time on the second full Business Day next preceding the first day of the relevant period in relation to which such rate is calculated.

Euro and mean the lawful currency of the Participating Member States introduced in accordance with EMU Legislation.

Eurocurrency Liabilities has the meaning set forth in Regulation D of the Federal Reserve Board.

 
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Eurocurrency Rate means, for any Interest Period, (a) in relation to any Loan denominated in Dollars for any Interest Period, the rate obtained by dividing (i) the applicable LIBOR Rate for such Interest Period by (ii) a percentage equal to 1 minus the stated maximum rate (stated as a decimal) of all reserves, if any, required to be maintained against Eurocurrency Liabilities (including any marginal, emergency, special or supplemental reserves), and (b) in relation to any Loan denominated in Euros, for any Interest Period, the rate obtained by dividing (i) the applicable EURIBOR for such Interest Period by (ii) a percentage equal to 1 minus the stated maximum rate (stated as a decimal) of all reserves, if any, required to be maintained against Eurocurrency Liabilities and (c) in relation to any Loan denominated in Sterling, for any Interest Period, the rate obtained by dividing (i) the applicable LIBOR Rate for such Interest Period by (ii) a percentage equal to 1 minus the stated maximum rate (stated as a decimal) of all reserves, if any, required to be maintained against Eurocurrency Liabilities.

Eurocurrency Rate Loan means a Loan, whether denominated in Dollars, Sterling or in Euros, that bears interest at a rate based on the Eurocurrency Rate and a Swing Line Loan denominated in an Alternative Currency.

European Revolving Credit Loan has the meaning set forth in Section 2.01(e).

European Swing Line Borrowing means a borrowing of a European Swing Line Loan pursuant to Section 2.04(c).

European Swing Line Facility means the swing line loan facility made available by the European Swing Line Lender pursuant to Section 2.04(b).

European Swing Line Lender means Citibank, N.A., London Branch, in its capacity as provider of European Swing Line Loans, or any successor swing line lender hereunder.

European Swing Line Loan has the meaning set forth in Section 2.04(b).

European Swing Line Loan Notice means a notice of a Swing Line Borrowing pursuant to Section 2.04(c), which, if in writing, shall be substantially in the form of Exhibit B.

European Swing Line Note means a promissory note of the Non-U.S. Borrowers payable to the European Swing Line Lender or its registered assigns, in substantially the form of Exhibit C-7, evidencing the aggregate Indebtedness of such Borrower to such European Swing Line Lender resulting from the European Swing Line Loans.

European Swing Line Obligations means, as at any date of determination, the aggregate principal amount of all European Swing Line Loans outstanding.

 Event of Default has the meaning set forth in Section 8.01.

Excess Cash Flow means, with respect to the Company and its Restricted Subsidiaries for any Fiscal Year, an amount equal to:

(a)           the sum, without duplication, of

                (i)Consolidated Net Income,

 
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                (ii)an amount equal to all non-cash charges and losses to the extent deducted in arriving at such Consolidated Net Income, and

                (iii)decreases in Consolidated Working Capital not paid into the Working Capital Reserve Account (other than any such decreases arising from changes from on balance sheet to off balance sheet treatment of Receivables Financings or acquisitions or dispositions by the Company and its Restricted Subsidiaries completed during such period) minus

(b)           the sum, without duplication, of

                (i)an amount equal to all non-cash credits and gains to the extent included in arriving at such Consolidated Net Income and cash charges included in the definition of Consolidated Net Income,

                (ii)the aggregate amount of Capital Expenditures made in cash or accrued during such period, but only to the extent such Capital Expenditures were financed (without duplication) other than with the substantially concurrent receipt of Externally Generated Funds or with any Carry-Forward Amount (provided that, to the extent that such Carry-Forward Amount is not fully utilized in the immediately succeeding Fiscal Year, Excess Cash Flow during such immediately succeeding Fiscal Year shall be increased by the amount of such Carry-Forward Amount that was not fully utilized in cash to make Capital Expenditures during such Fiscal Year),

                (iii)the aggregate amount of all principal payments of Indebtedness and (to the extent not deducted in arriving at such Consolidated Net Income) fees, premiums and similar amounts of the Company and the Restricted Subsidiaries (provided that fees, premiums and other payments in respect of Indebtedness, other than principal and interest, that reduces Excess Cash Flow pursuant to this clause (b)(iii) shall reduce the Applicable Amount), in each case, financed other than with the substantially concurrent receipt of Externally Generated Funds (including (A) the principal component of payments in respect of Capitalized Leases and (B) the amount of any scheduled repayment of Loans pursuant to Section 2.07), but excluding (X) all voluntary prepayments of Term Loans and (Y) all prepayments of Revolving Credit Loans, the Asset Backed Credit Facility and Swing Line Loans made during such period),

                (iv)increases in Consolidated Working Capital for such period (other than any such increases arising from changes from off-balance sheet to on-balance sheet treatment of Receivables Financings or acquisitions or dispositions by the Company and the Restricted Subsidiaries completed during such period),

                (v)the amount of Investments and acquisitions made in cash during such period to finance Investments permitted by Sections 7.02(e) but only in respect of Solvay Engineered Polymers, Inc., (g), (m) (but only to the extent reducing Consolidated Working Capital), (n), (o), (p), (q) and (t) to the extent that such Investments and acquisitions were financed other than with the substantially concurrent receipt of Externally Generated Funds or with Investments and acquisitions the Company or any Restricted Subsidiary is obligated to make pursuant to a binding agreement but that are not made during such period; provided that such Investment is made not later than 180 days after the end of such period and financed other than with the substantially concurrent receipt of Externally Generated Funds and that such Investments and/or acquisitions when made shall not reduce Excess Cash Flow for such subsequent period,

 
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                (vi)Transaction Expenses of $20,000,000 and original issue discount in connection with the Transactions, each to be deducted from Excess Cash Flow for the Fiscal Year ending December 31, 2008,

                (vii)to the extent not already otherwise deducted in calculating Consolidated Net Income, the cash amount of management fees and transaction advisory fees paid (including by way of dividend) to the Sponsor during such period but not including payments under the Tax Sharing Agreement (provided that such payments shall reduce the Applicable Amount),

                (viii)the amount of cash taxes paid in such period to the extent they exceed the amount of tax expense deducted in determining Consolidated Net Income for such period, and

                (ix)to the extent not otherwise deducted in calculating Consolidated Net Income, all break fees, prepayment premium, associated hedging break costs and premiums for replacement hedging fees, plus fees and expenses, in each case, to the extent paid in cash and reasonably incurred in connection with a Permitted Refinancing during such period.

Exchange Act means the Securities Exchange Act of 1934, as amended, or any successor statute or statutes thereto.

Exchange Rate means on any day with respect to any currency other than Dollars, the rate at which such currency may be exchanged into Dollars, as set forth at approximately 11:00 a.m. (London time) on such day on the Reuters World Currency Page for such currency; in the event that such rate does not appear on any Reuters World Currency Page, the Exchange Rate shall be determined by reference to such other publicly available service for displaying exchange rates as may be agreed upon by the Administrative Agent and the Company, or, in the absence of such agreement, such Exchange Rate shall instead be the arithmetic average of the spot rates of exchange of the Administrative Agent in the market where its foreign currency exchange operations in respect of such currency are then being conducted, at or about 10:00 a.m. (New York City time) on such date for the purchase of Dollars for delivery two Business Days later.

Excluded Capital Expenditures means (i) any expenditures required by any change in applicable Law, and (ii) any catalyst or turnaround expenditures that are not treated as capital expenditure consistent with the accounting practices of Lyondell on the Closing Date.

Excluded Subsidiary means (a) any Subsidiary that is not a Wholly Owned Subsidiary (for so long as such Subsidiary remains a non-Wholly Owned Subsidiary), (b) each Subsidiary of a Guarantor listed on Schedule 1.1B and any successor entity and each Subsidiary that is not a Material Subsidiary, in each case, for so long as such Subsidiary is not a Material Subsidiary, (c) any Subsidiary that is prohibited by applicable Law, or contractual restrictions or any of the other matters referred to in the Agreed Security Principles, from guaranteeing the Obligations and (d) any other Subsidiary with respect to which, in the reasonable judgment of the Administrative Agent and the Company, the cost or other consequences (including any adverse tax consequences) of providing a Guarantee shall be excessive in view of the benefits to be obtained by the Lenders therefrom or which would otherwise contravene the Agreed Security Principles.

 
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Excluded Taxes means, in the case of each Lender and Agent (including, for purposes of this definition, any sub-agent appointed pursuant to Section 9.02),

(a)           taxes imposed on or measured by its net income (or branch profits), and franchise or capital taxes imposed on it in lieu of net income taxes, in each case (i) by the jurisdiction (or any political subdivision thereof) under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable Lending Office is located, (ii) by reason of any other connection between the jurisdiction imposing such tax and the such Agent or Lender (or its applicable Lending Office) other than any connections arising solely from the such Agent or Lender (or its applicable Lending Office) having executed, delivered, been party to, received or perfected a security interest under or performed its obligations under,  received payment under or enforced, this Agreement or any other Loan Document, or (iii) under 49 para. 1 Nr. 5 lit. c (aa) of the German Income Tax Act by virtue of the Lender having security over German-situs real estate (inlndischen Grundbesitz) or over rights subject to the civil law provisions applicable to real estate (inlndische Rechte, die den Vorschriften des brgerlichen Rechts ber Grundstcke unterliegen);

(b)           in the case of a Foreign Lender or Foreign Agent other than an assignee pursuant to a request by the Borrowers Agent under Section 3.07,

                (i)with respect to any Loan to the U.S. Borrower, any U.S. federal withholding tax that is imposed on amounts payable to or for the account of a Foreign Lender or Foreign Agent pursuant to a law in effect at the time such Foreign Lender or Foreign Agent becomes a party hereto (or designates a new Lending Office), except to the extent that such Foreign Lender or Foreign Agent (or its assignor, if any) was entitled, immediately prior to the time of designation of a new Lending Office (or assignment), to receive additional amounts from the U.S. Borrower with respect to such withholding tax pursuant to Section 3.01; provided that this subclause (b)(i) shall not apply to any tax imposed on a Foreign Lender in connection with an interest or participation in any Loan or other obligation that such Foreign Lender was required to acquire pursuant to Section 8.05,

                (ii)with respect to any Loan to the German Borrower, any withholding taxes imposed by Germany on amounts payable to or for the account of a Foreign Lender or Foreign Agent pursuant to a law in effect at the time such Foreign Lender or Foreign Agent becomes a party hereto (or designates a new lending office), except to the extent that such Foreign Lender or Foreign Agent (or its assignor, if any) was entitled, immediately prior to the time of designation of a new lending office (or assignment), to receive additional amounts from the German Borrower with respect to such withholding tax pursuant to Section 3.01; provided that this subclause (b)(ii) shall not apply to any tax imposed on a Foreign Lender in connection with an interest or participation in any Loan or other obligation that such Foreign Lender was required to acquire pursuant to Section 8.05, or

                (iii)any withholding tax that is attributable to such Foreign Lender or Foreign Agents failure to comply with Section 3.01(d).

 
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(c) any withholding tax imposed on payments to a Lender by the German tax authorities under  50a para. 7 German Income Tax Act as in effect at the time such Lender becomes a party hereto by virtue of the Lender having security over German-situs real estate (inlndischen Grundbesitz) or over rights subject to the civil law provisions applicable to real estate (inlndische Rechte, die den Vorschriften des brgerlichen Rechts ber Grundstcke unterliegen) , except to the extent that such Lender (or its assignor, if any) was entitled, immediately prior to the time of an assignment, to receive additional amounts from any Borrower with respect to such withholding tax pursuant to Section 3.01; provided that this subclause (c) shall not apply to any tax imposed on a Lender in connection with an interest or participation in any Loan or other obligation that such Lender was required to acquire pursuant to Section 8.05; or

(d) any U.S. federal backup withholding imposed under Section 3406 of the Code.

Executive Order has the meaning set forth in the definition of Anti-Terrorism Laws.

Existing Indebtedness means the Indebtedness permitted by Section 7.03(b).

Existing Letters of Credit means the letters of credit outstanding on the Closing Date, as set forth on Schedule 1.01E.

Existing Notes means, collectively, the 2015 Notes, the 2027 Notes, the 10½% Senior Secured Notes due 2013 of Lyondell, the 8% Senior Unsecured Notes due 2014 of Lyondell, the 8¼% Senior Unsecured Notes due 2016 of Lyondell, the 6.875% Senior Unsecured Notes due 2017 of Lyondell, the 2010 Debentures, the 9.8% Debentures due 2020 of Lyondell, the 10⅛% Senior Unsecured Notes due 2008 of Equistar Chemicals LP, the 10⅛% Senior Unsecured Notes due 2011 of Equistar Chemicals L.P., the 7.55% Senior Notes due 2026 of Equistar Chemicals LP, the Millennium Notes and the 8¾% Unsecured Notes due 2009 of Equistar Chemicals LP, in each case to the extent outstanding on the Closing Date and the 4% Convertible Debentures due 2023 of Millennium Chemicals Inc. (to the extent not converted on the Closing Date).

Existing Senior Credit Facilities means the Facilities Agreement dated May 3, 2007 among the Company, certain of its Subsidiaries, ABN AMRO Bank N.V., Citigroup Global Markets Limited and ING Bank N.V.

Externally Generated Funds means the net proceeds of (a) Financial Indebtedness, (b) issuance of or contribution to Equity Interests (c) Dispositions or (d) Casualty Events, in each case of or by the Company or its Restricted Subsidiaries.

Facility means the U.S. Tranche A Dollar Term Loans, the U.S. Tranche B Dollar Term Loans, the Dutch Tranche A Dollar Term Loans, the German Tranche B Euro Term Loans, the Revolving Credit Facilities, the Swing Line Sublimit or the Letter of Credit Sublimit, as the context may require.

Federal Funds Rate means, for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Citibank, N.A. on such day on such transactions as determined by the Administrative Agent.

 
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Financial Indebtedness means (without duplication), at any time, the principal amount of Indebtedness of the Company and its Restricted Subsidiaries outstanding at such time, referred to in paragraphs (a), (b), (f), (h) and (i) of the definition of Indebtedness (but, as to such clause (i), only in respect of paragraphs (a), (b), (f) and (h) of such definition).

Fiscal Year means the twelve month fiscal period of the Company and its Subsidiaries commencing on January 1 of each calendar year and ending on December 31 of such calendar year unless amended pursuant to Section 7.12.

First Lien Senior Secured Leverage Ratio means, with respect to any Test Period, the ratio of (a) Consolidated First Lien Senior Secured Debt as of the last day of such Test Period to (b) Consolidated EBITDA for such Test Period.

Foreign Agent means, for purposes of the Tax in question, an Agent that is treated as foreign by the jurisdiction imposing such Tax.

Foreign Lender means, for purposes of the Tax in question, a Lender that is treated as foreign by the jurisdiction imposing such Tax.

Foreign Plan means any employee benefit plan, program, policy, arrangement or agreement maintained or contributed to by, or entered into with, a Loan Party or any Subsidiary with respect to employees employed outside the United States.

Foreign Subsidiary means any direct or indirect Restricted Subsidiary of the Company which is not a Domestic Subsidiary.

FRB means the Board of Governors of the Federal Reserve System of the United States, or any Governmental Authority succeeding to any of its principal functions.

French Civil Code means Code civil of France.

Fund means any Person (other than a natural Person) that is engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course.

Funded Debt means all Indebtedness of the Company and its Restricted Subsidiaries for borrowed money that matures more than one year from the date of its creation or matures within one year from such date that is renewable or extendable, at the option of such Person, to a date more than one year from such date or arises under a revolving credit or similar agreement that obligates the lender or lenders to extend credit during a period of more than one year from such date, including Indebtedness in respect of the Loans.

GAAP means generally accepted accounting principles in the United States of America as in effect from time to time as adopted by the Company; provided that the Company may make a one-time election to switch to IFRS, if permitted to do so by the SEC in its filings with the SEC, and following such election and the notification in writing to the Administrative Agent by the Company thereof, GAAP shall mean IFRS.  After such election, the Company cannot subsequently elect to report under U.S. generally accepted accounting principles.  If at any time the Company or the Borrowers Agent notifies the Administrative Agent in writing that the Company wishes to eliminate the effect of any change in GAAP on any provision of this Agreement, then such provision shall be applied on the basis of GAAP as in effect immediately before the relevant change in GAAP became effective until either such notice is withdrawn or such provision is amended in a manner satisfactory to the Borrowers Agent and the Required Lenders.

 
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German Borrower has the meaning set forth in the introductory paragraph to this Agreement.

German Tranche B Euro Term Commitment means, as to each German Tranche B Euro Term Lender, its obligation to make a German Tranche B Euro Term Loan to the German Borrower pursuant to Section 2.01(d) in an aggregate amount not to exceed the amount set forth opposite such Lenders name on Schedule 1.01A under the caption German Tranche B Euro Term Commitment or in the Assignment and Assumption pursuant to which such German Tranche B Euro Term Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement (including Section 2.14).  The initial aggregate amount of the German Tranche B Euro Term Commitments is 1,300,000,000.

German Tranche B Euro Term Lender means, at any time, any Lender that has a German Tranche B Euro Term Commitment or a German Tranche B Euro Term Loan at such time.

German Tranche B Euro Term Loan means a Loan made pursuant to Section 2.01(d).

German Tranche B Euro Term Loan Repayment Amount has the meaning set forth in Section 2.07(d).

German Tranche B Euro Term Note means a promissory note of the German Borrower payable to any German Tranche B Euro Term Lender or its registered assigns, in substantially the form of Exhibit C-4, evidencing the aggregate Indebtedness of the Company to such German Tranche B Euro Term Lender resulting from the German Tranche B Euro Term Loans made by such German Tranche B Euro Term Lender.

Governmental Authority means any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, court, administrative tribunal, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

Granting Lender has the meaning set forth in Section 10.07(g).

Guarantee means, as to any Person, without duplication, (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other monetary obligation payable or performable by another Person (the primary obligor) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other monetary obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other monetary obligation of the payment or performance of such Indebtedness or other monetary obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other monetary obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness or other monetary obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part), or (b) any Lien on any assets of such Person securing any Indebtedness or other monetary obligation of any other Person, whether or not such Indebtedness or monetary other obligation is assumed by such Person (or any right, contingent or otherwise, of any holder of such Indebtedness to obtain such Lien); provided that the term Guarantee shall not include endorsements for collection or deposit, in either case in the ordinary course of business, or customary and reasonable indemnity obligations in effect on the Closing Date or entered into in connection with any acquisition or disposition of assets permitted under this Agreement (other than such obligations with respect to Indebtedness).  The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith.  The term Guarantee as a verb has a corresponding meaning.

 
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Guaranteed Obligations has the meaning set forth in Section 11.01.

Guarantors has the meaning set forth in the definition of Collateral and Guarantee Requirement.

Guaranty means, collectively, the guaranty of the Obligations by the Guarantors pursuant to this Agreement.

Hazardous Materials means all materials, chemicals, substances, wastes, pollutants, contaminants, constituents and compounds of any nature or in any form, including petroleum or petroleum distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas or mold that are regulated pursuant to, or can give rise to liability under, any applicable Environmental Law.

Hedge Bank means any Person that is a Lender or an Affiliate of a Lender on the Closing Date or at the time it enters into a Secured Hedge Agreement or a Treasury Services Agreement, as applicable, in its capacity as a party thereto, and, in the case of a Person that is not a Lender but an Affiliate of a Lender, that delivers to the Administrative Agent a letter agreement reasonably satisfactory to it (i) appointing the Collateral Agent as its agent under the applicable Loan Documents and (ii) agreeing to be bound by Section 9.06 and 10.15 as if it were a Lender.

Holding Company means, in relation to a company, corporation or other legal entity, any other company, corporation or other legal entity in respect of which the former company, corporation or other legal entity is a Subsidiary.

Honor Date has the meaning set forth in Section 2.03(c)(i).

IFRS means the International Financial Reporting Standards issued and/or adopted by the International Accounting Standards Board, as in effect from time to time.

Incremental Amendment has the meaning set forth in Section 2.14(d).

Incremental Facility Closing Date has the meaning set forth in Section 2.14(d).

Incremental Term Loans has the meaning set forth in Section 2.14(a).

Indebtedness means, as to any Person at any time, without duplication, all of the following:

 
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(a)           all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;

(b)           the maximum amount (after giving effect to any prior drawings or reductions which may have been reimbursed) of all outstanding letters of credit (including standby and commercial), bankers acceptances, bank guaranties, surety bonds, performance bonds and similar instruments issued or created by or for the account of such Person;

(c)           net obligations of such Person under any Swap Contract;

(d)           all obligations of such Person issued or assumed as the deferred purchase price of property that is due more than six months after taking delivery of such property, all conditional sale obligations and all obligations under any title retention agreement (but excluding trade accounts payable and other accrued liabilities arising in the ordinary course of business that are not overdue by 90 days or more or are being contested in good faith by appropriate proceedings promptly instituted and diligently conducted);

(e)           all obligations of any third party of the type referred to in clauses (a), (b), (c), (d), (f) and (h) of this definition which are secured by any lien on any property or asset of such Person, the amount of such obligation being deemed to be the lesser of the fair market value of such property or asset or the amount of the obligation so secured;

(f)           all Receivables Financings, Securitization Transactions and obligations under Asset Backed Credit Facilities;

(g)           all Disqualified Equity Interests issued by such Person or preferred stock issued by a Restricted Subsidiary of such Person with the amount of Indebtedness represented by such Disqualified Equity Interests or preferred stock being equal to the greater of its voluntary or involuntary liquidation preference and its maximum fixed repurchase price, but excluding accrued dividends, if any.  For purposes hereof, the maximum fixed repurchase price of any Disqualified Equity Interests or preferred stock which do not have a fixed repurchase price shall be calculated in accordance with the terms of such Disqualified Equity Interests or preferred stock as if such Disqualified Equity Interests or preferred stock were purchased on any date on which Indebtedness shall be required to be determined pursuant to the this Agreement, and if such price is based upon, or measured by, the fair market value of such Disqualified Equity Interests or preferred stock, such fair market value shall be determined reasonably and in good faith by the Board of Directors of the issuer of such Disqualified Equity Interests or preferred stock; and

(h)           all Capitalized Leases of such Person;

if and to the extent that the foregoing would constitute indebtedness or a liability in accordance with GAAP; and

(i)           to the extent not otherwise included above, all Guarantees of any third partys Indebtedness in respect of any of the foregoing clauses.

Notwithstanding the foregoing, Indebtedness shall not include:

(1)           advances paid by customers in the ordinary course of business for services or products to be provided or delivered in the future,

 
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(2)           deferred taxes,

(3)           unsecured indebtedness of such Person incurred to finance insurance premiums in a principal amount not in excess of the insurance premiums to be paid by such Person and its Restricted Subsidiaries for a three-year period beginning on the date of any incurrence of such indebtedness,

(4)           Indebtedness owed or incurred by any Restricted Subsidiary whose activities are limited to holding shares in Joint Venture(s) (but only to the extent that (a) the creditors under the relevant agreement have no recourse to the Company other than such Restricted Subsidiary; and (b) the recourse those creditors have to such Restricted Subsidiary is limited to the proceeds (if any) of dividends received by such Restricted Subsidiary in respect of such Restricted Subsidiarys investment in such Joint Venture),

(5)           non-recourse Indebtedness permitted by Section 7.03(t) collateralized by any Limited Recourse Stock Pledge or any non-recourse guarantee given solely to support such pledge,

(6)           any Indebtedness which has been defeased in accordance with GAAP or defeased pursuant to the deposit of cash or government obligations (in an amount sufficient to satisfy all such Indebtedness at the Stated Maturity thereof or redemption, as applicable, and all payments of interest and premium, if any) in a trust or account created or pledged for the sole benefit of the holders of such Indebtedness, and subject to no other Liens, and other applicable terms of the instrument governing such Indebtedness or

(7)           Indebtedness for which irrevocable notice of redemption has been duly given and for which redemption money in the necessary amount has been irrevocably deposited with the applicable trustee or paying agent in trust for the holders of such Indebtedness.

Notwithstanding the foregoing, any accrual of interest, accrual of dividends, the accretion of value, the obligation to pay commitment fees and the payment of interest in the form of Indebtedness shall not be Indebtedness for the purposes of Section 7.03 only.

Indemnified Liabilities has the meaning set forth in Section 10.05.

Indemnified Taxes means all Taxes other than Excluded Taxes.

Indemnitees has the meaning set forth in Section 10.05.

Independent Financial Advisor means a firm which, in the judgment of the Board of Directors of the Company, is independent and qualified to perform the task for which it is to be engaged.

Information has the meaning set forth in Section 10.08.

 Intercreditor Agreement means the Cash Flow Intercreditor Agreement or the ABL Intercreditor Agreement, as the context requires.

Interest Payment Date means (a) as to any Eurocurrency Rate Loan, the last day of each Interest Period applicable to such Loan and the Maturity Date of the Facility under which such Loan was made; provided that if any Interest Period for a Eurocurrency Rate Loan exceeds three months, the respective dates that fall every three months after the beginning of such Interest Period shall also be Interest Payment Dates; (b) as to any Base Rate Loan (including a Swing Line Loan denominated in Dollars), fifth Business Day after the last day of each March, June, September and December and the Maturity Date of the Facility under which such Loan was made; and (c) as to any Swing Line Loan denominated in any Alternative Currency, the date of the repayment of such Swing Line Loan and the Maturity Date of the Revolving Credit Facility.

 
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Interest Period means, the period commencing on the date each Eurocurrency Rate Loan is disbursed or converted to or continued as a Eurocurrency Rate Loan and ending one week, or one, two, three or six months or, if agreed by each Lender of that Eurocurrency Rate Loan, nine or twelve months thereafter, as selected by the Borrowers Agent in its Committed Loan Notice; provided that:

                (i)any Interest Period that would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day;

                (ii)any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period;

                (iii)no Interest Period shall extend beyond the Maturity Date of the Facility under which such Loan was made; and

                (iv)on the Closing Date, the Borrowers shall elect six succesive Interest Periods of one week.

Investment means, with respect to any Person, any direct or indirect loan or other extension of credit (including a guarantee) or capital contribution (with respect to such loan, extension of credit or capital contribution, by means of any transfer of cash or other property to others or any payment for property or services for the account or  use of others), or any purchase or acquisition by such Person of any Equity Interest, bonds, notes, debentures or other securities or other Indebtedness issued by, any other Person.  Investment excludes (i) extensions of trade credit, (ii) commissions, loans, advances, fees and compensation paid in the ordinary course of business to officers, directors and employees, and (iii) reimbursement or payment obligations in respect of letters of credit and tender, bid, performance, government contract, surety and appeal bonds, in each case solely with respect to obligations of the Company or any of its Restricted Subsidiaries in accordance with the normal trade practices of the Company or such Restricted Subsidiary, as the case may be.  For the purposes of Section 7.06,

(1)           Investment shall include and be valued at the fair market value of the net assets of any Restricted Subsidiary of the Company at the time that such Restricted Subsidiary is designated an Unrestricted Subsidiary and shall exclude the fair market value of the net assets of any Unrestricted Subsidiary at the time that such Unrestricted Subsidiary is designated a Restricted Subsidiary of the Company; and

(2)           the amount of any Investment in any Person is the original cost of such Investment plus the cost of all additional Investments therein by the Company or any of its Restricted Subsidiaries, without any adjustments for increases or decreases in value, or write-ups, write-downs or write-offs with respect to such Investment, reduced by the payment of dividends or distributions in connection with such Investment or any other amounts received in respect of such Investment;

provided that no such payment of dividends or distributions or receipt of any such other amounts shall reduce the amount of any Investment if such payment of dividends or distributions or receipt of any such amounts would be included in Consolidated Net Income.

 
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If the Company or any Restricted Subsidiary sells or otherwise disposes of any voting Equity Interests of any direct or indirect Restricted Subsidiary of the Company such that, after giving effect to any such sale or disposition, the Company no longer owns, directly or indirectly, greater than 50% of the outstanding voting Equity Interests of such Restricted Subsidiary, the Company will be deemed to have made an Investment on the date of any such sale or disposition equal to the fair market value of the common Equity Interests of such Restricted Subsidiary not sold or disposed of.

IP Rights has the meaning set forth in Section 5.17.

Joint Venture means any joint venture entity, whether a company, unincorporated firm, association, partnership or any other entity which, in each case, is not a Subsidiary of the Company or any of its Restricted Subsidiaries but in which a the Company or a Restricted Subsidiary has a direct or indirect equity or similar interest.

Judgment Currency has the meaning set forth in Section 10.18.

Junior Financing has the meaning set forth in Section 7.13(a).

Junior Financing Documentation means any documentation governing any Junior Financing.

Laws means, as to any Person, collectively, all international, foreign, federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case binding on such Person or to which such Person or any of its property or assets is subject.

L/C Advances means the collective reference to Primary L/C Advances and Dutch L/C Advances.

L/C Borrowing means the collective reference to Primary L/C Borrowings and Dutch L/C Borrowings.

L/C Credit Extensions means the collectively reference to the Primary L/C Credit Extensions and the Dutch L/C Credit Extensions.

L/C Issuer means ABN AMRO Bank, N.V. and any other Lender that becomes an issuer of a Letter of Credit in accordance with Section 2.03(k) or 10.07(i), in each case, in its capacity as an issuer of Letters of Credit hereunder, or any successor issuer of Letters of Credit hereunder.

 
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L/C Obligations means, the collective reference to the Primary L/C Obligations and the Dutch L/C Obligations.

 Legal Reservations means:

(a)           the principle that equitable remedies may be granted or refused at the discretion of a court;

(b)           the limitation of enforcement by laws relating to insolvency, reorganization, penalties and other laws generally affecting the rights of creditors;

(c)           the time barring of claims under the statutes of limitation;

(d)           the possibility that an undertaking to assume liability for or indemnify a person against non-payment of UK stamp duty may be void;

(e)           defenses of set-off or counterclaim; and

(f)            principles which are set out in the qualifications as to matters of law in any legal opinion delivered on the Closing Date in connection with this Agreement.

 Lender has the meaning set forth in the introductory paragraph to this Agreement and, unless otherwise expressly provided, includes an L/C Issuer and a Swing Line Lender, and their respective successors and assigns as permitted hereunder, each of which is referred to herein as a Lender, together with, in each case, any Affiliate of any such financial institution through which such financial institution elects, by notice to the Administrative Agent, to make any Loans available to any Borrower; provided that, for all purposes of voting or consenting with respect to (a) any amendment, supplementation or modification of any Loan Document, (b) any waiver of any requirements of any Loan Document or any Default or Event of Default and its consequences, or (c) any other matter as to which a Lender may vote or consent pursuant to Section 10.01 of this Agreement, the financial institution making such election shall be deemed the Lender rather than such Affiliate, which shall not be entitled to vote or consent (it being agreed that failure of any such Affiliate to fund an obligation under this Agreement shall not relieve its affiliated financial institution from funding).  Lender means, at any time, any Dutch Tranche A Dollar Term Lender, U.S. Tranche A Dollar Term Lender, U.S. Tranche B Dollar Term Lender, German Tranche B Euro Term Lender or Revolving Credit Lender, unless otherwise expressly provided.

Lending Office means, as to any Lender, such office or offices as a Lender may from time to time notify the Borrowers Agent and the Administrative Agent.

Letter of Credits means the collective reference to Primary Letters of Credit and Dutch Letters of Credit.  A Letter of Credit may be a commercial letter of credit or a standby letter of credit.

Letter of Credit Application means an application and agreement for the issuance or amendment of a Letter of Credit in the form from time to time in use by the relevant L/C Issuer.

Letter of Credit Expiration Date means the day that is three (3) Business Days prior to the scheduled Maturity Date then in effect for the Primary Revolving Credit Facility (or, if such day is not a Business Day, the next preceding Business Day).

LIBOR Rate means, with respect to any Interest Period:

 
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(a)           the rate per annum equal to the rate determined by the Administrative Agent to be the offered rate that appears on the page of the Dow Jones Market screen (or any successor thereto) that displays an average British Bankers Association Interest Settlement Rate for deposits in Dollars, Euros or Sterling (for delivery on the first day of such Interest Period), with a term equivalent to such Interest Period, determined as of approximately 11:00 a.m. (London time) two (2) Business Days prior to the first day of such Interest Period, or, if different, the date on which quotations would customarily be provided by leading banks in the London Interbank Market for deposits of amounts in Dollars, Euros or Sterling for delivery on the first day of such Interest Period, or

(b)           if the rate referenced in the preceding clause (a) does not appear on such page or service or such page or service shall not be available, the rate per annum equal to the rate determined by the Administrative Agent (acting reasonably) to be the offered rate on such other page or other service that displays an average British Bankers Association Interest Settlement Rate for deposits in Dollars, Euros or Sterling (for delivery on the first day of such Interest Period), with a term equivalent to such Interest Period, determined as of approximately 11:00 a.m. (London time) two (2) Business Days prior to the first day of such Interest Period, or, if different, the date on which quotations would customarily be provided by leading banks in the London Interbank Market for deposits of amounts in Dollars, Euros or Sterling for delivery on the first day of such Interest Period, or

(c)           if the rates referenced in the preceding clauses (a) and (b) are not available, the rate per annum determined by the Administrative Agent as the rate of interest at which deposits in Dollars, Euros or Sterling for delivery on the first day of such Interest Period in Same Day Funds in the approximate amount of the Eurocurrency Rate Loan being made, continued or converted by Citibank, N.A., London Branch and with a term equivalent to such Interest Period would be offered by Citibank, N.A., London Branch to major banks in the London interbank eurodollar market at their request at approximately 11:00 a.m. (London time) two (2) Business Days prior to the first day of such Interest Period or, if different, the date on which quotations would customarily be provided by leading banks in the London Interbank Market for deposits of amounts in the relevant currency for delivery on the first day of such Interest Period.

Lien means any mortgage, deed of trust, pledge, hypothecation, assignment, transfer for security purposes, deposit arrangement, encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or preferential arrangement, of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any easement, right of way or other encumbrance on title to Real Property and any Capitalized Lease having substantially the same economic effect as any of the foregoing).

Limited Recourse Stock Pledge means the pledge of the Equity Interests in any joint venture or any Subsidiary (the Pledged Subsidiary) to secure non-recourse debt of such joint venture or such Pledged Subsidiary, the activities of which are solely limited to making and managing Investments, and owning Equity Interests, in such joint venture or Pledged Subsidiaries, but only for so long as its activities are so limited.

Liquidity means the sum of (a) the available amount under the Revolving Credit Facilities  plus (b) the amount available to be advanced under the Asset Backed Credit Facilities (for the avoidance of doubt after deducting also any amount used for the issuance of letters of credit from both Revolving Credit Facilities and Asset Backed Credit Facilities) plus (c) Unrestricted Cash.

 
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Listing means a listing of all or any of the share capital of the Company or any of its Subsidiaries or any Holding Company or any of its Subsidiaries (excluding the Sponsor (to the extent not a Subsidiary of the Company) and any such Holding Company of the Company or any of its Subsidiaries, but in each case only if a majority of the investments of such company are not constituted by the Company or any of its Subsidiaries) on any investment exchange or any other sale or issue by way of flotation or public offering or any equivalent circumstances in relation to the Company or any of its Subsidiaries or any Holding Company of the Company or any of its Subsidiaries (excluding the Sponsor (to the extent not a Subsidiary of the Company) and any such Holding Company of the Company or any of its Subsidiaries, but in each case only if a majority of the investments of such company are not constituted by the Company or any of its Subsidiaries) in any jurisdiction or county.

Loan means a U.S. Tranche A Dollar Term Loan, U.S. Tranche B Dollar Term Loan, Dutch Tranche A Dollar Term Loan, German Tranche B Euro Term Loan or Revolving Credit Loan, as the context may require.

Loan Documents means, collectively, (i) this Agreement, (ii) the Intercreditor Agreement, (iii) the Notes, (iv) the Collateral Documents and (v) for purposes of Section 8.01(c) only, the Second Amended and Restated Fee Letter dated as of the Closing Date by and among the Company, the Arrangers and the other parties thereto (the Fee Letter) and the sixth through tenth paragraphs of the Amended and Restated Commitment Letter dated as of October 29, 2007 by and among the Company, the Arrangers and the other parties thereto (the Commitment Letter).

Loan Parties means, collectively, the Borrowers and the Guarantors.

Lyondell has the meaning set forth in the introductory paragraph to this Agreement.

Management Agreement means the Management Agreement dated as of December 11, 2007, between, among others, the Company and certain of its Subsidiaries and Nell Limited, as in effect on the Closing Date.

Mandatory Cost means, with respect to any period, the percentage rate per annum determined in accordance with Schedule 1.01C.

Margin Loan means the loan originally entered into between, among others, AI Chemical Investments LLC, Merrill Lynch International and Merrill Lynch, Pierce, Fenner & Smith Incorporated on or about August 20, 2007 in order to finance the acquisition of certain shares in the capital of Lyondell (as amended, transferred or novated from time to time (including to certain Subsidiaries of the Company)).

Master Agreement has the meaning set forth in the definition of Swap Contract.

Material Adverse Change means any occurrence, condition, change, event or development, or series of any of the foregoing, that, individually or in the aggregate, (i) is or is likely to be materially adverse to the properties, facilities, assets, liabilities, financial condition, business or results of operations of Lyondell and its Subsidiaries, taken as a whole (taking into account the effects of any material disruption of production at a significant facility of Lyondell for an extended period of time), or (ii) materially impairs, prevents or delays the ability of Lyondell to consummate the transactions contemplated by the Acquisition Agreement or to perform its obligations thereunder; provided, however, that in no event shall any of the following constitute a Material Adverse Change:  (A) any occurrence, condition, change, event or effect resulting from or relating to changes in general economic or financial market conditions, including fluctuations in currency exchange rates, (B) any occurrence, condition, change, event or effect that affects the chemical industry or refining industry generally (including changes in commodity prices, general market prices and regulatory changes affecting the chemical industry or refining industry generally), (C) the outbreak or escalation of hostilities involving the United States, the declaration by the United States of a national emergency or war or the occurrence of any natural disasters and acts of terrorism (but not any such event resulting in any damage or destruction to or loss of Lyondells or its Subsidiaries physical properties to the extent such change or effect would otherwise constitute a Material Adverse Change), (D) any changes resulting from the consummation of the Acquisition contemplated by, or the announcement of the execution of the Acquisition Agreement, (E) change in GAAP, or in the interpretation thereof, as imposed upon Lyondell, its Subsidiaries or their respective businesses, (F) any change in law or regulation, or in the interpretation thereof, (G) the downgrade in rating of any debt securities of Lyondell or any of its Subsidiaries by S&P, Moodys or Fitch Ratings, (H) changes in the price or trading volume of Lyondells stock, (I) any legal proceedings made or brought by any of the current or former stockholders of Lyondell (on their own behalf or on behalf of Lyondell) arising out of or related to the Acquisition Agreement or the Acquisition, (J) any failure by Lyondell to meet projections of revenues or earnings for a period ending after the date of the Acquisition Agreement or (K) any occurrence, condition, change, event or effect resulting from compliance by Lyondell and its Subsidiaries with the terms of the Acquisition Agreement and each other agreement to be executed and delivered in connection herewith and therewith; except with respect to (A)(C) and (F), in the event, and only to the extent, that such occurrence, condition, change, event or effect has had a disproportionate effect on Lyondell and its Subsidiaries, taken as a whole, as compared to other Persons engaged in the chemical industry or refining industry in the same geographic regions and segments as Lyondell and its Subsidiaries and except with respect to (G), (H) and (J), provided that nothing in any such clauses shall prevent a determination that any underlying causes of such changes resulted in a Material Adverse Change.

 
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Material Adverse Effect means (a) a material adverse effect on the business, operations, assets, liabilities (actual or contingent) or financial condition of the Company and its Restricted Subsidiaries (taken as a whole), (b) a material adverse effect on the ability of the Borrowers or the Loan Parties (taken as a whole) to perform their respective payment obligations under any Loan Document to which any Borrower or any of the Loan Parties is a party or (c) a deficiency in the rights and remedies of the Lenders under the Loan Documents (taken as a whole) which is materially adverse to the Lenders.

Material Subsidiary means, at any date of determination, each of the Companys Subsidiaries (a) whose total assets at the last day of the relevant Fiscal Year were equal to or greater than 2.5% of the Total Assets of the Company and the Restricted Subsidiaries at such date or (b) whose EBITDA for the most recently ended Fiscal Year for which financial statements have been delivered pursuant to Section 6.01(a) is equal to or greater than 2.5% of the Consolidated EBITDA for such fiscal year.

Maturity Date means (i) with respect to the Tranche A Term Loans, the sixth anniversary of the Closing Date, (ii) with respect to the Tranche B Term Loans, the seventh anniversary of the Closing Date and (iii) with respect to the Revolving Credit Facility, the sixth anniversary of the Closing Date.

Maximum Rate has the meaning set forth in Section 10.10.

Millennium Holdings Group has the meaning set forth in Section 8.01.

Millennium Indenture means the indenture dated November 27, 1996 in respect of the Millennium Notes as supplemented by a Supplemental Indenture dated November 21, 1997, as in effect on the Closing Date.

 
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Millennium Notes means the Millennium America Inc. 7⅝ Senior Notes due 2026.

Moodys means Moodys Investors Service, Inc. and any successor thereto.

Mortgages means, collectively, the deeds of trust, trust deeds, hypothecs and mortgages creating and evidencing a Lien on a Mortgaged Property made by the Loan Parties in favor of or for the benefit of the Collateral Agent on behalf of the Secured Parties (i) with respect to Mortgages on Mortgaged Properties located in the United States, substantially in the form of Exhibit I and (ii) with respect to Mortgages on Mortgaged Properties outside of the United States, having customary terms and otherwise in form and substance reasonably satisfactory to the Collateral Agent, and any other mortgages executed and delivered pursuant to Sections 4.01, 6.12 and 6.14.

Mortgaged Properties has the meaning set forth in paragraph (f) of the definition of Collateral and Guarantee Requirement.

Multiemployer Plan means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which any Loan Party, any Subsidiary or any ERISA Affiliate makes or is obligated to make contributions, during the preceding five plan years, has made or been obligated to make contributions or otherwise could reasonably be expected to incur liability.

Net Proceeds means

(a)           with respect to any Disposition or Casualty Event 100% of the cash proceeds actually received by the Company or any Restricted Subsidiary from such Disposition or Casualty Event other than in respect of property constituting Collateral under the ABF Inventory Facility (including any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or purchase price adjustment receivable or otherwise and including casualty insurance settlements and condemnation awards in respect of any equipment, fixed assets or Real Property (including any improvements thereof)) to replace or repair such equipment, fixed assets or Real Property, but only as and when received, and excluding any liabilities assumed by the transferee and deemed to be cash for purposes of Section 7.05(j)(ii), in each case net of

                (i)attorneys fees, accountants fees, investment banking fees, purchaser due diligence costs (to the extent borne by the Company or any Restricted Subsidiary), survey costs, title insurance premiums, and related search and recording charges, transfer taxes, deed or mortgage recording taxes, required debt payments and required payments of other obligations relating to the applicable asset to the extent such debt or obligations are  secured by a Lien permitted hereunder (other than pursuant to the Loan Documents) on such asset, other customary expenses and brokerage, consultant and other customary fees actually incurred in connection therewith,

                (ii)Taxes paid or payable as a result thereof,

                (iii)the amount of any reserve certified by the Company Financial Officer as reasonable and established in accordance with GAAP against any adjustment to the sale price or to fund any liabilities (other than any taxes deducted pursuant to clause (ii) above) (x) related to any of the applicable assets and (y) retained by the Company or any of the  Restricted Subsidiaries, including pension and other post-employment benefit liabilities and liabilities related to environmental matters or against any indemnification obligations (provided, however, that the amount of any subsequent reduction of such reserve (other than in connection with a payment in respect of any such liability) shall be deemed to be Net Proceeds of such Disposition or Casualty Event received on the date of such reduction),

 
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                (iv)repayment of Existing Indebtedness required to be paid in connection with such Disposition or Casualty Event,

                (v)all distributions and other payments required to be made to other shareholders in subsidiaries or joint ventures as a result of such Disposition or Casualty Event or to any other person (other than the Company or a Restricted Subsidiary) owning a beneficial interest in the assets in such Disposition or Casualty Event, and

                (vi)the decrease in proceeds from Securitization Transactions which results from such Disposition or Casualty Event;

provided that, if no Default exists and the Company shall deliver a certificate of a Company Financial Officer to the Administrative Agent promptly following receipt of any such proceeds setting forth the Companys intention to use any such proceeds to acquire, maintain, develop, construct, improve, upgrade or repair assets useful in the business of the Company and the Restricted Subsidiaries or to make Permitted Acquisitions or any acquisition of all or substantially all the assets of, or all the Equity Interests (other than directors qualifying shares) in, a Person or division or line of business of a Person (or any subsequent investment made in a Person, division or line of business previously acquired), in each case within 450 days of such receipt, such portion of such proceeds shall not constitute Net Proceeds except to the extent not so used or contractually committed to be so used within 450 days of such receipt (it being understood that if any portion of such proceeds are not so used but are contractually committed within such 450-day period to be used, then if such Net Proceeds are not so used within the later of the last day of such 450-day period and the date that is 180 days from the entry into such Contractual Obligation, such remaining portion shall constitute Net Proceeds as of the date of such expiry or termination); providedfurther that (x) no proceeds realized in a single transaction or series of related transactions shall constitute Net Proceeds unless such proceeds shall exceed $25,000,000 and (y) no proceeds shall constitute Net Proceeds in any calendar year until the aggregate amount of all such unapplied proceeds (excluding proceeds described in clause (x) above realized in a single transaction or series of related transactions that are in excess of $100,000,000) in such calendar year shall exceed $100,000,000; and

(b)           with respect to a Recovery Event, 100% of the cash proceeds actually received by the Company or any Restricted Subsidiary from such Recovery Event, net of related fees, Taxes and transaction costs properly incurred in achieving any such recovery.

For purposes of calculating the amount of Net Proceeds, fees, commissions and other costs and expenses payable to the Company shall be disregarded.

Non-Consenting Lender has the meaning set forth in Section 3.07(d).

Non-extension Notice Date has the meaning set forth in Section 2.03(b)(iii).

Non-Responsive Lender means, with respect to any amendment, waiver or modification, any Lender who does not respond affirmatively or negatively within 20 Business Days to a request for such amendment, waiver or modification.

Non-U.S. Borrowers has the meaning set forth in the introductory paragraph to this Agreement.

 
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Note means a U.S. Tranche A Dollar Term Note, a U.S. Tranche B Dollar Term Note, a Dutch Tranche A Dollar Term Note, a German Tranche B Euro Term Note, a Revolving Credit Note or a Swing Line Note, as the context may require.

Obligations means all (x) advances to, and debts, liabilities, obligations, covenants and duties of, any Loan Party and its Subsidiaries arising under any Loan Document or otherwise with respect to any Loan or Letter of Credit, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against any Loan Party or Subsidiary of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding, and (y) obligations of any Loan Party arising under any Secured Hedge Agreement or any Treasury Services Agreement.  Without limiting the generality of the foregoing, the Obligations of the Loan Parties under the Loan Documents (and of their Subsidiaries to the extent they have obligations under the Loan Documents) include (a) the obligation (including guarantee obligations) to pay principal, interest, Letter of Credit fees, reimbursement obligations, charges, expenses, fees, Attorney Costs, indemnities and other amounts payable by any Loan Party or Subsidiary under any Loan Document and (b) the obligation of any Loan Party or Subsidiary to reimburse any amount in respect of any of the foregoing that any Lender, in its sole discretion, may elect to pay or advance on behalf of such Loan Party or such Subsidiary to the extent originally payable by that Loan Party or Subsidiary.

Organization Documents means (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the certificate or articles of formation, association or organization and operating agreement; and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.

Other Taxes has the meaning set forth in Section 3.01(b).

Outstanding Amount means (a) with respect to the Dutch Tranche A Dollar Term Loans, U.S. Tranche A Dollar Term Loans, U.S. Tranche B Dollar Term Loans, German Tranche B Euro Term Loans, Revolving Credit Loans and Swing Line Loans on any date, the Dollar Amount thereof, after giving effect to any borrowings and prepayments or repayments of Dutch Tranche A Dollar Term Loans, U.S. Tranche A Dollar Term Loans, U.S. Tranche B Dollar Term Loans, German Tranche B Euro Term Loans, Revolving Credit Loans (including any refinancing of outstanding unpaid drawings under Letters of Credit or L/C Credit Extensions as a Revolving Credit Borrowing and any cash collateralization or redesignation in the face amount of any Letters of Credit or Credit Extensions) and Swing Line Loans, as the case may be, occurring on such date; and (b) with respect to any L/C Obligations on any date, the Dollar Amount thereof on such date after giving effect to any L/C Credit Extension occurring on such date and any other changes thereto as of such date, including as a result of any reimbursements of outstanding unpaid drawings under any Letters of Credit (including any refinancing of outstanding unpaid drawings under Letters of Credit or L/C Credit Extensions as a Revolving Credit Borrowing collateralization or redesignation in the face amount of any Letters of Credit) or any reductions in the maximum amount available for drawing under Letters of Credit taking effect on such date.

 
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Overnight Rate means, for any day, (a) with respect to any amount denominated in Dollars, the Federal Funds Rate, and (b) with respect to any amount denominated in an Alternative Currency, the rate of interest per annum at which overnight deposits in the applicable Alternative Currency, in an amount approximately equal to the amount with respect to which such rate is being determined, would be offered for such day by a branch or Affiliate of Citibank, N.A. in the applicable offshore interbank market for such currency to major banks in such interbank market.

Parent means BI S. r.l., a socit responsabilit limite incorporated under the laws of the Grand Duchy of Luxembourg.

Parent Guarantor has the meaning set forth in Section 6.01.

Participant has the meaning set forth in Section 10.07(e).

Participant Register has the meaning set forth in Section 10.07(e).

Participating Member State means each state so described in any EMU Legislation.

Payor has the meaning set forth in the definition of Consolidated Net Income.

PBGC means the Pension Benefit Guaranty Corporation.

PBGC Settlement means the settlement agreement between Lyondell and the Pension Benefit Guaranty Corporation (or any successor entity) as amended, modified, restated or replaced from time to time.

Pension Plan means any employee pension benefit plan (as such term is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA or to the minimum funding standards under Section 412 of the Code or Section 302 of ERISA and is sponsored or maintained by any Loan Party, any Subsidiary or any ERISA Affiliate or to which any Loan Party, any Subsidiary or any ERISA Affiliate contributes or has an obligation to contribute, or in the case of a multiple employer or other plan described in Section 4064(a) of ERISA, has made contributions at any time during the immediately preceding five (5) plan years or with respect to which a Loan Party, Subsidiary or ERISA Affiliate could reasonably be expected to incur liability (including under Section 4063 or 4069 of ERISA).

Perfection Certificate means a certificate in the form of Exhibit G-1, as the same shall be supplemented from time to time by a Perfection Certificate Supplement or otherwise.

Perfection Requirements means the making or the procuring of the appropriate registrations, filings, endorsements, notarizations, stamping and/or notifications of the Collateral Documents and/or the Lien created hereunder, to the extent to be made other than by the Company or its Subsidiaries.

Permanent Financing means the incurrence of Indebtedness refinancing the Senior Second Lien Interim Loans (i) which matures not less than 180 days after the final maturity of the Tranche B Term Loans and has no scheduled principal payments prior to maturity, (ii) (x) which has terms in respect of priority of liens and collateral on terms at least as favorable to the Lenders as those contained in the Senior Second Lien Debt Documentation, (y) the terms and conditions (but excluding as to interest rate and redemption premium) of which, taken as a whole, are not materially less favorable to the Loan Parties or the Lenders than the terms and conditions of the Tranche B Term Loans; provided, however, that no Permanent Financings shall have financial maintenance covenants and (z) the obligor with respect to which is the Person who is the obligor (or any direct or indirect parent of the obligor) of the Senior Second Lien Interim Loans and (iii) would satisfy clause (a) of the definition of Permitted Refinancing with respect to the Senior Second Lien Interim Loans.

 
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Permitted Acquisition has the meaning set forth in Section 7.02(g).

Permitted Business means any business which is the same, similar, related or complementary to the businesses in which the Company and its Restricted Subsidiaries or any Specified Joint Venture were engaged on the Closing Date (including, for the avoidance of doubt, following consummation of the Acquisition), except to the extent that after engaging in any new business, the Company and its Restricted Subsidiaries, taken as a whole, remain substantially engaged in similar or related lines of business as were conducted by them on the Closing Date.

Permitted Joint Venture means (1) any person that is not a Subsidiary of the Company or any of its Restricted Subsidiaries that the Company or any of its Restricted Subsidiaries has a direct or indirect ownership interest in that is engaged in a Permitted Business or (2) any entity through which the Company has an ownership interest as described in clause (1), in the case of (1) and (2), for which the Sponsor does not hold an ownership interest (other than through its ownership interest in the Company).

Permitted Refinancing means, with respect to any Person, any modification, refinancing, defeasance, replacement, refunding, renewal or extension of any Indebtedness of such Person; provided that (a) the principal amount (or accreted value, if applicable) thereof does not exceed the principal amount (or accreted value, if applicable) of the Indebtedness so modified, refinanced, defeased, replaced, refunded, renewed or extended except by an amount equal to unpaid accrued (including, for the purposes of defeasance, future accrued) interest and premium thereon plus fees (including prepayment premium, associated hedging break costs and premium for replacement hedging) and expenses reasonably incurred in connection with such modification, refinancing, refunding, renewal or extension and by an amount equal to any existing commitments and incremental facilities unutilized thereunder to the extent incurrence of indebtedness under such unutilized commitment and incremental facilities would then have been permitted, (b) such modification, refinancing, defeasance, replacement, refunding, renewal, or extension has a final maturity date equal to or later than the final maturity date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being modified, refinanced, defeased, replaced,  refunded, renewed or extended, (c) other than with respect to a Permitted Refinancing in respect of Indebtedness permitted pursuant to Section 7.03(e) or (g), at the time thereof, no Event of Default shall have occurred and be continuing and (d) if such Indebtedness being modified, refinanced, defeased, replaced, refunded, renewed or extended is Indebtedness permitted pursuant to Section 7.03(b), 7.03(g) or 7.13(a) or is otherwise a Junior Financing, (i) to the extent such Indebtedness being modified, refinanced, defeased, replaced, refunded, renewed or extended is subordinated in right of payment to the Obligations or subordinated in respect of Liens, such modification, refinancing, defeasance, replacement, refunding, renewal or extension is subordinated in right of payment to the Obligations or subordinated in respect of Collateral on terms at least as favorable to the Lenders as those contained in the documentation governing the Indebtedness being modified, refinanced, defeased, replaced, refunded, renewed or extended, (ii) the terms and conditions (including, if applicable, as to collateral but excluding as to subordination, interest rate and redemption premium) of any such modified, refinanced, defeased, replaced, refunded, renewed or extended Indebtedness, taken as a whole, are not materially less favorable to the Loan Parties or the Lenders than the terms and conditions of the Indebtedness being modified, refinanced, defeased, replaced, refunded, renewed or extended; and (iii) such modification, refinancing, defeasance, replacement, refunding, renewal or extension is incurred by the Person who is the obligor of the Indebtedness being modified, refinanced, refunded, renewed or extended.

 
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Person means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

Plan means any employee benefit plan (as such term is defined in Section 3(3) of ERISA) established by any Loan Party or Subsidiary or, with respect to any such plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA Affiliate.

Platform has the meaning set forth in Section 6.01.

Pledged Debt has the meaning set forth in the U.S. Security Agreement.

Pledged Equity has the meaning set forth in the U.S. Security Agreement.

Primary Letter of Credit means a Letter of Credit issued under the Primary Revolving Credit Facility.

Primary L/C Advance means, with respect to each Primary Revolving Credit Lender, such Lenders funding of its participation in any Primary L/C Borrowing in accordance with its Pro Rata Share.

Primary L/C Borrowing means an extension of credit resulting from a drawing under any Primary Letter of Credit which has not been reimbursed on the date when made or refinanced as a Primary Revolving Credit Borrowing.

Primary L/C Credit Extension means, with respect to any Primary Letter of Credit, the issuance thereof or extension of the expiry date thereof, or the renewal or increase of the amount thereof.

Primary L/C Obligations means, as at any date of determination, the aggregate undrawn amount of all outstanding Primary Letters of Credit plus the aggregate of all Unreimbursed Amounts, including all Primary L/C Borrowings.

 Primary Letter of Credit Sublimit means an amount equal to the lesser of (a) $450,000,000 and (b) the aggregate Dollar Amount of the Primary Revolving Credit Commitments.  The Primary Letter of Credit Sublimit is part of, and not in addition to, the Primary Revolving Credit Facility.

 Primary Revolving Credit Commitment means, as to each Primary Revolving Credit Lender, its obligation to (a) make Primary Revolving Credit Loans to the Borrowers pursuant to Section 2.01(e), (b) purchase participations in Primary L/C Obligations in respect of Primary Letters of Credit and (c) purchase participations in Swing Line Loans, in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Lenders name on Schedule 1.01A under the caption Primary Revolving Credit Commitment or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement (including Section 2.14).  The aggregate Primary Revolving Credit Commitments of all Primary Revolving Credit Lenders shall be $800,000,000 on the Closing Date.

Primary Revolving Credit Exposure means, as to each Primary Revolving Credit Lender, the sum of the Dollar Amount of the outstanding principal amount of such Primary Revolving Credit Lenders Primary Revolving Credit Loans and its Pro Rata Share of the Dollar Amount of the Primary L/C Obligations and the Swing Line Obligations at such time.

 
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Primary Revolving Credit Facility means, at any time, the aggregate amount of the Revolving Credit Lenders Primary Revolving Credit Commitments at such time.

Primary Revolving Credit Lender means, at any time, any Lender that has a Primary Revolving Credit Commitment at such time.

Primary Revolving Credit Loan has the meaning specified in Section 2.01(e).

Primary Revolving Credit Note means a promissory note of the Borrowers payable to any Primary Revolving Credit Lender or its registered assigns, in substantially the form of Exhibit C-5, evidencing the aggregate Indebtedness of the Borrowers to such Primary Revolving Credit Lender resulting from the Primary Revolving Credit Loans made by such Primary Revolving Credit Lender to the Borrowers.

Principal L/C Issuer means any L/C Issuer that has issued Letters of Credit having an aggregate Outstanding Amount in excess of $10,000,000.

Pro Forma Balance Sheet has the meaning set forth in Section 5.05(a)(i).

Pro Forma Basis and Pro Forma Compliance mean, with respect to compliance with any test or covenant hereunder, that (A) if no Test Period cited in Section 7.11 has passed, the covenants in Section 7.11 for the first Test Period cited in such Section shall be satisfied as of the last four quarters then ended and (B) all Specified Transactions and the following transactions in connection therewith shall be deemed to have occurred as of the first day of the applicable period of measurement in such test or covenant:  (a) the benefit of any anticipated expense reductions and similar synergies as such reductions and synergies could be properly reflected in pro forma financial statements included in a registration statement filed under the Securities Act, (b) income statement items (whether positive or negative) attributable to the property or Person subject to such Specified Transaction, (i) in the case of a Disposition of all or substantially all Equity Interests in any Subsidiary of the Company or any division, product line, or facility used for operations of the Company or any of its Subsidiaries, shall be excluded, and (ii) in the case of a Permitted Acquisition or Investment described in the definition of  Specified Transaction, shall be included, (c) any retirement of Indebtedness, and (d) any Indebtedness incurred or assumed by the Company or any of the Restricted Subsidiaries in connection therewith and if such Indebtedness has a floating or formula rate, shall have an implied rate of interest for the applicable period for purposes of this definition determined by utilizing the rate which is or would be in effect with respect to such Indebtedness as at the relevant date of determination.

Pro Forma Financial Statements has the meaning set forth in Section 5.05(a)(i).

Prohibition has the meaning set forth in Section 11.11.

Projections has the meaning set forth in Section 6.01(c).

Pro Rata Share means, with respect to each Lender at any time a fraction (expressed as a percentage, carried out to the ninth decimal place), the numerator of which is the amount of the Commitments of such Lender under the applicable Facility or Facilities at such time and the denominator of which is the amount of the Aggregate Commitments under the applicable Facility or Facilities at such time; provided that if such Commitments have been terminated, then the Pro Rata Share of each Lender shall be determined based on the Pro Rata Share of such Lender immediately prior to such termination and after giving effect to any subsequent assignments made pursuant to the terms hereof.

 
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Public Lender has the meaning set forth in Section 6.01.

Qualified Equity Interest means any Equity Interest that is not a Disqualified Equity Interest.

Real Property means, collectively, all right, title and interest (including any leasehold, easement, mineral or other estate) in and to any and all parcels of or interests in real property owned, leased or operated by any Person, whether by lease, license or other means, together with, in each case, all easements, hereditaments and appurtenances relating thereto, all improvements and appurtenant fixtures and equipment, all general intangibles and contract rights and other property and rights incidental to the ownership, lease or operation thereof.

Receivables Financings means factoring, securitizations of receivables or any other receivables financing (including through the sale of receivables in a factoring arrangement or through the sale of receivables to lenders or to special purpose entities formed to borrow from such lenders against such receivables), whether or not recourse to the Company or any of its Restricted Subsidiaries, including the ABF Receivables Facility and any other Securitization Transaction.

Recovery Event means any event that gives rise to the receipt by the Company or any Restricted Subsidiary of proceeds pursuant to or in respect of the Acquisition Agreement or any due diligence report delivered to the Arrangers in connection with the Transaction or any related breach of contract, warranty claim, reliance letter or legal action or proceedings (whether by way of judgment on or settlement of any such claim).

Reference Time has the meaning set forth in the definition of Applicable Amount.

Refinanced Dutch Tranche A Dollar Term Loans has the meaning set forth in Section 10.01.

Refinanced German Tranche B Euro Term Loans has the meaning set forth in Section 10.01.

Refinanced U.S. Tranche A Dollar Term Loans has the meaning set forth in Section 10.01.

Refinanced U.S. Tranche B Dollar Term Loans has the meaning set forth in Section 10.01.

Register has the meaning set forth in Section 10.07(d).

Rejection Notice has the meaning set forth in Section 2.05(b)(vii).

Release means any spilling, leaking, seepage, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, disposing, depositing, dispersing or migrating in, into, onto or through the Environment.

Repayment Amount means the Dutch Tranche A Dollar Term Loan Repayment Amount, the U.S. Tranche A Dollar Term Loan Repayment Amount, the U.S. Tranche B Dollar Term Loan Repayment Amount or the German Tranche B Euro Term Loan Repayment Amount, as applicable.

 
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Replacement Dutch Tranche A Dollar Term Loans has the meaning set forth in Section 10.01.

Replacement German Tranche B Euro Term Loans has the meaning set forth in Section 10.01.

Replacement U.S. Tranche A Dollar Term Loans has the meaning set forth in Section 10.01.

Replacement U.S. Tranche B Dollar Term Loans has the meaning set forth in Section 10.01.

Reportable Event means any of the events set forth in Section 4043(c) of ERISA or the regulations issued thereunder, other than events for which the thirty (30) day notice period has been waived.

Request for Credit Extension means (a), with respect to a Borrowing, continuation or conversion of Term Loans or Revolving Credit Loans, a Committed Loan Notice, (b) with respect to an L/C Credit Extension, a Letter of Credit Application, and (c) with respect to a Swing Line Loan, a Swing Line Loan Notice.

Required Class Lenders means, as of any date of determination, Lenders of a Class having more than 50% of the sum of the (a) Total Outstandings in respect of that Class (with the aggregate Dollar Amount of each Lenders risk participation and funded participation in L/C Obligations and Swing Line Loans being deemed held by such Lender for purposes of this definition) for all Lenders of such Class and (b) aggregate unused Commitments in respect of that Class of all Lenders of such Class; provided that the unused Commitment in respect of that Class and the portion of the Total Outstandings in respect of that Class held or deemed held by, any Defaulting Lender or Non-Responsive Lender of such Class shall be excluded for purposes of making a determination of Required Class Lenders.

Required Lenders means, as of any date of determination, Lenders having more than 50% of the sum of the (a) Total Outstandings (with, in the case of the Primary Revolving Credit Facility, the aggregate Dollar Amount of each Lenders risk participation and funded participation in L/C Obligations and Swing Line Loans being deemed held by such Lender for purposes of this definition), (b) aggregate unused U.S. Tranche A Dollar Term Commitments, (c) aggregate unused Dutch Tranche A Dollar Term Commitments, (d) aggregate unused U.S. Tranche B Dollar Term Commitments, (e) aggregate unused German Tranche B Euro Term Commitments, (f) aggregate unused Primary Revolving Credit Commitments and (g) aggregate unused Dutch Revolving Credit Commitments; provided that the unused U.S. Tranche A Dollar Term Commitment, unused U.S. Tranche B Dollar Term Commitments, unused Dutch Tranche A Dollar Term Commitment, unused German Tranche B Euro Term Commitment, unused Primary Revolving Credit Commitment and unused Dutch Revolving Credit Commitments of, and the portion of the Total Outstandings held or deemed held by, any Defaulting Lender or Non-Responsive Lender shall be excluded for purposes of making a determination of Required Lenders.

Responsible Officer means the chief executive officer, president, vice president, chief financial officer, treasurer or assistant treasurer or other similar officer of a Loan Party (including, in the case of each Loan Party, the authorized number of managing directors or a general attorney or an attorney under a power of attorney of such Loan Party) and, as to any document delivered on the Closing Date, any secretary of such Loan Party.  Any document delivered hereunder that is signed by a Responsible Officer of a Loan Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Loan Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party.

 
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Restricted Party means any person listed:

(a)           in the Annex to the Executive Order;

(b)           on the Specially Designated Nationals and Blocked Persons list maintained by the OFAC;

(c)           in any successor list to either of the foregoing; or

(d)           any person or entity that commits, threatens or conspires to commit or supports terrorism as defined in the Executive Order.

Restricted Payment means

(1)           a declaration or payment of any dividend or the making of any distribution, other than dividends or distributions payable in Qualified Equity Interests of the Company and dividends or distributions payable solely to the Company or a Restricted Subsidiary of the Company, and other than pro rata dividends or other distributions made by a Subsidiary that is not a wholly-owned Subsidiary to minority shareholders (or owners of an equivalent interest in the case of a Subsidiary that is an entity other than a corporation), on or in respect of shares of the Companys Equity Interests to holders of such Equity Interests,

(2)           the purchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any warrants, rights or options to purchase or acquire shares of any class of such Equity Interests, or

(3)           any Investment other than an Investment permitted by Section 7.02.

Restricted Subsidiary means any Subsidiary of the Company other than an Unrestricted Subsidiary.  For the avoidance of doubt, each Borrower shall at all times constitute a Restricted Subsidiary.

Revolving Commitment Increase has the meaning set forth in Section 2.14(a).

Revolving Commitment Increase Lender has the meaning set forth in Section 2.14(e).

Revolving Credit Borrowing means a borrowing consisting of simultaneous Revolving Credit Loans of the same Type and, in the case of Eurocurrency Rate Loans, having the same Interest Period and currency.

Revolving Credit Commitments means the collective reference to the Primary Revolving Credit Commitment and Dutch Revolving Credit Commitment.

Revolving Credit Exposure means the collective reference to the Primary Revolving Credit Exposure and the Dutch Revolving Credit Exposure.

Revolving Credit Facilities means the collective reference to the Primary Revolving Credit Facility and Dutch Revolving Credit Facility.

Revolving Credit Lender means the collective reference to the Primary Revolving Credit Lenders and the Dutch Revolving Credit Lenders.

 
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Revolving Credit Loan has the meaning set forth in Section 2.01(e).

Revolving Credit Note means a Primary Revolving Credit Note or a Dutch Revolving Credit Note.

S&P means Standard & Poors Ratings Services, a division of The McGraw-Hill Companies, Inc., and any successor thereto.

Same Day Funds means (a) with respect to disbursements and payments in Dollars, immediately available funds, and (b) with respect to disbursements and payments in an Alternative Currency, same day or other funds as may be determined by the Administrative Agent to be customary in the place of disbursement or payment for the settlement of international banking transactions in the relevant Alternative Currency.

Scheduled Capital Expenditure Amount has the meaning set forth in Section 7.11(c).

SEC means the U.S. Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.

Secured Hedge Agreement means any Swap Contract permitted under Article VII entered into by and between any Borrower or any Loan Party and any Hedge Bank, and all Swap Contracts set forth on Schedule 1.01L.

Secured Parties means, collectively, the Administrative Agent, the Collateral Agent, the Lenders, the Hedge Banks, with respect to Existing Letters of Credit only, the issuers thereof, with respect to Secured Hedge Agreements set forth on Schedule 1.01L only, the counterparties thereto, the Supplemental Agents and each co-agent or sub-agent appointed by the Administrative Agent or Collateral Agent from time to time pursuant to Section 9.02.

Securities Act means the Securities Act of 1933, as amended.

Securitization Entity means Basell Capital Corporation, Basell Polyolefins Company BVBA, LyondellBasell Receivables I, LLC and each other entity to which the Company or any Subsidiary of the Company transfers, directly or indirectly, accounts receivable or equipment and related assets which engages in no activities other than in connection with the financing of accounts receivable or equipment and which is designated by the Board of Directors of the Company (as provided below) as a Securitization Entity; provided that:

(1)           no portion of the Indebtedness or any other obligations (contingent or otherwise) of which

(a)           is guaranteed by the Company or any Subsidiary of the Company (other than the Securitization Entity), excluding guarantees of obligations (other than the principal of, and interest on, Indebtedness) pursuant to Standard Securitization Undertakings,

(b)           is recourse to or obligates the Company or any Subsidiary of the Company (other than the Securitization Entity) in any way other than pursuant to Standard Securitization Undertakings, or

 
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(c)           subjects any property or asset of the Company or any Subsidiary of the Company (other than the Securitization Entity), directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than pursuant to Standard Securitization Undertakings and other than any interest in the accounts receivable or equipment and related assets being financed (whether in the form of an equity interest in such assets or subordinated indebtedness payable primarily from such financed assets) retained or acquired by the Company or any Subsidiary of the Company,

(2)           neither the Company nor any Subsidiary of the Company has any material contract, agreement, arrangement or understanding with the Securitization Entity other than on terms no less favorable to the Company or such Subsidiary than those that might be obtained at the time from Persons that are not Affiliates of the Company, other than fees payable in the ordinary course of business in connection with servicing receivables of such entity (other than Standard Securitization Undertakings), and

(3)           neither the Company nor any Subsidiary of the Company has any obligation to maintain or preserve such entitys financial condition or cause such entity to achieve certain levels of operating results (other than Standard Securitization Undertakings).

Any such designation by the Board of Directors of the Company shall be evidenced to the Administrative Agent by filing with the Administrative Agent a certified copy of the resolution of the Board of Directors of the Company giving effect to such designation and an officers certificate certifying that such designation complied with the foregoing conditions.  Following an initial public offering of common stock by a direct or indirect parent of the Company, references in the foregoing definition to the Company shall be deemed also to refer to such direct or indirect parent.

Securitization Transaction means any transaction or series of transactions that may be entered into by the Company or any of its Subsidiaries pursuant to which the Company or any of its Subsidiaries may sell, convey or otherwise transfer pursuant to customary terms to:

(1)           a Securitization Entity or to the Company which subsequently transfers to a Securitization Entity (in the case of a transfer by the Company or any of its Subsidiaries) and

(2)           any other Person (in the case of transfer by a Securitization Entity), or may grant a security interest in any accounts receivable (whether now existing or arising or acquired in the future) of the Company or any of its Subsidiaries, and any assets related thereto, including all collateral securing such accounts receivable, all contracts and contract rights and all guarantees or other obligations in respect of such accounts receivable, proceeds of such accounts receivable and other assets (including contract rights) which are customarily transferred or in respect of which security interests are customarily granted in connection with asset securitization transactions involving accounts receivable.

Following an initial public offering of common stock by a direct or indirect parent of the Company, references in the foregoing definition to the Company shall be deemed also to refer to such direct or indirect parent.

Security Agreements means the Security Agreements listed on Schedule 1.01J, or any other similar agreements that create a Lien or purport to create a Lien in favor of the Collateral Agent for the benefit of the Secured Parties.

 
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Senior Second Lien Debt means the Senior Second Lien Interim Loans, the Senior Second Lien Exchange Notes and the Senior Second Lien Extended Loans.

Senior Second Lien Exchange Notes means the Exchange Notes, as set forth in the Senior Second Lien Interim Loan Agreement.

Senior Second Lien Extended Loans means the Extended Loans, as set forth in the Senior Second Lien Interim Loan Agreement.

Senior Second Lien Interim Loan Agreement means the Bridge Loan Agreement dated as of the Closing Date, between LyondellBasell Finance Company, among others, the Company, the subsidiary guarantors party thereto, the lenders party thereto and the joint lead arrangers and bookrunners party thereto (including Exhibits thereto), as in effect on the Closing Date.

Senior Second Lien Interim Loans means $8,000,000,000 of senior second lien loans made to LyondellBasell Finance Company pursuant to the Senior Second Lien Interim Loan Agreement.

Solvent and Solvency mean, with respect to any Person on any date of determination, that on such date (a) the fair value of the property of such Person is greater than the total amount of liabilities, including contingent liabilities, of such Person, (b) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Persons ability to pay such debts and liabilities as they mature and (d) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Persons property would constitute an unreasonably small capital.  The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

SPC has the meaning set forth in Section 10.07(g).

Specified Foreign Currency has the meaning set forth in Section 2.01(e).

Specified Foreign Currency Funding Capacity means, at any date of determination, for any Lender, the ability of such Lender to fund Revolving Credit Loans denomi­nated in a Specified Foreign Currency, as set forth in the records of the Administrative Agent as notified in writing by such Lender to the Administrative Agent within three (3) Business Days of such Lender becoming a Lender hereunder.

Specified Foreign Currency Loan has the meaning set forth in Section 12.01(a).

Specified Foreign Currency Participation has the meaning set forth in Section 12.01(a).

Specified Foreign Currency Participation Fee has the meaning set forth in Section 12.06.

Specified Foreign Currency Participation Settlement has the meaning set forth in Section 12.02(i).

Specified Foreign Currency Participation Settlement Amount has the meaning set forth in Section 12.02(ii).

 
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Specified Foreign Currency Participation Settlement Date has the meaning set forth in Section 12.02(i).

Specified Foreign Currency Participation Settlement Period has the meaning set forth in Section 12.02(i).

Specified Joint Venture means Al-Waha Petrochemical Company and Saudi Ethylene and Polyethylene Company.

Specified Transaction means any Investment, Disposition, incurrence or repayment of Financial Indebtedness, Restricted Payment, Restricted Subsidiary designation, Incremental Term Loan or Revolving Commitment Increase that by the terms of this Agreement requires Pro Forma Compliance with a test or covenant hereunder or requires such test or covenant to be calculated on a pro forma basis.

Sponsor means,

(a)           the Blavatnik Group; and/or

(b)           other funds, limited partnerships or companies managed or controlled by Mr. Leonard Blavatnik, including Parent, for so long as so managed or controlled.

Standard Securitization Undertakings means representations, warranties, undertakings, covenants and indemnities entered into by the Company or any Subsidiary of the Company which are reasonably customary in an accounts receivable securitization transaction.  Following an initial public offering of common stock by a direct or indirect parent of the Company, references in the foregoing definition to the Company shall be deemed also to refer to such direct or indirect parent.

Stated Maturity means, with respect to any Indebtedness, the date specified in such security as the fixed date on which the final payment of principal of such security is due and payable, including pursuant to any mandatory redemption provision (but excluding any provision providing for the repurchase of such security at the option of the holder thereof upon the happening of any contingency beyond the relevant obligors control unless such contingency has occurred).

Sterling and mean the lawful currency of the United Kingdom.

Sterling Loan means a Loan that is a Eurocurrency Rate Loan and that is made in Sterling pursuant to the applicable Committed Loan Notice.

Structured Financing Transactions means the structured financing transaction, as in effect on the Closing Date, entered into in July 2007 by the Company and certain of its Restricted Subsidiaries and a European bank pursuant to which Basell Funding issued Dutch certification van aandelen (Certificates) to a special purpose vehicle (BAFB) with respect to 50 fixed-return preferred shares issued by Basell Holdings to Basell Funding for a consideration of 1,000,000,000; the Certificates give BAFB the right to receive from the Company dividends and other distributions that Basell Funding receives from Basell Holdings in relation to the preferred shares; together with a put and call option agreement entered into between the Company and the European bank with respect to the shares of BAFB and pursuant to which, at any time at their respective sole discretion either the Company can call or the European bank can put the shares of BAFB for a purchase price of 1,000,000,000; and the related Swap Contracts in respect of the aforementioned.

 
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Subsidiary means with respect to any Person, (1) a corporation a majority of the voting Equity Interests of which are at the time, directly or indirectly, owned by such Person; and (2) any other Person (other than a corporation), including, a partnership, limited liability company, business trust or joint venture, in which such Person, at the time thereof, directly or indirectly, has at least a majority ownership interest entitled to vote in the election of directors, managers or trustees thereof (or other Person performing similar functions) or (3) for so long as the Company or any of its Restricted Subsidiaries has a 50% ownership interest in Lyondell Bayer Manufacturing Maasvlakle VOF, Lyondell Bayer Manufacturing Maasvlakle VOF.  For the purposes of this Agreement, references to Subsidiaries of the Company under this Agreement shall be deemed to include Lyondell and its Subsidiaries after giving effect to the Acquisition.

Subsidiary Guarantors means, collectively, the Subsidiaries of the Company that are Guarantors.

Successor Borrower has the meaning set forth in Section 7.04(d).

Successor Company has the meaning set forth in Section 7.04(d).

Supplemental Agent has the meaning set forth in Section 9.13(a).

Survey means a survey of any Real Property subject to a Mortgage (and all improvements thereon) which is (a) (i) prepared by a surveyor or engineer licensed to perform surveys in the jurisdiction where such Real Property is located, (ii) dated (or redated) not earlier than six months prior to the date of delivery thereof unless there shall have occurred within six months prior to such date of delivery any exterior construction on the site of such Real Property or any easement, right of way or other interest in the Real Property has been granted or become effective through operation of law or otherwise with respect to such Real Property which, in either case, can be depicted on a survey, in which events, as applicable, such survey shall be dated (or redated) after the completion of such construction or if such construction shall not have been completed as of such date of delivery, not earlier than 30 days prior to such date of delivery, or after the grant or effectiveness of any such easement, right of way or other interest in the subject Real Property, (iii) certified by the surveyor (in a manner reasonably acceptable to the Administrative Agent) to the Administrative Agent, the Collateral Agent and the Title Company, (iv) complying in all material respects with the minimum detail requirements of the American Land Title Association as such requirements are in effect on the date of preparation of such survey and (v) sufficient for the Title Company to issue a Title Policy or (b) otherwise acceptable to the Collateral Agent.

Swap Contract means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, emission rights, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a Master Agreement), including any such obligations or liabilities under any Master Agreement.

 
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Swing Line Borrowing means a U.S. Swing Line Borrowing and/or a European Swing Line Borrowing, as the context may require.

Swing Line Facility means the U.S. Swing Line Facility and/or the European Swing Line Facility, as the context may require.

Swing Line Lender means the U.S. Swing Line Lender and/or the European Swing Line Lender, as the context may require.

Swing Line Loan means a U.S. Swing Line Loan and/or a European Swing Line Loan, as the context may require.

Swing Line Note means a U.S. Swing Line Note and/or a European Swing Line Note, as the context may require.

Swing Line Obligations means, as at any date of determination, the aggregate principal amount of all U.S. Swing Line Loans and/or European Swing Line Loans outstanding.

Swing Line Sublimit means $150,000,000.  The Swing Line Sublimit is part of, and not in addition to, the Primary Revolving Credit Commitments.

 TARGET Day means any day on which the Trans-European Automated Real-time Gross Settlement Express Transfer (TARGET) payment system (or, if such payment system ceases to be operative, such other payment system (if any) determined by the Administrative Agent in consultation with the Company to be a suitable replacement) is open for the settlement of payments in Euros.

Tax Sharing Agreement means the Tax Sharing Agreement dated the Closing Date on or about December 20, 2007, as in effect on the Closing Date which the Company and its Subsidiaries agree to make payments (the Tax Payments) to Nell Limited;  providing for (i) payments of up to 17.5% of the amount of those Dutch or French net operating losses of entities of the Company and its Restricted Subsidiaries that arose in taxable years ending prior to 2007 and that are scheduled thereto (the Qualifying Net Operating Loss Carryovers), (ii)  maximum aggregate Tax Payments of not more than $175,000,000 and (iii) any Tax Payment thereunder is to be accompanied by a certificate from independent counsel to the Company or its parent company that (x) such Tax Payment will be used by an indirect U.S.-taxpayer shareholder to pay taxes associated with taxable income of the Company and/or its Subsidiaries taxable to such shareholder by reason of such shareholders indirect ownership of the Company and its Subsidiaries and (y) as a result of the utilization of Qualifying Net Operating Loss Carryovers by the Subsidiaries of the Company, the U.S.-taxpayer shareholders U.S. federal income tax liability for such taxable year was increased by an amount equal to such Tax Payment.  Payments under the Tax Sharing Agreement are to be made promptly after the certificate is provided and in any event within 90 days after the end of the Fiscal Year in which the Qualifying Net Operating Loss Carryovers are used.

 Taxes means all present or future taxes, duties, levies, imposts, deductions, withholdings, assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto, whether disputed or not.

Term Borrowing means a borrowing consisting of simultaneous Term Loans of the same Type and currency and, in the case of Eurocurrency Rate Loans, having the same Interest Period made by each of the Term Lenders pursuant to Section 2.01.

 
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Term Commitment means a U.S. Tranche A Dollar Term Commitment, a U.S. Tranche B Dollar Term Commitment, a Dutch Tranche A Dollar Term Commitment or a German Tranche B Euro Term Commitment, as the context may require.

Term Lender means, at any time, a U.S. Tranche A Dollar Term Lender, U.S. Tranche B Dollar Term Lender, a Dutch Tranche A Dollar Term Lender or a German Tranche B Euro Term Lender, as the context may require.

Term Loan means a U.S. Tranche A Dollar Term Loan, a U.S. Tranche B Dollar Term Loan, a Dutch Tranche A Dollar Term Loan or a German Tranche B Euro Term Loan, as the context may require.

Test Period means, for any date of determination under this Agreement, the four consecutive fiscal quarters of the Company then last ended.

Threshold Amount means an amount equal to the lesser of (i) $100,000,000 or (ii) only for so long as any of the 2015 Notes are outstanding, 20,000,000 in respect of the Threshold Amount referred to in Section 8.01(e) and 30,000,000 in respect of the Threshold Amount referred to in Section 8.01(h).

Title Company means a nationally recognized title insurance company reasonably acceptable to the Administrative Agent.

Title Policy means a fully paid policy of title insurance (or marked-up title insurance commitment having the effect of a policy of title insurance) insuring the Lien of a Mortgage as a valid first mortgage Lien on the mortgaged property and fixtures described therein in the amount equal to not less than the fair market value of such mortgaged property and fixtures, issued by the Title Company which shall (a) to the extent  necessary, include such reinsurance arrangements (with provisions for direct access, if necessary) as shall be reasonably acceptable to the Administrative Agent, (b) contain a tie-in or cluster endorsement, if available under applicable law (i.e., policies which insure against losses regardless of location or allocated value of the insured property up to a stated maximum coverage amount), (c) have been supplemented by such endorsements (or where such endorsements are not available, opinions of special counsel, architects or other professionals reasonably acceptable to the Administrative Agent) as shall be reasonably requested by the Administrative Agent (including endorsements on matters relating to usury, first loss, last dollar, zoning, contiguity, revolving credit, doing business, non-imputation, public road access, survey, variable rate, environmental lien, subdivision, mortgage recording tax, separate tax lot, revolving credit and so-called comprehensive coverage over covenants and restrictions), and (d) contain no exceptions to title other than Liens permitted hereunder.

Total Assets of a Person or Persons means total assets of such Persons on a consolidated basis, shown on the most recent balance sheet of such Persons as may be expressly stated without giving effect to amortization of the amount of intangible assets since the Closing Date.

Total Outstandings means the aggregate Outstanding Amount of all Loans and all L/C Obligations.

Tranche A Incremental Term Loans has the meaning set forth in Section 2.14(b).

Tranche A Term Lenders means the U.S. Tranche A Dollar Term Lenders or the Dutch Tranche A Dollar Term Lenders, as the context requires.

 
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Tranche A Term Loans means the U.S. Tranche A Dollar Term Loans or Dutch Tranche A Dollar Term Loans, as the context requires.

Tranche B Incremental Term Loans has the meaning set forth in Section 2.14(b).

Tranche B Lenders means the U.S. Tranche B Dollar Term Lenders or the German Tranche B Euro Term Lenders, as the context requires.

Tranche B Term Loans means U.S. Tranche B Dollar Term Loans or German Tranche B Euro Term Loans, as the context requires.

Transaction means, collectively, the transactions contemplated by this Agreement, any Asset Backed Credit Facilities, Receivables Financing entered into on the Closing Date, the Senior Second Lien Interim Loan Agreement, the repayment of certain existing Indebtedness of the Company and its Subsidiaries (including the Margin Loans) and Lyondell and its Subsidiaries, the Acquisition (including the conversion of the Millennium 4% Convertible Debentures due 2026) and the intercompany transfers of the proceeds of any Asset Backed Credit Facilities or Receivables Financings funded on the Closing Date, the Senior Second Lien Interim Loans and the Loans to be made on the Closing Date, and the payment of any fees and expenses in connection therewith.

Transaction Expenses means any premiums, interest, discount, fees, costs or expenses incurred or paid by the Sponsors, the Company or any Restricted Subsidiary in connection with the Transaction (including expenses in connection with hedging transactions), this Agreement, the Permanent Financing, and amendments entered into after the Closing Date (and contemplated on the Closing Date) of the Securitization Transactions entered into on or before the Closing Date and the other Loan Documents and the transactions contemplated hereby and thereby.

Transferred Guarantor has the meaning set forth in Section 11.09.

Treasury Services Agreement means any agreement between any Loan Party or Restricted Subsidiary and any Hedge Bank relating to treasury, depository, and cash management services, employee credit card arrangements or automated clearinghouse transfer of funds.

Type means, with respect to a Loan denominated in Dollars, its character as a Base Rate Loan or a Eurocurrency Rate Loan.

Unfunded Current Liability of any Plan means the amount, if any, by which the Accumulated Benefit Obligation (as defined under Statement of Financial Accounting Standards No. 87 (SFAS 87)) under the Plan as of the close of its most recent plan year, determined in accordance with SFAS 87 as in effect on the Closing Date, exceeds the fair market value of the assets allocable thereto.

Uniform Commercial Code or UCC means the Uniform Commercial Code as the same may from time to time be in effect in the State of New York or the Uniform Commercial Code (or similar code or statute) of another jurisdiction, to the extent it may be required to apply to any item or items of Collateral.

United States and U.S. mean the United States of America.

Unreimbursed Amount has the meaning set forth in Section 2.03(c)(i).

 
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Unrestricted Cash means cash and Cash Equivalents, other than as disclosed on the consolidated financial statements of Company as a line item on the balance sheet as restricted cash or similar caption but including cash and Cash Equivalents so disclosed as restricted cash to the extent that such cash and Cash Equivalents are restricted solely on account of being set aside for repayment, defeasing or cash collateralizing Indebtedness included in clause (a) of the definition of Consolidated First Lien Senior Secured Debt (other than cash and Cash Equivalents under the Structured Financing Transaction).

Unrestricted Subsidiary of any Person means:

(1)           any Subsidiary of such Person that at any time will be or continue to be designated an Unrestricted Subsidiary and

(2)           any Subsidiary of an Unrestricted Subsidiary.

The Board of Directors of the Company may designate any Subsidiary (including any newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary if:

(a)           such Subsidiary does not own any Equity Interests of, or does not own or hold any Lien on any property of, the Company or any other Subsidiary of the Company that is not a Subsidiary of the Subsidiary to be so designated; and

(b)           such designation complies with Section 7.06.

All Investments in such Subsidiary shall be deemed an Investment in an Unrestricted Subsidiary on such date of designation, which shall be in compliance with Section 7.02.

The Board of Directors of the Company may designate any Unrestricted Subsidiary to be a Restricted Subsidiary only if:

(i)           the pro forma Consolidated Fixed Charge Coverage Ratio of the Company is at least 2.00:1.00;

(ii)           immediately before and immediately after giving effect to such designation, no Default or Event of Default will have occurred and be continuing;

(iii)           any Guarantee by the Company or any Restricted Subsidiary of any Indebtedness of the Subsidiary being so designated shall be deemed an incurrence of such Indebtedness and an Investment by the Company or such Restricted Subsidiary (or both, if applicable) at the time of such designation; and

(iv)           if applicable, the incurrence of Indebtedness and the Investment referred to in (iii) above would be permitted under Section 7.03 and 7.02 respectively.

Any such designation by the Board of Directors of the Company will be evidenced to the Administrative Agent by promptly filing with the Administrative Agent a copy of the board resolution approving the designation and an officers certificate of a Company Financial Officer certifying that the designation complied with this Agreement.

U.S. Borrower has the meaning set forth in the introductory paragraph to this Agreement.

 
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U.S. Revolving Credit Loan has the meaning set forth in Section 2.01(e).

U.S. Security Agreement means the Security Agreement substantially in the form of Exhibit F.

U.S. Swing Line Borrowing means a borrowing of a U.S. Swing Line Loan pursuant to Section 2.04(a).

U.S. Swing Line Facility means the swing line loan facility made available by the U.S. Swing Line Lender pursuant to Section 2.04(a).

U.S. Swing Line Lender means Citibank, N.A., in its capacity as provider of U.S. Swing Line Loans, or any successor swing line lender hereunder.

U.S. Swing Line Loan has the meaning set forth in Section 2.04(a).

U.S. Swing Line Note means a promissory note of the U.S. Borrower payable to the U.S. Swing Line Lender or its registered assigns, in substantially the form of Exhibit C-7, evidencing the aggregate Indebtedness of the U.S. Borrower to such U.S. Swing Line Lender resulting from the U.S. Swing Line Loans.

U.S. Swing Line Loan Notice means a notice of a U.S. Swing Line Borrowing pursuant to Section 2.04(a), which, if in writing, shall be substantially in the form of Exhibit B.

U.S. Swing Line Obligations means, as at any date of determination, the aggregate principal amount of all U.S. Swing Line Loans outstanding.

 U.S. Tranche A Dollar Term Commitment means, as to each U.S. Tranche A Dollar Term Lender, its obligation to make a U.S. Tranche A Dollar Term Loan to the U.S. Borrower pursuant to Section 2.01(a) in an aggregate amount not to exceed the amount set forth opposite such Lenders name on Schedule 1.01A under the caption U.S. Tranche A Dollar Term Commitment or in the Assignment and Assumption pursuant to which such U.S. Tranche A Dollar Term Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement (including Section 2.14).  The initial aggregate amount of the U.S. Tranche A Dollar Term Commitments is $1,500,000,000.

U.S. Tranche A Dollar Term Lender means, at any time, any Lender that has a U.S. Tranche A Dollar Term Commitment or a U.S. Tranche A Dollar Term Loan at such time.

U.S. Tranche A Dollar Term Loan means a Loan made pursuant to Section 2.01(a).

U.S. Tranche A Dollar Term Loan Repayment Amount has the meaning set forth in Section 2.07(a).

U.S. Tranche A Dollar Term Note means a promissory note of the U.S. Borrower payable to any U.S. Tranche A Dollar Term Lender or its registered assigns, in substantially the form of Exhibit C-2, evidencing the aggregate Indebtedness of the U.S. Borrower to such U.S. Tranche A Dollar Term Lender resulting from the U.S. Tranche A Dollar Term Loans made by such U.S. Tranche A Dollar Term Lender.

 
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U.S. Tranche B Dollar Term Commitment means, as to each U.S. Tranche B Dollar Term Lender, its obligation to make a U.S. Tranche B Term Loan to the U.S. Borrower pursuant to Section 2.01(b) in an aggregate amount not to exceed the amount set forth opposite such Lenders name on Schedule 1.01A under the caption U.S. Tranche B Dollar Term Commitment or in the Assignment and Assumption pursuant to which such U.S. Tranche B Dollar Term Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement (including Section 2.14).  The initial aggregate amount of the U.S. Tranche B Dollar Term Commitments is $7,550,000,000.

U.S. Tranche B Dollar Term Lender means, at any time, any Lender that has a U.S. Tranche B Dollar Term Commitment or a U.S. Tranche B Dollar Term Loan at such time.

U.S. Tranche B Dollar Term Loan means a Loan made pursuant to Section 2.01(b).

U.S. Tranche B Dollar Term Loan Repayment Amount has the meaning set forth in Section 2.07(b).

U.S. Tranche B Dollar Term Note means a promissory note of the U.S. Borrower payable to any U.S. Tranche B Dollar Term Lender or its registered assigns, in substantially the form of Exhibit C-3, evidencing the aggregate Indebtedness of the U.S. Borrower to such U.S. Tranche B Dollar Term Lender resulting from the U.S. Tranche B Dollar Term Loans made by such U.S. Tranche B Dollar Term Lender.

USA Patriot Act has the meaning set forth in Section 4.01(f).

Weighted Average Life to Maturity means, when applied to any Indebtedness at any date, the number of years obtained by dividing:  (i) the sum of the products obtained by multiplying (a) the amount of each then remaining installment, sinking fund, serial maturity or other scheduled payments of principal, including payment at final maturity, in respect thereof, by (b) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment; by (ii) the then outstanding principal amount of such Indebtedness.

Wholly Owned means, with respect to a Subsidiary of a Person, a Subsidiary of such Person all of the outstanding Equity Interests of which (other than (x) directors qualifying shares and (y) shares issued to third parties, in each case in a de minimis amount and to the extent required by applicable Law) are owned by such Person and/or by one or more wholly owned Subsidiaries of such Person.

Working Capital Reserve Account means a deposit account established by the Company and maintained with the Collateral Agent on behalf of the Secured Parties; provided that such account shall be in the name of the Collateral Agent or shall be subject to a customary control agreement in form and substance reasonably satisfactory to the Collateral Agent.

Section 1.02.   Other Interpretive Provisions
 
With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document:

(a)           The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms.

 
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(b)           The words herein, hereto, hereof and hereunder and words of similar import when used in any Loan Document shall refer to such Loan Document as a whole and not to any particular provision thereof.

(c)           Article, Section, Exhibit and Schedule references are to the Loan Document in which such reference appears.

(d)           The term including is by way of example and not limitation.

(e)           The term documents includes any and all instruments, documents, agreements, certificates, notices, reports, financial statements and other writings, however evidenced, whether in physical or electronic form.

(f)            In the computation of periods of time from a specified date to a later specified date, the word from means from and including; the words to and until each mean to but excluding; and the word through means to and including.

(g)           Section headings herein and in the other Loan Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Loan Document.

Section 1.03.   Accounting Terms
 
(a)           All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in accordance with, GAAP, except as otherwise specifically prescribed herein. Unless otherwise stated herein and except with respect to Article VII and Section 11.12, references to a Person with respect to accounting terms or items that appear in such Persons financial statements shall be deemed a reference to that Person and its Subsidiaries on a consolidated basis, except for references to the Company and its Restricted Subsidiaries, which will be deemed references to the Company and its Restricted Subsidiaries on a consolidated basis.

(b)           Notwithstanding anything to the contrary herein, for purposes of this Agreement (including in determining compliance with any test or covenant contained herein) with respect to any period during which any Specified Transaction occurs, the First Lien Senior Secured Leverage Ratio, Consolidated Debt Service Ratio and the Consolidated Fixed Charge Coverage Ratio shall be calculated with respect to such period and such Specified Transaction on a Pro Forma Basis.

Section 1.04.   Rounding
 
Any financial ratios required to be maintained by the Company pursuant to this Agreement (or required to be satisfied in order for a specific action to be permitted under this Agreement) shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding up if there is no nearest number).

Section 1.05.   References to Agreements, Laws, Etc.
 
Unless otherwise expressly provided herein, (a) references to Organization Documents, agreements (including the Loan Documents) and other contractual instruments shall be deemed to include all subsequent amendments, restatements, extensions, supplements and other modifications thereto, but only to the extent that such amendments, restatements, extensions, supplements and other modifications are permitted by the Loan Documents; and (b) references to any Law shall include all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting such Law.

 
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Section 1.06.   Times of Day
 
Unless otherwise specified, all references herein to times of day shall be references to Eastern time (daylight or standard, as applicable).

Section 1.07.   Timing of Payment or Performance
 
Unless otherwise specified, when the payment of any obligation or the performance of any covenant, duty or obligation is stated to be due or performance required on a day which is not a Business Day, the date of such payment (other than as described in the definition of Interest Period) or performance shall extend to the immediately succeeding Business Day.

Section 1.08.   Currency Equivalents Generally
 
Any amount specified in this Agreement (other than in Articles II, IX and X) or any of the other Loan Documents to be in Dollars; provided that the determination of the Dollar Amount of any Loan or Commitment shall be made in accordance with Section 2.15.  Notwithstanding the foregoing, for purposes of determining compliance with Sections 7.01, 7.02 and 7.03 with respect to any amount of Liens, Indebtedness or Investment in Euros, no Default shall be deemed to have occurred solely as a result of changes in rates of exchange occurring after the time such Lien is created, Indebtedness is incurred or Investment is made; provided, however, that (x) if, any such Lien, Indebtedness or Investment denominated in a different currency is subject to a currency Swap Contract (with respect to Dollars) covering principal amounts of such Lien, Indebtedness or Investment, the amount of such Lien, Indebtedness or Investment, as the case may be, expressed in Dollars will be adjusted to take into account the effect of such agreement; and (y) for the avoidance of doubt, the foregoing provisions of this Section 1.08 shall otherwise apply to such Sections, including with respect to determining whether any Lien, Indebtedness or Investment (not previously incurred on any date) may be incurred under such Sections.

Section 1.09.   Change of Currency
 
Each provision of this Agreement shall be subject to such reasonable changes of construction as the Administrative Agent may from time to time specify with the Companys consent to appropriately reflect a change in currency of any country and any relevant market conventions or practices relating to such change in currency.

Section 1.10.   Borrowers Agent
 
(a)           Each Loan Party by its execution of this Agreement or a joinder agreement pursuant to Section 6.12(b) irrevocably authorizes:

(i)    the Borrowers Agent on its behalf to supply all information concerning itself contemplated by this Agreement to the Secured Parties and to give and receive all notices, consents, certificates and instructions (including, in the case of a Borrower, Requests for Credit Extension), to make such agreements and to effect the relevant amendments, supplements and variations capable of being given, made or effected by any Loan Party, in each case, to the extent such Borrowers Agent is permitted to so act pursuant to this Agreement, notwithstanding that they may affect such Loan Party without further reference to or the consent of such Loan Party; and

 
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(ii)   each Secured Party to give any notice, demand or other communication to such Loan Party pursuant to the Loan Documents to the Borrowers Agent.

and in each case such Loan Party shall be bound as though such Loan Party itself had given the notices, consents, certificates and instructions (including any Requests for Credit Extension) or executed or made the agreements or effected the amendments, supplements or variations, or received the relevant notice, demand or other communication.

(b)           Every act, omission, agreement, undertaking, settlement, waiver, amendment, supplement, variation, notice or other communication given or made by the Borrowers Agent or given to the Borrowers Agent in its capacity under such Loan Document on behalf of another Loan Party or in connection with any Loan Document (whether or not known to any other Loan Party) shall be binding for all purposes on that Loan Party as if that Loan Party had expressly made, given or concurred with it.  This includes any amendment or waiver which would, but for this paragraph (b), require the consent of all Guarantors.  In the event of any conflict between any notices or other communications of the Borrowers Agent in its capacity as Borrowers Agent and any other Loan Party, those of the Borrowers Agent in its capacity as Borrowers Agent shall prevail.

(c)           The Company shall be entitled to appoint one or more Subsidiaries as additional Borrowers Agents and to terminate such appointments in each case provided it has first notified the Administrative Agent of such appointment or termination and, provided further that there shall be no more than two (2) Borrowers Agents at any one time. The provisions of this Section 1.10 shall apply to each Borrowers Agents (including any additional Borrowers Agent) until such time as termination of the appointment of such Borrowers Agent is notified to the Administrative Agent.  At any time when there is more than one Borrowers Agent, the Company shall nominate (and notify the Administrative Agent of) one such Borrowers Agent as the agent of all other Borrowers Agent for the purpose of receiving notices of Default from the Administrative Agent.

(d)           Each Loan Party hereby releases the Borrowers Agent from any restriction on self-dealing under any applicable law arising under section 181 of the German Civil Code (BGB).

Section 1.11.   Luxembourg Terms.  With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document:

(a)           a liquidator, trustee in bankruptcy, judicial custodian, compulsory manager, receiver, administrator receiver, administrator or similar officer includes any:

(i)   juge-commissaire and/or insolvency receiver (curateur) appointed under the Luxembourg Commercial Code;

(ii)   liquidateur appointed under Articles 141 to 151 of the Luxembourg act of 10 August 1915 on commercial companies, as amended;

(iii)    juge-commissaire and/or liquidateur appointed under Article 203 of the Luxembourg act dated 10 August 1915 on commercial companies, as amended;

 
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(iv)   commissaire appointed under the Grand-Ducal decree of 24 May 1935 on the controlled management regime or under Articles 593 to 614 of the Luxembourg Commercial Code; and

(v)    juge dlgu appointed under the Luxembourg act of 14 April 1886 on the composition to avoid bankruptcy, as amended;

(b)           a winding-up, administration or dissolution includes, without limitation, bankruptcy (faillite), liquidation, composition with creditors (concordat prventif de faillite), moratorium or reprieve from payment (sursis de paiement) and controlled management (gestion contrle); and

(c)           a person being unable to pay its debts includes that person being in a state of cessation of payments (cessation de paiements).
 
ARTICLE II.

The Commitments and Credit Extensions

Section 2.01.   The Loans.

(a)           The U.S. Tranche A Dollar Term Borrowings.  Subject to the terms and conditions set forth herein, each U.S. Tranche A Dollar Term Lender severally agrees to make to the U.S. Borrower a single loan on the Closing Date denominated in Dollars in an amount equal to such U.S. Tranche A Dollar Term Lenders U.S. Tranche A Dollar Term Commitment.  Amounts borrowed under this Section 2.01(a) and repaid or prepaid may not be reborrowed.

(b)           The U.S. Tranche B Dollar Term Borrowings.  Subject to the terms and conditions set forth herein, each U.S. Tranche B Dollar Term Lender severally agrees to make to the U.S. Borrower a single loan on the Closing Date denominated in Dollars in an amount equal to such U.S. Tranche B Dollar Term Lenders U.S. Tranche B Dollar Term Commitment.  Amounts borrowed under this Section 2.01(b) and repaid or prepaid may not be reborrowed.

(c)           The Dutch Tranche A Dollar Term Borrowings.  Subject to the terms and conditions set forth herein, each Dutch Tranche A Dollar Term Lender severally agrees to make to Basell Holdings a single loan on the Closing Date denominated in Dollars in an amount equal to such Dutch Tranche A Dollar Term Lenders Dutch Tranche A Dollar Term Commitment.  Amounts borrowed under this Section 2.01(c) and repaid or prepaid may not be reborrowed.

(d)           The German Tranche B Euro Term Borrowings.  Subject to the terms and conditions set forth herein, each German Tranche B Euro Term Lender severally agrees to make to the German Borrower a single loan on the Closing Date denominated in Euros in an amount equal to such German Tranche B Euro Term Lenders German Tranche B Euro Term Commitment.  Amounts borrowed under this Section 2.01(d) and repaid or prepaid may not be reborrowed.

(e)           The Revolving Credit Borrowings.  Subject to the terms and conditions set forth herein, each (i) Primary Revolving Credit Lender severally agrees to make revolving loans (A) denominated in Dollars or an Alternative Currency as elected by the Borrowers Agent pursuant to Section 2.02 to the U.S. Borrower from its applicable Lending Office (each such loan, a U.S. Revolving Credit Loan) from time to time, on any Business Day until the Maturity Date and (B) the Non-U.S. Borrowers in Euro or Sterling from its applicable Lending Office (each such loan, a European Revolving Credit Loan, and each U.S. Revolving Credit Loan and European Revolving Credit Loan being a Primary Revolving Credit Loan) from time to time, on any Business Day until the Maturity Date, in an aggregate Dollar Amount not to exceed at any time outstanding the amount of such Primary Revolving Credit Lenders Primary Revolving Credit Commitment; provided that after giving effect to any Primary Revolving Credit Borrowing, the aggregate Outstanding Amount of the Primary Revolving Credit Loans of any Primary Revolving Credit Lender, plus such Primary Revolving Credit Lenders Pro Rata Share of the Outstanding Amount of all Primary L/C Obligations, plus such Primary Revolving Credit Lenders Pro Rata Share of the Outstanding Amount of all Swing Line Loans shall not exceed such Primary Revolving Credit Lenders Primary Revolving Credit Commitment  and (ii) each Dutch Revolving Credit Lender severally agrees to make Dutch Revolving Credit Loans denominated in Dollars or an Alternative Currency as elected by either Dutch Borrower pursuant to Section 2.02 to such Dutch Borrower from its applicable Lending Office (each such loan, a Dutch Revolving Credit Loan and, together with the Primary Revolving Credit Loans, the Revolving Credit Loans) from time to time, on any Business Day until the Maturity Date, in an aggregate Dollar Amount not to exceed at any time outstanding the amount of such Lenders Dutch Revolving Credit Commitment; provided that after giving effect to any Dutch Revolving Credit Borrowing, the aggregate Outstanding Amount of the Dutch Revolving Credit Loans of any Dutch Revolving Credit Lender, plus such Dutch Revolving Credit Lenders Pro Rata Share of the Outstanding Amount of all Dutch L/C Obligations shall not exceed such Dutch Revolving Credit Lenders Dutch Revolving Credit Commitment.  Within the limits of each Revolving Credit Lenders Revolving Credit Commitments, and subject to the other terms and conditions hereof, each Borrower may borrow under this Section 2.01(e), prepay under Section 2.05, and reborrow under this Section 2.01(e).  U.S. Revolving Credit Loans may be Base Rate Loans or Eurocurrency Rate Loans and European Revolving Credit Loans shall be Eurocurrency Rate Loans.  Subject to, and to the extent provided in, Article XII, Revolving Credit Loans denominated in an Alternative Currency (the Specified Foreign Currency) that are required to be made by a Participating Specified Foreign Currency Lender pursuant to this Section 2.01(e) shall instead be made by Citibank, N.A., London Branch and purchased and settled by such Participating Specified Foreign Currency Lender in accordance with Article XII.

 
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Section 2.02.   Borrowings, Conversions and Continuations of Loans
 
(a)           Each Term Borrowing, each Revolving Credit Borrowing, each conversion of Term Loans or Revolving Credit Loans from one Type to the other, and each continuation of Eurocurrency Rate Loans shall be made upon the Borrowers Agents irrevocable notice to the Administrative Agent, which may be given by telephone.  Each such notice must be received by the Administrative Agent not later than (i) 12:30 p.m. (New York, New York time in the case of any Borrowing by the U.S. Borrower) and 5:30 p.m. (London, United Kingdom time in the case of any Borrowing by a Non-U.S. Borrower) three (3) Business Days prior to the requested date of any Borrowing or continuation of Eurocurrency Rate Loans or any conversion of Base Rate Loans to Eurocurrency Rate Loans, and (ii) 11:00 a.m. (New York, New York time in the case of any Borrowing by the U.S. Borrower) and 4:00 p.m. (London, United Kingdom time in the case of any Borrowing by a Non-U.S. Borrower) on the requested date of any Borrowing of Base Rate Loans or any conversion of Eurocurrency Rate Loans to Base Rate Loans.  Each telephonic notice by the Borrowers Agent pursuant to this Section 2.02(a) must be confirmed promptly by delivery to the Administrative Agent of a written Committed Loan Notice, appropriately completed and signed by a Responsible Officer of the Borrowers Agent.  Except as provided in Section 2.14(a), each Borrowing of, conversion to or continuation of Eurocurrency Rate Loans shall be in a minimum principal amount of $5,000,000, 5,000,000 or 5,000,000, as applicable, or a whole multiple of $1,000,000, 1,000,000 or 1,000,000, as applicable, in excess thereof.  Except as provided in Section 2.03(c), 2.04(c) or 2.14(a) each Borrowing of or conversion to Base Rate Loans shall be in a minimum principal amount of $1,000,000 or a whole multiple of $500,000 in excess thereof.  Each Committed Loan Notice (whether telephonic or written) shall specify (i) whether the Borrowers Agent is requesting a Term Loan Borrowing, a Revolving Credit Borrowing, a conversion of Term Loans or Revolving Credit Loans from one Type to the other, or a continuation of Eurocurrency Rate Loans, (ii) the requested date of the Borrowing, conversion or continuation, as the case may be (which shall be a Business Day), (iii) the principal amount of Loans to be borrowed, converted or continued, (iv) in the case of a Borrowing, the currency in which the Loans to be borrowed are to be denominated, (v) the Type of Loans to be borrowed or to which existing Term Loans or Revolving Credit Loans are to be converted, and (vi) if applicable, the duration of the Interest Period with respect thereto.  If with respect to Loans denominated in Dollars the Borrowers Agent fails to specify a Type of Loan in a Committed Loan Notice or fails to give a timely notice requesting a conversion or continuation, then the applicable Term Loans or Revolving Credit Loans shall be made as, or converted to, Base Rate Loans.  Any such automatic conversion to Base Rate Loans shall be effective as of the last day of the Interest Period then in effect with respect to the applicable Eurocurrency Rate Loans.  If the Borrowers Agent requests a Borrowing of, conversion to, or continuation of Eurocurrency Rate Loans in any such Committed Loan Notice, but fails to specify an Interest Period (or fails to give a timely notice requesting a continuation of Eurocurrency Rate Loans denominated in an Alternative Currency), it will be deemed to have specified an Interest Period of one (1) month.  If no currency is specified, the requested Borrowing shall be

 
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(A)           in the case of Term Loans, in (i) Dollars if to any Borrower other than the German Borrower or (ii) Euros if to the German Borrower or

(B)           in the case of Revolving Credit Loans, in (i) Dollars if to the U.S. Borrower or (ii) Euros if to any Non-U.S. Borrower.

(b)           Following receipt of a Committed Loan Notice, the Administrative Agent shall promptly notify each Appropriate Lender of the amount of its Pro Rata Share of the applicable Class of Loans, and if no timely notice of a conversion or continuation is provided by the Borrowers Agent, the Administrative Agent shall notify each Lender of the details of any automatic conversion to Base Rate Loans or continuation described in Section 2.02(a).  In the case of each Borrowing, each Appropriate Lender shall make the amount of its Loan available to the Administrative Agent in Same Day Funds at the Administrative Agents Office for the applicable currency not later than 1:00 p.m. (New York, New York time in the case of any Loan denominated in Dollars and London, United Kingdom time in the case of any Loan denominated in an Alternative Currency) in each case on the Business Day specified in the applicable Committed Loan Notice.  The Administrative Agent shall make all funds so received available to the applicable Borrower in like funds as received by the Administrative Agent either by (i) crediting the account of such Borrower on the books of Citibank, N.A. with the amount of such funds or (ii) wire transfer of such funds, in each case in accordance with instructions provided to (and reasonably acceptable to) the Administrative Agent by the Borrowers Agent; provided that if, on the date the Committed Loan Notice with respect to such Borrowing is given by the Borrowers Agent, there are Swing Line Loans or L/C Borrowings outstanding, then the proceeds of such Borrowing shall be applied, first, to the payment in full of any such L/C Borrowing, second, to the payment in full of any such Swing Line Loans, and third, to such Borrower as provided above.

(c)           Except as otherwise provided herein, a Eurocurrency Rate Loan may be continued or converted only on the last day of an Interest Period for such Eurocurrency Rate Loan unless the applicable Borrower pays the amount due, if any, under Section 3.05 in connection therewith.  During the existence of an Event of Default, the Administrative Agent or the Required Lenders may require that no Loans denominated in Dollars may be converted to or continued as Eurocurrency Rate Loans.

 
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(d)           The Administrative Agent shall promptly notify the Borrowers Agent and the Appropriate Lenders of the interest rate applicable to any Interest Period for Eurocurrency Rate Loans upon determination of such interest rate.  The determination of the Eurocurrency Rate by the Administrative Agent shall be conclusive in the absence of manifest error.  At any time that Base Rate Loans are outstanding, the Administrative Agent shall notify the Borrowers Agent and the Appropriate Lenders of any change in the Citibank, N.A. prime rate used in determining the Base Rate promptly following the public announcement of such change.

(e)           After giving effect to all Term Loan Borrowings, all Revolving Credit Borrowings, all conversions of Term Loans and Revolving Credit Loans from one Type to the other, and all continuations of Term Loans and Revolving Credit Loans as the same Type, there shall not be more than twenty (20) Interest Periods in effect (it being understood that a Revolving Credit Borrowing, conversion or continuation in Dollars an Alternative Currency that is divided among Classes in accordance with Section 2.02(a) shall be deemed to relate to only one Interest Period solely for purposes of this sentence).

(f)           The failure of any Lender to make the Loan to be made by it as part of any Borrowing shall not relieve any other Lender of its obligation, if any, hereunder to make its Loan on the date of such Borrowing, but no Lender shall be responsible for the failure of any other Lender to make the Loan to be made by such other Lender on the date of any Borrowing.

Section 2.03.   Letters of Credit
 
(a)           The Letter of Credit Commitment.  (1)  Subject to the terms and conditions set forth herein, (A)(1) each L/C Issuer agrees, in reliance upon the agreements of the other Primary Revolving Credit Lenders set forth in this Section 2.03, (x) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Primary Letters of Credit denominated in Dollars, an Alternative Currency or any other currency the L/C Issuer shall agree for the account of any Borrower (provided that any Primary Letter of Credit may be issued on behalf of any Person; provided that, if issued on behalf of any Person other than a Borrower, such Primary Letter of Credit is for the account of and counter-indemnified by a Borrower) and to amend or renew Primary Letters of Credit previously issued by it, in accordance with Section 2.03(b), and (y) to honor drafts under the Primary Letters of Credit and (2) the Primary Revolving Credit Lenders severally agree to participate in Primary Letters of Credit issued pursuant to this Section 2.03 and (B)(1) each L/C Issuer agrees, in reliance upon the agreements of the other Dutch Revolving Credit Lenders set forth in this Section 2.03, (x) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Dutch Letters of Credit denominated in Dollars, an Alternative Currency or any other currency the Dutch Letter of Credit Issuer shall agree for the account of any Borrower (provided that any Dutch Letter of Credit may be issued on behalf of any Person; provided that, if issued on behalf of any Person other than a Dutch Borrower, such Dutch Letter of Credit is for the account of and counter-indemnified by a Dutch Borrower) and to amend or renew Dutch Letters of Credit previously issued by it, in accordance with Section 2.03(b), and (y) to honor drafts under the Dutch Letters of Credit and (B) the Dutch Revolving Credit Lenders severally agree to participate in Dutch Letters of Credit issued pursuant to this Section 2.03; provided that no L/C Issuer shall be obligated to make any L/C Credit Extension with respect to any Letter of Credit, and no Primary Revolving Credit Lender shall be obligated to participate in any Letter of Credit if as of the date of such L/C Credit Extension, (x) the Revolving Credit Exposure of any Revolving Credit Lender would exceed such Revolving Credit Lenders Revolving Credit Commitment or (y) the Outstanding Amount of the L/C Obligations would exceed the Primary Letter of Credit Sublimit or Dutch Letter of Credit Sublimit, as applicable.  Within the foregoing limits, and subject to the terms and conditions hereof, each Borrowers ability to obtain Letters of Credit shall be fully revolving, and accordingly each Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed.  All Existing Letters of Credit shall be deemed to be issued hereunder and shall constitute Letters of Credit subject to the terms hereof.

 
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(ii)            An L/C Issuer shall be under no obligation to issue any Letter of Credit if:

(A)           any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain such L/C Issuer from issuing such Letter of Credit, or any Law applicable to such L/C Issuer or any directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over such L/C Issuer shall prohibit, or direct that such L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular;

(B)           subject to Section 2.03(b)(iii), the expiry date of such requested Letter of Credit would occur more than twelve months after the date of issuance or last renewal, unless (i) the Lenders holding a majority of the Primary Revolving Credit Commitments have approved such expiry date or such expiration date for such type of Letter of Credit or (ii) such later expiry date for such type of Letter of Credit is required in connection with certain performance bonds in respect of licensing agreements, in respect of leases and other agreements entered into in the ordinary course of business with a term longer than twelve months or as backstop collateral for standby equity commitments in respect of joint ventures, in each case consistent with the past practice of the Loan Parties;

(C)           the expiry date of such requested Letter of Credit would occur after the Letter of Credit Expiration Date, unless all the Primary Revolving Credit Lenders have approved such expiry date;

(D)           the issuance of such Letter of Credit would violate any Laws binding upon such L/C Issuer or any internal compliance policies of the L/C Issuer;

(E)           such Letter of Credit is in an initial amount less than $10,000 (or 10,000 if denominated in Euros or 10,000 if denominated in Sterling); or

(F)           such request for such Letter of Credit was received by such L/C Issuer and the Administrative Agent less than 30 days prior to the Maturity Date for the Primary Revolving Credit Facility or such request provides for an issuance of such Letter of Credit less than 30 days prior to the Maturity Date for the Primary Revolving Credit Facility.

(iii)    An L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) such L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.

(b)           Procedures for Issuance and Amendment of Letters of Credit; Auto-Extension Letters of Credit.  (2)  Each Letter of Credit shall be issued or amended, as the case may be, upon the request of a Borrowers Agent delivered to an L/C Issuer (with a copy to the Administrative Agent) in the form of a Letter of Credit Application, appropriately completed and signed by a Responsible Officer of such Borrowers Agent.  Such Letter of Credit Application must be received by the relevant L/C Issuer and the Administrative Agent not later than 12:30 p.m. (New York, New York time in the case of any Letter of Credit issued on behalf of a U.S. entity and London, United Kingdom time in the case of any Letter of Credit issued on behalf of a Non-U.S. Person or, so long as ABN AMRO is an L/C Issuer, Central European Time) at least two (2) Business Days prior to the proposed issuance date or date of amendment, as the case may be, or, in each case, such later date and time as the relevant L/C Issuer may agree in a particular instance in its sole discretion.  In the case of a request for an initial issuance of a Letter of Credit, such Letter of Credit Application shall (unless otherwise agreed with the relevant L/C Issuer) specify in form and detail reasonably satisfactory to the relevant L/C Issuer:  (A) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day); (B) the amount thereof; (C) the expiry date thereof; (D) the name and address of the beneficiary thereof; (E) the documents to be presented by such beneficiary in case of any drawing thereunder; (F) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder; (G) the currency in which the requested Letter of Credit will be denominated; and (H) such other matters as the relevant L/C Issuer may reasonably request.  In the case of a request for an amendment of any outstanding Letter of Credit, such Letter of Credit Application shall (unless otherwise agreed with the relevant L/C Issuer) specify in form and detail reasonably satisfactory to the relevant L/C Issuer (1) the Letter of Credit to be amended; (2) the proposed date of amendment thereof (which shall be a Business Day); (3) the nature of the proposed amendment; and (4) such other matters as the relevant L/C Issuer may reasonably request.

 
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(ii)    Promptly after receipt of any Letter of Credit Application, the relevant L/C Issuer will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received a copy of such Letter of Credit Application from the Borrowers Agent and, if not, such L/C Issuer will provide the Administrative Agent with a copy thereof.  Upon receipt by the relevant L/C Issuer of confirmation from the Administrative Agent that the requested issuance or amendment is permitted in accordance with the terms hereof, then, subject to the terms and conditions hereof, such L/C Issuer shall, on the requested date, issue a Letter of Credit for the account of any Borrower (provided that a Letter of Credit may be issued on behalf of any Person; provided that any Letter of Credit issued on behalf of a Person other than a Borrower shall be counter-indemnified by a Borrower) or enter into the applicable amendment, as the case may be.  Immediately upon the issuance of (x) each Primary Letter of Credit, each Primary Revolving Credit Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the relevant L/C Issuer a risk participation in such Primary Letter of Credit in an amount equal to the product of such Lenders Pro Rata Share times the amount of such Primary Letter of Credit and (y) each Dutch Letter of Credit, each Dutch Revolving Credit Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the relevant L/C Issuer a risk participation in such Dutch Letter of Credit in an amount equal to the product of such Lenders Pro Rata Share times the amount of such Dutch Letter of Credit.

(iii)   If the Borrowers Agent so requests in any applicable Letter of Credit Application, the relevant L/C Issuer shall agree to issue a Letter of Credit that has automatic extension provisions (each, an Auto-Extension Letter of Credit); provided that any such Auto-Extension Letter of Credit must permit the relevant L/C Issuer to prevent any such extension at least once in each twelve-month period (commencing with the date of issuance of such Letter of Credit) by giving prior notice to the beneficiary thereof not later than a date (the Non-extension Notice Date) in each such twelve-month period to be agreed upon at the time such Letter of Credit is issued.  Unless otherwise directed by the relevant L/C Issuer, the Borrowers Agent shall not be required to make a specific request to the relevant L/C Issuer for any such extension.  Once an Auto-Extension Letter of Credit has been issued, the Lenders shall be deemed to have authorized (but may not require) the relevant L/C Issuer to permit the extension of such Letter of Credit at any time to an expiry date not later than the Letter of Credit Expiration Date; provided that the relevant L/C Issuer shall not be required to permit any such extension if (A) the relevant L/C Issuer has determined that it would have no obligation at such time to issue such Letter of Credit in its extended form under the terms hereof (by reason of the provisions of Section 2.03(a)(ii) or otherwise), or (B) it has received notice (which may be by telephone or in writing) on or before the day that is five (5) Business Days before the Non-extension Notice Date from the Administrative Agent, that the Primary Revolving Credit Lenders have elected not to permit such extension and that one or more of the applicable conditions specified in Section 4.02 is not then satisfied.

 
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(iv)   Promptly after its delivery of any Letter of Credit or any amendment to a Letter of Credit to an advising bank with respect thereto or to the beneficiary thereof, the relevant L/C Issuer shall also deliver to the Borrowers Agent and the Administrative Agent a true and complete copy of such Letter of Credit or amendment.

(c)           Drawings and Reimbursements; Funding of Participations.  (3) Upon receipt from the beneficiary of any Letter of Credit of any notice of a drawing under such Letter of Credit, the relevant L/C Issuer shall promptly notify the Borrowers Agent and the Administrative Agent thereof.  Not later than 11:00 a.m. (New York, New York time in the case of any Letter of Credit issued on behalf of a U.S. entity and London, United Kingdom time in the case of any Letter of Credit issued on behalf of a Non-U.S. Person and so long as ABN AMRO is an L/C Issuer, Central European Time) on the second Business Day immediately following any payment by an L/C Issuer under a Letter of Credit (each such date, an Honor Date), the applicable Borrower shall reimburse such L/C Issuer through the Administrative Agent in an amount equal to the amount of such drawing.  If the applicable Borrower fails to so reimburse such L/C Issuer by such time, the Administrative Agent shall promptly notify each Appropriate Lender of the Honor Date, the amount of the unreimbursed drawing (expressed in Dollars in the Dollar Amount thereof in the case of an Alternative Currency) (the Unreimbursed Amount), and the amount of such Appropriate Lenders Pro Rata Share thereof.  In such event, (x) in the case of an Unreimbursed Amount under a Primary Letter of Credit, the applicable Borrower shall be deemed to have requested a Primary Revolving Credit Borrowing of Base Rate Loans and (y) in the case of an Unreimbursed Amount under a Dutch Letter of Credit, the applicable Borrower shall be deemed to have requested a Dutch Revolving Credit Borrowing of Base Rate Loans, in each case to be disbursed on the Honor Date in an amount equal to the Unreimbursed Amount, without regard to the minimum and multiples specified in Section 2.02 for the principal amount of Base Rate Loans but subject to the amount of the unutilized portion of the Primary Revolving Credit Commitments of the Appropriate Lenders and the conditions set forth in Section 4.02 (other than the delivery of a Committed Loan Notice).  Any notice given by an L/C Issuer or the Administrative Agent pursuant to this Section 2.03(c)(i) may be given by telephone if immediately confirmed in writing; provided that the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice.

(ii)    Each Appropriate Lender (including any Lender acting as an L/C Issuer) shall upon any notice pursuant to Section 2.03(c)(i) make funds available to the Administrative Agent for the account of the relevant L/C Issuer, in Dollars, at the Administrative Agents Office for payments in an amount equal to its Pro Rata Share of the Unreimbursed Amount not later than 1:00 p.m. on the Business Day specified in such notice by the Administrative Agent, whereupon, subject to the provisions of Section 2.03(c)(iii), each Appropriate Lender that so makes funds available shall be deemed to have made a Base Rate Loan to the applicable Borrower in such amount.  The Administrative Agent shall remit the funds so received to the relevant L/C Issuer.

(iii)    With respect to any Unreimbursed Amount that is not fully refinanced by a Primary Revolving Credit Borrowing of Base Rate Loans because the conditions set forth in Section 4.02 cannot be satisfied or for any reason, the applicable Borrower shall be deemed to have incurred from the relevant L/C Issuer a Primary L/C Borrowing in the amount of the Unreimbursed Amount that is not so refinanced, which Primary L/C Borrowing shall be due and payable on demand (together with interest).  In such event, each Appropriate Lenders payment to the Administrative Agent for the account of the relevant L/C Issuer pursuant to Section 2.03(c)(ii) shall be deemed payment in respect of its participation in such Primary L/C Borrowing and shall constitute an Primary L/C Advance from such Lender in satisfaction of its participation obligation under this Section 2.03.  With respect to any Unreimbursed Amount that is not fully refinanced by a Dutch Revolving Credit Borrowing of Base Rate Loans because the conditions set forth in Section 4.02 cannot be satisfied or for any reason, the applicable Borrower shall be deemed to have incurred from the relevant L/C Issuer a Dutch L/C Borrowing in the amount of the Unreimbursed Amount that is not so refinanced, which Dutch L/C Borrowing shall be due and payable on demand (together with interest).  In such event, each Appropriate Lenders payment to the Administrative Agent for the account of the relevant L/C Issuer pursuant to Section 2.03(c)(ii) shall be deemed payment in respect of its participation in such Dutch L/C Borrowing and shall constitute an Dutch L/C Advance from such Lender in satisfaction of its participation obligation under this Section 2.03.

 
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(iv)    Until each Appropriate Lender funds its Primary Revolving Credit Loan or L/C Advance pursuant to this Section 2.03(c) to reimburse the relevant L/C Issuer for any amount drawn under any Letter of Credit, interest in respect of such Lenders Pro Rata Share of such amount shall be solely for the account of the relevant L/C Issuer.

(v)    Each Revolving Credit Lenders obligation to make Revolving Credit Loans or L/C Advances to reimburse an L/C Issuer for amounts drawn under Letters of Credit, as contemplated by this Section 2.03(c), shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right which such Lender may have against the relevant L/C Issuer, the applicable Borrower or any other Person for any reason whatsoever; (B) the occurrence or continuance of a Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided that each Revolving Credit Lenders obligation to make Revolving Credit Loans pursuant to this Section 2.03(c) is subject to the conditions set forth in Section 4.02 (other than delivery by the Borrowers Agent of a Committed Loan Notice ).  No such making of an L/C Advance shall relieve or otherwise impair the obligation of the applicable Borrower to reimburse the relevant L/C Issuer for the amount of any payment made by such L/C Issuer under any Letter of Credit, together with interest as provided herein.

(vi)   If any Revolving Credit Lender fails to make available to the Administrative Agent for the account of the relevant L/C Issuer any amount required to be paid by such Lender pursuant to the foregoing provisions of this Section 2.03(c) by the time specified in Section 2.03(c)(ii), such L/C Issuer shall be entitled to recover from such Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to such L/C Issuer at a rate per annum equal to the applicable Overnight Rate from time to time in effect.  A certificate of the relevant L/C Issuer submitted to any Revolving Credit Lender (through the Administrative Agent) with respect to any amounts owing under this Section 2.03(c)(vi) shall be conclusive absent manifest error.

(d)           Repayment of Participations.  (4)  If, at any time after an L/C Issuer has made a payment under any Letter of Credit and has received from any Revolving Credit Lender such Lenders L/C Advance in respect of such payment in accordance with Section 2.03(c), the Administrative Agent receives for the account of such L/C Issuer any payment in respect of the related Unreimbursed Amount or interest thereon (whether directly from the applicable Borrower or otherwise, including proceeds of Cash Collateral applied thereto by the Administrative Agent), the Administrative Agent will distribute to such Lender its Pro Rata Share thereof (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Lenders L/C Advance was outstanding) in the same funds as those received by the Administrative Agent.

 
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(ii)           If any payment received by the Administrative Agent for the account of an L/C Issuer pursuant to Section 2.03(c)(i) is required to be returned under any of the circumstances described in Section 10.06 (including pursuant to any settlement entered into by such L/C Issuer in its discretion), each Appropriate Lender shall pay to the Administrative Agent for the account of such L/C Issuer its Pro Rata Share thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned by such Lender, at a rate per annum equal to the applicable Overnight Rate from time to time in effect.

(e)           Obligations Absolute.  The obligation of the applicable Borrower to reimburse the relevant L/C Issuer for each drawing under each Letter of Credit issued by it and to repay each L/C Borrowing shall be absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including the following:

(i)     any lack of validity or enforceability of such Letter of Credit, this Agreement, or any other agreement or instrument relating thereto;

(ii)    the existence of any claim, counterclaim, setoff, defense or other right that any Loan Party may have at any time against any beneficiary or any transferee of such Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), the relevant L/C Issuer or any other Person, whether in connection with this Agreement, the transactions contemplated hereby or by such Letter of Credit or any agreement or instrument relating thereto, or any unrelated transaction;

(iii)   any draft, demand, certificate or other document presented under such Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; or any loss or delay in the transmission or otherwise of any document required in order to make a drawing under such Letter of Credit;

(iv)   any payment by the relevant L/C Issuer under such Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of such Letter of Credit; or any payment made by the relevant L/C Issuer under such Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of such Letter of Credit, including any arising in connection with any proceeding under any Debtor Relief Law;

(v)    any exchange, release or nonperfection of any Collateral, or any release or amendment or waiver of or consent to departure from the Guaranty or any other guarantee, for all or any of the Obligations of any Loan Party in respect of such Letter of Credit; or

(vi)   any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, any Loan Party;
 
provided that the foregoing shall not excuse any L/C Issuer from liability to the applicable Borrower to the extent of any direct damages (as opposed to consequential damages, claims in respect of which are waived by the applicable Borrower to the extent permitted by applicable Law) suffered by the applicable Borrower that are caused by such L/C Issuers gross negligence or willful misconduct when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof.

 
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(f)           Role of L/C Issuers.  Each Lender and each Borrower agree that, in paying any drawing under a Letter of Credit, the relevant L/C Issuer shall not have any responsibility to obtain any document (other than any sight draft, certificates and documents expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such document.  None of the L/C Issuers, any Agent-Related Person nor any of the respective correspondents, participants or assignees of any L/C Issuer shall be liable to any Lender for (i) any action taken or omitted in connection herewith at the request or with the approval of the Lenders, the Lenders holding a majority of the Primary Revolving Credit Commitments or the Lenders holding a majority of the Dutch Revolving Credit Commitments, as applicable; (ii) any action taken or omitted in the absence of gross negligence or willful misconduct; or (iii) the due execution, effectiveness, validity or enforceability of any document or instrument related to any Letter of Credit or Letter of Credit Application.  Each Borrower hereby assumes all risks of the acts or omissions of any beneficiary or transferee with respect to its use of any Letter of Credit; provided that this assumption is not intended to, and shall not, preclude such Borrowers pursuing such rights and remedies as it may have against the beneficiary or transferee at law or under any other agreement.  None of the L/C Issuers, any Agent-Related Person, nor any of the respective correspondents, participants or assignees of any L/C Issuer, shall be liable or responsible for any of the matters described in clauses (i) through (vi) of Section 2.03(e); provided that anything in such clauses to the contrary notwithstanding, each Borrower may have a claim against an L/C Issuer, and such L/C Issuer may be liable to such Borrower, to the extent, but only to the extent, of any direct, as opposed to consequential or exemplary, damages suffered by such Borrower which such Borrower proves were caused by such L/C Issuers willful misconduct or gross negligence or such L/C Issuers willful or grossly negligent failure to pay under any Letter of Credit after the presentation to it by the beneficiary of a sight draft and certificate(s) strictly complying with the terms and conditions of a Letter of Credit.  In furtherance and not in limitation of the foregoing, each L/C Issuer may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary, and no L/C Issuer shall be responsible for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason.

(g)           Cash Collateral.  If (i) an L/C Issuer has honored any full or partial drawing request under any Letter of Credit and such drawing has resulted in an L/C Borrowing and the conditions set forth in Section 4.02 to a Revolving Credit Borrowing cannot then be met (and a backstop letter of credit reasonably acceptable to the L/C Issuer is not provided as collateral for such Letter of Credit), (ii) as of the Letter of Credit Expiration Date, any Letter of Credit may for any reason remain outstanding and partially or wholly undrawn (and a backstop letter of credit reasonably acceptable to the L/C Issuer is not provided as collateral for such Letter of Credit), (iii) any Event of Default occurs and is continuing and the Administrative Agent, the Lenders holding a majority of the Primary Revolving Credit Commitments or the Lenders holding a majority of the Dutch Revolving Credit Commitments,  as applicable, require the applicable Borrower to Cash Collateralize the L/C Obligations pursuant to Section 8.02(a) or (iv) an Event of Default set forth under Section 8.01(f) or (g) occurs and is continuing, then such Borrower shall Cash Collateralize the then Outstanding Amount of all L/C Obligations (in an amount equal to such Outstanding Amount determined as of the date of such L/C Borrowing or the Letter of Credit Expiration Date, as the case may be), and shall do so not later than 3:00 p.m. (New York, New York time in the case of any Letter of Credit issued on behalf of a U.S. entity and London, United Kingdom time in the case of any Letter of Credit issued on behalf of a Non-U.S. Person, and, so long as ABN AMRO is an L/C Issuer, Central European Time), (x) in the case of the immediately preceding clauses (i) and (iii), (1) the Business Day that such Borrower receives notice thereof, if such notice is received on such day prior to 11:00 a.m., or (2) if clause (1) above does not apply, the Business Day immediately following the day that the Borrowers Agent receives such notice, (y) in the case of the immediately preceding clause (ii), the Business Day that is thirty (30) days prior to the Maturity Date with respect to the Revolving Credit Facilities, or if such date is not a Business Day, the next succeeding Business Day and (z) in the case of the immediately preceding clause (iv), the Business Day on which an Event of Default set forth under Section 8.01(f) or (g) occurs or, if such day is not a Business Day, the Business Day immediately succeeding such day.  Cash Collateralize means to pledge and deposit with or deliver to the Administrative Agent, for the benefit of the relevant L/C Issuer and the Lenders, as collateral for the L/C Obligations, cash or deposit account balances (Cash Collateral) pursuant to documentation in form and substance reasonably satisfactory to the Administrative Agent and the relevant L/C Issuer (which documents are hereby consented to by the Lenders).  Derivatives of such term have corresponding meanings.  Each Borrower hereby grants to the Administrative Agent, for the benefit of the L/C Issuers and the Lenders, a security interest in all such cash, deposit accounts and all balances therein and all proceeds of the foregoing.  Cash Collateral shall be maintained in blocked accounts at the Administrative Agent and may be invested in readily available Cash Equivalents.  If at any time the Administrative Agent determines that any funds held as Cash Collateral are subject to any right or claim of any Person other than the Administrative Agent (on behalf of the Secured Parties) or that the total amount of such funds is less than the aggregate Outstanding Amount of all L/C Obligations, the applicable Borrower will, forthwith upon demand by the Administrative Agent, pay to the Administrative Agent, as additional funds to be deposited and held in the deposit accounts at the Administrative Agent as aforesaid, an amount equal to the excess of (a) such aggregate Outstanding Amount over (b) the total amount of funds, if any, then held as Cash Collateral that the Administrative Agent reasonably determines to be free and clear of any such right and claim.  Upon the drawing of any Letter of Credit for which funds are on deposit as Cash Collateral, such funds shall be applied, to the extent permitted under applicable Law, to reimburse the relevant L/C Issuer.  To the extent the amount of any Cash Collateral exceeds the then Outstanding Amount of such L/C Obligations and so long as no Event of Default has occurred and is continuing, the excess shall be refunded to the applicable Borrower.

 
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(h)           Letter of Credit Fees.
 
(i)     On the fifth Business Day after Letter of Credit Fees are calculated in respect of Primary Letters of Credit pursuant to the next succeeding sentence, each Borrower shall pay to the Administrative Agent for the account of each Primary Revolving Credit Lender in accordance with its Pro Rata Share a fee for each Primary Letter of Credit issued for the account of such Borrower equal to the Applicable Rate times the daily maximum amount then available to be drawn under such Primary Letter of Credit (whether or not such maximum amount is then in effect under such Primary Letter of Credit if such maximum amount increases periodically pursuant to the terms of such Primary Letter of Credit). Fees in respect of Primary Letters of Credit shall be paid in Dollars.  Such letter of credit fees shall be calculated and accrued on the first Business Day after the end of each March, June, September and December, commencing with the first such date to occur after the issuance of such Primary Letter of Credit, on the Letter of Credit Expiration Date and thereafter on demand.  If there is any change in the Applicable Rate during any quarter, the daily maximum amount of each Primary Letter of Credit shall be computed and multiplied by the Applicable Rate separately for each period during such quarter that such Applicable Rate was in effect.

(ii)            On the fifth Business Day after Letter of Credit Fees are calculated in respect of Dutch Letters of Credit pursuant to the next succeeding sentence, each Borrower shall pay to the Administrative Agent for the account of each Dutch Revolving Credit Lender in accordance with its Pro Rata Share a fee for each Dutch Letter of Credit issued for the account of such Borrower equal to the Applicable Rate times the daily maximum amount then available to be drawn under such Dutch Letter of Credit (whether or not such maximum amount is then in effect under such Dutch Letter of Credit if such maximum amount increases periodically pursuant to the terms of such Dutch Letter of Credit).  Fees in respect of Dutch Letters of Credit shall be paid in Dollars.  Such letter of credit fees shall be calculated and accrued on the first Business Day after the end of each March, June, September and December, commencing with the first such date to occur after the issuance of such Dutch Letter of Credit, on the Letter of Credit Expiration Date and thereafter on demand.  If there is any change in the Applicable Rate during any quarter, the daily maximum amount of each Dutch Letter of Credit shall be computed and multiplied by the Applicable Rate separately for each period during such quarter that such Applicable Rate was in effect

 
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(i)           Fronting Fee and Documentary and Processing Charges Payable to L/C Issuers.  Each Borrower shall pay directly to each L/C Issuer for its own account a fronting fee with respect to each Letter of Credit issued by such L/C Issuer for the account of such Borrower equal to 0.125% per annum.  This fee shall be calculated on a quarterly basis upfront for the lifetime of the Letter of Credit.  If a Letter of Credit expires or is cancelled or is called before the end of a quarter there will be a refund on a pro rata basis of the fees for the remainder of the quarter that is not used.  In addition, each Borrower shall pay directly to each L/C Issuer for its own account with respect to each Letter of Credit issued to such Borrower the customary issuance, presentation, amendment and other processing fees, and other standard costs and charges, of such L/C Issuer relating to Letters of Credit as from time to time in effect.  Such customary fees and standard costs and charges are due and payable within ten (10) Business Days of demand and are nonrefundable.

(j)           Conflict with Letter of Credit Application.  Notwithstanding anything else to the contrary in this Agreement, in the event of any conflict between the terms hereof and the terms of any Letter of Credit Application, the terms hereof shall control.

(k)           Addition of an L/C Issuer.  A Revolving Credit Lender may become an additional L/C Issuer hereunder pursuant to a written agreement among the Borrowers Agent, the Administrative Agent and such Revolving Credit Lender.  The Administrative Agent shall notify the Revolving Credit Lenders of any such additional L/C Issuer.

Section 2.04.   Swing Line Loans
 
(a)           The U.S. Swing Line.  Subject to the terms and conditions set forth herein, Citibank, N.A. in its capacity as U.S. Swing Line Lender agrees to make loans in U.S. Dollars to the U.S. Borrower so long as such Borrower has an account at such Swing Line Lender (each such loan, a U.S. Swing Line Loan) from time to time on any Business Day (other than the Closing Date) until the Maturity Date in an aggregate amount taken together with European Swing Line Loans, not to exceed at any time the amount of the Swing Line Sublimit, notwithstanding the fact that such U.S. Swing Line Loans, when aggregated with the Pro Rata Share of the Outstanding Amount of Primary Revolving Credit Loans and L/C Obligations of the Lender acting as Swing Line Lender, may exceed the amount of the U.S. Swing Line Lenders Primary Revolving Credit Commitment; provided that, after giving effect to any U.S. Swing Line Loan, (i) the Revolving Credit Exposure shall not exceed the aggregate Primary Revolving Credit Commitment and (ii) the aggregate Outstanding Amount of the Primary Revolving Credit Loans of any Lender (other than the U.S. Swing Line Lender), plus such Lenders Pro Rata Share of the Outstanding Amount of all L/C Obligations, plus such Lenders Pro Rata Share of the Outstanding Amount of all Swing Line Loans shall not exceed such Lenders Primary Revolving Credit Commitment then in effect; provided further that no Borrower shall use the proceeds of any U.S. Swing Line Loan to refinance any outstanding Swing Line Loan.  Within the foregoing limits, and subject to the other terms and conditions hereof, the U.S. Borrower may borrow under this Section 2.04(a), prepay under Section 2.05, and reborrow under this Section 2.04(a).  Each U.S. Swing Line Loan shall be a Base Rate Loan.  Immediately upon the making of a U.S. Swing Line Loan, each Primary Revolving Credit Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the U.S. Swing Line Lender a risk participation in such U.S. Swing Line Loan in an amount equal to the product of such Lenders Pro Rata Share multiplied by the amount of such U.S. Swing Line Loan.

 
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(b)           The European Swing Line.  Subject to the terms and conditions set forth herein, Citibank, N.A., London Branch, in its capacity as European Swing Line Lender, agrees to make loans in an Alternative Currency to any Non-U.S. Borrower (each such loan a European Swing Line Loan) from time to time on any Business Day (other than the Closing Date) until the Maturity Date in an aggregate amount taken together with U.S. Swing Line Loans, not to exceed at any time the amount of the Swing Line Sublimit, notwithstanding the fact that such European Swing Line Loans, when aggregated with the Pro Rata Share of the Outstanding Amount of Primary Revolving Credit Loans and L/C Obligations of the European Swing Line Lender, may exceed the amount of such Swing Line Lenders Primary Revolving Credit Commitment; provided that, after giving effect to any European Swing Line Loan, the Revolving Credit Exposure of any Lender (other than the European Swing Line Lender) shall not exceed such Lenders Primary Revolving Credit Commitment then in effect; provided further that no Borrower shall use the proceeds of any European Swing Line Loan to refinance any outstanding Swing Line Loan.  Within the foregoing limits and subject to the other terms and conditions hereof, the Company may borrow under this Section 2.04(b), prepay under Section 2.05, and reborrow under this Section 2.04(b).  Immediately upon the making of a European Swing Line Loan, each Primary Revolving Credit Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the European Swing Line Lender a risk participation in such European Swing Line Loan in an amount equal to the product of such Lenders Pro Rata Share of Primary Revolving Credit Commitments times the amount of such European Swing Line Loan.

(c)           Borrowing Procedures.  Each Swing Line Borrowing shall be made upon the Borrowers Agents irrevocable notice to the relevant Swing Line Lender and the Administrative Agent, which may be given by telephone.  Each such notice must be received by the relevant Swing Line Lender and the Administrative Agent not later than 3:00 p.m. (New York, New York time) or, in the case of a European Swing Line Borrowing, 2:00 p.m. (London, United Kingdom time) on the requested borrowing date and shall specify (i) the amount to be borrowed, which shall be a minimum of $100,000, 100,000 or 100,000, as applicable, or a whole multiple of $100,000, 100,000 or 100,000 as applicable, in excess thereof (or comparable amounts determined by the Administrative Agent in the case of a European Swing Line Loan denominated in Sterling) and (ii) the requested borrowing date, which shall be a Business Day.  Each such telephonic notice must be confirmed promptly by delivery to the relevant Swing Line Lender and the Administrative Agent of a written Swing Line Loan Notice, appropriately completed and signed by a Responsible Officer of the Borrowers Agent.  Promptly after receipt by the relevant Swing Line Lender of any Swing Line Loan Notice (by telephone or in writing), such Swing Line Lender will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has also received such Swing Line Loan Notice and, if not, such Swing Line Lender will notify the Administrative Agent (by telephone or in writing) of the contents thereof.  Unless the relevant Swing Line Lender has received notice (by telephone or in writing) from the Administrative Agent (including at the request of any Appropriate Lender) prior to 2:00 p.m. on the date of the proposed Swing Line Borrowing (A) directing such Swing Line Lender not to make such Swing Line Loan as a result of the limitations set forth in the first proviso to the first sentence of Section 2.04(a) or 2.04(b), as applicable, or (B) that one or more of the applicable conditions specified in Section 4.02 is not then satisfied, then, subject to the terms and conditions hereof, the relevant Swing Line Lender will, not later than 3:00 p.m. (New York, New York time) or, in the case of a Euro Swing Line Borrowing, 3:00 p.m. (London, United Kingdom time) on the borrowing date specified in such Swing Line Loan notice, make the amount of its Swing Line Loan available to the applicable Borrower.

 
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(d)           Refinancing of Swing Line Loans.

(i)     Each Swing Line Lender at any time in its sole and absolute discretion may request, on behalf of any Borrower (each of which hereby irrevocably authorizes such Swing Line Lender to so request on its behalf), that each Appropriate Lender make a Base Rate Loan (in respect of U.S. Swing Line Loans), a Eurocurrency Rate Loan (in respect of European Swing Line Loans) with an Interest Period of one month, in an amount equal to such Lenders Pro Rata Share of the amount of Swing Line Loans then outstanding.  Such request shall be made in writing (which written request shall be deemed to be a Committed Loan Notice for purposes hereof) and in accordance with the requirements of Section 2.02, without regard to the minimum and multiples specified therein for the principal amount of Base Rate Loans or Eurocurrency Rate Loans, but subject to the unutilized portion of the aggregate Primary Revolving Credit Commitments and the conditions set forth in Section 4.02.  The relevant Swing Line Lender shall furnish the applicable Borrower with a copy of the applicable Committed Loan Notice promptly after delivering such notice to the Administrative Agent.  Each Primary Revolving Credit Lender shall make an amount equal to its Pro Rata Share of the amount specified in such Committed Loan Notice available to the Administrative Agent in Same Day Funds for the account of the relevant Swing Line Lender at the Administrative Agents Office not later than 1:00 p.m. on the day specified in such Committed Loan Notice, whereupon, subject to Section 2.04(c)(ii), each Primary Revolving Credit Lender that so makes funds available shall be deemed to have made a Base Rate Loan in U.S. Dollars or a Eurocurrency Rate Loan in an Alternative Currency, as applicable, to the applicable Borrower.  The Administrative Agent shall remit the funds so received to the relevant Swing Line Lender.

(ii)    If for any reason any Swing Line Loan cannot be refinanced by such a Primary Revolving Credit Borrowing in accordance with Section 2.04(d)(i), the request for Base Rate Loans or Eurocurrency Rate Loans submitted by the relevant Swing Line Lender as set forth herein shall be deemed to be a request by such Swing Line Lender that each of the Appropriate Lenders fund its risk participation in the relevant Swing Line Loan, and each Appropriate Lenders payment to the Administrative Agent for the account of such Swing Line Lender pursuant to Section 2.04(d)(i) shall be deemed payment in respect of such participation.

(iii)   If any Primary Revolving Credit Lender fails to make available to the Administrative Agent for the account of a Swing Line Lender any amount required to be paid by such Lender pursuant to the foregoing provisions of this Section 2.04(d) by the time specified in Section 2.04(c)(d)(i), such Swing Line Lender shall be entitled to recover from such Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to the Swing Line Lender at a rate per annum equal to the applicable Overnight Rate from time to time in effect.  A certificate of a Swing Line Lender submitted to any Lender (through the Administrative Agent) with respect to any amounts owing under this clause (iii) shall be conclusive absent manifest error.

(iv)   Each Primary Revolving Credit Lenders obligation to make Primary Revolving Credit Loans or to purchase and fund risk participations in Swing Line Loans pursuant to this Section 2.04(d) shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right which such Lender may have against a Swing Line Lender, a Borrower or any other Person for any reason whatsoever, (B) the occurrence or continuance of a Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided that each Primary Revolving Credit Lenders obligation to make Primary Revolving Credit Loans pursuant to this Section 2.04(d) (but not to purchase and fund risk participations in Swing Line Loans) is subject to the conditions set forth in Section 4.02.  No such funding of risk participations shall relieve or otherwise impair the obligation of the applicable Borrower to repay Swing Line Loans, together with interest as provided herein.

 
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(e)           Repayment of Participations.

(i)    At any time after any Primary Revolving Credit Lender has purchased and funded a risk participation in a Swing Line Loan, if the relevant Swing Line Lender receives any payment on account of such Swing Line Loan, such Swing Line Lender will distribute to such Lender its Pro Rata Share of such payment (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Lenders risk participation was funded) in the same funds as those received by such Swing Line Lender.

(ii)    If any payment received by a Swing Line Lender in respect of principal or interest on any Swing Line Loan is required to be returned by such Swing Line Lender under any of the circumstances described in Section 10.06 (including pursuant to any settlement entered into by such Swing Line Lender in its discretion), each Appropriate Lender shall pay to such Swing Line Lender its Pro Rata Share thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned, at a rate per annum equal to the applicable Overnight Rate.  The Administrative Agent will make such demand upon the request of a Swing Line Lender.

(f)           Interest for Account of Swing Line Lenders.  Each Swing Line Lender shall be responsible for invoicing each Borrower for interest on its Swing Line Loans.  Until each Appropriate Lender funds its Base Rate Loan or Eurocurrency Rate Loan or risk participation pursuant to this Section 2.04 to refinance such Lenders Pro Rata Share of any Swing Line Loan, interest in respect of such Pro Rata Share shall be solely for the account of the relevant Swing Line Lender.

(g)           Payments Directly to Swing Line Lender.  The Borrowers shall make all payments of principal and interest in respect of the Swing Line Loans directly to the relevant Swing Line Lender. The Swing Lender shall apply payments of principal to the Swing Line Loans in the order which such Loans were borrowed.

Section 2.05.          Prepayments

(a)           Optional.

(i)     Each Borrower may, upon notice by the Borrowers Agent to the Administrative Agent, at any time or from time to time voluntarily prepay Loans in whole or in part without premium or penalty; provided that (1) such notice must be received by the Administrative Agent not later than 12:30 p.m. (New York, New York time in the case of any Borrowings by the U.S. Borrower and London, United Kingdom time in the case of Borrowings by any Non-U.S. Borrower) (A) two (2) Business Days prior to any date of prepayment of Eurocurrency Rate Loans and (B) on the date of prepayment of Base Rate Loans; (2) any prepayment of Eurocurrency Rate Loans shall be in a minimum principal amount of $5,000,000,  5,000,000 or 5,000,000, as applicable, or a whole multiple of $500,000, 500,000 or 500,000, as applicable, in excess thereof; and (3) any prepayment of Base Rate Loans shall be in a minimum principal amount of $1,000,000 or a whole multiple of $250,000 in excess thereof or, in each case, if less, the entire principal amount thereof then outstanding.  Each such notice shall specify the date and amount of such prepayment and the Class(es) and Type(s) of Loans and the order of Borrowing(s) to be prepaid.  The Administrative Agent will promptly notify each Appropriate Lender of its receipt of each such notice, and of the amount of such Lenders Pro Rata Share of such prepayment.  The applicable Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein; provided that a notice of prepayment of the Loans delivered by the Borrowers Agent may state that such notice is conditional upon the effectiveness of another financing or a Change of Control, and in either such case, such notice may be revoked by the Borrowers Agent (by written notice to the Administrative Agent a reasonable time prior to the specified effective date) if such condition is not satisfied.  Any prepayment of a Eurocurrency Rate Loan shall be accompanied by all accrued interest thereon, together with any additional amounts required pursuant to Section 3.05.  Each prepayment of principal of, and interest on, Revolving Credit Loans shall be made in the currency in which such Revolving Credit Loans are denominated.  Each prepayment of principal of, and interest on, Loans denominated in Dollars shall be made in Dollars.  Subject to Section 2.05(b)(vii) below, in the case of each prepayment of the Loans pursuant to this Section 2.05(a), the Borrowers Agent may in its sole discretion select the Borrowing or Borrowings (and the order of maturity of principal payments) to be repaid, and such payment shall be paid to the Appropriate Lenders in accordance with their respective Pro Rata Shares.

 
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(ii)    Each Borrower may, upon notice by the Borrowers Agent to the relevant Swing Line Lender (with a copy to the Administrative Agent), at any time or from time to time, voluntarily prepay Swing Line Loans in whole or in part without premium or penalty; provided that (1) such notice must be received by the relevant Swing Line Lender and the Administrative Agent not later than 1:00 p.m. (London time in the case of Swing Line Loans denominated in Alternative Currency) on the date of the prepayment, and (2) any such prepayment shall be in a minimum principal amount of $100,000, 100,000 or 100,000, as applicable, or a whole multiple of $100,000, 100,000 or 100,000, as applicable, in excess thereof or, if less, the entire principal amount thereof then outstanding.  Each such notice shall specify the date and amount of such prepayment.  The applicable Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein.

(b)           Mandatory.

(i)     Within fifteen (15) Business Days after financial statements have been delivered pursuant to Section 6.01(a) (commencing with the Fiscal Year ending December 31, 2008) and the related Compliance Certificate has been delivered pursuant to Section 6.02(a), the Company shall cause to be prepaid an aggregate Dollar Amount of Term Loans equal to (A) the Applicable ECF Percentage of Excess Cash Flow, if any, for the Fiscal Year covered by such financial statements minus (B) the sum of

(1)           all voluntary prepayments of Term Loans during such Fiscal Year, in each case to the extent such prepayments are not funded with the proceeds of Indebtedness,

(2)           all voluntary prepayments of Revolving Credit Loans, Swingline Loans and loans under the Asset Backed Credit Facility and the Receivables Financings during such Fiscal Year, in each case to the extent the related commitments are concurrently and permanently reduced and in each case to the extent such prepayments are not funded with the proceeds of Indebtedness;

 
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(3)           if both (x) there is a decrease in Consolidated Working Capital in such Fiscal Year and (y) the Average Brent Crude Oil Price for the last fiscal quarter of such Fiscal Year is lower than the Average Brent Crude Oil price for the last fiscal quarter of the previous Fiscal Year, an amount equal to the product of (I) the amount of such decrease in Consolidated Working Capital and (II) the Applicable ECF Percentage for such Fiscal Year; provided that the Company shall deposit an amount equal to the amount of such decrease in Consolidated Working Capital into the Working Capital Reserve Account and none of such decrease in Consolidated Working Capital so deposited shall be included in the calculation of the amount of Excess Cash Flow required to be applied pursuant to this Section 2.05(b)(i)), unless the Average Brent Crude Oil Price over the last fiscal quarter of the relevant Fiscal Year is between zero and 5% lower than the Average Brent Crude Oil Price over the last fiscal quarter of the previous Fiscal Year, in which case 50% of such decrease in Consolidated Working Capital shall be deposited into the Working Capital Reserve Account (and, for the avoidance of doubt, the other 50% shall continue to be included in the calculation of Excess Cash Flow); provided that all amounts deposited in the Working Capital Reserve Account shall only be used (x) to fund any net increase in Consolidated Working Capital during the following Fiscal Year; and/or (y) to prepay the Loans in accordance with Section 2.05(b)(i) as if the amount prepaid had not been excluded from Excess Cash Flow in such relevant Fiscal Year pursuant to this Section 2.05(b)(i), and must be so applied in full by the end of the following Fiscal Year; and any payment out of the Working Capital Reserve Account shall be certified at the end of the fiscal quarter during which such payment is made by the Company Financial Officer as being made in compliance with the terms of this Agreement; and

(4)           if both (x) after giving Pro Forma Effect to any prepayment made pursuant to this Section 2.05(b)(i), the projections then most recently delivered pursuant to 6.01(c) show Liquidity at any point during the next two Fiscal Years covered by such projections to be less than $800,000,000 ($800,000,000 less such Liquidity, the Liquidity Shortfall) and (y) the outstanding amount under the Receivables Financing and the ABF Inventory Facility (taken as a whole) at the end of the Fiscal Year with respect to which Excess Cash Flow is calculated is less than such amount at the end of the previous Fiscal Year without any corresponding permanent reduction in associated commitments (a Temporary Paydown), then an amount equal to the product of (I) the lesser of the Liquidity Shortfall and the amount of the Temporary Paydown and (II) the Applicable ECF Percentage for such Fiscal Year (such product, the ECF Deferral Amount); provided that (A) the prepayment obligation pursuant to this Section 2.05(b)(i) in the next succeeding Fiscal Year shall be increased by the ECF Deferral Amount unless and to the extent there is also a Liquidity Shortfall for such next succeeding Fiscal Year and (B) no Restricted Payments pursuant to Section 7.06(n) or payments pursuant to 7.13(a)(iv) shall be permitted until the earlier of (1) the payment of such ECF Deferral Amount in accordance with Section 2.05(b)(i) with respect to the next succeeding Fiscal Year or (2) deposit of an amount in cash equal to the ECF Deferral Amount in the Working Capital Reserve Account.

(ii)    If (A) the Company or any of its Restricted Subsidiaries Disposes of any property or assets after the Closing Date (other than any Disposition of any property or assets permitted by Section 7.05(a), (b), (c), (d), (e), (g), (h), (i), (k) or (l)), (B) any Casualty Event occurs  after the Closing Date, or (C) any Recovery Event occurs after the Closing Date, in each case that results in the realization or receipt by the Company or such Subsidiary of Net Proceeds,  the Company shall cause to be prepaid an aggregate amount of Term Loans equal to 100% of all Net Proceeds received on or prior to the date which is ten (10) Business Days after the date of the realization or receipt by the Company or such Restricted Subsidiary of such Net Proceeds.

 
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(iii)   If the Company or any of its Restricted Subsidiaries incurs or issues any Indebtedness after the Closing Date (other than Indebtedness not prohibited under Section 7.03), the Company shall cause to be prepaid an aggregate Dollar Amount of Term Loans equal to 100% of all cash proceeds of such Indebtedness (net of all Taxes, fees, costs and expenses which are incurred by the Company and its Restricted Subsidiaries with respect to such incurrence or issuance) received therefrom on or prior to the date which is ten (10) Business Days after the receipt by such Loan Party or Restricted Subsidiary of such cash proceeds.

(iv)           If for any reason the aggregate Primary Revolving Credit Exposures at any time exceed the aggregate Primary Revolving Credit Commitments then in effect (including pursuant to Section 2.15(b)), the Company shall promptly cause to be prepaid Primary Revolving Credit Loans and/or Swing Line Loans and Cash Collateralize the Primary L/C Obligations in an aggregate amount equal to such excess (or the amount required pursuant to Section 2.15(b)); provided that the Company shall not be required to Cash Collateralize the Primary L/C Obligations pursuant to this Section 2.05(b)(iv) unless after the prepayment in full of the Primary Revolving Credit Loans and Swing Line Loans such aggregate Outstanding Amount exceeds the aggregate Primary Revolving Credit Commitments then in effect.

(v)           If for any reason the aggregate Dutch Revolving Credit Exposures at any time exceed the aggregate Dutch Revolving Credit Commitments then in effect (including pursuant to Section 2.15(b)), the Company shall promptly cause to be prepaid Dutch Revolving Credit Loans and Cash Collateralize the Dutch L/C Obligations in an aggregate amount equal to such excess (or the amount required pursuant to Section 2.15(b)); provided that the Company shall not be required to Cash Collateralize the Dutch L/C Obligations pursuant to this Section 2.05(b)(v) unless after the prepayment in full of the Dutch Revolving Credit Loans such aggregate Outstanding Amount exceeds the aggregate Primary Revolving Credit Commitments then in effect.

(vi)           Each prepayment of Term Loans pursuant to this Section 2.05(b) shall be applied, subject to clause (vii) below,  pro rata among the U.S. Tranche A Dollar Term Loans, U.S. Tranche B Dollar Term Loans, Dutch Tranche A Dollar Term Loans and German Tranche B Euro Term Loans first, to accrued interest and fees due on the amount of the prepayment under such Term Loan Facility, and second, to the applicable remaining Repayment Amounts due pursuant to Section 2.07 on (x) a pro rata basis in the case of the Tranche B Term Loans or (y) in direct order of maturity in the case of the Tranche A Term Loans, in each case in accordance with the Appropriate Lenders respective Pro Rata Shares.

(vii)           The Borrowers Agent shall notify the Administrative Agent in writing of any mandatory prepayment of Term Loans required to be made pursuant to clauses (i) through (iii) of this Section 2.05(b) at least three (3) Business Days prior to the date of such prepayment.  Each such notice shall specify the date of such prepayment and provide a reasonably detailed calculation of the amount of such prepayment.  The Administrative Agent shall promptly notify each Appropriate Lender of the contents of the prepayment notice and of such Appropriate Lenders Pro Rata Share of the prepayment.  At any time when Tranche A Term Loans are outstanding, each Tranche B Term Lender may reject all or a portion of its Pro Rata Share of any optional or mandatory prepayment (such declined amounts, the Declined Proceeds) of Tranche B Term Loans by providing written notice (each, a Rejection Notice) to the Administrative Agent and the Company no later than 5:00 p.m. one Business Day after the date of such Tranche B Term Lenders receipt of notice from the Administrative Agent regarding such prepayment. Each Rejection Notice shall specify the principal amount of the mandatory repayment of Tranche B Term Loans to be rejected by such Lender.  If a Tranche B Term Lender fails to deliver a Rejection Notice to the Administrative Agent within the time frame specified above or such Rejection Notice fails to specify the principal amount of the Tranche B Term Loans to be rejected, such Tranche B Term Lender will be deemed to have accepted the total amount of such prepayment of Loans applicable to it.  At any time when Tranche A Term Loans are outstanding, any Declined Proceeds of Tranche B Term Loans shall be applied to the Repayment Amounts, if any, with respect to the Tranche A Term Loans in accordance with clause (vi).  After repayment in full of the Tranche A Term Loans, the Tranche B Term Lenders may not decline any optional prepayments under Section 2.05(a) but may continue to decline mandatory prepayments under Section 2.05(b) and, subject to any mandatory prepayment provisions under the Asset Backed Credit Facilities or the Senior Second Lien Debt and any Permanent Financing, any Declined Proceeds shall be retained by the Company.

 
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(c)           Funding Losses, Etc.  All prepayments under this Section 2.05 shall be made together with, in the case of any such prepayment of a Eurocurrency Rate Loan on a date other than the last day of an Interest Period therefor, any amounts owing in respect of such Eurocurrency Rate Loan pursuant to Section 3.05.  Notwithstanding any of the other provisions of Section 2.05(b), so long as no Event of Default shall have occurred and be continuing, if any prepayment of Eurocurrency Rate Loans is required to be made under Section 2.05(b) other than on the last day of the Interest Period therefor, the Company or the relevant Borrower may, in its sole discretion, deposit the amount of any such prepayment otherwise required to be made thereunder into a Cash Collateral Account until the last day of such Interest Period, at which time the Administrative Agent shall be authorized (without any further action by or notice to or from the Company or any other Loan Party) to apply such amount to the prepayment of such Loans in accordance with Section 2.05(b).  Upon the occurrence and during the continuance of any Event of Default, the Administrative Agent shall also be authorized (without any further action by or notice to or from the Company or any other Loan Party) to apply such amount to the prepayment of the outstanding Loans in accordance with Section 2.05(b).

Section 2.06.   Termination or Reduction of Commitments
 
(a)           Optional.  The Company may, upon written notice to the Administrative Agent, terminate the unused Revolving Credit Commitments, or from time to time permanently reduce the unused Revolving Credit Commitments; provided that (i) any such notice shall be received by the Administrative Agent three (3) Business Days prior to the date of termination or reduction, (ii) any such partial reduction shall be in a minimum aggregate amount of $1,000,000, 1,000,000 or 1,000,000, as applicable, or any whole multiple of $250,000, 250,000,or 250,000 as applicable, in excess thereof and (iii) if, after giving effect to any reduction of the Revolving Credit Commitments, the applicable Letter of Credit Sublimit or the Swing Line Sublimit exceeds the amount of such Revolving Credit Facility, such sublimit shall be automatically reduced by the amount of such excess.  The amount of any such Primary Revolving Credit Commitments reduction shall not otherwise be applied to the Letter of Credit Sublimit or the Swing Line Sublimit unless otherwise specified by the Company; provided that a notice of termination of such Revolving Credit Commitments delivered by the Borrowers Agent may state that such notice is conditional upon the effectiveness of another financing or a Change of Control, and in either such case, such notice may be revoked by the Borrowers Agent (by written notice to the Administrative Agent a reasonable time prior to the specified effective date) if such condition is not satisfied.

(b)           Mandatory.  The U.S. Tranche A Dollar Term Commitment of each U.S. Tranche A Dollar Term Lender shall be automatically and permanently reduced to $0 upon the making of such U.S. Tranche A Dollar Term Lenders U.S. Tranche A Dollar Term Loans pursuant to Section 2.01(a).  The U.S. Tranche B Dollar Term Commitment of each U.S. Tranche B Dollar Term Lender shall be automatically and permanently reduced to $0 upon the making of such U.S. Tranche B Dollar Term Lenders U.S. Tranche B Dollar Term Loans pursuant to Section 2.01(b).  The Dutch Tranche A Dollar Term Commitment of each Dutch Tranche A Dollar Term Lender shall be automatically and permanently reduced to $0 upon the making of such Dutch Tranche A Dollar Term Lenders Dutch Tranche A Dollar Term Loans pursuant to Section 2.01(c).  The German Tranche B Euro Term Commitment of each German Tranche B Euro Term Lender shall be automatically and permanently reduced to 0 upon the making of such German Tranche B Euro Term Lenders Tranche B Term Loans pursuant to Section 2.01(d).  The Revolving Credit Commitments of each Revolving Credit Lender shall be automatically and permanently terminated if at any time there are no outstanding Term Loans.
 
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(c)           Application of Commitment Reductions; Payment of Fees.  The Administrative Agent will promptly notify the Lenders of any termination or reduction of unused portions of the Primary Letter of Credit Sublimit, Dutch Letter of Credit Sublimit or the Swing Line Sublimit or the unused Commitments of any Class under this Section 2.06.  Upon any reduction of unused Revolving Credit Commitments, the Revolving Credit Commitments of each Lender shall be reduced by such Lenders Pro Rata Share of the amount by which such Revolving Credit Commitments are reduced (other than the termination of the Commitment of any Lender as provided in Section 3.07).  All commitment fees accrued until the effective date of any termination of the Revolving Credit Commitments shall be paid on the effective date of such termination.

Section 2.07.   Repayment of Loans

(a)           U.S. Tranche A Dollar Term Loans.  The U.S. Borrower shall repay to the Administrative Agent, in Dollars, for the ratable account of the U.S. Tranche A Dollar Term Lenders, during each annual period set forth below in equal quarterly installments on the last Business Day of each March, June, September and December, commencing with the first full quarter after the Closing Date, a principal amount in respect of the U.S. Tranche A Dollar Term Loans equal to the product of (x) the outstanding amount of the U.S. Tranche A Dollar Term Loans on such date and (y) the percentage set forth below (each, a U.S. Tranche A Dollar Term Loan Repayment Amount):

Date
  
U.S. Tranche A Dollar  Term Loan Repayment Amount
     
March 31, 2008
  
  4.75%
June 30, 2008
  
  4.75%
September 30, 2008
  
  10.0%
December 31, 2008
  
  15.0%
March 31, 2009
  
  22.5%
June 30, 2009
  
  43.0%
September 30, 2009   
                    1.1875%
December 31, 2009   
                    1.1875% 
March 31, 2010                        2.5000% 
June 30, 2010                        2.5000% 
September 30, 2010                        2.5000% 
December 31, 2010                        2.5000% 
March 31, 2011                        3.7500% 
June 30, 2011                        3.7500% 
September 30, 2011                        3.7500% 
December 31, 2011                        3.7500% 
March 31, 2012                        5.6250% 
June 30, 2012                        5.6250% 
September 30, 2012                        5.6250% 
December 31, 2012                        5.6250% 
March 31, 2013                          14.3333% 
June 30, 2013                              14.3333% 
September 30, 2013                              14.3333% 
Tranche A Term Loan Maturity Date
  
Remaining outstanding amounts

(b)           U.S. Tranche B Dollar Term Loans.  The U.S. Borrower shall repay to the Administrative Agent in Dollars for the ratable account of the U.S. Tranche B Dollar Term Lenders (i) on the last Business Day of each March, June, September and December, commencing with the first full quarter after the Closing Date, an aggregate Dollar Amount equal to 0.25% of the aggregate Dollar Amount of all U.S. Tranche B Dollar Term Loans drawn hereunder on the Closing Date (which payments shall be reduced as a result of the application of prepayments in accordance with the order of priority set forth in Section 2.05) and (ii) on the Maturity Date for the U.S. Tranche B Dollar Term Loans, the aggregate principal amount of all U.S. Tranche B Dollar Term Loans outstanding on such date (each such repayment amount,  a U.S. Tranche B Dollar Term Loan Repayment Amount).

 
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(c)           Dutch Tranche A Dollar Term Loans.  Basell Holdings shall repay to the Administrative Agent, in Dollars, for the ratable account of the Dutch Tranche A Dollar Term Lenders, during each annual period set forth below in quarterly installments on the last Business Day of each March, June, September and December, commencing with the first full quarter after the Closing Date, a principal amount in respect of the Dutch Tranche A Dollar Term Loans equal to the product of (x) the outstanding principal amount of the Dutch Tranche A Dollar Term Loans on such date and (y) the percentage set forth below (each, a DutchTranche A Dollar Term Loan Repayment Amount):

 
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Date
  
U.S. Tranche A Dollar  Term Loan Repayment Amount
     
March 31, 2008
  
  1.1875%
June 30, 2008
  
  1.1875%
September 30, 2008
  
  1.1875%
December 31, 2008
  
  1.1875%
March 31, 2009
  
  1.1875%
June 30, 2009
  
  1.1875%
September 30, 2009   
  1.1875%
December 31, 2009   
  1.1875%
March 31, 2010                2.5000% 
June 30, 2010                        2.5000% 
September 30, 2010                    2.5000% 
December 31, 2010                    2.5000% 
March 31, 2011                            3.7500% 
June 30, 2011                            3.7500% 
September 30, 2011                            3.7500% 
December 31, 2011                            3.7500% 
March 31, 2012                        5.6250% 
June 30, 2012                        5.6250% 
September 30, 2012                    5.6250% 
December 31, 2012                        5.6250% 
March 31, 2013                         14.3333% 
June 30, 2013                             14.3333% 
September 30, 2013                             14.3333% 
Tranche A Term Loan Maturity Date
  
Remaining outstanding amounts

(d)           German Tranche B Euro Term Loans.  The German Borrower shall repay to the Administrative Agent in Euros for the ratable account of the German Tranche B Euro Term Lenders (i) on the last Business Day of each March, June, September and December, commencing with the first full quarter after the date on which all German Tranche B Euro Term Loans have been borrowed (or Commitments in respect thereof terminated), an aggregate amount equal to 0.25% of the aggregate amount of all German Tranche B Euro Term Loans drawn hereunder on the Closing Date (which payments shall be reduced as a result of the application of prepayments in accordance with the order of priority set forth in Section 2.05) and (ii) on the Maturity Date for the German Tranche B Euro Term Loans, the aggregate principal amount of all Term Loans outstanding on such date (each such repayment amount, a German Tranche B Euro Term Loan Repayment Amount).

(e)           Revolving Credit Loans.  Each Borrower shall repay to the Administrative Agent for the ratable account of the Appropriate Lenders on the Maturity Date for the Revolving Credit Facility the aggregate principal amount of all of such Borrowers Revolving Credit Loans under such Facility outstanding on such date.

(f)           Swing Line Loans.  Each Borrower shall repay the aggregate principal amount of its Swing Line Loans on the earlier to occur of (i) the date five (5) Business Days after such Loan is made and (ii) the Maturity Date for the Primary Revolving Credit Facility.

Section 2.08.   Interest

(a)           Subject to the provisions of Section 2.08(b), (i) each Eurocurrency Rate Loan (other than a European Swing Line Loan) shall bear interest on the outstanding principal amount or face amount thereof for each Interest Period at a rate per annum equal to the Eurocurrency Rate for such Interest Period plus the Applicable Rate plus (in the case of a Eurocurrency Rate Loan of any Lender which is lent from a Lending Office in the United Kingdom or a Participating Member State) the Mandatory Cost; (ii) each Base Rate Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the Base Rate plus the Applicable Rate; (iii) each Swing Line Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the Base Rate plus the Applicable Rate for Revolving Credit Loans and (v) each European Swing Line Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the Eurocurrency Rate plus the Applicable Rate for Eurocurrency Rate Loans.

 
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(b)           During the continuance of a Default pursuant to Section 8.01(a), the applicable Borrower shall pay interest on amounts due hereunder at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Law.  Accrued and unpaid interest on such amounts (including interest on past due interest) shall be due and payable upon demand.

(c)           Interest on each Loan shall be due and payable in arrears on each Interest Payment Date applicable thereto and at such other times as may be specified herein.  Interest hereunder shall be due and payable in accordance with the terms hereof before and after judgment, and before and after the commencement of any proceeding under any Debtor Relief Law.

Section 2.09.   Fees
 
In addition to certain fees described in Sections 2.03(h) and (i):

(a)           Commitment Fee.  On the fifth Business Day after commitment fees are calculated in accordance with the next succeeding sentence, the U.S. Borrower and Basell Finance shall pay in Dollars to the Administrative Agent for the account of each (1) Primary Revolving Credit Lender in accordance with its Pro Rata Share a commitment fee equal to the Applicable Rate with respect to Primary Revolving Credit Loans times the actual daily amount by which the aggregate Primary Revolving Credit Commitment exceeds the sum of (A) the Outstanding Amount of Primary Revolving Credit Loans under such Facility and (B) the Outstanding Amount of Primary L/C Obligations; provided that any commitment fee accrued with respect to any of the Commitments of a Defaulting Lender (other than a Lender deemed a Defaulting Lender solely under clause (c) of the definition thereof) during the period prior to the time such Lender became a Defaulting Lender and unpaid at such time shall not be payable so long as such Lender shall be a Defaulting Lender except to the extent that such commitment fee shall otherwise have been due and payable prior to such time; and provided further that no commitment fee shall accrue on any of the Commitments of a Defaulting Lender (other than a Lender deemed a Defaulting Lender solely under clause (c) of the definition thereof) so long as such Lender shall be a Defaulting Lender and (2) Dutch Revolving Credit Lender in accordance with its Pro Rata Share a commitment fee equal to the Applicable Rate with respect to Dutch Revolving Credit Loans times the actual daily amount by which the aggregate Dutch Revolving Credit Commitment exceeds the sum of (A) the Outstanding Amount of Dutch Revolving Credit Loans under such Facility and (B) the Outstanding Amount of Dutch L/C Obligations; provided that any commitment fee accrued with respect to any of the Commitments of a Defaulting Lender (other than a Lender deemed a Defaulting Lender solely under clause (c) of the definition thereof) during the period prior to the time such Lender became a Defaulting Lender and unpaid at such time shall not be payable so long as such Lender shall be a Defaulting Lender except to the extent that such commitment fee shall otherwise have been due and payable prior to such time; and provided further that no commitment fee shall accrue on any of the Commitments of a Defaulting Lender (other than a Lender deemed a Defaulting Lender solely under clause (c) of the definition thereof) so long as such Lender shall be a Defaulting Lender.  The commitment fee shall accrue at all times from the Closing Date until the Maturity Date for the Revolving Credit Facility, including at any time during which one or more of the conditions in Article IV is not met, and shall be calculated quarterly in arrears on the last Business Day of each March, June, September and December, commencing with the first such date to occur after the Closing Date, and on the Maturity Date for the Revolving Credit Facility.  If there is any change in the Applicable Rate during any quarter, the actual daily amount shall be computed and multiplied by the Applicable Rate separately for each period during such quarter that such Applicable Rate was in effect.

 
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(b)           Other Fees.  The Company shall pay in Dollars to the Agents such fees as shall have been separately agreed upon in writing in the amounts and at the times so specified.  Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever (except as expressly agreed between the Company and the applicable Agent).

Section 2.10.   Computation of Interest and Fees

All computations of interest for Base Rate Loans when the Base Rate is determined by Citibank, N.A.s prime rate shall be made on the basis of a year of three hundred and sixty-five (365) days, or three hundred and sixty-six (366) days, as applicable, and actual days elapsed.  All other computations of fees and interest shall be made on the basis of a three hundred and sixty (360) day year and actual days elapsed.  Interest shall accrue on each Loan for the day on which the Loan is made, and shall not accrue on a Loan, or any portion thereof, for the day on which the Loan or such portion is paid; provided that any Loan that is repaid on the same day on which it is made shall, subject to Section 2.12(a), bear interest for one (1) day.  Each determination by the Administrative Agent of an interest rate or fee hereunder shall be conclusive and binding for all purposes, absent manifest error.

Section 2.11.   Evidence of Indebtedness

(a)           The Credit Extensions made by each Lender shall be evidenced by one or more accounts or records maintained by such Lender and evidenced by one or more entries in the Register maintained by the Administrative Agent, acting solely for purposes of Treasury Regulation Section 5f.103-1(c), as agent for the Borrowers, in each case in the ordinary course of business.  The accounts or records maintained by the Administrative Agent and each Lender shall be prima facie evidence absent manifest error of the amount of the Credit Extensions made by the Lenders to the Borrowers and the interest and payments thereon.  Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of the Borrowers hereunder to pay any amount owing with respect to the Obligations.  In the event of any conflict between the accounts and records maintained by any Lender and the accounts and records of the Administrative Agent in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error.  Upon the request of any Lender made through the Administrative Agent upon reasonable notice, the relevant Borrowers shall execute and deliver to such Lender (through the Administrative Agent) a Note payable to such Lender, which shall evidence such Lenders Loans in addition to such accounts or records.  Each Lender may attach schedules to its Note and endorse thereon the date, Type (if applicable), amount and maturity of its Loans and payments with respect thereto.

(b)           In addition to the accounts and records referred to in Section 2.11(a), each Lender and the Administrative Agent shall maintain in accordance with its usual practice accounts or records and, in the case of the Administrative Agent, entries in the Register, evidencing the purchases and sales by such Lender of participations in Letters of Credit and Swing Line Loans.  In the event of any conflict between the accounts and records maintained by the Administrative Agent and the accounts and records of any Lender in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error.

(c)           Entries made in good faith by the Administrative Agent in the Register pursuant to Sections 2.11(a) and (b), and by each Lender in its account or accounts pursuant to Sections 2.11(a) and (b), shall be primafacie evidence of the amount of principal and interest due and payable or to become due and payable from the Borrowers to, in the case of the Register, each Lender and, in the case of such account or accounts, such Lender, under this Agreement and the other Loan Documents, absent manifest error; provided that the failure of the Administrative Agent or such Lender to make an entry, or any finding that an entry is incorrect, in the Register or such account or accounts shall not limit or otherwise affect the obligations of the Borrowers under this Agreement and the other Loan Documents.

 
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Section 2.12.   Payments Generally

(a)           All payments to be made by the Borrowers shall be made without condition or deduction for any counterclaim, defense, recoupment or setoff.  Except as otherwise expressly provided herein and except with respect to principal of and interest on Loans denominated in an Alternative Currency, all payments by the Borrowers hereunder shall be made to the Administrative Agent, for the account of the respective Lenders to which such payment is owed, at the applicable Administrative Agents Office in Dollars and in Same Day Funds not later than 2:00 p.m. (New York, New York time in the case of any Borrowing by the U.S. Borrower and London, United Kingdom time in the case of any Borrowing by any Non-U.S. Borrower) on the date specified herein.  Except as otherwise expressly provided herein, all payments by the Borrowers hereunder with respect to principal and interest on Loans denominated in an Alternative Currency shall be made to the Administrative Agent, for the account of the respective Lenders to which such payment is owed, at the Administrative Agents Office in such Alternative Currency and in Same Day Funds not later than 2:00 p.m. (London, United Kingdom time) on the dates specified herein.  If, for any reason, the applicable Borrower is prohibited by any Law from making any required payment hereunder in an Alternative Currency, such Borrower shall make such payment in Dollars in the Dollar Amount of the Alternative Currency payment amount.  The Administrative Agent will promptly distribute to each Lender its Pro Rata Share (or other applicable share as provided herein) of such payment in like funds as received by wire transfer to such Lenders applicable Lending Office.  All payments received by the Administrative Agent (i) after 2:00 p.m., in the case of payments in Dollars, or (ii) after 2:00 p.m. (London time) in the case of payments in an Alternative Currency, shall in each case be deemed received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue.

(b)           If any payment to be made by a Borrower shall come due on a day other than a Business Day, payment shall be made on the immediately succeeding Business Day, and such extension of time shall be reflected in computing interest or fees, as the case may be; provided that, if such extension would cause payment of interest on or principal of Eurocurrency Rate Loans to be made in the next succeeding calendar month, such payment shall be made on the immediately preceding Business Day.

(c)           Unless a Borrower or any Lender has notified the Administrative Agent, prior to the time any payment is required to be made by it to the Administrative Agent hereunder, that such Borrower or such Lender, as the case may be, will not make such payment, the Administrative Agent may assume that such Borrower or such Lender, as the case may be, has timely made such payment and may (but shall not be so required to), in reliance thereon, make available a corresponding amount to the Person entitled thereto.  If and to the extent that such payment was not in fact made to the Administrative Agent in Same Day Funds, then:
 
(i)     if the applicable Borrower failed to make such payment, each Lender shall forthwith on demand repay to the Administrative Agent the portion of such assumed payment that was made available to such Lender in Same Day Funds, together with interest thereon in respect of each day from and including the date such amount was made available by the Administrative Agent to such Lender to the date such amount is repaid to the Administrative Agent in Same Day Funds at the applicable Overnight Rate from time to time in effect; and

 
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(ii)    if any Lender failed to make such payment, such Lender shall forthwith on demand pay to the Administrative Agent the amount thereof in Same Day Funds, together with interest thereon for the period from the date such amount was made available by the Administrative Agent to such Borrower to the date such amount is recovered by the Administrative Agent (the Compensation Period) at a rate per annum equal to the applicable Overnight Rate from time to time in effect.  When such Lender makes payment to the Administrative Agent (together with all accrued interest thereon), then such payment amount (excluding the amount of any interest which may have accrued and been paid in respect of such late payment) shall constitute such Lenders Loan included in the applicable Borrowing.  If such Lender does not pay such amount forthwith upon the Administrative Agents demand therefor, the Administrative Agent may make a demand therefor upon such Borrower, and such Borrower shall pay such amount to the Administrative Agent, together with interest thereon for the Compensation Period at a rate per annum equal to the rate of interest applicable to the applicable Borrowing.  Nothing herein shall be deemed to relieve any Lender from its obligation to fulfill its Commitment or to prejudice any rights which the Administrative Agent or such Borrower may have against any Lender as a result of any default by such Lender hereunder.

A notice of the Administrative Agent to any Lender or the Borrowers Agent with respect to any amount owing under this Section 2.12(c) shall be conclusive, absent manifest error.

(d)           If any Lender makes available to the Administrative Agent funds for any Loan to be made by such Lender as provided in the foregoing provisions of this Article II, and such funds are not made available to the applicable Borrower by the Administrative Agent because the conditions to the applicable Credit Extension set forth in Article IV are not satisfied or waived in accordance with the terms hereof, the Administrative Agent shall return such funds (in like funds as received from such Lender) to such Lender, without interest.

(e)           The obligations of the Lenders hereunder to make Loans and to fund participations in Letters of Credit and Swing Line Loans are several and not joint.  The failure of any Lender to make any Loan or to fund any such participation on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make its Loan or purchase its participation.

(f)           Nothing herein shall be deemed to obligate any Lender to obtain the funds for any Loan in any particular place or manner or to constitute a representation by any Lender that it has obtained or will obtain the funds for any Loan in any particular place or manner.

(g)           Whenever any payment received by the Administrative Agent under this Agreement or any of the other Loan Documents is insufficient to pay in full all amounts due and payable to the Administrative Agent and the Lenders under or in respect of this Agreement and the other Loan Documents on any date, such payment shall be distributed by the Administrative Agent and applied by the Administrative Agent and the Lenders in the order of priority set forth in Section 8.03.  If the Administrative Agent receives funds for application to the Obligations of the Loan Parties under or in respect of the Loan Documents under circumstances for which the Loan Documents do not specify the manner in which such funds are to be applied, the Administrative Agent may (to the fullest extent permitted by mandatory provisions of applicable Law), but shall not be obligated to, elect to distribute such funds to each of the Lenders in accordance with such Lenders Pro Rata Share of the sum of (a) the Outstanding Amount of all Loans outstanding at such time and (b) the Outstanding Amount of all L/C Obligations outstanding at such time, in repayment or prepayment of such of the outstanding Loans or other Obligations then owing to such Lender.

 
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Section 2.13.   Sharing of Payments
 
If, other than as expressly provided elsewhere herein, any Lender shall obtain on account of the Loans made by it, or the participations in L/C Obligations and Swing Line Loans held by it, any payment (whether voluntary, involuntary, through the exercise of any right of setoff or otherwise) in excess of its ratable share (or other share contemplated hereunder) thereof, such Lender shall immediately (a) notify the Administrative Agent of such fact, and (b) purchase from the other Lenders such participations in the Loans made by them and/or such subparticipations in the participations in L/C Obligations or Swing Line Loans held by them, as the case may be, as shall be necessary to cause such purchasing Lender to share the excess payment in respect of such Loans or such participations, as the case may be, pro rata with each of them; provided that if all or any portion of such excess payment is thereafter recovered from the purchasing Lender under any of the circumstances described in Section 10.06 (including pursuant to any settlement entered into by the purchasing Lender in its discretion), such purchase shall to that extent be rescinded and each other Lender shall repay to the purchasing Lender the purchase price paid therefor, together with an amount equal to such paying Lenders ratable share (according to the proportion of (i) the amount of such paying Lenders required repayment to (ii) the total amount so recovered from the purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered, without further interest thereon.  Each Borrower agrees that any Lender so purchasing a participation from another Lender may, to the fullest extent permitted by applicable Law, exercise all its rights of payment (including the right of setoff, but subject to Section 10.09) with respect to such participation as fully as if such Lender were the direct creditor of such Borrower in the amount of such participation.  The Administrative Agent will keep records (which shall be conclusive and binding in the absence of manifest error) of participations purchased under this Section 2.13 and will in each case notify the Lenders following any such purchases or repayments.  Each Lender that purchases a participation pursuant to this Section 2.13 shall from and after such purchase have the right to give all notices, requests, demands, directions and other communications under this Agreement with respect to the portion of the Obligations purchased to the same extent as though the purchasing Lender were the original owner of the Obligations purchased.

Section 2.14.   Incremental Credit Extensions
 
(a)           The Borrowers Agent may at any time or from time to time after the Closing Date, by notice to the Administrative Agent (whereupon the Administrative Agent shall promptly deliver a copy to each of the Lenders), request (a) one or more additional tranches of term loans (the Incremental Term Loans) or (b) one or more increases in the amount of the Revolving Credit Commitments (each such increase, a Revolving Commitment Increase); provided that (i) upon the effectiveness of any Incremental Amendment referred to below, the conditions precedent to such Credit Extension set forth in Section 4.02 shall have been satisfied and (ii) the First Lien Senior Secured Leverage Ratio shall be less than 2.75:1.00 determined on a Pro Forma Basis for the incurrence of the Incremental Term Loan or Revolving Commitment Increase.

(b)           Each tranche of Incremental Term Loans and each Revolving Commitment Increase shall be in an aggregate principal Dollar Amount of not less than $50,000,000, in the case of any Revolving Commitment Increase, and $100,000,000 in the case of Incremental Term Loans (provided that such amount may be less if such amount represents all remaining availability under the limit set forth in the next sentence).  Notwithstanding anything to the contrary herein, the aggregate Dollar Amount of all Incremental Term Loans and the Revolving Commitment Increases shall not exceed $2,000,000,000.  The Incremental Term Loans may be in Dollars or Euro.  The Incremental Term Loans and any Revolving Commitment Increase (i) shall rank pari passu in right of payment and have the equal benefit of guarantees and security with the Loans, (ii) with respect to the Incremental Term Loans only, increases shall not have a final maturity date earlier than the Maturity Date for the (x) Tranche A Term Loans with respect to $500,000,000 of Incremental Term Loans (Tranche A Incremental Term Loans), or (y) Tranche B Term Loans in the case of $1,500,000,000 of Incremental Term Loans and consisting of Tranche A Incremental Term Loans (the Tranche B Incremental Term Loans), and (iii) with respect to the Incremental Term Loans only, except as set forth in clauses (A) and (B) of the proviso hereto, shall be treated substantially the same as the Tranche A Term Loans, in the case of Tranche A Incremental Term Loans or Tranche B Term Loans, in the case of Incremental Tranche B Term Loans, (in each case, including with respect to mandatory and voluntary prepayments); provided that (A) except as provided herein, the terms and conditions applicable to Incremental Term Loans may be materially different from those of the Term Loans to the extent such differences are reasonably acceptable to the Administrative Agent and (B) the amortization schedule applicable to the Incremental Term Loans shall be determined by the Borrowers Agent and the lenders thereof, in each case so long as the Weighted Average Life to Maturity for any Incremental Term Loans shall not be shorter than the then remaining Weighted Average Life to Maturity of the Tranche A Term Loans, in the case of Tranche A Incremental Term Loans or Tranche B Term Loans, in the case of Incremental Tranche B Term Loans.  Each notice from the Borrowers Agent pursuant to this Section 2.14 shall set forth the requested amount and proposed terms of the relevant Incremental Term Loans or the requested amount of the Revolving Commitment Increase.

 
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(c)           Incremental Term Loans may be made, and Revolving Commitment Increases may be provided, by any existing Lender (and each existing Term Lender shall have the right, but not an obligation, to make a portion of any Incremental Term Loan, and each existing Revolving Credit Lender shall have the right, but not the obligation, to provide a portion of any Revolving Commitment Increase, in each case on terms permitted in this Section 2.14 and otherwise on terms reasonably acceptable to the Administrative Agent) or by any other bank or other financial institution (any such other bank or other financial institution, an Additional Lender); provided that the Administrative Agent shall have consented (not to be unreasonably withheld) to such Lenders or Additional Lenders making such Incremental Term Loans or providing such Revolving Commitment Increases if such consent would be required under Section 10.07(b) for an assignment of Loans or Revolving Credit Commitments, as applicable, to such Lender or Additional Lender.

(d)           Commitments in respect of Incremental Term Loans and Revolving Commitment Increases shall become Commitments (or in the case of a Revolving Commitment Increase to be provided by an existing Revolving Credit Lender, an increase in such Lenders applicable Revolving Credit Commitment) under this Agreement pursuant to an amendment (an Incremental Amendment) to this Agreement and, as appropriate, the other Loan Documents, executed by the applicable Borrower, each Lender agreeing to provide such Commitment, if any, each Additional Lender, if any, and the Administrative Agent. The Incremental Amendment may, without the consent of any other Agents or Lenders, effect such amendments to this Agreement and the other Loan Documents as may be necessary or appropriate, in the reasonable opinion of the Administrative Agent and the applicable Borrowers Agent, to effect the provisions of this Section 2.14.  The effectiveness of any Incremental Amendment shall be subject to the satisfaction on the date thereof (each, an Incremental Facility Closing Date) of each of the conditions set forth in Section 4.02 (it being understood that all references to the date of such Credit Extension or similar language in such Section 4.02 shall be deemed to refer to the effective date of such Incremental Amendment) and such other conditions as the parties thereto shall agree.  The Borrowers shall use the proceeds of the Incremental Term Loans and Revolving Commitment Increases for any purpose not prohibited by this Agreement.

 
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(e)           Upon any Revolving Commitment Increase (i)  if the increase relates to the Primary Revolving Credit Facility, each Primary Revolving Credit Lender immediately prior to such increase will automatically and without further act be deemed to have assigned to each Lender providing a portion of the Revolving Commitment Increase (each, a Revolving Commitment Increase Lender), and each such Revolving Commitment Increase Lender will automatically and without further act be deemed to have assumed (in the case of an increase to the Primary Revolving Credit Facility only), a portion of such Revolving Credit Lenders participations hereunder in outstanding Letters of Credit and Swing Line Loans such that, after giving effect to each such deemed assignment and assumption of participations, the percentage of the aggregate outstanding (A) participations hereunder in Letters of Credit and (B) participations hereunder in Swing Line Loans held by each Primary Revolving Credit Lender (including each such Revolving Commitment Increase Lender) will equal the percentage of the aggregate Primary Revolving Credit Commitments of all Primary Revolving Credit Lenders represented by such Primary Revolving Credit Lenders Primary Revolving Credit Commitment and (ii) if, on the date of such increase, there are any Revolving Credit Loans outstanding, such Revolving Credit Loans shall on or prior to the effectiveness of such Revolving Commitment Increase be prepaid from the proceeds of additional Revolving Credit Loans made hereunder (reflecting such increase in Revolving Credit Commitments), which prepayment shall be accompanied by accrued interest on the Revolving Credit Loans being prepaid and any costs incurred by any Lender in accordance with Section 3.05.  The Administrative Agent and the Lenders hereby agree that the minimum borrowing, pro rata borrowing and pro rata payment requirements contained elsewhere in this Agreement shall not apply to the transactions effected pursuant to the immediately preceding sentence.

(f)           This Section 2.14 shall supersede any provisions in Section 2.13 or 10.01 to the contrary.

Section 2.15.   Currency Equivalents
 
(a)           The Administrative Agent shall determine the Dollar Amount of each Loan denominated in an Alternative Currency and L/C Obligation in respect of Letters of Credit denominated in an Alternative Currency (i) in the case of any Revolving Credit Facility or Term Loan, as of the date of incurrence of such Term Loan, (ii) in the case of any Swing Line Loan denominated in Alternative Currency, as of the date of incurrence of such Swing Line Loan, and (iii) otherwise, (A) as of the first day of each Interest Period applicable thereto and (B) as of the end of each fiscal quarter of the Company and shall promptly notify the Borrowers Agent and the Lenders of each Dollar Amount so determined by it.  Each such determination shall be based on the Exchange Rate (x) on the date of the related Committed Loan Notice for purposes of the initial such determination for any Loan denominated in Alternative Currency and (y) on the fourth Business Day prior to the date as of which such Dollar Amount is to be determined, for purposes of any subsequent determination.

(b)           If after giving effect to any such determination of a Dollar Amount, the aggregate Outstanding Amount of the Revolving Credit Loans of any Facility and, in the case of the Primary Revolving Credit Facility, the Swing Line Loans and the L/C Obligations exceeds the aggregate Revolving Credit Commitments under such Facility then in effect by 5% or more, one or more of the applicable Borrowers shall, within five (5) Business Days of receipt of notice thereof from the Administrative Agent setting forth such calculation in reasonable detail, prepay or cause to be prepaid outstanding Revolving Credit Loans under such Facility and/or Swing Line Loans (in the case of the Primary Revolving Credit Facility) (as selected by the Borrowers Agent and notified to the Lenders through the Administrative Agent not less than three (3) Business Days prior to the date of prepayment) or take other action (including, in the applicable Borrowers discretion, cash collateralization of L/C Obligations in amounts from time to time equal to such excess) to the extent necessary to eliminate any such excess.

 
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ARTICLE III.

Taxes, Increased Costs Protection and Illegality

Section 3.01.   Taxes

(a)           Except as required by law, any and all payments by the Loan Parties to or for the account of any Agent or any Lender (which, for purposes of this Section 3.01, shall include any L/C Issuer and the Swing Line Lender) under any Loan Document shall be made free and clear of and without deduction for any Taxes.  If any Loan Party or other applicable withholding agent shall be required by any Laws to withhold or deduct any Indemnified Taxes or Other Taxes from or in respect of any sum payable under any Loan Document to or for the account of any Agent or any Lender, (i) the sum payable by the applicable Loan Party shall be increased as necessary so that after making all required withholdings or deductions of Indemnified Taxes or Other Taxes (including withholdings or deductions applicable to additional sums payable under this Section 3.01), each Lender receives an amount equal to the sum it would have received had no such withholdings or deductions of Indemnified Taxes or Other Taxes been made, (ii) such Loan Party or other applicable withholding agent (as applicable) shall make such withholdings or deductions, (iii) such Loan Party or other applicable withholding agent (as applicable) shall pay the full amount withheld or deducted to the relevant taxation authority or other authority in accordance with applicable Law, and (iv) within thirty (30) days after the date of such payment (or, if receipts or evidence are not available within thirty (30) days, as soon as possible thereafter), if a Loan Party made the withholding or deduction, such Loan Party shall furnish to the Administrative Agent or affected Lender (as the case may be) the original or a copy of a receipt evidencing payment thereof or other evidence reasonably acceptable to such Agent or Lender.

(b)           The Loan Parties agree to pay any and all present or future stamp, court or documentary taxes and any other excise, property, intangible, mortgage recording or similar taxes or charges or levies which arise from any payment made under any Loan Document or from the execution, delivery, performance, enforcement or registration of, or otherwise with respect to, any Loan Document (hereinafter referred to as Other Taxes) except for any such tax resulting from an assignment or participation by a Lender or Participant (Assignment Tax), but only if such Assignment Taxes result from a connection between the jurisdiction imposing such tax and such Lender or Participant other than any connections arising solely from such Lender or Participant having executed, delivered, been a party to, received or perfected a security interest under or performed its obligations under,  received payment under or enforced, this Agreement or any other Loan Document.

(c)           Each Loan Party jointly and severally agrees to indemnify and hold harmless each Agent and each Lender for (i) the full amount of Indemnified Taxes and Other Taxes payable by such Agent or such Lender (including Indemnified Taxes or Other Taxes imposed directly on the Agent or Lender) whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant taxing authority and (ii) any expenses (excluding any Excluded Taxes) arising therefrom or with respect thereto.  A certificate as to the amount of such payment or liability, along with a reasonably detailed description of such payment or liability, delivered to the applicable Loan Party shall be conclusive absent manifest error.

 
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(d)           Each Foreign Lender with respect to a Loan to a U.S. Borrower shall, to the extent it is legally entitled to do so, (v) on or prior to the Closing Date in the case of each Foreign Lender that is a signatory hereto, (w) on or prior to the date of the Assignment and Assumption pursuant to which such Foreign Lender becomes a Lender, (x) on or prior to the date on which any such form or certification expires or becomes obsolete or incorrect, (y) after the occurrence of any event involving such Foreign Lender that requires a change in the most recent form or certification previously delivered by it to the U.S. Borrower and the Administrative Agent, and (z) from time to time if reasonably requested by the U.S. Borrower or the Administrative Agent, provide the Administrative Agent and the U.S. Borrower with two completed originals of each of the following, as applicable:

(i)     IRS Form W-8ECI (claiming exemption from U.S. federal withholding tax because the income is effectively connected with a U.S. trade or business) or any successor form;

(ii)    IRS Form W-8BEN (claiming exemption from, or a reduction of, U.S. federal withholding tax under an income tax treaty) or any successor form;

(iii)   in the case of a Foreign Lender claiming exemption under Section 871(h) or 881(c) of the Code, an IRS Form W-8BEN or any successor form and a certificate substantially in the form of Exhibit J (to claim exemption from U.S. federal withholding tax under the portfolio interest exemption); or

(iv)   any other applicable form, certificate or document prescribed by the IRS certifying as to such Foreign Lenders entitlement to such exemption from U.S. federal withholding tax or reduced rate with respect to specified payments to be made by the U.S. Borrower to such Foreign Lender under the Loan Documents.

To the extent it is legally entitled to do so, any Foreign Lender with respect to a Loan to a U.S. Borrower which Lender does not act or ceases to act for its own account with respect to any portion of any sums paid or payable to such Foreign Lender under any of the Loan Documents shall deliver to Administrative Agent and the U.S. Borrower, on or prior to the date such Foreign Lender becomes a Lender, or on or prior to such later date when such Foreign Lender ceases to act for its own account with respect to any portion of any such sums paid or payable (and on or prior to the date on which any such form or certification expires or becomes obsolete or incorrect, after the occurrence of any event involving such Foreign Lender that requires a change in the most recent form or certification previously delivered by it to the U.S. Borrower and the Administrative Agent, and from time to time thereafter if reasonably requested by the U.S. Borrower or Administrative Agent), two completed originals of IRS Form W-8IMY (or any successor forms) properly completed and duly executed by such Foreign Lender, together with all information required to be transmitted with such form, and any other certificate or statement of exemption required under the Code or reasonably requested by the Borrowers Agent or the Administrative Agent, to establish that such Foreign Lender is not acting for its own account with respect to a portion of any such sums payable to such Foreign Lender and to establish that such portion may be received without deduction for, or at a reduced rate of, U.S. federal withholding tax (including, if the Foreign Lender is claiming the portfolio interest exemption with respect to one or more of its beneficial owners, a certificate substantially in the form of Exhibit J with respect to such beneficial owners).

In addition to the foregoing, any Lender that is entitled to an exemption from or reduction of withholding tax under the law of any jurisdiction in which any Borrower is located or doing business, or any treaty to which such jurisdiction is a party, with respect to payments under this Agreement or any other Loan Document shall deliver to such Borrower and the Administrative Agent, at the time or times prescribed by applicable law, such properly completed and executed documentation prescribed by applicable law or reasonably requested by such Borrower or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate, provided that such Lender has received written notice from such Borrower or the Administrative Agent advising it of the availability of such exemption or reduction and supplying all applicable documentation.

 
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The Administrative Agent shall, to the extent it is legally entitled to do so, provide the U.S. Borrower with, (i) with respect to any amount received on behalf of a Lender, one completed original of IRS Form W-9 or W-8IMY, as applicable, (ii) with respect to any fee received by the Administrative Agent hereunder, one completed original of IRS Form W-9 or applicable W-8 and (iii) any other documentation reasonably requested by the U.S. Borrower as will permit any payment of such fee to be made without withholding or at a reduced rate of withholding.  Thereafter and from time to time, the Administrative Agent shall, to the extent it is legally entitled to do so, provide the U.S. Borrower such additional duly completed and signed copies of one or more of such forms (or such successor forms) or documentations on or prior to the date on which any such form or documentation expires or becomes obsolete or incorrect.

(e)           Each Lender that is a United States person within the meaning of Section 7701(a)(30) of the Code shall, on the date such Lender becomes a party hereto, provide the Borrowers Agent and the Administrative Agent with two completed originals of IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding and shall update such form from time to time if such form expires or becomes obsolete or incorrect.

(f)           Any Lender or Agent claiming any additional amounts or indemnification payments pursuant to this Section 3.01 shall use its reasonable efforts (if requested by the Borrowers Agent) to change the jurisdiction of its Lending Office or take other steps (in each case, at Borrowers expense) if such a change or other steps would reduce any such additional amounts or indemnification payments (or any similar amount that may thereafter accrue) and would not, in the sole determination of such Lender or Agent, result in any unreimbursed cost or expense or be otherwise disadvantageous to such Lender or Agent.

(g)           If any Lender or Agent determines, in its sole good faith discretion, that it has received a refund in respect of any Indemnified Taxes or Other Taxes as to which indemnification or additional amounts have been paid to it by the Borrowers pursuant to this Section 3.01, it shall promptly remit the portion of such refund to the applicable Loan Party that will leave it in no better or worse after-tax position (taking into account all out-of-pocket expenses of the Lender or Agent, as the case may be, than if the Indemnified Tax or Other Tax giving rise to such refund had not been imposed in the first instance); provided that the Loan Parties, upon the request of the Lender or Agent, as the case may be, agree promptly to return such refund (plus any penalties, interest or other charges imposed by the relevant taxing authority) to such party in the event such party is required to repay such refund to the relevant taxing authority.  This clause (g) shall not be construed to require any Lender or Agent to make available its tax returns (or any other information relating to its taxes that it deems confidential) to any Loan Party or any other Person.

Section 3.02.   Illegality
 
If any Lender determines that any Law has made it unlawful or otherwise prohibited, or that any Governmental Authority has asserted that it is unlawful or otherwise prohibited, for any Lender or its applicable Lending Office to make, maintain or fund Eurocurrency Rate Loans of any currency, or to determine or charge interest rates based upon the Eurocurrency Rate for any currency, then, on notice thereof by such Lender to the Borrowers Agent through the Administrative Agent, any obligation of such Lender to make or continue Eurocurrency Rate Loans of such currency or to convert Base Rate Loans to Eurocurrency Rate Loans shall be suspended until such Lender notifies the Administrative Agent and the Borrowers Agent that the circumstances giving rise to such determination no longer exist.  Upon receipt of such notice, the Borrowers Agent shall upon demand from such Lender (with a copy to the Administrative Agent), prepay or, if applicable, convert all applicable Eurocurrency Rate Loans of such Lender to Base Rate Loans, either on the last day of the Interest Period therefor, if such Lender may in compliance with applicable Law continue to maintain such Eurocurrency Rate Loans to such day, or promptly, if such Lender may not in compliance with applicable Law continue to maintain such Eurocurrency Rate Loans.  Upon any such prepayment or conversion, such Borrower shall also pay accrued interest on the amount so prepaid or converted and all amounts due, if any, in connection with such prepayment or conversion under Section 3.05.  Each Lender agrees to designate a different Lending Office if such designation will avoid the need for such notice and will not, in the good faith judgment of such Lender, otherwise be materially disadvantageous to such Lender.

 
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Section 3.03.   Inability To Determine Rates
 
If the Required Lenders determine that for any reason adequate and reasonable means do not exist for determining the applicable Eurocurrency Rate for any requested Interest Period with respect to a proposed Eurocurrency Rate Loan, or that the Eurocurrency Rate for any requested Interest Period with respect to a proposed Eurocurrency Rate Loan does not adequately and fairly reflect the cost to such Lenders of funding such Loan, or that Dollar or other applicable deposits are not being offered to banks in the London interbank Eurodollar, or other applicable, market for the applicable amount and the Interest Period of such Eurocurrency Rate Loan, the Administrative Agent will promptly so notify the Borrowers Agent and each Lender.  Thereafter, the obligation of the Lenders to make or maintain Eurocurrency Rate Loans of any applicable currency shall be suspended until the Administrative Agent (upon the instruction of the Required Lenders) revokes such notice.  Upon receipt of such notice, the Borrowers Agent may revoke any pending request for a Borrowing of, conversion to or continuation of such Eurocurrency Rate Loans or, failing that, will be deemed to have converted such request, if applicable, into a request for a Borrowing of Base Rate Loans in the amount specified therein.

Section 3.04.   Increased Cost and Reduced Return; Capital Adequacy; Reserves on Eurocurrency Rate Loans
 
(a)           If any Lender determines that as a result of a Change in Law after the Closing Date, or such Lenders compliance therewith, there shall be any increase in the cost to such Lender of agreeing to make or making, funding or maintaining any Eurocurrency Rate Loans (or, in the case of any Taxes not excluded below, any Loans) or (as the case may be) issuing or participating in Letters of Credit, or a reduction in the amount received or receivable by such Lender in connection with any of the foregoing (excluding for purposes of this Section 3.04(a) any such increased costs or reduction in amount resulting from (i) Indemnified Taxes or Excluded Taxes, (ii) reserve requirements contemplated by Section 3.04(c), (iii) the requirements of the European Central Bank reflected in the Mandatory Cost (other than as set forth below) or the Mandatory Cost, as calculated hereunder, does not represent the cost to such Lender of complying with the requirements of the Financial Services Authority or the European Central Bank in relation to its making, funding or maintaining of Eurocurrency Rate Loans and (iv) the implementation or application of or compliance with the International Convergence of Capital Measurement and Capital Standards, a Revised Framework published by the Basel Committee on Banking Supervision in June 2004 in the form existing on the date of this Agreement (Basel II) or any other law or regulation which implements Basel II (whether such implementation, application or compliance is by a government, regulator, the Lenders or any of its Affiliates or the Agents or any of its Affiliates)), then from time to time within fifteen (15) days after demand by such Lender setting forth in reasonable detail such increased costs (with a copy of such demand to the Administrative Agent given in accordance with Section 3.06), the applicable Borrower shall pay to such Lender such additional amounts as will compensate such Lender for such increased cost or reduction or, if applicable, the portion of such cost that is not represented by the Mandatory Cost.

 
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(b)           If any Lender determines that the introduction of any Law regarding capital adequacy or any change therein or in the interpretation thereof, in each case after the Closing Date, or compliance by such Lender (or its Lending Office) therewith, has the effect of reducing the rate of return on the capital of such Lender or any corporation controlling such Lender as a consequence of such Lenders obligations hereunder (taking into consideration its policies with respect to capital adequacy and such Lenders desired return on capital), then from time to time upon demand of such Lender setting forth in reasonable detail the charge and the calculation of such reduced rate of return (with a copy of such demand to the Administrative Agent given in accordance with Section 3.06), the applicable Borrower shall pay to such Lender such additional amounts as will compensate such Lender for such reduction within fifteen (15) days after receipt of such demand.

(c)           Each Borrower shall pay to each Lender, (i) as long as such Lender shall be required to maintain reserves with respect to liabilities or assets consisting of or including Eurocurrency funds or deposits, additional interest on the unpaid principal amount of each applicable Eurocurrency Rate Loan of such Borrower equal to the actual costs of such reserves allocated to such Loan by such Lender (as determined by such Lender in good faith, which determination shall be conclusive in the absence of manifest error), and (ii) as long as such Lender shall be required to comply with any reserve ratio requirement or analogous requirement of any other central banking or financial regulatory authority imposed in respect of the maintenance of the Commitments or the funding of any Eurocurrency Rate Loans of such Borrower, such additional costs (expressed as a percentage per annum and rounded upwards, if necessary, to the nearest five decimal places) equal to the actual costs allocated to such Commitment or Loan by such Lender (as determined by such Lender in good faith, which determination shall be conclusive absent manifest error) which in each case shall be due and payable on each date on which interest is payable on such Loan, provided the Borrowers Agent shall have received at least fifteen (15) days prior notice (with a copy to the Administrative Agent) of such additional interest or cost from such Lender.  If a Lender fails to give notice fifteen (15) days prior to the relevant Interest Payment Date, such additional interest or cost shall be due and payable fifteen (15) days from receipt of such notice.

(d)           Failure or delay on the part of any Lender to demand compensation pursuant to this Section 3.04 shall not constitute a waiver of such Lenders right to demand such compensation.

(e)           If any Lender requests compensation under this Section 3.04, then such Lender will, if requested by the Borrowers Agent, use commercially reasonable efforts to designate another Lending Office for any Loan or Letter of Credit affected by such event; provided that such efforts are made on terms that, in the reasonable judgment of such Lender, cause such Lender and its Lending Office(s) to suffer no material economic, legal or regulatory disadvantage, and providedfurther that nothing in this Section 3.04(e) shall affect or postpone any of the Obligations of such Borrower or the rights of such Lender pursuant to Section 3.04(a), (b), (c) or (d).

 
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Section 3.05.   Funding Losses
 
Upon demand of any Lender (with a copy to the Administrative Agent) from time to time, each Borrower shall promptly compensate such Lender for and hold such Lender harmless from any loss, cost or expense actually incurred by it as a result of:

(a)           (i) any continuation, conversion, payment or prepayment of any Eurocurrency Rate Loan of such Borrower on a day other than the last day of the Interest Period for such Loan or (ii) the CAM Exchange (in each case, whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise); or

(b)           any failure by the applicable Borrower (for a reason other than the failure of such Lender to make a Loan) to prepay, borrow, continue or convert any Eurocurrency Rate Loan of such Borrower on the date or in the amount notified by the Borrowers Agent;

including any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain such Loan or from fees payable to terminate the deposits from which such funds were obtained.

For purposes of calculating amounts payable by any Borrower to the Lenders under this Section 3.05, each Lender shall be deemed to have funded each Eurocurrency Rate Loan made by it at the Eurocurrency Rate for such Loan by a matching deposit or other borrowing in the London interbank Eurodollar market for a comparable amount and for a comparable period, whether or not such Eurocurrency Rate Loan was in fact so funded.

Section 3.06.   Matters Applicable to All Requests for Compensation.

(a)           Any Agent or any Lender claiming compensation under this Article III  shall deliver a certificate to the Borrowers Agent setting forth the additional amount or amounts to be paid to it hereunder which shall be conclusive in the absence of manifest error.  In determining such amount, such Agent or such Lender may use any reasonable averaging and attribution methods.

(b)           With respect to any Lenders claim for compensation under Section 3.01, 3.02, 3.03 or 3.04, the Borrowers Agent shall not be required to compensate such Lender for any amount incurred more than one hundred and twenty (120) days prior to the date that such Lender notifies the applicable Borrower of the event that gives rise to such claim; provided that, if the circumstance giving rise to such claim is retroactive, then such 120-day period referred to above shall be extended to include the period of retroactive effect thereof.  If any Lender requests compensation by the Borrowers under Section 3.04, the Borrowers Agent may, by notice to such Lender (with a copy to the Administrative Agent), suspend the obligation of such Lender to make or continue from one Interest Period to another applicable Eurocurrency Rate Loans, or, if applicable, to convert Base Rate Loans into Eurocurrency Rate Loans, until the event or condition giving rise to such request ceases to be in effect (in which case the provisions of Section 3.06(c) shall be applicable); provided that such suspension shall not affect the right of such Lender to receive the compensation so requested.

(c)           If the obligation of any Lender to make or continue any Eurocurrency Rate Loan, or to convert Base Rate Loans into Eurocurrency Rate Loans shall be suspended pursuant to Section 3.06(b) hereof, such Lenders applicable Eurocurrency Rate Loans shall be automatically converted into Base Rate Loans (or, if such conversion is not possible, repaid) on the last day(s) of the then current Interest Period(s) for such Eurocurrency Rate Loans (or, in the case of an immediate conversion required by Section 3.02, on such earlier date as required by Law) and, unless and until such Lender gives notice as provided below that the circumstances specified in Section 3.01, 3.02, 3.03 or 3.04 hereof that gave rise to such conversion no longer exist:

 
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(i)     to the extent that such Lenders Eurocurrency Rate Loans have been so converted, all payments and prepayments of principal that would otherwise be applied to such Lenders applicable Eurocurrency Rate Loans shall be applied instead to its Base Rate Loans; and

(ii)    all Loans that would otherwise be made or continued from one Interest Period to another by such Lender as Eurocurrency Rate Loans shall be made or continued instead as Base Rate Loans (if possible), and all Base Rate Loans of such Lender that would otherwise be converted into Eurocurrency Rate Loans shall remain as Base Rate Loans.

(d)           If any Lender gives notice to the Borrowers (with a copy to the Administrative Agent) that the circumstances specified in Section 3.01, 3.02, 3.03 or 3.04 hereof that gave rise to the conversion of any of such Lender s Eurocurrency Rate Loans pursuant to this Section 3.06 no longer exist (which such Lender agrees to do promptly upon such circumstances ceasing to exist) at a time when Eurocurrency Rate Loans made by other Lenders under the applicable Facility are outstanding, if applicable, such Lenders Base Rate Loans shall be automatically converted, on the first day(s) of the next succeeding Interest Period(s) for such outstanding Eurocurrency Rate Loans, to the extent necessary so that, after giving effect thereto, all Loans held by the Lenders holding Eurocurrency Rate Loans (in Dollars) under such Facility and by such Lender are held pro rata (as to principal amounts, interest rate basis, and Interest Periods) in accordance with their respective Commitments for the applicable Facility.

Section 3.07.   Replacement of Lenders Under Certain Circumstances
 
(a)           If at any time (i) the Borrowers become obligated to pay additional amounts or indemnity payments described in Section 3.01 or 3.04 as a result of any condition described in such Sections or any Lender ceases to make any Eurocurrency Rate Loans as a result of any condition described in Section 3.02 or Section 3.04, (ii) any Lender becomes a Defaulting Lender or (iii) any Lender becomes a Non-Consenting Lender, then the Borrowers Agent may, on ten (10) Business Days prior written notice to the Administrative Agent and such Lender, replace such Lender by causing such Lender to (and such Lender shall be obligated to) assign pursuant to Section 10.07(b) (with the assignment fee to be paid by the Company in each such instance) all of its rights and obligations under this Agreement (in respect of any applicable Facility only in the case of clause (i) or, with respect to a Class vote, clause (iii)) to one or more Assignees; provided that neither the Administrative Agent nor any Lender shall have any obligation to the Borrowers to find a replacement Lender or other such Person; and providedfurther that (A) in the case of any such assignment resulting from a Lender becoming a Non-Consenting Lender, the applicable Assignees shall have agreed to, and shall be sufficient (together with all other consenting Lenders) to cause the adoption of, the applicable departure, waiver or amendment of the Loan Documents and (B) in the case of any such assignment resulting from a claim for compensation under Section 3.04 or payments required to be made pursuant to Section 3.01, such assignment will result in a reduction in such compensation or payments.

(b)           Any Lender being replaced pursuant to Section 3.07(a) above shall (i) execute and deliver an Assignment and Assumption with respect to such Lenders applicable Commitment and outstanding Loans and participations in L/C Obligations and Swing Line Loans in respect thereof, and (ii) deliver any Notes evidencing such Loans to the applicable Borrowers or to the Administrative Agent.  Pursuant to such Assignment and Assumption, (A) the assignee Lender shall acquire all or a portion, as the case may be, of the assigning Lenders Commitment and outstanding Loans and participations in L/C Obligations and Swing Line Loans, (B) all obligations of the Borrowers owing to the assigning Lender relating to the Loans, Commitments and participations so assigned shall be paid in full by the assignee Lender to such assigning Lender concurrently with such Assignment and Assumption and (C) upon such payment and, if so requested by the assignee Lender, delivery to the assignee Lender of the appropriate Note or Notes executed by the applicable Borrowers, the assignee Lender shall become a Lender hereunder and the assigning Lender shall cease to constitute a Lender hereunder with respect to such assigned Loans, Commitments and participations, except with respect to indemnification provisions under this Agreement, which shall survive as to such assigning Lender.  In connection with any such replacement, if any such Non-Consenting Lender or Defaulting Lender does not execute and deliver to the Administrative Agent a duly executed Assignment and Assumption reflecting such replacement within five (5) Business Days of the date on which the assignee Lender executes and delivers such Assignment and Assumption to such Non-Consenting Lender or Defaulting Lender, then such Non-Consenting Lender or Defaulting Lender shall be deemed to have executed and delivered such Assignment and Assumption without any action on the part of the Non-Consenting Lender or Defaulting Lender.

 
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(c)           Notwithstanding anything to the contrary contained above, any Lender that acts as an L/C Issuer may not be replaced hereunder at any time that it has any Letter of Credit outstanding hereunder unless arrangements reasonably satisfactory to such L/C Issuer (including the furnishing of a back-up standby letter of credit in form and substance, and issued by an issuer reasonably satisfactory to such L/C Issuer or the depositing of cash collateral into a cash collateral account in amounts and pursuant to arrangements reasonably satisfactory to such L/C Issuer) have been made with respect to each such outstanding Letter of Credit and the Lender that acts as the Administrative Agent may not be replaced hereunder except in accordance with the terms of Section 9.09.

(d)           In the event that (i) the Borrowers or the Administrative Agent has requested that the Lenders consent to a departure or waiver of any provisions of the Loan Documents or agree to any amendment thereto, (ii) the consent, waiver or amendment in question requires the agreement of all affected Lenders in accordance with the terms of Section 10.01 or all the Lenders with respect to a certain Class of the Loans and (iii) the Required Lenders or the Required Class Lenders of the relevant Class have agreed to such consent, waiver or amendment, then any Lender who does not agree to such consent, waiver or amendment shall be deemed a Non-Consenting Lender.

Section 3.08.   Survival
 
All of the Borrowers obligations under this Article III shall survive termination of the Aggregate Commitments and repayment of all other payment Obligations hereunder.

Section 3.09.   Calculation of Applicable Rate
 
In the event that any financial statement delivered pursuant to Section 6.01 or Compliance Certificate delivered pursuant to Section 6.02(a) is shown to be inaccurate (regardless of whether this Agreement or the Commitments are in effect when such inaccuracy is discovered), and such inaccuracy, if corrected, would have led to a higher Applicable Rate for any period (an Applicable Period) than the Applicable Rate applied for such Applicable Period, then (i) the Company shall as promptly as reasonably practicable deliver to the Administrative Agent a correct Compliance Certificate for such Applicable Period, (ii) the Applicable Rate shall be determined by reference to the corrected Compliance Certificate (but in no event shall the Lenders owe any amounts to any Borrower), and (iii) such Borrower shall immediately pay to the Administrative Agent the additional interest owing as a result of such increased Applicable Rate for such Applicable Period, which payment shall be promptly applied by the Administrative Agent in accordance with the terms hereof.  This Section 3.09 shall not limit the rights of the Administrative Agent and the Lenders hereunder.

 
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ARTICLE IV.

Conditions Precedent to Credit Extensions

Section 4.01.   Conditions of Initial Credit Extension
 
The obligation of each Lender to make the Credit Extensions on the Closing Date hereunder is subject to satisfaction of the following conditions precedent:

(a)           The Administrative Agents receipt of the following, each of which shall be originals or facsimiles (followed promptly by originals) unless otherwise specified, each properly executed by a Responsible Officer of the signing Loan Party to the extent such Loan Party is a party thereto, each in form and substance reasonably satisfactory to the Administrative Agent and its legal counsel:

(i)             executed counterparts of this Agreement (including by all Lenders party hereto);

(ii)   a Note executed by each relevant Borrower in favor of each Lender that has requested a Note more than three (3) Business Days prior to the Closing Date;

(iii)   except where delivery after the Closing Date is contemplated by Section 6.14(a), each Collateral Document set forth on Schedule 1.01G, duly executed by each Loan Party party thereto, together with:

(A)   certificates, if any, representing the Pledged Equity referred to therein accompanied, if applicable, by undated stock powers executed in blank and instruments evidencing the Pledged Debt indorsed in blank, and

(B)           where appropriate and customary in each relevant jurisdiction where the Guarantors are organized, evidence that all other actions, recordings and filings that the Administrative Agent may acting reasonably deem necessary to satisfy the Collateral and Guarantee Requirement (and as have been notified to the Borrowers Agent or their counsel no later than three (3) Business Days prior to the Closing Date) shall have been taken, completed or otherwise provided for in a manner reasonably satisfactory to the Administrative Agent;

(iv)   such certificates of resolutions or other action, incumbency certificates and/or other certificates of Responsible Officers of each Loan Party as the Administrative Agent may reasonably require (and as have been notified to the Borrowers Agent no later than three (3) Business Days before the Closing Date) evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with this Agreement and the other Loan Documents to which such Loan Party is a party or is to be a party on the Closing Date;

 
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(v)   (A)  the executed legal opinion of Skadden, Arps, Slate, Meagher & Flom LLP, special U.S. counsel to the Company and certain other Loan Parties, substantially in the form of Exhibit H; and

(B)           the executed legal opinion of local counsel to the Lenders or Loan Parties, as applicable, in the jurisdictions listed on Schedule 4.01(a)(v)(B), in form and substance reasonably satisfactory to the Administrative Agent;

(vi)   a certificate signed by a Company Financial Officer certifying that since the date of the Acquisition Agreement there has been no Material Adverse Change;

(vii)          a certificate signed by a Company Financial Officer attesting to the Solvency of the Loan Parties (taken as a whole) after giving effect to the Transactions, from;

(viii)         except as contemplated by Section 6.14(a), evidence that all insurance (including title insurance) required to be maintained pursuant to the Loan Documents has been obtained and is in effect and that the Collateral Agent has been named as loss payee, mortgagee and additional insured under each insurance policy with respect to such insurance as to which the Collateral Agent shall have requested to be so named;

(ix)   a Committed Loan Notice relating to the Credit Extensions made on the Closing Date;

(x)             the Intercreditor Agreement, executed and delivered by a duly authorized officer of the applicable Loan Parties and of the Collateral Agent and other agents party thereto; and

(xi)            the non-U.S. documentation set forth on Schedule 4.01(a)(xi).
 
(b)           prior to or substantially simultaneously with the Credit Extensions made on the Closing Date, arrangements reasonably satisfactory to the Arrangers shall have been made to pay all fees and expenses (to the extent invoices for such expenses have been provided at least five (5) Business Days prior to the Closing Date) required to be paid hereunder by the Company or any Borrower from the Credit Extensions made on the Closing Date.

(c)           prior to or substantially simultaneously with the Credit Extensions made on the Closing Date, the Acquisition shall have been consummated in accordance with the terms of the Acquisition Agreement (except for the filing of the merger certificate which shall occur substantially concurrently), without giving effect to any amendments or waivers thereto (excluding any waiver by Lyondell of the conditions set forth in Section 6.3(a)(i) of the Acquisition Agreement) that are materially adverse to the Lenders made without reasonable consent of the Arrangers (such consent not to be unreasonably withheld or delayed), and in compliance with applicable material Laws and regulatory approvals.

(d)           prior to or substantially simultaneously with the Credit Extensions for Tranche A Term Loans made on the Closing Date, the Company shall have received at least $8,000,000,000 in gross cash proceeds from the issuance of the Senior Second Interim Loans.

(e)           the Company and its Subsidiaries shall have outstanding no Financial Indebtedness or Disqualified Equity Interests other than (A) the Loans and other Obligations, (B) the Senior Second Lien Interim Loans, (C) the Existing Notes, (D) Existing Indebtedness (including letters of credit issued and outstanding on the Closing Date), (E) the Asset Backed Credit Facility, Receivables Financing and Securitization Transactions and (F) liabilities incurred in the ordinary course of business and (G) liabilities disclosed in the Pro Forma Financial Statements, in each case to the extent permitted by Section 7.03.

 
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(f)           the Administrative Agent shall have received all documentation and other information mutually agreed to be required by regulatory authorities under applicable know your customer and anti-money laundering rules and regulations, including the United States PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the USA Patriot Act), including the information described in Section 10.20.

Section 4.02.   Conditions to All Credit Extensions
 
The obligation of each Lender and each L/C Issuer to make any Credit Extension (including any Credit Extension made pursuant to Section 2.14 and including, in the case of Sections 4.02(a) and (c)), the Credit Extensions made on the Closing Date) is subject to the satisfaction of the following conditions precedent; provided that a conversion of Loans to the other Type or a continuation of Eurocurrency Rate Loans shall not be deemed a Credit Extension for the purposes of this Section 4.02.

(a)           The representations and warranties of each Borrower and each other Loan Party contained in Article V or any other Loan Document shall be true and correct in all material respects on and as of the date of such Credit Extension (except that the representations contained in Sections 5.02, 5.04 and 5.13 shall be the only representations the accuracy of which shall be a condition to the Credit Extensions made on the Closing Date); provided that to the extent that such representations and warranties specifically refer to an earlier date, they shall be true and correct in all material respects as of such earlier date; provided,further, that any representation and warranty that is qualified as to materiality, Material Adverse Effect or similar language shall be true and correct in all respects on such respective dates.

(b)           Except in the case of the Credit Extensions made on the Closing Date, no Default shall exist or would result from such proposed Credit Extension or from the application of the proceeds therefrom.

(c)           The Administrative Agent and, if applicable, the relevant L/C Issuer or the relevant Swing Line Lender shall have received a Request for Credit Extension in accordance with the requirements hereof.

Each Request for Credit Extension (other than a Committed Loan Notice requesting only a conversion of Loans to the other type or a continuation of Eurocurrency Rate Loans) submitted by the Borrowers Agent shall be deemed to be a representation and warranty that the conditions specified in Sections 4.02(a) and (other than in respect of the Credit Extensions made on the Closing Date) (b) have been satisfied on and as of the date of the applicable Credit Extension.
 
  ARTICLE V.

  Representations and Warranties

Each Loan Party represents and warrants to the Agents and the Lenders that:

 
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Section 5.01.   Existence, Qualification and Power; Compliance with Laws
 
Subject to the Legal Reservations, each Loan Party and each Material Subsidiary (a) is a Person duly organized or formed, validly existing and in good standing, in each case where such concept exists, under the Laws of the jurisdiction of its incorporation or organization, (b) has all requisite constitutional, corporate or other similar power and authority to (i) own or lease its material assets and carry on its business substantially as currently conducted and (ii) execute, deliver and perform its obligations under the Loan Documents to which it is a party, (c) is duly qualified and in good standing, in each case where such concept exists, under the Laws of each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification, (d) is in compliance with all Laws, orders, writs and injunctions and (e) has all requisite governmental licenses, authorizations, consents and approvals to operate its business as currently conducted; except in each case referred to in clause (c), (d) or (e), to the extent that failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 5.02.   Authorization; No Contravention
 
The execution, delivery and performance by each Loan Party of each Loan Document to which such Person is a party, and the consummation of the Transaction, are within such Loan Partys corporate or other powers, have been duly authorized by all necessary corporate or other organizational action, and do not (a) contravene the terms of any of such Persons Organization Documents; (b) in any material way, conflict with or result in any breach or contravention of or the creation of any Lien under (other than as permitted by Section 7.01), or require any payment to be made under, (i) except payments as set forth in the funds flow memorandum dated the Closing Date and delivered to the Administrative Agent, any Contractual Obligation to which such Person is a party or affecting such Person or the properties of such Person or any of its Subsidiaries or (ii) any order in any material way, injunction, writ or decree of any Governmental Authority or any arbitral award to which such Person or its property is subject in any material way; or (c) violate any material Law in any material way; except with respect to any conflict, breach or contravention or payment (but not creation of Liens) referred to in clause (b)(i), to the extent that such conflict, breach, contravention, violation or payment could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 5.03.   Governmental Authorization; Other Consents

Subject to the Legal Reservations, no material approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary for or required of a Loan Party in connection with (a) the execution, delivery or performance by, or enforcement against, any Loan Party of this Agreement or any other Loan Document, or for the consummation of the Transaction, (b) the grant by any Loan Party of the Liens granted by it pursuant to the Collateral Documents, (c) the perfection or maintenance of the Liens created under the Collateral Documents (including the priority thereof) or (d) the exercise by the Administrative Agent or any Lender of its rights under the Loan Documents or the remedies in respect of the Collateral pursuant to the Collateral Documents, except for (i) filings, notices, consents and registrations necessary to perfect the Liens on the Collateral granted by the Loan Parties in favor of the Secured Parties, (ii) the approvals, consents, exemptions, authorizations, actions, notices and filings which have been duly obtained, taken, given or made and are in full force and effect (or, with respect to consummation of the Transaction, will be duly obtained, taken, given or made and will be in full force and effect, in each case within the time period required to be so obtained, taken, given or made); (iii) those approvals, consents, exemptions, authorizations or other actions, notices or filings, the failure of which to obtain or make could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect and (iv) those not required in accordance with Agreed Security Principles.

 
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Section 5.04.   Binding Effect

This Agreement and each other Loan Document dated on or prior to the date this representation is made has been duly executed and delivered by each Loan Party that is a party thereto.  This Agreement and each other Loan Document dated on or prior to the date this representation is made constitutes, a legal, valid and binding obligation of such Loan Party, enforceable against each Loan Party that is a party thereto in accordance with its terms, except as such enforceability may be limited by (i) Debtor Relief Laws and by general principles of equity, (ii) the need for filings and registrations necessary to perfect the Liens on the Collateral granted by the Loan Parties in favor of the Secured Parties and (iii) the effect of foreign Laws, rules and regulations as they relate to pledges of Equity Interests in Foreign Subsidiaries (other than those pledges made under the Laws of the jurisdiction of formation of the applicable Foreign Subsidiary).

Section 5.05.   Financial Statements; No Material Adverse Effect
 
(a)           (i)  The unaudited pro forma consolidated balance sheet of the Company and its Subsidiaries as of September 30, 2007 (including the notes thereto) (the Pro Forma Balance Sheet) and the related pro forma consolidated statement of income of the Company and its Subsidiaries for the twelve months ended September 30, 2007 together with the Pro Forma Balance Sheet, the Pro Forma Financial Statements), copies of which have heretofore been furnished to each Lender, have been prepared giving effect (as if such events had occurred on September 30, 2007 in the case of the Pro Forma Balance Sheet and January 1, 2006 in the case of the Pro Forma income statement) to the Transaction.  The Pro Forma Financial Statements have been prepared in good faith, based on assumptions believed by the Company to be reasonable as of the date of delivery thereof, and so far as it was then aware, shall present fairly in all material respects on a pro forma basis the estimated financial position of the Company and its Subsidiaries as of September 30, 2007 and their estimated results of operations for the period covered thereby, assuming that the events specified in the preceding sentence had actually occurred on September 30, 2007 or January 1, 2006 as the case may be.

(ii)    On the Closing Date, the Audited Financial Statements fairly present in all material respects the financial condition of the Company and its Subsidiaries as of the dates thereof and their results of operations for the period covered thereby in accordance with GAAP consistently applied throughout the periods covered thereby, except as otherwise expressly noted therein.  During the period from December 31, 2006 to and including the Closing Date, there has been (x) no sale, transfer or other disposition by the Company or any of its Subsidiaries of any material part of the business or property of the Company or any of its Subsidiaries, taken as a whole, and (y) no purchase or other acquisition by the Company or any of its Subsidiaries of any business or property (including any Equity Interests of any other Person) material in relation to the consolidated financial condition of the Company and its Subsidiaries, in each case, which is not reflected in the foregoing financial statements or in the notes thereto or has not otherwise been disclosed in writing to the Lenders prior to the Closing Date.

(b)           The forecasts of consolidated balance sheets, income statements and cash flow statements of the Company and its Subsidiaries which have been furnished to the Administrative Agent prior to the Closing Date have been prepared in good faith on the basis of the assumptions stated therein, which assumptions were believed to be reasonable at the time of preparation of such forecasts, it being understood that actual results may vary from such forecasts and that such variations may be material.

 
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(c)           Since the Closing Date, there has been no event or circumstance that could, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(d)           As of the Closing Date, the Company and its Subsidiaries shall have outstanding no Financial Indebtedness or Disqualified Equity Interests other than (i) the Loans and other Obligations, (ii) the Senior Second Lien Interim Loans, (iii) the Existing Notes, (iv) Existing Indebtedness (including letters of credit issued and outstanding on the Closing Date), (E) the Asset Backed Credit Facility, Receivables Financing and Securitization Transactions and (F) liabilities incurred in the ordinary course of business and (G) liabilities disclosed in the Pro Forma Financial Statements, in each case to the extent permitted by Section 7.03.

Section 5.06.   Litigation
 
There are no actions, suits, proceedings, claims or disputes pending or, to the knowledge of the Borrowers, threatened in writing or contemplated, at law, in equity, in arbitration or before any Governmental Authority, by or against any Loan Party or any of its Subsidiaries or against any of their properties or revenues that could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 5.07.   [Reserved]
 
Section 5.08.   Ownership of Property; Liens
 
(a)           Each Loan Party and each of its Subsidiaries has good record fee simple title (or otherwise holds full legal (and, if applicable, beneficial) ownership under applicable Law) to, or valid leasehold interests in, or easements or other limited property interests in, all Real Property necessary in the ordinary conduct of its business, free and clear of all Liens except for (x) minor defects in title that do not materially interfere with its ability to conduct its business or to utilize such assets for their intended purposes and (y) Liens permitted under Section 7.01 (other than Section 7.01(z)) and except where the failure to have such title could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(b)           As of the Closing Date, Schedule 7 to the Perfection Certificate dated the Closing Date contains a true and complete list of each interest in material Real Property owned or ground leased by the Loan Parties and describes the type of interest therein held by each such entity.

Section 5.09.   Environmental Matters
 
In each case, except as set forth on Schedule 5.09,

(a)           There are no claims, actions, suits, proceedings, demands, notices or, to the knowledge of any Loan Party and each of its Subsidiaries, investigations alleging actual or potential liability of any Loan Party or its Subsidiaries under or for violation of, or otherwise relating to, any Environmental Law that could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(b)           Except except for items that could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, (i) each Loan Party and each of their respective Subsidiaries and each of their Real Property, other assets and operations are in compliance with all applicable Environmental Laws, including all Environmental Permits; (ii) none of the properties currently or, to the knowledge of any Loan Party or any of its Subsidiaries, formerly, owned, leased or operated by any Loan Party or any of its Subsidiaries is listed or formally proposed for listing on the National Priority List under CERCLA, or the German register of contaminated sites (Altlaster register) or any analogous list maintained pursuant to any Environmental Law; (iii) all asbestos or asbestos-containing material on, at or in any property or facility currently owned, leased or operated by any Loan Party or any of its Subsidiaries is in compliance with Environmental Laws; and (iv) there has been no Release of Hazardous Materials by any Person on, at, under or from any property or facility currently or formerly owned, leased or operated by any Loan Party or any of its Subsidiaries and there has been no Release of Hazardous Materials by any Loan Party or any of its Subsidiaries at any other location.

 
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(c)           The properties and facilities owned, leased or operated by the Loan Parties and their Subsidiaries do not contain any Hazardous Materials in amounts or concentrations which (i) constitute a violation of, (ii) require investigation or other response or corrective action under, or (iii) could reasonably be expected to give rise to liability under, Environmental Laws, which violations, actions and/or liabilities, individually or in the aggregate, could, reasonably be expected to result in a Material Adverse Effect.

(d)           None of the Loan Parties or their Subsidiaries is undertaking or financing, in whole or in part, either individually or together with other potentially responsible parties, any investigation, response or other corrective action relating to any actual or threatened Release of Hazardous Materials at any property, facility or location pursuant to any Environmental Law except for such investigation, response or other corrective action that, individually or in the aggregate, could not, reasonably be expected to result in a Material Adverse Effect.

(e)           All Hazardous Materials generated, used, treated, handled or stored by any Loan Party or any of their Subsidiaries at, or transported by or on behalf of any Loan Party or any of their Subsidiaries to or from, any property or facility currently or formerly owned, leased or operated by any Loan Party or any of its Subsidiaries have been disposed of in a manner which could not reasonably be expected to result, individually or in the aggregate, in a Material Adverse Effect.

(f)           Except as could not reasonably be expected to result, individually or in the aggregate, in a Material Adverse Effect, none of the Loan Parties or any of their Subsidiaries has contractually assumed, and is not subject or a party to any judgment, order, decree or agreement which imposes, any liability or obligation under or relating to any Environmental Law.

Section 5.10.   Taxes
 
Except as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (a) each of the Loan Parties and each of their respective Subsidiaries has (i) timely filed all Tax returns required to be filed and all such tax returns are true and correct, (ii) timely paid all Taxes levied or imposed upon it or its properties (whether or not shown on a tax return), and (iii) satisfied all of its Tax withholding obligations; (b) there are no current, pending or threatened audits, examinations or claims with respect to Taxes of any Loan Party or any of their respective Subsidiaries and (c) none of the Loan Parties has ever participated in a listed transaction within the meaning of Treasury Regulation Section 1.6011-4.

Section 5.11.   ERISA Compliance
 
(a)           Except as could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect, each Plan is in compliance with the applicable provisions of ERISA, the Code and other Federal or state Laws.

 
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(b)           (i) No ERISA Event has occurred or is reasonably expected to occur and (ii) neither any Loan Party, any Subsidiary nor any ERISA Affiliate has engaged in a transaction that could be subject to Section 4069 or 4212(c) of ERISA, except, with respect to each of the foregoing clauses of this Section 5.11(b), as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(c)           Except where noncompliance could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect, (i) each Foreign Plan has been maintained in compliance with its terms and with the requirements of any and all applicable laws, statutes, rules, regulations and orders and has been maintained, where required, in good standing with applicable regulatory authorities, and (ii) neither any Loan Party nor any Subsidiary has incurred any obligation in connection with the termination of or withdrawal from any Foreign Plan.

Section 5.12.   Subsidiaries; Equity Interests
 
As of the Closing Date (after giving effect to any part of the Transaction that is consummated on or prior to the Closing Date), no Loan Party has any Subsidiaries other than dormant or inactive entities and those specifically disclosed in Schedule 5.12, and all of the outstanding Equity Interests owned by the Loan Parties (or a Subsidiary of any Loan Party) in such Subsidiaries have been validly issued and are fully paid and all Equity Interests owned by a Loan Party (or a Subsidiary of any Loan Party) in such Subsidiaries are owned free and clear of all Liens except (i) those created under the Collateral Documents and (ii) any Lien that is permitted under Section 7.01.  As of the Closing Date, Schedules 1(a) and 10(a) and (b) to the Perfection Certificate set forth the name, jurisdiction and ownership interest of each Loan Party in each direct Domestic Subsidiary or any material Foreign Subsidiary which is not dormant or inactive, including the percentage of such ownership, and no such entities have any direct or indirect Material Subsidiaries.

Section 5.13.   Margin Regulations; Investment Company Act
 
(a)           No Borrower is engaged nor will it engage, principally or as one of its important activities, in the business of purchasing or carrying margin stock (within the meaning of Regulation U issued by the FRB), or extending credit for the purpose of purchasing or carrying margin stock, and no proceeds of any Borrowings will be used for any purpose that violates Regulation U.

(b)           None of the Borrowers, any Person Controlling any Borrower, or any of the Subsidiaries of a Borrower is or is required to be registered as an investment company under the Investment Company Act of 1940.

Section 5.14.   Disclosure
 
As of the Closing Date, to the best of the Loan Parties knowledge, no report, financial statement, certificate or other written information furnished by or on behalf of any Loan Party to any Agent or any Lender in connection with the transactions contemplated hereby and the negotiation of this Agreement or delivered hereunder or any other Loan Document (as modified or supplemented by other information so furnished) when taken as a whole contains any material misstatement of fact or, as at the Closing Date only, omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not materially misleading; provided that, with respect to projected financial information and pro forma financial information, the Borrowers represent only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time of preparation; it being understood that such projections may vary from actual results and that such variances may be material.

 
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Section 5.15.   [Reserved]
 
Section 5.16.   Anti-Terrorism Laws
 
(a)           To the best knowledge of the Loan Parties organized in the United States, no such Loan Party nor any Subsidiary thereof: (i) is, or is controlled by or is acting on behalf of, a Restricted Party; (ii) has received funds or other property from a Restricted Party; or (iii) is in breach of or is the subject of any action or investigation under any Anti-Terrorism Law.

(b)           Each of the Loan Parties organized in the United States and, to the best of such Loan Parties knowledge, each Subsidiary thereof has taken reasonable measures to ensure compliance with the Anti-Terrorism Laws.

Section 5.17.   Intellectual Property; Licenses, Etc.
 
Each of the Loan Parties and their Subsidiaries own, license or otherwise possess the right to use, all of the trademarks, service marks, trade names, domain names, copyrights, patents, trade secrets, know-how, database rights, design rights and other intellectual property rights (collectively, IP Rights) that are material to the operation of their respective businesses as currently conducted, and, without conflict with the rights of any Person, except to the extent such conflicts could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  To the knowledge of the Loan Parties, the operation of the businesses as currently conducted does not infringe upon any IP Rights held by any Person except for such infringements, individually or in the aggregate, which could not reasonably be expected to have a Material Adverse Effect.  No claim or litigation brought against any Loan Party alleging the infringement or misuse of any IP Rights is pending or, to the knowledge of the Loan Parties, threatened against any Loan Party or any of its Subsidiaries, which could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

Except pursuant to licenses and other user agreements entered into by each Loan Party in the ordinary course of business, on and as of the Closing Date (i) each Loan Party owns and possesses the right to use the copyrights, patents and trademarks identified with such Loan Partys name on Schedule 12(a) or 12(b), as applicable, to the Perfection Certificate, and (ii) the registrations listed on Schedule 12(a) and 12(b) are valid and in full force and effect, except, in each case, to the extent failure to own or possess such right to use or of such registrations to be valid and in full force and effect could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 5.18.   Solvency
 
On the Closing Date, the Loan Parties (taken as a whole) after giving effect to the Transaction, are Solvent.

Section 5.19.   Use of Proceeds
 
The Borrowers will use the proceeds of Loans made on the Closing Date solely to finance the Transaction.  The Borrowers will use the proceeds of the Revolving Credit Loans borrowed after the Closing Date, Swing Line Loans and Letters of Credit for working capital and general corporate purposes of the Company and its Subsidiaries (including Permitted Acquisitions).

 
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Section 5.20.   [Reserved]
 
Section 5.21.   Security Documents
 
(a)           Subject to the Legal Reservations, the Collateral Documents are or in the case of each Collateral Document delivered pursuant to Sections 6.12 and 6.14 will, upon execution and deliver thereof, be effective to create in favor of the Collateral Agent for the benefit of the Secured Parties (or in favor of the relevant Secured Parties directly, as applicable), legal, valid and enforceable Liens on, and security interests in, the Collateral described therein to the extent intended to be created thereby and (i) when financing statements and other filings in appropriate form are filed in the offices specified on Schedule 7 to the Perfection Certificate and registration achieved (if applicable), (ii) when all appropriate filings, recordings, endorsements, notarizations, stamping, registrations and/or notifications are made as required under applicable Law and (iii) upon the taking of possession or control by the Collateral Agent of such Collateral with respect to which a security interest may be perfected only by possession or control (which possession or control shall be given to the Collateral Agent to the extent possession or control by the Collateral Agent is required by the Security Agreement), the Liens created by the Collateral Documents shall constitute fully perfected Liens on, and security interests in (to the extent intended to be created thereby), all right, title and interest of the grantors in such Collateral, in each case subject to no Liens other than Liens permitted hereunder.

(b)           When the Security Agreement governed by U.S. Law or a short form thereof is properly filed in the United States Patent and Trademark Office and the United States Copyright Office, the Liens created by such Security Agreement shall constitute fully perfected Liens on, and security interests in, all right, title and interest of the grantors thereunder (to the extent intended to be created thereby) in the IP Rights to the extent that a security interest can be created under Article 9 of the UCC and can be perfected by the filing of a financing statement in accordance therewith, except as the enforcement thereof may be limited by applicable bankruptcy, insolvency or similar laws affecting the enforcement of rights of creditors generally and except to the extent that enforcement of rights and remedies set forth therein may be limited by equitable principles (regardless of whether enforcement is considered in a court of law or a proceeding in equity), in each case subject to no Liens other than Liens permitted hereunder (it being understood that subsequent recordings in the United States Patent and Trademark Office and the United States Copyright Office may be necessary to perfect a Lien on registered patents and copyrights acquired by the grantors thereof after the Closing Date).

(c)           Notwithstanding anything herein (including this Section 5.21) or in any other Loan Document to the contrary, no Loan Party makes any representation or warranty as to the effects of perfection or non-perfection, the priority or the enforceability of any pledge of or security interest (other than with respect to those pledges and security interests made under the Laws of the jurisdiction of formation of the applicable Foreign Subsidiary) in any Equity Interests of any Foreign Subsidiary, or as to the rights and remedies of the Agents or any Lender with respect thereto, under foreign Law.

Section 5.22.   Works Council
 
As of the Closing Date, none of the Dutch Loan Parties other than Basell Benelux B.V. has, or is required to have, a (central) works council ((centrale) ondernemingsraad) and there is no (central) works council which under the Dutch Works Councils Act (Wet op de ondernemingsraden) would have the right to give advice in connection with any Loan Document.

 
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ARTICLE VI.

Affirmative Covenants

So long as any Lender shall have any Commitment hereunder, or any Loan or other Obligation hereunder which is accrued and payable shall remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding (and not cash collateralized in accordance with Section 2.03(g)), the Company shall, and shall cause each of its Restricted Subsidiaries to:

Section 6.01.   Financial Statements
 
(a)           Deliver to the Administrative Agent for prompt further distribution to each Lender, as soon as available, but in any event within ninety (90) days (one-hundred and twenty (120) days in the case of the Fiscal Year ending December 31, 2007) (or such earlier date on which the Company is required to make any public filing of such information) after the end of each Fiscal Year of the Company beginning with the Fiscal Year ending December 31, 2007, a consolidated balance sheet of the Company and its Subsidiaries as at the end of such Fiscal Year, and the related consolidated statements of income and retained earnings and of cash flows for such Fiscal Year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on without material qualification (including any going concern or like qualification) by an independent registered public accounting firm of nationally recognized standing;

(b)           Deliver to the Administrative Agent for prompt further distribution to each Lender (as soon as available, but in any event within forty-five (45) days (sixty (60) days in the case of the first three fiscal quarters of the Fiscal Year ending December 31, 2008)  (or such earlier date on which the Company is required to make any public filing of such information), after the end of each of the first three (3) fiscal quarters of each Fiscal Year of the Company, a consolidated balance sheet of the Company and its Subsidiaries as at the end of such fiscal quarter, and the related consolidated statements of income and cash flows, each for such fiscal quarter and the portion of the Fiscal Year then ended, setting forth in each case in comparative form the figures for the corresponding fiscal quarter of the previous Fiscal Year and the corresponding portion of the previous Fiscal Year, all certified (subject to normal year-end adjustments) as to fairness of presentation and consistency by a Company Financial Officer as fairly presenting in all material respects the financial condition, results of operations and cash flows of the Company and its Subsidiaries in accordance with GAAP, subject only to normal year-end audit adjustments and the absence of footnotes and (2) deliver to the Administrative Agent for each Lender, promptly, any other information, documents and other reports which the Company or any Subsidiary is (when registered) required to file with the SEC pursuant to Section 13(a) or 15(d) of the Exchange Act; and

(c)           Deliver to the Administrative Agent for each Lender, promptly, and in any event no later than thirty (30) days after the end of each Fiscal Year, a consolidated budget for the following Fiscal Year prepared by the Company for approval by its Board of Directors, the following two Fiscal Years (including (A) a projected consolidated cashflow statement and profit and loss account of financial position of the Company and its Subsidiaries as of the end of each such Fiscal Year, (B) in respect of each principal operating division of the Company and its Subsidiaries, an income statement beginning with EBITDA by business group, and projected levels of the First Lien Senior Secured Leverage Ratio and Consolidated Debt Service Ratio as of the end of each fiscal quarter in the first Fiscal Year of the period presented and (C) a summary of the material underlying assumptions applicable thereto) (collectively, the Projections).

 
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Notwithstanding the foregoing, the obligations to deliver financial statements pursuant to paragraphs (a) and (b) of this Section 6.01 will be satisfied with respect to financial information of the Company by furnishing (A) the applicable financial statements of the Company or (B) the Companys Form 10-K or 10-Q, as applicable, filed with the SEC or prior to or in lieu of any such requirement to file with the SEC, such equivalent information is made public by the Company in compliance with such corresponding obligations under any Permanent Financing of the Senior Second Lien Interim Loans consisting of securities registered under the Securities Act or pursuant to Rule 144A thereunder, as the case may be); provided that, with respect to each of clauses (A) and (B), to the extent such information is in lieu of information required to be provided under Section 6.01(a), all such materials to be reported on without material qualification (including any going concern or like qualification) by an independent registered public accounting firm of nationally recognized standing.

Documents required to be delivered pursuant to Section 6.01 and Section 6.02(a) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which the Company (or any direct or indirect parent of the Company) posts such documents, or provides a link thereto on the website on the Internet at the website address listed on Schedule 10.02; or (ii) on which such documents are posted on the Companys behalf on IntraLinks/IntraAgency or another website identified in the notice provided pursuant to the next succeeding paragraph of this Section 6.01, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent); provided that:  (x) upon written request by the Administrative Agent or any Lender, the Company shall deliver paper copies of such information to the Administrative Agent or such Lender (as applicable) and (y) the Company shall notify (which may be by facsimile or electronic mail) the Administrative Agent of the posting of any such documents.  Notwithstanding anything contained herein, in every instance the Company shall be required to provide paper copies of the Compliance Certificates required by Section 6.02(a)(i) to the Administrative Agent; provided, however, that if such Compliance Certificate is first delivered by electronic means, the date of such delivery by electronic means shall constitute the date of delivery for purposes of compliance with Section 6.02(a)(i).  Each Lender shall be solely responsible for timely accessing posted documents or requesting delivery of paper copies of such documents from the Administrative Agent and maintaining its copies of such documents.

The Company hereby acknowledges that (a) the Administrative Agent and/or the Arrangers will make available to the Lenders materials and/or information provided by or on behalf of the Company hereunder (collectively, Company Materials) by posting the Company Materials on IntraLinks or another similar electronic system (the Platform) and (b) certain of the Lenders may be public-side Lenders (i.e., Lenders that do not wish to receive material non-public information with respect to the Company or its securities) (each, a Public Lender).  The Company hereby agrees that it will identify that portion of the Company Materials that may be distributed to the Public Lenders and that (w) all such Company Materials shall be clearly and conspicuously marked PUBLIC which, at a minimum, shall mean that the word PUBLIC shall appear prominently on the first page thereof; (x) by marking Company Materials PUBLIC, the Company shall be deemed to have authorized the Administrative Agent, the Arrangers and the Lenders to treat such Company Materials as not containing any material non-public information (although it may be sensitive and proprietary) with respect to the Company or its securities for purposes of United States federal and state securities laws (provided, however, that to the extent such Company Materials constitute Information, they shall be treated as set forth in Section 10.08); (y) all Company Materials marked PUBLIC are permitted to be made available through a portion of the Platform designated Public Investor; and (z) the Administrative Agent and the Arrangers shall be entitled to treat any Company Materials that are not marked PUBLIC as being suitable only for posting on a portion of the Platform not designated Public Investor.

 
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From and after the date on which an entity which (i) owns directly or indirectly 100% of the Equity Interests of the Company and (ii) does not hold any other assets other than its investment in the Company or any intermediate holding company and de minimis assets necessary to maintain its corporate existence (and any such intermediate holding company shall not hold any asset other than its investment in the Company and de minimis assets necessary to maintain its corporate existence), guarantees on a senior unconditional basis all of the obligations of the Company under this Agreement (the Parent Guarantor), all references to the Company in this Section 6.01 shall be references to the Parent Guarantor.

Section 6.02.   Certificates; Other Information
 
(a)           Deliver to the Administrative Agent for prompt further distribution to each Lender:

(i)     no later than five (5) days after the delivery of the financial statements required by Sections 6.01(a) and (b), a duly completed Compliance Certificate signed by a Company Financial Officer;

(ii)    together with the delivery of each Compliance Certificate delivered in connection with the delivery of financial statements required under Section 6.01(a) pursuant to clause (i) above, (A) a description of each event, condition or circumstance during the last fiscal quarter covered by such Compliance Certificate requiring a mandatory prepayment under Section 2.05(b) and (B) a list of each Subsidiary of the Company that identifies each Subsidiary as a Restricted or an Unrestricted Subsidiary as of the date of delivery of such Compliance Certificate or confirming there has been no change since the date of the last such certificate; and

(iii)   promptly, such additional information regarding the business, legal, financial or corporate affairs of the Loan Parties or any of their respective Subsidiaries, or compliance with the terms of the Loan Documents, as the Administrative Agent or any Lender through the Administrative Agent may from time to time reasonably request.

(b)           Upon request by the Administrative Agent, representatives of senior management of the Company reasonably agreed by the Administrative Agent and the Company shall give a presentation in each Fiscal Year to the Lenders within 30 days after the Company has delivered its financial statements pursuant to paragraph (a) of Section 6.01 about the business, financial performance and prospects of the Company and its Subsidiaries, and such other matters as any Lender may (through the Administrative Agent) reasonably request.

Section 6.03.   Notices
 
Promptly after a Responsible Officer of a Loan Party has obtained knowledge thereof, notify the Administrative Agent:

(a)           of the occurrence of any Default; and

(b)           of any matter that has resulted or could reasonably be expected to result in a Material Adverse Effect.

Each notice pursuant to this Section 6.03 shall be accompanied by a written statement of a Responsible Officer of the Company (x) that such notice is being delivered pursuant to Section 6.03(a) or (b) (as applicable) and (y) setting forth details of the occurrence referred to therein and stating what action the Company has taken and proposes to take with respect thereto.

 
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Section 6.04.   Payment of Obligations
 
Timely pay, discharge or otherwise satisfy as the same shall become due and payable in the normal conduct of its business, all its obligations and liabilities in respect of Taxes imposed upon it or upon its income or profits or in respect of its property, except, in each case, to the extent the failure to pay or discharge the same could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 6.05.   Preservation of Existence, Etc
 
Preserve, renew and maintain in full force and effect its legal existence under the Laws of the jurisdiction of its organization except (x) in a transaction permitted by Section 7.04 or 7.05 and (y) any Restricted Subsidiary may merge and amalgamate, consolidate or amalgamate with any other Restricted Subsidiary and (b) take all reasonable action to maintain all rights, privileges (including its good standing, where such concept exists), permits, licenses and franchises necessary or desirable in the normal conduct of its business, except (i) to the extent that failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect or (ii) pursuant to a transaction permitted by Section 7.04 or 7.05 or clause (y) of this Section 6.05.

Section 6.06.   Maintenance of Properties
 
Except if the failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, maintain, preserve and protect all of its material properties and equipment necessary in the operation of its business in good working order, repair and condition, ordinary wear and tear excepted and casualty or condemnation excepted.

Section 6.07.   Maintenance of Insurance
 
Maintain with reputable insurance companies, insurance with respect to its assets, properties and business against loss or damage to the extent available on commercially reasonable terms of the kinds customarily insured against by Persons of similar size engaged in the same or similar industry, of such types and in such amounts (after giving effect to any self-insurance (including captive industry insurance) reasonable and customary for similarly situated Persons of similar size engaged in the same or similar businesses as the Company and the Restricted Subsidiaries) as are customarily carried under similar circumstances by such other Persons.  With respect to each Mortgaged Property located in the U.S., obtain flood insurance in such total amount as required by applicable Law, if at any time the area in which any improvements are located on any Mortgaged Property is designated a flood hazard area in any Flood Insurance Rate Map published by the Federal Emergency Management Agency (or any successor agency), and, if required by law, comply with the National Flood Insurance Program as set forth in the Flood Disaster Protection Act of 1973, as amended from time to time.

Section 6.08.   Compliance with Laws
 
Comply in all material respects with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its business or property, except to the extent the failure to comply therewith could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 
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Section 6.09.   Compliance with Environmental Laws; Environmental Reports
 
(a)           Comply, and cause all lessees and other Persons occupying Real Property to comply, with all Environmental Laws and Environmental Permits applicable to its operations, facilities and Real Property, except where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; obtain and renew all material Environmental Permits applicable to its operations, facilities and Real Property; and conduct all responses required by, and in accordance with, Environmental Laws; provided that neither the Company nor any of its Subsidiaries shall be required to undertake any response to the extent that its obligation to do so is being contested in good faith and by proper proceedings and appropriate reserves are being maintained with respect to such circumstances in accordance with GAAP.

(b)           If a Default caused by reason of a breach of Section 5.09 or Section 6.09(a) shall have occurred and be continuing for more than 20 days without the Company commencing activities reasonably likely to cure such Default in accordance with Environmental Laws, at the written request of the Administrative Agent or the Required Lenders through the Administrative Agent, provide to the Lenders within 45 days after such request, at the expense of the Company or the applicable Borrower, an environmental assessment report regarding the matters which are subject of such Default, including, where appropriate, soil and/or groundwater sampling, prepared by environmental consulting firm and, in the form and substance, reasonably acceptable to the Administrative Agent and indicating the presence or absence of Hazardous Materials and the estimated cost of any compliance or response to address them.

Section 6.10.   Books and Records
 
Maintain proper books of record and account, in which entries that are full, true and correct in all material respects and which reflect all material financial transactions and matters involving the assets and business of the Loan Parties or a Restricted Subsidiary, as the case may be (it being understood and agreed that certain Foreign Subsidiaries maintain individual books and records in conformity with generally accepted accounting principles in their respective countries of organization and that such maintenance shall not constitute a breach of the representations, warranties or covenants hereunder).

Section 6.11.   Inspection Rights
 
Permit representatives and independent contractors of the Administrative Agent or the Required Lender or, as provided in the second proviso below, any Lender to visit and inspect any of its properties, to examine its corporate, financial and operating records as is reasonably specified, and make copies thereof or abstracts therefrom, and to discuss its affairs, finances and accounts with its directors, officers, and independent public accountants, all at the reasonable expense of the Borrowers and at such reasonable times during normal business hours, upon reasonable advance notice to the Company; provided that, excluding any such visits and inspections during the continuation of an Event of Default, only the Administrative Agent on behalf of the Lenders may exercise rights of the Administrative Agent and the Lenders under this Section 6.11 and the Administrative Agent shall not exercise such rights more often than two (2) times during any calendar year at the Borrowers expense; providedfurther that when an Event of Default exists, the Administrative Agent or any Lender (or any of their respective representatives or independent contractors) may do any of the foregoing at the expense of the Borrowers at any time during normal business hours and upon reasonable advance notice.  The Administrative Agent and the Lenders shall give the Company the opportunity to participate in any discussions with the Companys independent public accountants.  Notwithstanding anything to the contrary in this Section 6.11, at all times during such visits and inspections, the Administrative Agent or any Lender (or their respective representatives or contractors) must comply with all applicable site regulations as the Company or its Subsidiaries or any of their respective officers or employees may require by reasonable notice of the same.

 
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Section 6.12.   Additional Collateral; Additional Guarantors
 
(a)           Subject to this Section 6.12 and Section 6.14(b) and the Agreed Security Principles, with respect to any property (or material property, in respect of IP Rights) acquired after the Closing Date by any Loan Party that is intended to be subject to the Lien created by any of the Collateral Documents but is not so subject, promptly (and in any event within 120 days after the acquisition thereof or such later time as the Administrative Agent or the Collateral Agent, as applicable, acting reasonably, agrees to) (i) execute and deliver to the Administrative Agent and the Collateral Agent such amendments or supplements to the relevant Collateral Documents or such other documents as the Administrative Agent or the Collateral Agent shall reasonably deem necessary or advisable to grant to the Collateral Agent, for its benefit and for the benefit of the other Secured Parties or to the relevant Secured Parties directly, as applicable, a Lien on such property subject to no Liens other than Liens permitted pursuant to Section 7.01, and (ii) take all commercially reasonable actions necessary to cause such Lien to be duly perfected to the extent required by such Collateral Document in accordance with all applicable Law, including the filing of financing statements in such jurisdictions as may be reasonably requested by the Collateral Agent.  The Borrowers shall otherwise take such commercially reasonable actions and execute and/or deliver to the Collateral Agent such documents as the Collateral Agent shall reasonably require to confirm the validity, perfection and priority of the Lien of the Collateral Documents on such after-acquired properties.

(b)           Subject to the Agreed Security Principles with respect to any Person that is or becomes a direct Subsidiary other than a Securitization Entity of a Loan Party after the Closing Date, promptly (and in any event within 120 days after such Person becomes a Subsidiary or such later time as the Administrative Agent or the Collateral Agent, as applicable, may agree in its sole discretion) (i) deliver to the Collateral Agent all certificates representing the Equity Interests (to the extent certificated) of such Subsidiary owned by such Loan Party and required to be pledged pursuant to the Collateral and Guarantee Requirement and together with undated stock powers or other appropriate instruments of transfer executed and delivered in blank by a duly authorized officer of the holder(s) of such Equity Interests, and all existing intercompany notes other than (i) held by any Securitization Entity or Basell Sales & Marketing B.V. or (ii) which on an individual basis do not exceed 10,000,000 owing from such Subsidiary to any Loan Party and required to be pledged pursuant to the Collateral and Guarantee Requirement, together with instruments of transfer executed and delivered in blank by a duly authorized officer of such Loan Party (in each case, with respect to Foreign Subsidiaries, to the extent applicable and permitted under foreign laws, rules or regulations) or, if necessary to perfect a Lien under applicable Law, by means of an applicable Collateral Document, create a Lien on such Equity Interests and intercompany notes in favor of the Collateral Agent on behalf of the Secured Parties and (ii) cause any such new Subsidiary that is required to be a Guarantor under the Collateral and Guarantee Requirement (A) to execute a joinder agreement reasonably acceptable to the Collateral Agent or such comparable documentation to become a Subsidiary Guarantor and a joinder agreement to the applicable Collateral Documents (including the applicable Security Agreement), substantially in the form annexed thereto, or, in the case of a Foreign Subsidiary, execute a security agreement over substantially all of its assets to the extent required by the Collateral and Guarantee Requirement compatible with the Laws of such Foreign Subsidiarys jurisdiction in form and substance reasonably satisfactory to the Administrative Agent, and (B) to take all actions necessary or advisable in the reasonable opinion of the Collateral Agent to cause the Lien created by the applicable Collateral Documents (including the Security Agreement) to be duly perfected to the extent required by such agreement in accordance with all applicable Law, including the filing of financing statements in such jurisdictions as may be reasonably requested by the Collateral Agent.

 
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(c)           (1)  Subject to the Agreed Security Principles, in the case of a Loan Party, promptly grant to the Collateral Agent, within 120 days of the acquisition thereof or such longer period as the Collateral Agent may determine, in its sole discretion, a Mortgage (or in the case of Real Property outside the U.S., other appropriate security as the Collateral Agent may reasonably request) on each parcel of Real Property owned in fee or otherwise with legal title or ground leased such Loan Party as is acquired by such Loan Party after the Closing Date and that, together with any improvements thereon, individually has a fair market value of at least $25,000,000 as additional security for the Obligations (unless the subject property is already mortgaged to a third party to the extent permitted hereunder).

(i)     Subject to the Agreed Security Principles, in the case of a Loan Party promptly grant to the Collateral Agent, within 120 days of the acquisition thereof or such longer period as the Collateral Agent may determine in its sole discretion, a Mortgage (or in the case of Real Property outside the U.S., other appropriate security as the Collateral Agent may reasonably request) in form reasonably satisfactory to the Administrative Agent and Collateral Agent on each pipeline easement and other similar Real Property (except any such easement or other similar Real Property as would be excluded from the grant set forth in Section 2.1 of the applicable Mortgage in the penultimate paragraph therein) as is acquired by such Loan Party after the Closing Date as additional security for the Obligations (unless the subject property is already mortgaged to a third party to the extent permitted hereunder).

(ii)    Such Mortgages shall be subject to the Agreed Security Principles and the Mortgages or instruments related thereto shall be duly recorded or filed in such manner and in such places as are required by Law to establish, perfect, preserve and protect the Liens in favor of the Collateral Agent and/or the Secured Parties required to be granted pursuant to the Mortgages and all taxes, fees and other charges payable in connection therewith shall be paid in full.  Subject to the Agreed Security Principles, such Loan Party shall otherwise take such commercially reasonable actions and execute and/or deliver to the Collateral Agent such documents as the Administrative Agent or the Collateral Agent shall reasonably require to confirm the validity, perfection and priority of the Lien of any existing Mortgage or new Mortgage against such after-acquired Real Property (including a Title Policy (only in the case of Real Property located in the United States, but excluding Excluded Easements as such term is defined in the definition of Collateral and Guarantee Requirement)), a Survey and local counsel opinion (in form and substance reasonably satisfactory to the Administrative Agent and the Collateral Agent) in respect of such Mortgage).

(d)           The foregoing shall not require the creation or perfection of pledges of or security interests in, or the obtaining of title insurance or surveys with respect to, particular assets if and for so long as (i) in the reasonable judgment of the Administrative Agent, the cost of creating or perfecting such pledges or security interests in such assets or obtaining title insurance or surveys in respect of such assets shall be excessive in view of the benefits to be obtained by the Lenders therefrom or (ii) the creation or perfection of such pledges or security interests would violate third party contracts or applicable Law (including any Law requiring the approval or consultation of any works council or similar entity before a security interest can be granted, in which case the Borrowers shall use their commercially reasonable efforts to obtain such approval, unless the Administrative Agent shall determine in its reasonable judgment that such pledge or security interest shall not be required with respect to such assets).  In addition, the foregoing will not require actions under this Section 6.12 by a Person if and to the extent that such action would (a) go beyond the corporate or other powers of the Person concerned (and then only as such corporate or other power cannot be modified or excluded to allow such action) or (b) unavoidably result in material issues of directors personal liability, breach of fiduciary duty or criminal liability.  The Administrative Agent may grant extensions of time for the perfection of security interests in or the obtaining of title insurance with respect to particular assets (including extensions beyond the Closing Date for the perfection of security interests in the assets of the Loan Parties on such date) where it reasonably determines, in consultation with the Borrowers Agent, that perfection cannot be accomplished using commercially reasonable efforts by the time or times at which it would otherwise be required by this Agreement or the Collateral Documents.

 
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(e)           Notwithstanding the foregoing provisions of this Section 6.12 or anything in this Agreement or any other Loan Document to the contrary, Liens required to be granted from time to time pursuant to this Section 6.12 shall be subject to the Agreed Security Principles and exceptions and limitations set forth in the Collateral Documents as in effect on the Closing Date and, to the extent appropriate in the applicable jurisdiction, as agreed between the Collateral Agent and the Company.  Notwithstanding the foregoing provisions of this Section 6.12 or anything in this Agreement or any other Loan Document to the contrary, any Subsidiary of the Company that Guarantees the Senior Second Lien Debt, any Permanent Financing or any Junior Financing shall be a Guarantor hereunder for so long as it Guarantees such Indebtedness.

Section 6.13.   ERISA
 
Promptly after any Loan Party or any ERISA Affiliate knows or has reason to know of the occurrence of any of the following events that, individually or in the aggregate (including in the aggregate such events previously disclosed or exempt from disclosure hereunder, to the extent the liability therefor remains outstanding), would reasonably be expected to have a Material Adverse Effect, deliver to the Administrative Agent and each of the Lenders a certificate of a Company Financial Officer setting forth details as to such occurrence and the action, if any, that the Loan Party or such ERISA Affiliate is required or proposes to take, together with any notices (required, proposed or otherwise) given to or filed with or by the Loan Party, such ERISA Affiliate, the PBGC, a Plan participant (other than notices relating to any individual participants benefits) or the Plan administrator with respect thereto:  that a Reportable Event has occurred; that an accumulated funding deficiency has been incurred or an application is to be made to the Secretary of the Treasury for a waiver or modification of the minimum funding standard (including any required installment payments) or an extension of any amortization period under Section 412 of the Code (or Section 430 of the Code as amended by the Pension Protection Act of 2006) with respect to a Plan; that a Plan having an Unfunded Current Liability has been or is to be terminated, reorganized, partitioned or declared insolvent under Title IV of ERISA (including the giving of written notice thereof); that a Plan has an Unfunded Current Liability that has or will result in a lien under ERISA or the Code; that proceedings will be or have been instituted to terminate a Plan having an Unfunded Current Liability (including the giving of written notice thereof); that a proceeding has been instituted against a Loan Party or an ERISA Affiliate pursuant to Section 515 of ERISA to collect a delinquent contribution to a Plan; that the PBGC has notified a Loan Party or any ERISA Affiliate of its intention to appoint a trustee to administer any Plan; that a Loan Party or any ERISA Affiliate has failed to make a required installment or other payment pursuant to Section 412 of the Code with respect to a Plan; or that a Loan Party or any ERISA Affiliate has incurred or will incur (or has been notified in writing that it will incur) any liability (including any contingent or secondary liability) to or on account of a Plan pursuant to Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201 or 4204 of ERISA or Section 4971 or 4975 of the Code.

Section 6.14.   Further Assurances and Post-Closing Conditions
 
(a)           Subject to the Agreed Security Principles, within the time periods set forth in Schedule 6.14(a) (subject to extension by the Administrative Agent in its discretion), perform each obligation and deliver each Collateral Document, in each case as set forth on Schedule 6.14(a), with respect to the matters set forth therein, duly executed by each Loan Party thereto, together with all documents and instruments required to perfect the security interest of the Collateral Agent in and otherwise comply with the Collateral and Guarantee Requirement with respect to the Collateral (if any) free of any other pledges, security interests or mortgages, except Liens permitted hereunder.

 
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(b)           Subject to the Agreed Security Principles, promptly upon reasonable request by the Administrative Agent (i) correct any material defect or error that may be discovered in the execution, acknowledgment, filing or recordation of any Collateral Document or other document or instrument relating to any Collateral, and (ii) do, execute, acknowledge, deliver, record, re-record, file, re-file, register and re-register any and all such further acts, deeds, certificates, assurances and other instruments as the Administrative Agent may reasonably request from time to time in order to carry out more effectively the purposes of the Collateral Documents.  If the Administrative Agent, the Collateral Agent or the Required Lenders determine that they are required by applicable Law to have appraisals prepared in respect of the Real Property of any Loan Party constituting Collateral, the Borrowers Agent shall provide to the Administrative Agent appraisals that satisfy the applicable requirements of the Real Estate Appraisal Reform Amendments of FIRREA and are otherwise in form and substance reasonably satisfactory to the Administrative Agent and the Collateral Agent.

(c)           The U.S. Borrower agrees promptly (and in any event within 10 Business Days of such change) to notify the Collateral Agent in writing of any change (i) in legal name of the U.S. Borrower or any Loan Party that is a grantor under the U.S. Security Agreement, (ii) in the identity or type of organization or corporate structure of the Borrower domiciled in any jurisdiction of the United States or any such Loan Party, or (iii) in the jurisdiction of organization or organizational identification number of the Borrower domiciled in any jurisdiction of the United States or any such Loan Party.

Section 6.15.   Use of Proceeds
 
Use the proceeds of the Loans only for the purposes set forth in Section 5.19.

Section 6.16.   Interest Rate Protection
 
No later than the date that is the later of (x) the 90th day after the Closing Date and (y) five (5) Business Days after the completion of the primary syndication of the Facilities, as determined by the Administrative Agent, the Company shall enter into, and for a minimum of three years thereafter, maintain, Secured Hedge Agreements with customary terms and conditions that result in the following being effectively subject to a fixed interest rate; at least 50% of the sum of the aggregate of the principal amount of the Companys Consolidated Total Debt, including a notional amount of $2,000,000,000 only in respect of Securitization Transactions, Asset Backed Credit Facilities and other Receivables Financings, in each case only as permitted under this Agreement (regardless of the actual aggregate amount outstanding under those financings) and deeming Indebtedness outstanding under and pursuant to the Senior Second Lien Debt as being fixed rate Indebtedness, excluding (A) in respect of the Asset Backed Credit Facilities, Securitization Transactions and other Receivables Financings, any Indebtedness exceeding $2,000,000,000 and (B) Revolving Credit Loans.

Section 6.17    Know Your Customer Requests
 
(a)           If:

(1)           there is a Change in Law after the Closing Date;

 
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(2)           any change in the status of a Loan Party or the composition of the shareholders of a Loan Party after the Closing Date; or

(3)           a proposed assignment or transfer by a Lender of any of its rights and obligations under this Agreement to a party that is not a Lender prior to such assignment or transfer,

obliges the Administrative Agent or any Lender (or, in the case of paragraph (3) above, any prospective new Lender) to comply with know your customer or similar identification procedures in circumstances where the necessary information is not already available to it, each Loan Party shall promptly upon the request of the Administrative Agent, in its capacity as a Lender or on behalf of any Lender, to the Company supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Administrative Agent (for itself or on behalf of any Lender, or, in the case of the event described in paragraph (3) above, on behalf of any prospective new Lender) in order for the Administrative Agent, such Lender or, in the case of the event described in paragraph (3) above, any prospective new Lender to carry out and be satisfied it has complied with all necessary know your customer or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Loan Documents.

(b)           Following any notification of requirement to add a Loan Party pursuant to Section 6.12, if the joinder of such additional Guarantor obliges the Administrative Agent or any Lender to comply with know your customer or similar identification procedures in circumstances where the necessary information is not already available to it, the Company shall promptly upon the request of the Administrative Agent (for itself or on behalf of any Lender or any prospective new Lender) supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Administrative Agent (for itself or on behalf of any Lender or any prospective new Lender) in order for the Administrative Agent or such Lender or any prospective new Lender to carry out and be satisfied it has complied with all necessary know your customer or other similar checks under all applicable laws and regulations pursuant to the joinder of such Subsidiary to this Agreement as an Additional Guarantor.

ARTICLE VII.

Negative Covenants

So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation (other than Secured Hedge Agreements and Treasury Services Agreements not yet due and payable and contingent obligations not yet accrued and payable) hereunder which is accrued and payable shall remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding and not cash collateralized, the Company shall not, nor shall it permit any of its Restricted Subsidiaries to, directly or indirectly:

Section 7.01.   Liens. Create, incur, assume or suffer to exist or become effective any Lien of any kind upon any of its property, assets or revenues, whether now owned or hereafter acquired, other than the following:

(a)           Liens created pursuant to any Loan Document;

(b)           Liens existing on the Closing Date or which are required to come into effect as a result of existing contractual provisions (in each case, to the extent in respect of underlying obligations exceeding $1,000,000 individually, listed on Schedule 7.01(b)) and any reissuance, renewals or extensions thereof;

 
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(c)           Liens for taxes, assessments or governmental charges or claims that are extinguished within 60 days of notice of their existence, are not yet due and payable or that are being contested in good faith by appropriate proceedings;

(d)           Liens of landlords, carriers, vendor, pipeline, warehousemen, mechanics, suppliers, materialmen, repairmen, employees, pension plan administrators or other like Liens arising by operation of law in the ordinary course of business of the Company or any Restricted Subsidiary which secure amounts which are not overdue for a period of more than 30 days or not yet subject to penalties for non-payment or that are being contested in good faith by appropriate proceedings;

(e)           Liens (i) arising out of pledges or deposits made in the ordinary course of business in connection with workers compensation, unemployment insurance and other types of social security or other insurance (including unemployment insurance) and (ii) arising out of pledges and deposits in the ordinary course of business securing liability for reimbursement or indemnification obligations with respect to premiums and exit fees of (including to support obligations in respect of letters of credit or bank guarantees for the benefit of) insurance carriers providing property, casualty or liability insurance to the Company or any Subsidiary;

(f)           Liens arising out of pledges or deposits made to secure the performance of tenders, bids or trade or government contracts, or to secure leases, statutory or regulatory, insurance obligations, surety, judgment or appeal bonds, completion guarantee, surety, letters of credit, performance bonds, guarantees or other obligations of a like nature (including those to secure health,  safety and environmental obligations) incurred in the ordinary course of business (other than obligations for the payment of borrowed money);

(g)           zoning restrictions of governmental authorities, easements, licenses, reservations of, or rights of others for, licenses reservations, title defects, rights of others for rights-of-way, utilities, sewers, electrical lines, telephone lines, telegraph wires, restrictions, encroachments and other similar charges, encumbrances or title defects of zoning, survey exceptions, encumbrances, or other restrictions as to the use of real property or Liens incurred in the ordinary course of business that do not in the aggregate materially interfere with in any material respect the ordinary conduct of the business of the Company and its Restricted Subsidiaries, taken as a whole;

(h)           Liens arising by reason of any judgment, decree or order of any court so long as such Lien is adequately bonded and any appropriate legal proceedings that may have been duly initiated for the review of such judgment, decree or order shall not have been finally terminated or the period within which such proceedings may be initiated shall not have expired;

(i)           (x) leases or subleases or licenses or sublicenses of Real Property or IP Rights granted in the ordinary course of business to others that do not individually or in the aggregate interfere in any material respect with the ordinary conduct of the business of the Company and its Restricted Subsidiaries, taken as a whole and (y) any interest or title of a lessor or in property subject to a lease other than a capitalized lease;

(j)           Liens in favor of customs and revenue authorities arising as a matter of Law to secure payment of customs duties in connection with the importation of goods;

 
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(k)           Liens (i) of a collection bank arising under Section 4-210 of the Uniform Commercial Code on items in the course of collection, (ii) attaching to commodity trading accounts or other commodities brokerage accounts incurred in the ordinary course of business, (iii) in favor of banking or other financial institutions arising as a matter of Law encumbering deposits (including the right of setoff) and which are within the general parameters customary in the banking industry or arising pursuant to such banking institutions general terms and conditions and (iv) arising under clause 18 of the general conditions of a bank operating in The Netherlands or Germany based on the general conditions drawn up by the Netherlands Bankers Association (Nederlandse Vereniging van Banken) and the Consumers Union (Consumentenbond) or analogous conditions in other jurisdictions provided that where such condition is not regularly imposed, the Loan Parties shall use all reasonable efforts to procure a waiver of such right by the respective account bank;

(l)           Liens (i) on cash advances in favor of the seller of any property to be acquired in or monies placed in escrow pursuant to an Investment permitted pursuant to Section 7.02 to be applied against the purchase price for such Investment, (ii) over assets being acquired pursuant to Investments permitted by Section 7.02 pending payment in full of the purchase price (iii) consisting of an agreement to Dispose of any property in a Disposition permitted under Section 7.05 and (iv) consisting of intellectual property licenses permitted by Section 7.02(q);

(m)           Liens in favor of the Company or any of its Restricted Subsidiaries securing Indebtedness permitted under Section 7.03(d) (other than Indebtedness owed to a Restricted Subsidiary that is not a Loan Party);

(n)           Liens arising out of conditional sale, title retention, consignment or similar arrangements for sale of goods entered into by the Company or any of its Restricted Subsidiaries in the ordinary course of business;

(o)           Liens upon specific items of inventory or other goods and proceeds of any Person securing such Persons obligations in respect of documentary letters of credit, Liens on documents of title in respect of documenting letters of credit or bankers acceptances issues or credit for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;

(p)           Liens securing Indebtedness and other obligations under Asset Backed Credit Facilities, Securitization Transactions and Receivables Financings; provided that any Liens in respect of Receivables Financings which are recourse to the Company or any Restricted Subsidiary (other than any Securitization Entity) shall be limited to accounts receivable, inventory, the Equity Interests in, and intercompany Indebtedness owed by, any Securitization Entity, related books and records and the accounts and proceeds thereof together with any returned goods therefrom;

(q)           Liens arising by reason of deposits necessary to qualify the Company or any of its Restricted Subsidiaries to conduct business, maintain self insurance or comply with any law and Liens securing the PBGC Settlement;

(r)           Liens securing any Capitalized Lease and Liens to secure Indebtedness (including Capitalized Leases) permitted by clause (e) of Section 7.03 covering only the property or assets acquired with such Indebtedness;

 
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(s)           Liens securing obligations under Swap Contracts of the Company or any Restricted Subsidiary permitted under Section 7.03 or any collateral for the obligations under such Swap Contracts relate;

(t)           Liens on property of, or on Equity Interests or Indebtedness of, any Person or attaching to any assets existing at the time such property or Person is acquired by, merged, amalgamated with or into or consolidated with, or assets are acquired by, the Company or any Restricted Subsidiary; provided that such Liens (a) do not extend to or cover any property or assets of the Company or any Restricted Subsidiary other than the property or assets acquired (other than assets and property affixed or appurtenant thereto) or the property and assets of the Person merged into or consolidated with the Company or Restricted Subsidiary and (b) were created prior to, and not in connection with or in contemplation of, such acquisition, merger, amalgamation or consolidation;

(u)           Liens granted by Restricted Subsidiaries (other than Guarantors) in support of Indebtedness of Restricted Subsidiaries (other than Guarantors); provided that the aggregate amount secured by such Liens does not exceed $500,000,000 at any one time outstanding;

(v)           Liens in respect of the Senior Second Lien Debt, any Permanent Financing or any Permitted Refinancing;

(w)           Liens of the Company or any Restricted Subsidiary with respect to obligations that do not exceed the greater of (i) $250,000,000 and (ii) 1% of Consolidated Net Tangible Assets at any one time outstanding;

(x)           Liens over shares in joint ventures or over dividends in respect thereof in any Restricted Subsidiary acting as a special purpose vehicle with the sole purpose to hold shares in a joint venture to secure Indebtedness or other obligations of such joint venture or Restricted Subsidiary or Indebtedness permitted by Section 7.03(t);

(y)           Liens resulting from any Limited Recourse Stock Pledge;

(z)           Liens granted in favor of Loan Parties and Liens on any property or assets of a Restricted Subsidiary that is not a Guarantor granted in favor of the Company, a Restricted Subsidiary that is a Guarantor or any wholly-owned Restricted Subsidiary;

(aa)           Liens securing Indebtedness incurred to modify, refinance, defease, refund, extend, renew or replace Indebtedness that has been secured by a Lien permitted by this Agreement; provided that (a) such new Lien shall be limited to all or part of the same property and assets that secured or, under the written agreements pursuant to which the original Lien arose, could secure the original Lien plus improvements and accessions to, such property or proceeds or distributions thereof); and (b) the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of (i) the outstanding principal amount or, if greater, committed amount of the Indebtedness at the time the original Lien became a Lien permitted under this Section 7.01 and (ii) an amount necessary to pay any fees and expenses, including prepayment premiums, associated hedging break costs and premiums or replacement hedges, related to such refinancing, refunding, extension, renewal or replacement;

(bb)           any extension, amendment, renewal or replacement, in whole or in part, of any Lien described in Sections 7.01(b), (t) and (v); provided that any such extension, renewal or replacement shall be no more restrictive in any material respect than the Lien so extended, amended, renewed or replaced and shall not extend to any additional property or assets; and

 
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(cc)           Liens arising from precautionary Uniform Commercial Code financing statement filings; and

(dd)           any netting or set-off arrangements entered into by the Company or any Restricted Subsidiary in the ordinary course of its banking arrangements (including, for the avoidance of doubt, cash pooling arrangements) for the purposes of netting debit and credit balances of the Company or any Restricted Subsidiary, including pursuant to any Treasury Services Agreement; and

(ee)           Liens over cash deposits deposited with the trustees in connection with the purchase of certain of the Existing Notes.

Notwithstanding the foregoing, no consensual Liens shall exist on Equity Interests that constitute Collateral other than pursuant to clause (a) or (t) above or as permitted in the Intercreditor Agreements.
 
Section 7.02.   Investments
 
Make or hold any Investments, except:

(a)           Investments in cash or Cash Equivalents;

(b)           loans and advances to employees, directors and officers of the Company and its Subsidiaries (i) required by applicable employment laws or (ii) otherwise in the ordinary course of business for travel, business, related entertainment, relocation, as part of a recruitment or retention plan and related expenses in an aggregate principal amount outstanding not to exceed $10,000,000;

(c)           Investments (i) by the Company or any Restricted Subsidiary in any Loan Party or any Person that will, substantially contemporaneously with the making of the relevant Investment, become a Loan Party other than the Company, (ii) by any Restricted Subsidiary that is not a Loan Party in any other Restricted Subsidiary that is not at the time of such Investment a Loan Party, (iii) by the Company or any of its Restricted Subsidiaries (A) in any Subsidiary, constituting an exchange of Equity Interests of such Subsidiary for Indebtedness of such Subsidiary or (B) constituting Guarantees of Indebtedness or other monetary obligations of Subsidiaries owing to the Company or any of its Restricted Subsidiaries and (iv) Investments by Basell Finance in Restricted Subsidiaries made in the ordinary course of business in connection with the cash management operations of the Company and its Restricted Subsidiaries; provided, that, in the case of  this clause (iv), any such Investments by Basell Finance in Restricted Subsidiaries who are not Loan Parties shall be in the form of an intercompany loan or intercompany account agreement pledged as Collateral pursuant to applicable Security Agreement;

(d)           Investments in the Company by any Restricted Subsidiary of the Company;

(e)           (i) Investments existing on the Closing Date, (ii) Investments contemplated on the Closing Date and set forth on Schedule 7.02(e), and (iii) any modification, replacement, renewal, reinvestment or extension of any Investment set forth on Schedule 7.02(e) that does not increase the aggregate amount thereof;

 
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(f)           Swap Contracts entered into in the ordinary course of business and otherwise permitted under this Agreement;

(g)           any acquisition of all or substantially all the assets of, or all the Equity Interests (other than directors qualifying shares) in, a Person or division or line of business of a Person to the extent (A) such acquisition is effected by a contribution to capital not constituting Disqualified Equity Interests, (B) the consideration paid is settled by the issuance or with the proceeds of the issuance of Qualified Equity Interests of the Company or Parent or any Holding Company of Parent, or (C) immediately after giving effect thereto: (i) no Default shall have occurred and be continuing or would result therefrom; (ii) the acquired entity, assets, division or line of business shall be in a Permitted Business; (iii) after giving effect to such acquisition, the Company and its Restricted Subsidiaries would be in Pro Forma Compliance with Sections 7.11(a) and (b); and (iv) with respect to such Investments by Loan Parties in assets that are not (or do not be or become) owned by a Loan Party in Persons that are not or do not become Loan Parties within 90 days of consummation of the acquisition (1) such Person shall not be designated an Unrestricted Subsidiary within 12 months of such acquisition and (2) the aggregate consideration paid in such Investments pursuant to this clause (iv) shall not exceed $2,000,000,000 (net of any capital distribution in respect of any such Investment); provided that of such $2,000,000,000, at least $1,500,000,000 must be funded with the proceeds of Incremental Term Loans (any such acquisition, a Permitted Acquisition);

(h)           loans and advances to the Company and any other direct or indirect parent of a Restricted Subsidiary, in lieu of, and not in excess of the amount of (after giving effect to any other loans, advances or Restricted Payments in respect thereof), Restricted Payments to the extent permitted to be made to such parent in accordance with Section 7.06; provided that all such loans and advances shall be deemed a Restricted Payment for the purposes of Section 7.06;

(i)           Investments (including Investments in securities) received pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of any debtors of the Company or its Restricted Subsidiaries or received in settlement of debts created in the ordinary course of business and owing to the Company or a Restricted Subsidiary or in satisfaction of judgments or in settlement of any litigation or arbitration;

(j)           purchase of shares of Royal Dutch Shell plc and BASF AG required to satisfy Basell Holdings obligations under its stock option plans as such plans and stock appreciation rights were in effect on the Closing Date;

(k)           if the Applicable Amount Availability Condition shall be met, other Investments in an aggregate amount outstanding pursuant to this clause (k) (valued at the time of the making thereof, and without giving effect to any write-downs or write-offs thereof) not to exceed the portion, if any, of the Applicable Amount on the date of such election that the Borrowers Agent elects to apply to this clause (k), such election to be specified in a written notice of a Company Financial Officer calculating in reasonable detail the Applicable Amount immediately prior to such election and specifying the amount thereof elected to be so applied;

(l)           Investments by the Company or a Wholly Owned Subsidiary of the Company in a Securitization Entity or any Investment by a Securitization Entity in any other Person in connection with a Securitization Transaction; provided that any Investment in a Securitization Entity is in the form of a purchase money note or an equity interest;

 
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(m)           Investments held by any Person (other than an Affiliate of such Person) that becomes a Restricted Subsidiary; provided that such Investments were not acquired in contemplation of the acquisition of such Person;

(n)           Investments in Subsidiaries and Permitted Joint Ventures not to exceed $500,000,000 plus

(i)     the aggregate net after-tax amount returned in cash on or with respect to any Investments made in Unrestricted Subsidiaries and Permitted Joint Ventures whether through interest payments, principal payments, dividends or other distributions or payments on account of such Investment,

(ii)    the net after-tax cash proceeds received by the Company or any Restricted Subsidiary from the disposition of all or any portion of such Investments (other than to a Restricted Subsidiary),

(iii)           upon redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary, the fair market value of such Subsidiary; and

(iv)           Investments in Equity Interests of Specified Joint Ventures in an amount not to exceed $20,000,000;

provided, however, that the net after-tax amount has not been included in Consolidated Net Income for the purpose of calculating the Applicable Amount;

(o)           Investments in a Permitted Business having an aggregate value, taken together with all other Investments made pursuant to this clause (o) that are at that time outstanding, not to exceed $250,000,000 (with the value of each such Investment being measured at the time made and without giving effect to subsequent changes in value);

(p)           payments to any direct or indirect parent of the Company for the purposes described in Section 7.06(n) which, when aggregated with the payment made under Section 7.06(l), shall not exceed 1,500,000 or the equivalent Dollar Amount in any Fiscal Year;

(q)           Investments through the licensing contribution of technology in a Person that is or will be as a result of such Investment a Permitted Joint Venture, or Investments through the licensing, contribution or transactions that economically result in a contribution in kind of intellectual property pursuant to joint venture arrangements, in each case in the ordinary course of business;

(r)           Guarantees of Indebtedness to the extent such Guarantee is permitted under Section 7.03;

(s)           Investments received by the Company or its Restricted Subsidiaries as consideration for a Disposition pursuant to Section 7.05(c), (j), (l) or (n);

(t)           Limited Recourse Stock Pledges; and

(u)           any Indebtedness of the Company owing to any of its Subsidiaries incurred in connection with Standard Securitization Undertakings or Receivables Financing which constitute Standard Securitization Undertakings, to the extent permitted and permitted not to be subordinated pursuant to the Intercreditor Agreement, the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company to a Securitization Entity in a Securitization Transaction.

 
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Notwithstanding the foregoing, no Investments shall be made in any member of the Millennium Holdings  Group other than Investments (x) outstanding on the Closing Date and set forth on Schedule 7.02(e), (y) made pursuant to Section 7.02(k) or Section 7.06(d), in each case for the purpose of paying final judgments or settlements or orders for the payment of money or for the purpose of paying costs and expenses associated with litigation and claims under related insurance policies, and (z) in respect of environmental remediation capital expenditures or for the purpose of paying costs and expenses associated with litigation and claims under related insurance policies.
 
Section 7.03.   Indebtedness
 
Create, incur, assume or suffer to exist any Indebtedness, except:

(a)           Indebtedness of any Loan Party under the Loan Documents or any refinancings thereof;

(b)           Indebtedness existing or outstanding on the Closing Date and, to the extent such Indebtedness represents Financial Indebtedness in excess of $1,000,000 on an individual basis or Indebtedness (which is not Financial Indebtedness) in excess of $10,000,000 on an individual basis, listed on Schedule 7.03(b) and any Permitted Refinancing thereof as reduced by the amount of any prepayments of such Indebtedness with the proceeds of Dispositions (which are accompanied by a corresponding permanent commitment reduction in any revolving credit facility) and  intercompany Indebtedness outstanding on the Closing Date and any refinancing thereof;

(c)           Guarantees by the Company and any Restricted Subsidiary in respect of Indebtedness of the Company or any Restricted Subsidiary otherwise permitted hereunder; provided that (A) no Guarantee of any Indebtedness other than the Obligations shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein and (B) if the Indebtedness being Guaranteed is subordinated to the Obligations, such Guarantee shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;

(d)           Indebtedness of the Company or any Restricted Subsidiary owing to the Company or any Restricted Subsidiary for so long as such Indebtedness is held by the Company or a Restricted Subsidiary, in each case subject to no Lien held by a Person other than the Company or a Restricted Subsidiary (other than the pledge of intercompany notes hereunder); provided that any such intercompany Indebtedness owing (i) by a Loan Party to a Restricted Subsidiary that is not a Loan Party shall be subordinated to the Loans or Guarantees, as applicable, to the extent required by the terms of the Intercreditor Agreement and (ii) by a Restricted Subsidiary that is not a Loan Party to a Loan Party shall be intercompany loan from Basell Finance governed by the terms of the Intercompany Account Agreement;

(e)           Indebtedness of the Company or any Subsidiary of the Company incurred in the ordinary course of business not to exceed the greater of (i) $200,000,000 in the aggregate and (ii) 0.8% of Consolidated Net Tangible Assets at the date of incurrence, in each case, at any one time outstanding and

 
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(1)           representing Capitalized Leases or;

(2)           constituting Indebtedness incurred to finance the acquisition of, or cost of design, construction, installation, repair, addition to or improvement of, property or assets of the Company or any Restricted Subsidiary used in the ordinary course of business of the Company or any Restricted Subsidiary; provided, however, that such Indebtedness shall not exceed the cost of such property or assets or repair or improvement thereof and shall not be secured by any property or assets of the Company or any Restricted Subsidiary other than the property and assets so acquired;

(f)           Swap Contracts that are incurred for the purpose of (i) fixing or hedging interest rate or currency risk with respect to any fixed or floating rate Indebtedness permitted under this Agreement or any receivable or liability the payment of which is determined by reference to a foreign currency; provided that the notional principal amount of any such Swap Contract does not exceed the principal amount of the Indebtedness to which such Swap Contract relates or (ii) managing fluctuations in the price or cost of raw materials, emission rights, manufactured products or related commodities or (iii) hedging the potential exposure in respect of certain executives and employees options over, or stock appreciation rights in relation to shares of Royal Dutch Shell plc and BASF AG; provided that, in each case, such obligations are entered into in the ordinary course of business to hedge or mitigate risks to which the Company or any of its Restricted Subsidiaries are exposed in the conduct of its business or the management of its liabilities;

(g)           Indebtedness under the Senior Second Lien Debt, any Permanent Financing and the Existing Notes, the Guarantees thereof and any Permitted Refinancing thereof;

(h)           Indebtedness arising from agreements of the Company or a Subsidiary providing for indemnification, adjustment of purchase price, earn out or similar obligations, in each case, incurred in connection with the disposition or acquisition of any business, assets or Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition; provided that the maximum aggregate liability in respect of all such Indebtedness shall at no time exceed the gross proceeds actually received by the Company and the Subsidiary in connection with such disposition except to the extent the Company or relevant Subsidiary has a liability in respect of such business, asset or subsidiary before (and not created in contemplation of) such disposition;

(i)           Indebtedness under any Treasury Services Agreements;

(j)           any Indebtedness of the Company owing to any of its Subsidiaries incurred in connection with Standard Securitization Undertakings or Receivables Financings which constitute Standard Securitization Undertakings, to the extent permitted and permitted not to be subordinated pursuant to the Intercreditor Agreement, the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company to a Securitization Entity in a Securitization Transaction; and

(k)           Indebtedness consisting of obligations of the Company and the Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and any acquisition, Investment, or Disposition expressly permitted hereunder;

 
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(l)           Indebtedness of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount not to exceed the greater of (i) $750,000,000 and (ii) 3% of Consolidated Net Tangible Assets at the date of incurrence, in each case, at any time outstanding;

(m)           Indebtedness of the Company or any of its Restricted Subsidiaries represented by letters of credit, bank guarantees, bankers acceptances and warehouse receipts for the account of the Company or such Restricted Subsidiary or similar instruments, as the case may be, in order to provide security for workers compensation or environmental claims, payment obligations in connection with self-insurance or similar requirements in the ordinary course of business;

(n)           obligations in respect of, tender, bid, judgment, appeal, performance or governmental contract bonds and completion guarantees, surety, standby letters of credit and warranty and contractual service obligations of a like nature, trade letters of credit and documentary letters of credit and similar bonds or guarantees provided by the Company or any Subsidiary of the Company in the ordinary course of business;

(o)           (i) the incurrence by the Company or a Restricted Subsidiary of Indebtedness pursuant to the ABF Inventory Facility only and in an aggregate principal amount not to exceed, in the aggregate for all such Indebtedness, $1,500,000,000 and (ii) the incurrence of any Receivables Financing permitted hereunder that is not recourse to the Company or any Subsidiary of the Company (except for Standard Securitization Undertakings);

(p)           Indebtedness of the Company or a Restricted Subsidiary to any of its subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company or such Restricted Subsidiary from any such Subsidiary which assets are subsequently conveyed by the Company or such Restricted Subsidiary to a Securitization Entity in a Securitization Transaction;

(q)           Guarantees by the Company or a Restricted Subsidiary of Indebtedness incurred by Permitted Joint Ventures or Unrestricted Subsidiaries not to exceed the greater of (i) $250,000,000 in the aggregate and (ii) 1% of Consolidated Net Tangible Assets at the date of incurrence, in each case, at any one time outstanding;

(r)           (i) other Indebtedness of the Company or any Guarantor which may be secured by a Lien to the extent permitted under Section 7.01; provided that, (x) both immediately prior to and after giving effect thereto on a Pro Forma Basis, no Default shall exist or result therefrom and (y) the Consolidated Fixed Charge Coverage Ratio of the Company and its Restricted Subsidiaries (calculated on a Pro Forma Basis after giving effect to the incurrence of such Indebtedness) for the most recently ended four fiscal quarters for which financial statements are available immediately preceding the date on which such Indebtedness is incurred would have been at least 2.00 to 1.00 and (ii) any Permitted Refinancings thereof;

(s)           Indebtedness of a Person existing at the time that Person becomes a Restricted Subsidiary or assumed in connection with an acquisition by the Company or a Restricted Subsidiary or Indebtedness attaching to assets acquired in a acquisition, and, in each case, not incurred in connection with or in anticipation of such acquisitions; provided that the holders of any such Indebtedness do not, at any time, have direct or indirect recourse to any property or assets of the Company or any Restricted Subsidiary other than the property or assets of such acquired Person and its Subsidiaries; provided further, that on the date of such acquisition and after giving pro forma effect thereto, either (i) the Company would have been able to incur at least $1.00 of additional Indebtedness pursuant to Section 7.03(r) or (ii) the Consolidated Fixed Charge Coverage Ratio would be greater than or equal to the Consolidated Fixed Charge Coverage Ratio immediately prior to giving pro forma effect to such acquisition, in each case, together with any Permitted Refinancing thereof;

 
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(t)           Indebtedness of the Company or a Restricted Subsidiary (each, a JV Investor) the purpose of which is to finance a Permitted Joint Venture or an investment therein; provided that at all times (i) the creditors under the relevant facility have no direct or indirect recourse to the Company or any Restricted Subsidiary other than such JV Investor and (ii) the only direct or indirect recourse those creditors have to such JV Investor is limited to the proceeds (if any) of dividends received by such JV Investor in respect of such JV Investors investment in that Permitted Joint Venture;

(u)           Indebtedness consisting of take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business; and

(v)           Indebtedness arising from the honoring by a bank or other financial institution of a check or draft or similar instrument drawn against insufficient funds, overdrafts and money market lines in the ordinary course of business.

Notwithstanding the foregoing, Indebtedness incurred by Restricted Subsidiaries of the Company that are not Guarantors under clauses (e), (l), (q), (r) and (s) of this Section 7.03 may not exceed $500,000,000 in the aggregate at any one time outstanding.
 
Section 7.04.   Fundamental Changes
 
Merge, amalgamate, dissolve, liquidate, consolidate with or into another Person, or Dispose of (whether in one transaction or in a series of related transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to or in favor of any Person (other than as part of the Transaction), except that:

(a)           any Restricted Subsidiary (other than a Borrower) may merge or amalgamate  with the Company or one or more Restricted Subsidiaries; provided that when any Person that is a Loan Party is merging with a Restricted Subsidiary, a Loan Party shall be the continuing or surviving Person or such Restricted Subsidiary shall become a Loan Party under the terms hereunder;

(b)           any Restricted Subsidiary (other than a Borrower) may Dispose of all or substantially all of its assets (upon voluntary liquidation or otherwise) to the Company or to another Restricted Subsidiary; provided that if the transferor in such a transaction is a Guarantor, then (i) the transferee must be a Loan Party or become a Loan Party or (ii) to the extent constituting an Investment, such Investment must be a permitted Investment in or Indebtedness of a Restricted Subsidiary which is not a Loan Party in accordance with Sections 7.02 (other than Section 7.02(e)) and 7.03, respectively; and

 
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(c)           so long as no Default exists or would result therefrom, the Company or any Borrower may merge, consolidate or amalgamate  with any other Person; provided that (i) the Company or such Borrower, as the case may be, shall be the continuing or surviving corporation or (ii) if the Person formed by or surviving any such merger, amalgamation or consolidation is not the Company or such Borrower (any such Person, the Successor Company or the Successor Borrower, as the case may be), (A) the Successor Company or the Successor Borrower, as the case may be, shall be an entity in the same corporate form organized or existing under the laws of the United States, any state thereof, the District of Columbia or any territory thereof, or, in the case of the Company or a Borrower organized outside the United States, under the laws of such non-United States jurisdiction (or in the case of the Company or a Borrower organized under the Laws of Luxembourg, the Laws of the Netherlands), (B) the Successor Company or the Successor Borrower, as the case may be, shall expressly assume all the obligations of the Company or such Borrower under this Agreement and the other Loan Documents to which the Company or such Borrower is a party pursuant to a supplement hereto or thereto in form reasonably satisfactory to the Administrative Agent, (C) each Guarantor, unless it is the other party to such merger, amalgamation or consolidation, shall have confirmed that its Guarantee shall apply to the Successor Companys obligations or the Successor Borrowers obligations under the Loan Documents, (D) each Guarantor, unless it is the other party to such merger, amalgamation or consolidation, shall have by a supplement to the Security Agreement and other applicable Collateral Documents confirmed that its obligations thereunder shall apply to the Successor Companys obligations or the Successor Borrowers obligations under the Loan Documents, (E) each mortgagor of a Mortgaged Property, unless it is the other party to such merger, amalgamation or consolidation, shall have by an amendment to or restatement of the applicable Mortgage confirmed that its obligations thereunder shall apply to the Successor Companys obligations or the Successor Borrowers obligations under the Loan Documents, (F) after giving effect to such transaction and the use of any proceeds therefrom, the Company would have the ability to incur (i) an additional $1.00 of Indebtedness under Section 7.03(r) or (ii) the Consolidated Fixed Charge Coverage Ratio at the time of such transaction and after giving pro forma effect thereto as if such transaction had occurred at the beginning of the applicable four-quarter period will be equal to or greater than it was immediately before such transaction; and (G) the Company shall have delivered to the Administrative Agent a certificate of a Company Financial Officer and an opinion of counsel, each stating that such merger, amalgamation or consolidation and such supplement to this Agreement or any Collateral Document comply with this Agreement; providedfurther that if the foregoing are satisfied, the Successor Company or the Successor Borrower, as the case may be, will succeed to, and be substituted for, the Company or such Borrower under this Agreement; providedfurther that neither Millennium Chemicals Inc. nor Millennium Holdings LLC nor any of their respective subsidiaries as of the Closing Date may be merged with or into the Company or any other Restricted Subsidiary (other than Millennium Chemicals Inc., Millennium Holdings LLC or any of their respective subsidiaries).

Section 7.05.   Dispositions
 
Make any Disposition or enter into any agreement to make any Disposition (other than as part of or in connection with the Transaction), except:

(a)           Dispositions of obsolete, redundant, surplus or worn out property, whether now owned or hereafter acquired, in the ordinary course of business and Dispositions of property no longer used or useful in the conduct of the business of the Company or any of its Restricted Subsidiaries;

 
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(b)           Dispositions of inventory in the ordinary course of business;

(c)           Dispositions of property to the extent that (i) such property is exchanged for credit against the purchase price of similar replacement property or (ii) the proceeds of such Disposition are promptly applied to the purchase price of such replacement property;

(d)           Dispositions of property to the Company or any Restricted Subsidiary; provided that if the transferor of such property is a Loan Party, (i) the transferee thereof must be a Loan Party or (ii) if such transaction constitutes an Investment, such transaction is permitted under Section 7.02;

(e)           Dispositions permitted by Sections 7.04 and 7.06 and Liens permitted by Section 7.01;

(f)           Dispositions of property pursuant to sale-leaseback transactions; provided that the fair market value of all property so Disposed of after the Closing Date shall not exceed $250,000,000;

(g)           Dispositions of cash and Cash Equivalents;

(h)           leases, subleases, licenses or sublicenses (including the provision of software under an open source license), in each case in the ordinary course of business and which do not materially interfere with the business of the Company and the Restricted Subsidiaries;

(i)           transfers of property as a result of Casualty Events;

(j)           Dispositions of property not otherwise permitted under this Section 7.05 the proceeds (net of costs associated with such Disposition) of which do not to exceed $1,000,000,000 in any transaction or series of related transactions in the aggregate; provided that (i) at the time of such Disposition, no Default shall exist or would result from such Disposition, (ii) with respect to any Disposition pursuant to this clause (j) for a purchase price in excess of $50,000,000, the Company or any of its Restricted Subsidiaries shall receive not less than 75% of such consideration in the form of cash or Cash Equivalents (in each case, free and clear of all Liens at the time received); provided for purposes of this clause (ii) any liabilities (as shown on the Companys most recent balance sheet provided hereunder or in the footnotes thereto) of the Company or such Restricted Subsidiary, other than liabilities that are by their terms subordinated to the payment in cash of the Obligations, that are assumed by the transferee with respect to the applicable Disposition and for which the Company and all of the Restricted Subsidiaries shall have been validly released by all applicable creditors in writing shall be deemed to be cash, and (iii) the Net Proceeds shall be used to prepay Loans to the extent required by Section 2.05(b)(ii);
 
(k)           Dispositions listed in Schedule 7.05(k);

(l)           Dispositions of inventory and accounts receivable in connection with Receivables Financings, Securitization Transactions or the Asset Backed Credit Facility;

(m)           any swap of assets in exchange for services or other assets in the ordinary course of business of comparable or greater value or usefulness to the business of the Company and its Subsidiaries as a whole, as determined in good faith by the management of the Company; and

 
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(n)           Dispositions pursuant to buy-sell arrangements or similar agreements between Lyondell China Holdings Limited of Ningbo ZRCC and Lyondell Chemical Company Ltd;

provided that any Disposition of any property pursuant to this Section 7.05 (except pursuant to Sections 7.05(e) and (i) and except for Dispositions from a Loan Party to any other Loan Party) shall be for no less than the fair market value of such property at the time of such Disposition.  To the extent any Collateral is Disposed of as expressly permitted by this Section 7.05 to any Person other than a Loan Party, such Collateral shall be sold free and clear of the Liens created by the Loan Documents, and the Administrative Agent or the Collateral Agent, as applicable, shall be authorized to take any actions deemed appropriate in order to effect the foregoing.

Section 7.06.   Restricted Payments
 
Declare or make, directly or indirectly, any Restricted Payment, except:

(a)           each Restricted Subsidiary may make Restricted Payments to the Company and other Restricted Subsidiaries (and, in the case of a Restricted Payment by a non-Wholly Owned Restricted Subsidiary, to the Company and any other Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests);

(b)           the Company and each Restricted Subsidiary may declare and make dividend payments or other Restricted Payments payable solely in the Equity Interests (other than Disqualified Equity Interests not otherwise permitted by Section 7.03) of such Person;

(c)           the payment of any dividend or consummation of any irrevocable redemption within 60 days after the date of declaration of such dividend or the giving of a redemption notice if the dividend or redemption would have been permitted on the date of declaration or giving of notice;

(d)           any Restricted Payments, either (i) solely in exchange for shares of Qualified Equity Interests of the Company or (ii) if no Default or Event of Default shall have occurred and be continuing, through the application of net cash proceeds of a substantially concurrent Equity Offering (other than to a subsidiary of the Company) or capital contribution received by the Company;

(e)           to the extent constituting Restricted Payments, the Company  and its Restricted Subsidiaries may enter into and consummate the Acquisition and transactions expressly permitted by any provision of Section 7.04;

(f)           cash repurchases of Equity Interests in the Company or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants;

(g)           beginning on August 1, 2010, so long as no Default or Event of Default shall have occurred and be continuing or would be caused thereby, repurchases by the Company or a Restricted Subsidiary of, or declarations and payments of dividends to a direct or indirect parent of the Company or a Restricted Subsidiary to permit repurchases by such direct or indirect parent of, Equity Interests of the Company or a Restricted Subsidiary or such parent from employees, former employees, directors or former directors of the Company or a Restricted Subsidiary or any of its Subsidiaries (or permitted transferees of such Persons) or their authorized representatives upon the death, disability or termination of employment of such employees or directors, in an aggregate amount for all periods not to exceed 2.0% of the capital stock of the Company from time to time at fair market value at the date of such repurchase

 
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(h)           Restricted Payments to any direct or indirect parent company of the Company for legal, audit, tax and other expenses directly relating to the administration of that parent company (or any of its parent companies) including customary compensation payable to that Persons directors and employees, not to exceed 1,500,000 or the equivalent Dollar Amount in any Fiscal Year;

(i)           cash payments in lieu of issuing fractional shares pursuant to the exercise or conversion of any exercisable or convertible securities;

(j)           payments or distributions to dissenting shareholders pursuant to applicable Law in connection with or in contemplation of, any acquisition, merger, amalgamation, consolidation or transfer of assets that complies with Section 7.04;

(k)           payments of dividends on Disqualified Equity Interests issued in accordance with Section 7.03;

(l)           directors fees (including non-executive directors of the Company) or if the Company is a partnership, directors fees of the general partner of the Company, in an amount not to exceed $1,500,000 per year;

(m)           so long as no Default or Event of Default shall have occurred and be continuing or would be caused thereby, Restricted Payments in respect of sums payable (including payment of fees) pursuant to the Management Agreement in an aggregate amount not to exceed (x) $25,000,000 in respect of any Fiscal Year in which Consolidated EBITDA is less than $6,000,000,000, or (y) $30,000,000 in respect of any Fiscal Year in which Consolidated EBITDA exceeds $6,000,000,000;

(n)           so long as no Default or Event of Default shall have occurred and be continuing or would be caused thereby,

(i)     Restricted Payments by the Company in an amount not to exceed (x) prior to Listing, $50,000,000 per annum and $200,000,000 in the aggregate, plus (y) at any time, if, the Applicable Amount Availability Condition shall be met, other Restricted Payments in an aggregate amount pursuant to this clause (n) not to exceed the portion, if any, of the Applicable Amount on the date of such election that the Borrowers Agent elects to apply pursuant to this clause (n), such election to be specified in a written notice of a Company Financial Officer calculating in reasonable detail the amount of Applicable Amount immediately prior to such election and the amount thereof elected to be so applied, and

(ii)    following Listing, the payment of dividends on the listed common stock at a rate not to exceed 6% per annum of the net cash proceeds received by the Company in connection with such Listing or any subsequent Listing; provided that if such Listing was of the share capital of a Holding Company of the Company, the net proceeds of any such dividend are used to fund a corresponding dividend in equal or greater amount on the share capital of such Holding Company;

 
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(o)           distributions by any Restricted Subsidiary or any joint venture of chemicals to a holder of Equity Interests of such Restricted Subsidiary or joint venture if such distributions are made pursuant to a provision in a joint venture agreement or other arrangement entered into in connection with the establishment of such joint venture or Restricted Subsidiary that requires such holder to pay a price for such chemicals equal to that which would be paid in a comparable transaction negotiated on an arms-length basis (or pursuant to a provision that imposes a substantially equivalent requirement); and

(p)           payments in the amounts and on the conditions described in the Tax Sharing Agreement.

Section 7.07.   Change in Nature of Business
 
Engage in any material line of business substantially different from a Permitted Business.

Section 7.08.   Transactions with Affiliates
 
Enter into any transaction of any kind with any Affiliate of the Company, whether or not in the ordinary course of business, other than:

(a)           reasonable fees and compensation paid to and employee benefit arrangements, customary insurance and indemnity provided on behalf of, officers, directors, managers, employees or consultants of the Company or any Restricted Subsidiary as determined in good faith by the Board of Directors or senior management of the Company;

(b)           transactions exclusively between or among the Company and any of its Restricted Subsidiaries or exclusively between or among such Restricted Subsidiaries in each case, provided such transactions are not otherwise prohibited hereby;

(c)           any agreement as in effect as of the Closing Date set forth on Schedule 7.08 or any amendment or renewal thereto or any transaction contemplated thereby or in any replacement agreement thereto so long as any such amendment or renewal or replacement agreement is not more disadvantageous to the Lenders (as determined by the Board of Directors of the Company in their reasonable and good faith judgment) in any material respect than the original agreement;

(d)           Investments of the type described in clauses (b), (c), (d), (h), (k), (n) and (p) of Section 7.02 and Restricted Payments made in compliance with Section 7.06;

(e)           transactions between any of the Company, any of its Subsidiaries and any Securitization Entity in connection with a Securitization Transaction, in each case provided that such transactions are not otherwise prohibited hereby;

(f)           transactions with customers, clients, suppliers, distributors or other purchases or sales of goods or services, in each case in the ordinary course of business;

(g)           transactions with Permitted Joint Ventures entered into in the ordinary course of business and in a manner consistent with past practice;

 
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(h)           the issuance or sale of any Qualified Equity Interests of the Company or capital contributions received by the Company;

(i)           transactions entered into between or among the Company or any of its Restricted Subsidiaries and any joint venture, or other Affiliate that would otherwise be subject to this covenant solely because the Company or a Restricted Subsidiary owns any Equity Interests of or otherwise controls such person, or other Affiliate engaged in a Permitted Business that is under common control with the Company or such Restricted Subsidiary, on terms that are no less favorable as might reasonably have been obtained at such time from an unaffiliated party or, if no such comparable transaction is available, on terms that are fair from a financial point of view to the Company or such Restricted Subsidiary;

(j)           transactions entered into by a Person prior to the time such Person becomes a Restricted Subsidiary or is merged or consolidated into the Company or a Restricted Subsidiary (provided such transaction is not entered into in contemplation of such event);

(k)           dividends and distributions to the Company and its Restricted Subsidiaries by any Unrestricted Subsidiary of the Company or joint venture; and

(l)           transactions (x) involving aggregate payments of consideration equal to or less than $10,000,000 or (y) on terms that are no less favorable to the Company or the relevant Restricted Subsidiary than those terms that might reasonably have been obtained in a comparable transaction at such time on an arms length basis by the Company or the relevant Restricted Subsidiary and an unrelated Person or, if no such comparable transaction with a Person who is not an Affiliate is available on terms that are fair from a financial point of view to the Company or such Restricted Subsidiary as certified by an Independent Financial Advisor; provided that (x) the Board of Directors of the Company or the board of directors of the relevant Restricted Subsidiary and the board of directors of the relevant Restricted Subsidiary must approve each transaction with an Affiliate to which they are a party that involves aggregate payments or other property with a fair market value in excess of $25,000,000, such approval to be evidenced by a board resolution that states that the Board of Directors of the Company has determined that the transaction complies with the foregoing provisions and (y) if the Company or any Restricted Subsidiary enters into a transaction with an Affiliate that involves payments or other property with an aggregate fair market value of more than $100,000,000, then prior to the consummation of such transaction, the parties to such transaction must obtain a favorable opinion as to the fairness of such transaction or series of related transactions to the Company or the relevant Restricted Subsidiary, as the case may be, from a financial point of view, from an Independent Financial Advisor and deliver the same to the Administrative Agent.

Section 7.09.   Burdensome Agreements
 
Enter into or permit to exist any Contractual Obligation (other than this Agreement or any other Loan Document) that limits the ability of (a) any Restricted Subsidiary that is not a Guarantor to make Restricted Payments to any Borrower or any Guarantor or (b) any Loan Party to create, incur, assume or suffer to exist Liens on property of such Person for the benefit of the Lenders with respect to the Facilities and the Obligations or under the Loan Documents; provided that the foregoing clauses (a) and (b) shall not apply to Contractual Obligations which

 
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(i)     (x) exist on the Closing Date and (to the extent not otherwise permitted by this Section 7.09) are listed on Schedule 7.09 and (y) to the extent Contractual Obligations permitted by clause (x) are set forth in an agreement evidencing Indebtedness, are set forth in any agreement evidencing any permitted renewal, extension or refinancing of such Indebtedness so long as such renewal, extension or refinancing does not expand the scope of such Contractual Obligation,

(ii)    are binding on a Restricted Subsidiary at the time such Restricted Subsidiary first becomes a Restricted Subsidiary, so long as such Contractual Obligations were not entered into solely in contemplation of such Person becoming a Restricted Subsidiary and as amended or modified; provided, however, that any such amendment or modification is no less favorable to the Company in any material respect as determined by the Board of Directors of the Company in their reasonable and good faith judgment than the provisions prior to such amendment or modification; providedfurther that this clause (ii) shall not apply to Contractual Obligations that are binding on a Person that becomes a Restricted Subsidiary pursuant to Section 6.12,

(iii)   represent Indebtedness of a Restricted Subsidiary which is not a Loan Party which is permitted by Section 7.03,

(iv)   arise in connection with any Disposition permitted by Section 7.04 or 7.05 and relate solely to the assets or Person subject to such Disposition,

(v)    are customary provisions in joint venture agreements and other similar agreements applicable to joint ventures permitted under Section 7.02 and applicable solely to such joint venture entered into in the ordinary course of business,

(vi)   are negative pledges and restrictions on Liens in favor of any holder of Indebtedness permitted under Section 7.03 but solely to the extent any negative pledge relates to the property financed by such Indebtedness (and excluding in any event any Indebtedness constituting any Junior Financing),

(vii)   are customary restrictions on leases, subleases, licenses or asset sale agreements otherwise permitted hereby so long as such restrictions relate to the assets subject thereto,

(viii)         comprise restrictions imposed by any agreement relating to secured Indebtedness permitted pursuant to Section 7.03(e) to the extent that such restrictions apply only to the property or assets securing such Indebtedness,

(ix)    are customary provisions restricting subletting or assignment of any lease governing a leasehold interest of the Company or any Restricted Subsidiary,

(x)    are customary provisions restricting assignment of any agreement entered into in the ordinary course of business,

(xi)    comprise restrictions imposed by the Senior Second Lien Interim Loan Agreement, any Permanent Financing, any Permitted Refinancing or under any Receivables Financings with terms no less favorable to the Company than those provided for by a Securitization Transaction or Asset Backed Credit Facilities,

(xii)   are restrictions on cash or other deposits imposed by customers under contracts entered into in the ordinary course of business, and

(xiii)         are customary restrictions in construction loans, purchase money obligations, Capitalized Leases, security agreements or mortgages securing Indebtedness of the Company or a Restricted Subsidiary to the extent such restrictions restrict the transfer of the property subject to such Capitalized Leases, security agreements or mortgages.
 
 
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Section 7.10.   Anti-Money Laundering
 
Each Loan Party will use commercially reasonable efforts to ensure that no funds used to pay the obligations under the Loan Documents are derived from any unlawful activity.

Section 7.11.   Financial Covenants
 
(a)           First Lien Senior Secured Leverage Ratio.  Permit the First Lien Senior Secured Leverage Ratio as of the last day of any Test Period, beginning with the Test Period ending March 31, 2008, to be greater than 3.75:1.00.

(b)           Consolidated Debt Service Ratio.  Permit the Consolidated Debt Service Ratio as of the last day of any Test Period, beginning with the Test Period ending March 31, 2008, to be less than 1.10:1.00.

(c)           Limitation on Capital Expenditures.  Permit the aggregate amount of Capital Expenditures (other than Excluded Capital Expenditures) made in any Fiscal Year to exceed the amount set forth opposite such Fiscal Year below (each such amount, a Scheduled Capital Expenditure Amount):

Fiscal Year
  
Amount (in millions)
     
Ending December 31, 2008
  
$1,250
     
Ending January 1, 2009 and each Fiscal Year thereafter
  
$1,000

provided, however, that

(i)     so long as no Default has occurred and is continuing or would result from such expenditure, an amount equal to 50% of any portion of any amount set forth above, if not expended in the Fiscal Year for which it is permitted above, may be carried over for expenditure in the following Fiscal Year (each such amount, a Carry-Forward Amount); provided that if any such amount is so carried over, it will be deemed used in the Fiscal Year after the amount set forth opposite such Fiscal Year above and

(ii)    so long as no Default has occurred and is continuing or would result from such expenditure, if Capital Expenditures (other than Excluded Capital Expenditures) made by the Company and its Restricted Subsidiaries during any Fiscal Year exceed the amount set forth opposite such Fiscal Year above, if any, an amount up to 50% of the Scheduled Capital Expenditures Amount for the next succeeding Fiscal Year (each such amount, a carry-back amount) may be carried back to such prior Fiscal Year and utilized to make Capital Expenditures in such prior fiscal year (it being understood and agreed that (A) no carry-back amount may be carried back beyond the Fiscal Year immediately prior to the Fiscal Year of such Scheduled Capital Expenditure Amount and (B) the portion of the carry-back amount actually utilized in any Fiscal Year shall be deducted from the Scheduled Capital Expenditure Amount in the Fiscal Year from which it was carried back); provided further that, if the Applicable Amount Availability Condition shall be met, the Company and its Restricted Subsidiaries shall be permitted to make Capital Expenditures in an aggregate amount pursuant to Section 7.11(c) not to exceed the portion, if any, of the Applicable Amount on the date of such election that the Company elects to apply this clause, such election to be specified in a written notice of a Company Financial Officer calculating in reasonable detail the amount of Applicable Amount immediately prior to such election and the amount thereof elected to be so applied.

 
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Section 7.12.   Accounting Changes
 
Make any change in its fiscal year; provided, however, that the Company may, upon written notice to the Administrative Agent, change its or any of its Subsidiaries fiscal year to any other fiscal year reasonably acceptable to the Administrative Agent, in which case the Company and the Administrative Agent shall, and are hereby authorized by the Lenders to, make any adjustments to this Agreement that are reasonably necessary to reflect such change in fiscal year.

Section 7.13.   Prepayments, Etc. of Indebtedness
 
(a)           Prepay, redeem, purchase, defease or otherwise satisfy prior to the scheduled maturity thereof in any manner (it being understood that payments of regularly scheduled interest shall be permitted) any contractually subordinated Indebtedness (other than ordinary course intercompany Indebtedness and pursuant to the Dividend Distribution Note, so long as treated as a Restricted Payment), the Second Lien Debt, the Existing Notes, any Permitted Financing or any Permitted Refinancing thereof (such Indebtedness, Junior Financing) or make any payment in violation of any subordination terms of any Junior Financing Documentation, except (i) the refinancing thereof with the net proceeds of any Indebtedness (net of all Taxes, fees, costs and expenses incurred by the Company and its Restricted Subsidiaries with respect to such incurrence or issuance) (to the extent such Indebtedness constitutes a Permitted Refinancing and, if such Indebtedness was originally incurred under Section 7.03(l), is permitted pursuant to Section 7.03(l)), in each case to the extent not required to prepay any Loans pursuant to Section 2.05(b), (ii) the conversion of any Junior Financing to Qualified Equity Interests of the Company or any direct or indirect parent of the Company, (iii) the prepayment, defeasance or discharge of Indebtedness under any Existing Notes with the proceeds of incurrence of Indebtedness on the Closing Date in connection with the Transactions, (iv) prepayment, defeasance or discharge of  Indebtedness under the 2015 Notes, and (v) prepayments, redemptions, purchases, defeasances and other payments in respect of Junior Financings prior to their scheduled maturity an aggregate amount not to exceed (A) $100,000,00 plus (B) if the Applicable Amount Availability Condition shall have been satisfied on a Pro Forma Basis after giving effect to such prepayment, redemption, purchase, defeasance or other payment, with the portion, if any, of the Applicable Amount on the date of such payment that the Borrowers Agent elects to apply to this Section 7.13(a), such election to be specified in a written notice of a Company Financial Officer calculating in reasonable detail the amount of Applicable Amount immediately prior to such election and the amount thereof elected to be so applied.

(b)           Amend, modify or change in any manner materially adverse to the interests of the Lenders any term or condition of any Junior Financing Documentation without the consent of the Administrative Agent (which consent shall not be unreasonably withheld).

 
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Section 7.14.   Holding Company
 
The Company shall not, conduct, transact or otherwise engage in any business or operations other than (i) those incidental to its ownership of the Equity Interests of its Subsidiaries, (ii) those incidental to the maintenance of its legal existence, (iii) the performance of the Loan Documents, the Collateral Documents to which it is a party, the Existing Notes (only to the extent that the Company is a party thereto on the Closing Date), the Management Agreement, the Tax Sharing Agreement, the Acquisition Agreement, the Structured Financing and the other agreements contemplated by the Acquisition Agreement, (iv) any public offering of its common stock or any other issuance of its Equity Interests not prohibited by Article VII, (v) any transaction that the Company has entered into on or prior to the Closing Date, (vi) obligations of the Company under European Securitization Transactions in effect on the Closing Date, (vii) performance guarantees made in the ordinary course of business, (viii) non-speculative hedging obligations, (ix) the making of loans or payments to Subsidiaries as permitted hereunder, (x) the provisions of administrative and management services to Subsidiaries of a type customarily provided by a holding company to its subsidiaries and employing employees whose services are required for the operation of the Company and its Subsidiaries and other administrative and management services to holding companies of the Company, and (xi) rights under and liabilities incurred resulting from Taxes or loans being made to it, as the same are permitted hereunder.

ARTICLE VIII.

Events of Default and Remedies

Section 8.01.   Events of Default
 
Any of the following shall constitute an event of default (an Event of Default), subject to Section 8.02(b):

(a)           Non-Payment.  Any Loan Party fails to pay (i) when and as required to be paid herein, any amount of principal of any Loan, or (ii) within five (5) Business Days after the same becomes due, any interest on any Loan or any other amount payable hereunder or with respect to any other Loan Document; or

(b)           Specific Covenants.  Any Borrower fails to perform or observe any term, covenant or agreement contained in Sections 6.03, 6.05 (solely with respect to the Company and the Borrowers), Article VII or Section 10.01; or

(c)           Other Defaults.  Any Loan Party fails to perform or observe any other covenant or agreement (not specified in Section 8.01(a) or (b) above) contained in any Loan Document on its part to be performed or observed and such failure continues for thirty (30) days, or solely with respect to a failure to comply with clauses (a) and (b) of Section 6.01, ten (10) Business Days, after notice thereof by the Administrative Agent to the Company or the Borrowers Agent; or

(d)           Representations and Warranties.  Any representation, warranty, certification or statement of fact made or deemed made by or on behalf of any Borrower or any other Loan Party herein, in any other Loan Document, or in any document that is an exhibit to a Loan Document (or any certification by a Company Financial Officer or the Borrowers Agent expressly contemplated by this Agreement) shall be incorrect or misleading in any material respect when made or deemed made; or

 
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(e)           Cross-Default.  Any Loan Party or any Restricted Subsidiary  (i) fails to make any payment beyond the applicable grace period with respect thereto, if any (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise) in respect of any Indebtedness (other than Indebtedness hereunder) having an aggregate principal amount of not less than the Threshold Amount, or (ii) fails to observe or perform any other agreement or condition relating to any such Indebtedness of not less than the Threshold Amount (any such Indebtedness, Threshold Indebtedness), or any other event occurs (other than, with respect to Indebtedness consisting of Swap Contracts, termination events or equivalent events pursuant to the terms of such Swap Contracts), the effect of which default or other event is to cause, or to permit the holder or holders of such Indebtedness (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause, with the giving of notice if required, such Indebtedness to become due or to be repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an offer to repurchase, prepay, defease or redeem such Indebtedness to be made, prior to its Stated Maturity; provided that this clause (e)(ii) shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness, if such sale or transfer is permitted hereunder and under the documents providing for such Indebtedness; provided further that such failure is unremedied and is not waived by the holders of such Indebtedness prior to any termination of the Commitments or acceleration of the Loans pursuant to Section 8.02; or

(f)           Insolvency Proceedings, Etc.  Any of the Company, any Borrower or any Material Subsidiary to the fullest extent permitted under applicable mandatory provisions of law institutes or consents to the institution of any proceeding under any Debtor Relief Law or files for the opening of insolvency proceedings or a third person files for the opening of insolvency proceedings, or makes an assignment for the benefit of creditors; or applies for or consents to the appointment of any receiver, trustee (not being a custodian), custodian, conservator, liquidator (not being a bewindvoerder), rehabilitator, administrator, administrative receiver or similar officer for it or for all or any material part of its property under any applicable Debtor Relief Laws; or any receiver, trustee, custodian, conservator, liquidator, rehabilitator, administrator, administrative receiver or similar officer is appointed without the application or consent of such Person and the appointment continues undischarged or unstayed for sixty (60) calendar days; or any proceeding under any Debtor Relief Law relating to any such Person or to all or any material part of its property is instituted without the consent of such Person and continues undismissed or unstayed for sixty (60) calendar days, or an order for relief is entered in any such proceeding; or

(g)           Inability to Pay Debts; Attachment.  (i) Any of the Company, any Borrower or any Material Subsidiary becomes unable or admits in writing its inability or fails generally to pay its debts in excess of the Threshold Amount as they become due, or (ii) any writ or warrant of attachment or execution or similar process is issued or levied against all or any material part of the property of the Borrowers and the Restricted Subsidiaries, taken as a whole, and is not released, vacated or fully bonded within sixty (60) days after its issue or levy in each case, for the purposes of any Subsidiary domiciled in the United Kingdom, ignoring the deeming provisions of Section 123(1)(a) of the Insolvency Act 1986; or

(h)           Judgments.  There is entered against any Loan Party or any Restricted Subsidiary one or more final judgments or order for the payment of money in an aggregate amount exceeding the Threshold Amount (to the extent not covered by independent third-party insurance as to which the insurer has been notified of such judgment or order and has not denied coverage) and such judgments or orders shall not have been satisfied, vacated, discharged or stayed or bonded pending an appeal for a period of sixty (60) consecutive days; or

 
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(i)           Invalidity of Guaranties.  Any material portion of the Guarantees of the Loans, at any time after its execution and delivery and for any reason other than as expressly permitted hereunder or thereunder (including as a result of a transaction permitted under Section 7.04 or 7.05) or as a result of acts or omissions by the Administrative Agent or Collateral Agent or any Lender or the satisfaction in full of all the Obligations, ceases to be in full force and effect; or any Loan Party contests in writing the validity or enforceability of any provision of any Loan Document or the validity or priority of a Lien as required by the Collateral Documents on a material portion of the Collateral; or any Loan Party denies in writing that it has any or further liability or obligation under any Loan Document (other than as a result of repayment in full of the payment Obligations and termination of the Aggregate Commitments), or purports in writing to revoke or rescind any Loan Document; or it becomes unlawful for any Loan Party to perform any of its payment Obligations under the Loan Documents; or

(j)           Change of Control.  There occurs or shall exist any Change of Control; or

(k)           Collateral Documents.  Any Collateral Document or the Intercreditor Agreement after delivery thereof pursuant to Section 4.01, 6.12 or 6.14 shall for any reason (other than pursuant to the terms hereof or thereof or solely as a result of acts or omissions of the Administrative Agent or any Lender) ceases to create a valid and perfected Lien, with the priority required by the Collateral Documents and the Intercreditor Agreement on and security interest in any material portion of the Collateral, subject to Liens permitted under Section 7.01, except (i) to the extent that any such loss of perfection or priority results from the failure of the Administrative Agent or the Collateral Agent to (a) maintain possession of certificates actually delivered to it representing securities pledged under the Collateral Documents or (b) file Uniform Commercial Code continuation statements, (ii) as to Collateral consisting of Real Property to the extent that such losses are covered by a lenders title insurance policy and such insurer has not denied or failed to acknowledge coverage, or (iii) any of the Equity Interests of the Borrower ceasing to be pledged pursuant to any Security Agreement free of Liens other than Liens created by such Security Agreement or any nonconsensual Liens arising solely by operation of Law; or

(l)           ERISA.  An ERISA Event or any similar event with respect to a Foreign Plan occurs which, together with all other ERISA Events (or similar events with respect to Foreign Plans) that have occurred, has resulted or could reasonably be expected to result in a Material Adverse Effect.

Notwithstanding the foregoing, Events of Default under Section 8.01(e) and (h) shall not apply with respect to Millennium Holdings LLC or any Person that is a Subsidiary of Millennium Holdings LLC as of the Closing Date (collectively, the Millennium Holdings Group) if, at the time of determination, (x) the event that would otherwise give rise to such an Event of Default is excluded from the corresponding provision in all other Threshold Indebtedness or would otherwise not give rise to an event of default thereunder in accordance with the terms of such Threshold Indebtedness and (y) the Millennium Holdings Group, taken as a whole, is not a Material Subsidiary.
 
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Section 8.02.   Remedies upon Event of Default
 
(a)           If any Event of Default occurs and is continuing, the Administrative Agent may and, at the request of the Required Lenders, shall take any or all of the following actions:

(i)     declare the commitment of each Lender to make Loans and any obligation of the L/C Issuers to make L/C Credit Extensions to be terminated, whereupon such commitments and obligation shall be terminated;

(ii)    declare the unpaid principal amount of all outstanding Loans, all interest accrued and unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan Document to be immediately due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the Borrowers Agent;

(iii)   require that the Borrowers Cash Collateralize the L/C Obligations (in an amount equal to the then Outstanding Amount thereof);

(iv)   exercise on behalf of itself and the Lenders all rights and remedies available to it and the Lenders under the Loan Documents or applicable Law; and

(v)    by notice to the Dutch Loan Party concerned, require any Dutch Loan Party to give a Guarantee or Lien (in accordance with the Collateral and Guarantee Requirement) in favor of the Secured Parties and/or the Administrative Agent and the Dutch Loan Party must comply with that request;

provided that upon the occurrence of an actual or deemed entry of an order for relief with respect to the Company under any Debtor Relief Law, the obligation of each Lender to make Loans and any obligation of the L/C Issuers to make L/C Credit Extensions shall automatically terminate, the unpaid principal amount of all outstanding Loans and all interest and other amounts as aforesaid shall automatically become due and payable and the obligation of the Borrowers to Cash Collateralize the L/C Obligations as aforesaid shall automatically become effective, in each case without further act of the Administrative Agent or any Lender.

(b)           Notwithstanding the foregoing, during the period from the Closing Date until the date that is 90 days after the Closing Date (the Clean-Up Period), a breach of any representation or warranty or a breach of any covenant or an Event of Default which arises solely with respect to Lyondell or any of its Subsidiaries will be deemed not to be a breach of representation or warranty or a breach of covenant or an Event of Default (as the case may be) if, it would have been (if it were not for this provision) a breach of representation or warranty or a breach of covenant or an Event of Default only by reason of circumstances not known to the Company to exist on July 16, 2007 (or if known disclosed to the Administrative Agent on or prior to July 16, 2007) and relating  to Lyondell and its Subsidiaries or any of them if and for so long as the circumstances giving rise to the relevant breach of representation or warranty or breach of covenant or Event of Default:

(i)    are not the result of any positive action taken by the Company or any of its Subsidiaries (other than Lyondell and its Subsidiaries);

(ii)    the Company notifies the Administrative Agent promptly upon becoming aware of the same; and

 
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(iii)   reasonable efforts are being made to remedy the same;

provided that if the relevant circumstances are continuing at the end of the Clean-Up Period there shall be a breach of representation or warranty, breach of covenant or Event of Default, as the case may be.

Section 8.03.   Application of Funds
 
After the exercise of remedies provided for in Section 8.02 (or after the Loans have automatically become immediately due and payable and the L/C Obligations have automatically been required to be Cash Collateralized as set forth in the proviso to Section 8.02), any amounts received on account of the Obligations shall be applied by the Administrative Agent in the following order (to the fullest extent permitted by mandatory provisions of applicable Law):

First, to payment of that portion of the payment Obligations constituting fees, indemnities, expenses and other amounts (other than principal and interest, but including Attorney Costs payable under Section 10.04 and amounts payable under Article III) payable to the Administrative Agent or the Collateral Agent in its capacity as such;

Second, to payment of that portion of the payment Obligations constituting fees, indemnities and other amounts (other than principal and interest) payable to the Lenders (including Attorney Costs payable under Section 10.04 and amounts payable under Article III), ratably among them in proportion to the amounts described in this clause Second payable to them;

Third, to payment of that portion of the payment Obligations constituting accrued and unpaid interest on the Loans and L/C Borrowings, and any fees, premiums and scheduled periodic payments due under Treasury Services Agreements or Secured Hedge Agreements, ratably among the Secured Parties in proportion to the respective amounts described in this clause Third payable to them;

Fourth, to payment of that portion of the payment Obligations constituting unpaid principal of the Loans and L/C Borrowings (including to Cash Collateralize that portion of L/C Obligations comprised of the aggregate undrawn amount of Letters of Credit), and any breakage, termination or other payments under Treasury Services Agreements or Secured Hedge Agreements, ratably among the Secured Parties in proportion to the respective amounts described in this clause Fourth held by them;

Fifth, to the payment of all other payment Obligations of the Borrowers that are due and payable to the Administrative Agent and the other Secured Parties on such date, ratably based upon the respective aggregate amounts of all such Obligations owing to the Administrative Agent and the other Secured Parties on such date; and

Last, the balance, if any, after all of the payment Obligations have been paid in full, to the Borrowers or as otherwise required by Law.

Subject to Section 2.03(c), amounts used to Cash Collateralize the aggregate undrawn amount of Letters of Credit pursuant to clause Fifth above shall be applied to satisfy drawings under such Letters of Credit as they occur.  If any amount remains on deposit as Cash Collateral after all Letters of Credit have either been fully drawn or expired, such remaining amount shall be applied to the other Obligations, if any, in the order set forth above and, if no Obligations remain outstanding, to the Borrowers as applicable.

 
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Section 8.04.   Right to Cure
 
(a)           Notwithstanding anything to the contrary contained in Section 8.01(b), in the event of any Default or Event of Default arising solely as a result of failure to comply with the requirements of the covenants set forth in Section 7.11(a) or (b), the Company may obtain the investment of further equity or shareholder debt (provided that the same is fully subordinated pursuant to an intercreditor agreement) into the Company in an aggregate amount sufficient to reduce Consolidated First Lien Senior Secured Debt for the purpose of the financial covenant set forth in Section 7.11(a), or to the extent such investment is applied in prepayment of any of the Facilities, reduce the portion of the Consolidated Interest Expense attributable to such Facility for the purposes of the financial covenant set forth in Section 7.11(b) (but, for the avoidance of doubt, the investment of further equity or shareholder debt shall not increase Consolidated EBITDA and be treated as having no effect for the purposes of calculating any Applicable Rate, the Applicable ECF Percentage, the Applicable Amount or covenant relaxation).  Such investment must be made no more than 10 Business Days after the date on which the relevant Compliance Certificate is required to have been delivered. To the extent that any such equity or shareholder debt is invested in a particular period to enable a test or tests in a previous period to be not breached, that investment shall be deemed to have taken place on the last day of that prior period for the purpose of the financial covenant in Section 7.11(a) or on the first day of such prior period for the purpose of the financial covenant in Section 7.11(b).  No more than four cures shall be permitted during the life of the Facility.

(b)           If on a Pro Forma Basis after giving effect to the investment of equity or shareholder debt pursuant to the preceding clause (a), the Company would have been in compliance with the covenant set forth in Section 7.11(a) and Section 7.11(b) as of the date of the relevant Compliance Certificate, the Default or Event of Default under Section 8.01(b) shall be deemed to have not occurred.

(c)           The Company shall, immediately following an investment of equity or shareholder debt and the repayment of Indebtedness pursuant to Section 8.04(a), deliver to the Administrative Agent a Compliance Certificate demonstrating to the Administrative Agents satisfaction that on a Pro Forma Basis after giving effect to such investment and repayment of Indebtedness that the financial covenants set forth in Sections 7.11(a) and (b) are then complied with.

Section 8.05.   CAM Exchange
 
On the CAM Exchange Date, (i) the Lenders shall automatically and without further act be deemed to have exchanged interests in the Designated Obligations such that, in lieu of the interests of each Lender in the Designated Obligations under each Loan in which it shall participate as of such date, such Lender shall own an interest equal to such Lenders CAM Percentage in the Designated Obligations under each of the Loans and (ii) simultaneously with the deemed exchange of interests pursuant to clause (i) above, the interests in the Designated Obligations to be received in such deemed exchange shall, automatically and with no further action required, be converted into the Dollar Amount, determined using the Exchange Rate calculated as of such date, of such amount and on and after such date all amounts accruing and owed to the Lenders in respect of such Designated Obligations shall accrue and be payable in U.S. Dollars at the rate otherwise applicable hereunder.  Each Lender, each Person acquiring a participation from any Lender as contemplated by Section 10.07 and each Borrower hereby consents and agrees to the CAM Exchange.  Each  of the Borrowers and the Lenders agrees from time to time to execute and deliver to the Administrative Agent all such promissory notes and other instruments and documents as the Administrative Agent shall reasonably request to evidence and confirm the respective interests and obligations of the Lenders after giving effect to the CAM Exchange, and each Lender agrees to surrender any promissory notes originally received by it in connection with its Loans hereunder to the Administrative Agent against delivery of any promissory notes so executed and delivered; provided that the failure of any Borrower to execute or deliver or of any Lender to accept any such promissory note, instrument or document shall not affect the validity or effectiveness of the CAM Exchange.

 
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As a result of the CAM Exchange, on and after the CAM Exchange Date, each payment received by the Administrative Agent pursuant to any Loan Document in respect of the Designated Obligations shall be distributed to the Lenders pro rata in accordance with their respective CAM Percentages (to be redetermined as of each such date of payment).
 
ARTICLE IX.

Administrative Agent and Other Agents

Section 9.01.   Appointment and Authorization of Agents
 
(a)           Each Lender hereby irrevocably appoints, designates, authorizes and releases from the restrictions on self-dealing (18A of the German Civil Code) each of the Administrative Agent and the Collateral Agent to execute on its behalf and on behalf of the other Secured Parties the Collateral Documents and the Intercreditor Agreement take such action on its and their behalf under the provisions of this Agreement and each other Loan Document and the Intercreditor Agreement and to exercise such powers and perform such duties as are expressly delegated to it by the terms of this Agreement or any other Loan Document, together with such powers as are reasonably incidental thereto, and the Administrative Agent and the Collateral Agent each accept such assignment.  Each Lender hereby irrevocably appoints, designates, authorizes and releases from the restrictions on self-dealing (18A of the German Civil Code) the Collateral Agent (the Equistar Restricted Collateral Agent) to execute on its behalf, on behalf of the other Secured Parties, and on behalf of the Equistar Notes Secured Parties security agreements, pledge agreements, mortgages and/or other collateral documents (the Equistar Restricted Collateral Documents) and to take such action on its and their behalf under the provisions of this Agreement and the Equistar Restricted Collateral Documents and to exercise such powers and perform such duties as are expressly delegated to it by the terms of this Agreement or the Equistar Restricted Collateral Documents, together with such powers as are reasonably incidental thereto, and the Equistar Restricted Collateral Agent accepts such assignment. In addition, each Lender hereby irrevocably appoints, designates, authorizes and releases from the restrictions on self-dealing (18A of the German Civil Code) the Collateral Agent (the Restricted Collateral Agent) to execute on its behalf, on behalf of the other Secured Parties, and on behalf of the Arco Notes Secured Parties (as defined in the Security Agreement executed by BIL Acquisition Holdings Limited (the Restricted Security Agreement)) the Restricted Security Agreement and to take such action on its and their behalf under the provisions of this Agreement and the Restricted Security Agreement and to exercise such powers and perform such duties as are expressly delegated to it by the terms of this Agreement or the Restricted Security Agreement, together with such powers as are reasonably incidental thereto, and the Restricted Collateral Agent accepts such assignment.  Notwithstanding any provision to the contrary contained elsewhere herein, in any other Loan Document or any documents related to the Transactions, neither the Administrative Agent nor the Collateral Agent shall have any duties or responsibilities, except those expressly set forth herein or in any other Loan Document and the Intercreditor Agreement, nor shall the Administrative Agent or the Collateral Agent have or be deemed to have any fiduciary relationship with any Lender or Participant, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement, any other Loan Document or any documents related to the Transactions or otherwise exist against the Administrative Agent or the Collateral Agent.  Without limiting the generality of the foregoing sentence, the use of the term agent herein and in the other Loan Documents and the Intercreditor Agreement with reference to any Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable Law.  Instead, such term is used merely as a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties.

 
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(b)           Each L/C Issuer shall act on behalf of the Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and each such L/C Issuer shall have all of the benefits and immunities (i) provided to the Agents in this Article IX with respect to any acts taken or omissions suffered by such L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and the applications and agreements for letters of credit pertaining to such Letters of Credit as fully as if the term Agent as used in this Article IX and in the definition of Agent-Related Person included such L/C Issuer with respect to such acts or omissions, and (ii) as additionally provided herein with respect to such L/C Issuer.

(c)           Each of the Secured Parties hereby irrevocably appoints, designates and authorizes (under release from restrictions on self-dealing (181 of the German Civil Code)), including under the release from the restrictions on self-dealing (18A of the German Civil Code), the Collateral Agent to act as the agent of (and to hold any security interest created by the Collateral Documents for and on behalf of or on trust for and to enter into any Parallel Debt as defined in the Collateral Documents governed by Dutch law) such Secured Party for purposes of executing the Collateral Documents on its own behalf, acquiring, holding and enforcing any and all Liens on Collateral granted by the Loan Parties to secure any of the Obligations, together with such powers and discretion as are reasonably incidental thereto.  In this connection, the Collateral Agent (and any co-agents, sub-agents and attorneys-in-fact appointed by the Collateral Agent pursuant to Section 9.02 for purposes of holding or enforcing any Lien on the Collateral (or any portion thereof) granted under the Collateral Documents, or for exercising any rights and remedies thereunder at the direction of the Collateral Agent), shall be entitled to the benefits of all provisions of this Article IX (including Section 9.07, as though such co-agents, sub-agents and attorneys-in-fact were the Collateral Agent under the Loan Documents) as if set forth in full herein with respect thereto.

(d)           The appointment of the Collateral Agent pursuant to Section 9.01(a) referred to in this Section 9.01 shall be regarded and construed, for the purposes of Italian law, as a mandato con rappresentanza, and accordingly the Collateral Agent shall act as the mandatario con rappresentanza of the Secured Parties and shall be fully entitled to, without limitation:

(i)     exercise in its name (in nome proprio) and in the name and on behalf (in nome e per conto) of the Secured Parties all rights, powers and discretion, execute all documents and take all actions which are expressed to be exercised, executed or taken by the Secured Parties under or in connection with any of the Collateral Documents governed by Italian law;

(ii)    execute and perfect, in its name (in nome proprio) and in the name and on behalf (in nome e per conto) of the Secured Parties, any amendment agreement, deed of acknowledgement, supplemental deed, confirmation deed or any other document to be executed in connection with or under any Collateral Document governed by Italian law;

(iii)   apply the proceeds of any enforcement and sale under the relevant Collateral Document governed by Italian law in accordance with the terms of the Intercreditor Agreement; and

 
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(iv)   take, in its name (in nome proprio) and in the name and on behalf (in nome e per conto) of the Secured Parties, any enforcement action in connection with any Collateral and, in accordance with the enforcement procedures provided for by Italian Law and the provisions of the Loan Documents governed by Italian Law, provided that the Collateral Agent may delegate or authorize any Secured Party to take enforcement actions in compliance with the provisions of the other Loan Documents and the provisions of Italian Law.

Section 9.02.   Delegation of Duties
 
Each of the Administrative Agent and the Collateral Agent may execute any of its duties under this Agreement or any other Loan Document (including for purposes of holding or enforcing any Lien on the Collateral (or any portion thereof) granted under the Collateral Documents or of exercising any rights and remedies thereunder) by or through agents, employees or attorneys-in-fact including for the purpose of any Borrowings or payments in Euros, such sub-agents as shall be deemed necessary by the Administrative Agent or the Collateral Agent (which such agents may be released from the restrictions set forth in 18A of the German Civil Code), as the case may be, and shall be entitled to advice of counsel and other consultants or experts concerning all matters pertaining to such duties.  The Administrative Agent shall not be responsible for the negligence or misconduct of any agent or sub-agent or attorney or attorney-in-fact that it selects in the absence of gross negligence or willful misconduct (as determined in the final judgment of a court of competent jurisdiction).

Section 9.03.   Liability of Agents
 
No Agent-Related Person shall (i) be liable for any action taken or omitted to be taken by any of them under or in connection with this Agreement or any other Loan Document or the transactions contemplated hereby (except for its own bad faith, gross negligence or willful misconduct, as determined by the final judgment of a court of competent jurisdiction, in connection with its duties expressly set forth herein), or (ii) be responsible in any manner to any Lender or Participant for any recital, statement, representation or warranty made by any Loan Party or any officer thereof, contained herein or in any other Loan Document or the transactions contemplated hereby or thereby, or in any certificate, report, statement or other document referred to or provided for in, or received by the Administrative Agent or the Collateral Agent under or in connection with, this Agreement or any other Loan Document or the transactions contemplated hereby or thereby, or the validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Document, or the perfection or priority of any Lien or security interest created or purported to be created under the Collateral Documents, or for any failure of any Loan Party or any other party to any Loan Document to perform its obligations hereunder or thereunder.  No Agent-Related Person shall be under any obligation to any Lender or participant to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Loan Document or agreements related to the Transactions or to inspect the properties, books or records of any Loan Party or any Affiliate thereof.

Section 9.04.   Reliance by Agents
 
(a)           Each Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, communication, signature, resolution, representation, notice, consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone message, electronic mail message or transmission, statement or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons, and upon advice and statements of legal counsel (including counsel to any Loan Party), independent accountants and other experts selected by such Agent.  Each Agent shall be fully justified in failing or refusing to take any action under any Loan Document unless it shall first receive such advice or concurrence of the Required Lenders as it deems appropriate and, if it so requests, it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action.  Each Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement or any other Loan Document in accordance with a request or consent of the Required Lenders (or such greater number of Lenders as may be expressly required hereby in any instance) and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Lenders.

 
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(b)           For purposes of determining compliance with the conditions specified in Section 4.01 or 4.02(a), each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its objection thereto.

Section 9.05.   Notice of Default
 
The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Default, except with respect to defaults in the payment of principal, interest and fees required to be paid to the Administrative Agent for the account of the Lenders, unless the Administrative Agent shall have received written notice from a Lender or a Borrowers Agent referring to this Agreement, describing such Default and stating that such notice is a notice of default.  The Administrative Agent will notify the Lenders of its receipt of any such notice.  The Administrative Agent shall take such action with respect to any Event of Default as may be directed by the Required Lenders in accordance with Article VIII; provided that unless and until the Administrative Agent has received any such direction, the Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Event of Default as it shall deem advisable or in the best interest of the Lenders.

Section 9.06    Credit Decision; Disclosure of Information by Agents
 
(a)           Each Lender confirms to the Administrative Agent, each other Lender and each of their respective Affiliates that it (i) possesses (individually or through its Affiliates) such knowledge and experience in financial and business matters that it is capable, without reliance on the Administrative Agent, any other Lender or any of their respective Affiliates, of evaluating the merits and risks (including tax, legal, regulatory, credit, accounting and other financial matters) of (x) entering into this Agreement and the transactions contemplated thereby, (y) making Loans and other extensions of credit hereunder and under the other Loan Documents and (z) taking or not taking actions hereunder and thereunder, (ii) is financially able to bear such risks and (iii) has determined that entering into this Agreement and making Loans and other extensions of credit hereunder and under the other Loan Documents is suitable and appropriate for it.

(b)           Each Lender acknowledges that (i) it is solely responsible for making its own independent appraisal and investigation of all risks arising under or in connection with this Agreement and the other Loan Documents and the transactions contemplated hereby and thereby, (ii) that it has, independently and without reliance upon the Administrative Agent, any other Lender or any of their respective Affiliates, made its own appraisal and investigation of all risks associated with, and its own credit analysis and decision to enter into, this Agreement based on such documents and information as it has deemed appropriate and (iii) it will, independently and without reliance upon the Administrative Agent, any other Lender or any of their respective Affiliates, continue to be solely responsible for making its own appraisal and investigation of all risks arising under or in connection with, and its own credit analysis and decision to take or not take action under, this Agreement and the other Loan Documents and the transactions contemplated hereby and thereby based on such documents and information as it shall from time to time deem appropriate, which may include, in each case:

 
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(i)     the financial condition, status and capitalization of the Company, the Borrowers and each other Loan Party;

(ii)    the legality, validity, effectiveness, adequacy or enforceability of this Agreement and each other Loan Document and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Loan Document and the transactions contemplated hereby and thereby;

(iii)   determining compliance or non-compliance with any condition hereunder to the making of a Loan or the issuance of a Letter of Credit and the form and substance of all evidence delivered in connection with establishing the satisfaction of each such condition; and

(iv)   the adequacy, accuracy and/or completeness of any information delivered by the Administrative Agent, any other Lender or by any of their respective Affiliates under or in connection with this Agreement or any other Loan Document, the transactions contemplated hereby and hereby and thereby or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Loan Document or the transactions contemplated hereby and thereby.

Section 9.07.   Indemnification of Agents
 
Whether or not the transactions contemplated hereby are consummated, the Lenders shall indemnify upon demand each Agent-Related Person (to the extent not reimbursed by or on behalf of any Loan Party and without limiting the obligation of any Loan Party to do so), pro rata, and hold harmless each Agent-Related Person from and against any and all Indemnified Liabilities incurred by it; provided that no Lender shall be liable for the payment to any Agent-Related Person of any portion of such Indemnified Liabilities resulting from such Agent-Related Persons own gross negligence or willful misconduct, as determined by the final judgment of a court of competent jurisdiction; provided that no action taken in accordance with the directions of the Required Lenders (or such other number or percentage of the Lenders as shall be required by the Loan Documents) shall be deemed to constitute gross negligence or willful misconduct for purposes of this Section 9.07.  In the case of any investigation, litigation or proceeding giving rise to any Indemnified Liabilities, this Section 9.07 applies whether any such investigation, litigation or proceeding is brought by any Lender or any other Person.  Without limitation of the foregoing, each Lender shall reimburse each of the Administrative Agent and the Collateral Agent upon demand for its ratable share of any costs or out-of-pocket expenses (including Attorney Costs) incurred by the Administrative Agent or the Collateral Agent, as the case may be, in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement, any other Loan Document, or any document contemplated by or referred to herein, to the extent that the Administrative Agent or the Collateral Agent, as the case may be, is not reimbursed for such expenses by or on behalf of the Loan Parties.  The undertaking in this Section 9.07 shall survive termination of the Aggregate Commitments, the payment of all other Obligations and the resignation of the Administrative Agent or the Collateral Agent, as the case may be.

 
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Section 9.08.   Agents in Their Individual Capacities

Citibank, N.A. and its Affiliates may make loans to, issue letters of credit for the account of, accept deposits from, acquire Equity Interests in and generally engage in any kind of banking, trust, financial advisory, underwriting or other business with the Borrowers and their respective Affiliates as though Citibank, N.A. were not the Administrative Agent, the Collateral Agent or an L/C Issuer hereunder and without notice to or consent of the Lenders.  The Lenders acknowledge that, pursuant to such activities, Citibank, N.A. or its Affiliates may receive information regarding the Borrowers or their respective Affiliates (including information that may be subject to confidentiality obligations in favor of any such Borrower or such Affiliate) and acknowledge that neither the Administrative Agent nor the Collateral Agent shall be under any obligation to provide such information to them.  With respect to its Loans, Citibank, N.A. and its Affiliates shall have the same rights and powers under this Agreement as any other Lender and may exercise such rights and powers as though it were not the Administrative Agent, the Collateral Agent or an L/C Issuer, and the terms Lender and Lenders include Citibank, N.A. in its individual capacity.  Any successor to Citibank, N.A. as the Administrative Agent or the Collateral Agent shall also have the rights attributed to Citibank, N.A. under this paragraph.

Section 9.09.   Successor Agents

Each of the Administrative Agent and the Collateral Agent may resign as the Administrative Agent or the Collateral Agent, as applicable upon thirty (30) days notice to the Lenders and the Company.  If the Administrative Agent or the Collateral Agent resigns under this Agreement, the Required Lenders shall appoint from among the Lenders a successor agent for the Lenders, which successor agent shall be consented to by the Company at all times other than during the existence of an Event of Default under Section 8.01(f) or (g) (which consent of the Company shall not be unreasonably withheld or delayed).  If no successor agent is appointed prior to the effective date of the resignation of the Administrative Agent or the Collateral Agent, as applicable, the Administrative Agent or the Collateral Agent, as applicable, may appoint, after consulting with the Lenders and the Company, a successor agent from among the Lenders.  Upon the acceptance of its appointment as successor agent hereunder, the Person acting as such successor agent shall succeed to (and the Administrative Agent or the Collateral Agent shall assign and transfer to its successor) all the claims, rights, powers and duties of the retiring Administrative Agent or retiring Collateral Agent and the term Administrative Agent or Collateral Agent shall mean such successor administrative agent or collateral agent and/or Supplemental Agent, as the case may be, and the retiring Administrative Agents or Collateral Agents appointment, powers and duties as the Administrative Agent or Collateral Agent shall be terminated.  After the retiring Administrative Agents or the Collateral Agents resignation hereunder as the Administrative Agent or Collateral Agent, the provisions of this Article IX and Sections 10.04 and 10.05 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was the Administrative Agent or Collateral Agent under this Agreement.  If no successor agent has  accepted appointment as the Administrative Agent or the Collateral Agent by the date which is thirty (30) days following the retiring Administrative Agents or Collateral Agents notice of resignation, the retiring Administrative Agents or the retiring Collateral Agents resignation shall nevertheless thereupon become effective and the Lenders shall perform all of the duties of the Administrative Agent or Collateral Agent hereunder until such time, if any, as the Required Lenders appoint a successor agent as provided for above.  Upon the acceptance of any appointment as the Administrative Agent or Collateral Agent hereunder by a successor and upon the execution and filing or recording of such financing statements, or amendments thereto, and such other instruments or notices, as may be necessary or desirable, or as the Required Lenders may request, in order to (a) continue the perfection of the Liens granted or purported to be granted by the Collateral Documents or (b) otherwise ensure that Section 6.12 is satisfied, the Administrative Agent or Collateral Agent shall thereupon succeed to and become vested with all the rights, powers, discretion, privileges, and duties of the retiring Administrative Agent or Collateral Agent, and the retiring Administrative Agent or Collateral Agent shall be discharged from its duties and obligations under the Loan Documents.  After the retiring Administrative Agents or Collateral Agents resignation hereunder as the Administrative Agent or the Collateral Agent, the provisions of this Article IX shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as the Administrative Agent or the Collateral Agent.

 
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Section 9.10.   Administrative Agent May File Proofs of Claim
 
In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to any Loan Party, the Administrative Agent (irrespective of whether the principal of any Loan or L/C Obligation shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on a Borrowers Agent or the Collateral Agent) shall be (to the fullest extent permitted by mandatory provisions of applicable Law) entitled and empowered, by intervention in such proceeding or otherwise:

(a)           to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, L/C Obligations and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders, the Collateral Agent and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders, the Collateral Agent and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders, the Collateral Agent and the Administrative Agent under Sections 2.03(h) and (i), 2.09 and 10.04) allowed in such judicial proceeding; and

(b)           to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;

and any custodian, curator, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender to make such payments to the Administrative Agent or the Collateral Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders, to pay to the Administrative Agent or the Collateral Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Agents and their respective agents and counsel, and any other amounts due the Administrative Agent or the Collateral Agent under Sections 2.09 and 10.04.

Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or to authorize the Administrative Agent to vote in respect of the claim of any Lender in any such proceeding.

Section 9.11.   Collateral and Guaranty Matters
 
(a)           The Lenders irrevocably agree:

(i)     that any Lien on any property granted to or held by the Administrative Agent or the Collateral Agent under any Loan Document shall be automatically released (i) upon termination of the Aggregate Commitments and payment in full of all Obligations (other than (x) obligations under Secured Hedge Agreements and Treasury Services Agreements not yet due and payable and (y) contingent indemnification obligations not yet accrued and payable) and the expiration or termination, or issuance of a back stop letter of credit for, or cash collateralization of all Letters of Credit, (ii) at the time the property subject to such Lien is transferred or to be transferred as part of or in connection with any transfer permitted hereunder or under any other Loan Document to any Person other than a Person required to grant a Lien to the Administrative Agent or the Collateral Agent under the Loan Documents (or, if such transferee is a Person required to grant a Lien to the Administrative Agent or the Collateral Agent on such asset, at the option of the applicable Loan Party, such Lien on such asset may still be released in connection with the transfer so long as (A) the transferee grants a new Lien to the Administrative Agent or Collateral Agent on such asset substantially concurrently with the transfer of such asset and (B) the priority of the new Lien is the same as that of the original Lien), (iii) subject to Section 10.01, if the release of such Lien is approved, authorized or ratified in writing by the Required Lenders or (iv) if the property subject to such Lien is owned by a Guarantor, upon release of such Guarantor from its obligations under its Guaranty pursuant to clause (c) below;

 
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(ii)   to release or subordinate any Lien on any property granted to or held by the Administrative Agent or the Collateral Agent under any Loan Document to the holder of any Lien on such property that is permitted by Section 7.01(n) and (p);

(iii)   that any Guarantor shall be automatically released from its obligations under the Guaranty if such Person ceases to be a Restricted Subsidiary or becomes an Excluded Subsidiary as a result of a transaction or designation permitted hereunder; provided that no such release shall occur if such Guarantor continues to be a guarantor in respect of any Junior Financing; and

(iv)   to release any Lien on any pipeline easement and other similar Real Property granted to or held by the Administrative Agent or the Collateral Agent under any Loan Document in connection with a Disposition of pipeline easements pursuant to Section 7.05(n) of this Agreement subject to and in accordance with the following:

(A)           the Administrative Agent and Collateral Agent have been furnished evidence satisfactory to them that the swap of assets contemplated in such subpart (n) relating to the release being requested satisfies the requirements of such subpart (n); and

(B)           In connection with such disposition and as a condition to the granting of such release, (I) the Loan Party acquiring the new pipeline easements and other similar Real Property has obtained titled to such Real Property, (II) the Collateral Agent has received a Mortgage duly executed and delivered by such Loan Party with respect to such Real Property, such Mortgage being free of any Liens except as expressly permitted by Section 7.01, and (III) such Loan Party has delivered to the Administrative Agent and the Collateral Agent such existing surveys, existing abstracts, certificates, title documents, existing appraisals, legal opinions and other documents as the Administrative Agent may reasonably request with respect to any such Real Property.

Upon request by the Administrative Agent or the Collateral Agent at any time, the Required Lenders will confirm in writing the Administrative Agents or the Collateral Agents authority to release or subordinate its interest in particular types or items of property, or to release any Guarantor from its obligations under the Guaranty pursuant to this Section 9.11.  In each case as specified in this Section 9.11, the Administrative Agent or the Collateral Agent will (and each Lender irrevocably authorizes the Administrative Agent and the Collateral Agent to), at the Borrowers expense, execute and deliver to the applicable Loan Party such documents as the Borrowers may reasonably request to evidence the release or subordination of such item of Collateral from the assignment and security interest granted under the Collateral Documents, or to evidence the release of such Guarantor from its obligations under the Guaranty, in each case in accordance with the terms of the Loan Documents and this Section 9.11.

 
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(b)           (i)           In this clause (b):

(A)           Collateral Agent Claim means any amount which a Loan Party owes to the Collateral Agent under this clause; and

(B)           Secured Party Claim means any amount which a Loan Party owes to a Secured Party under or in connection with the Loan Documents.

(ii)    Unless expressly provided to the contrary in any Loan Document, the Collateral Agent holds:

(A)           any security created by a Collateral Document governed by Luxembourg law;

(B)           the benefit of any Collateral Agent Claims; and

(C)           any proceeds of security,

for the benefit, and as the property, of the Secured Parties and so that they are not available to the personal creditors of the Collateral Agent.

(iii)   The Collateral Agent will separately identify in its records the property rights referred to in paragraph (ii) above.

(iv)   Paragraphs (ii) to (iii) above do not apply to any security created by a Collateral Document governed by Dutch law.

(v)    Each Loan Party must pay the Collateral Agent, as an independent and separate creditor, an amount equal to each Secured Party Claim on its due date.

(vi)   The Collateral Agent may enforce performance of any Collateral Agent Claim in its own name as an independent and separate right.  This includes any suit, execution, enforcement of security, recovery of guarantees and applications for and voting in respect of any kind of insolvency proceeding.

(vii)   Each Secured Party must, at the request of the Collateral Agent, perform any act required in connection with the enforcement of any Collateral Agent Claim.  This includes joining in any proceedings as co-claimant with the Collateral Agent.

(viii)         Unless the Collateral Agent fails to enforce a Collateral Agent Claim within a reasonable time after its due date, a Secured Party may not take any action to enforce the corresponding Secured Party Claim unless it is requested to do so by the Collateral Agent.

(ix)    Discharge by a Loan Party of a Secured Party Claim will discharge the corresponding Collateral Agent Claim in the same amount.

 
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(x)    Discharge by a Loan Party of a Collateral Agent Claim will discharge the corresponding Secured Party Claim in the same amount.

(xi)    The aggregate amount of the Collateral Agent Claims will never exceed the aggregate amount of Secured Party Claims.

(xii)   A defect affecting a Collateral Agent Claim against a Loan Party will not affect any Secured Party Claim.

(xiii)          A defect affecting a Secured Party Claim against a Loan Party will not affect any Collateral Agent Claim.

(xiv)         Each Collateral Agent Claim is created on the understanding that and provided that the Collateral Agent will:

(A)           share the benefit, including in particular the proceeds of the Collateral Agent Claim, with the other Secured Parties; and

(B)           pay those proceeds to the Secured Parties, in accordance with the Intercreditor Agreement.

(xv)   Each party agrees that the Collateral Agent:

(A)           will be the joint and several creditor (together with the relevant Secured Party) of each and every obligation of each Loan Party towards each Secured Party under this Agreement; and

(B)           will have its own independent right to demand performance by each Loan Party of those obligations.

(xvi)         Discharge by a Loan Party of any obligation owed to the Collateral Agent or another Secured Party shall, to the same extent, discharge the corresponding obligation owing to the other.

(xvii)        Without limiting or affecting the Collateral Agents rights against each Loan Party (whether under this paragraph or under any other provision of the Loan Documents), the Collateral Agent agrees with each other Secured Party (on a several and divided basis) that, subject to the paragraph below, it will not exercise its rights as joint and several creditor with a Secured Party except in accordance with the Intercreditor Agreement.

Nothing in this clause (b) shall in any way limit the Collateral Agents right to act in the protection or preservation of rights under or to enforce any Collateral Document as contemplated by this Agreement and/or the relevant Collateral Document (or to do any act reasonably incidental to any of the above).

(c)           The Collateral Agent may accept, without enquiry, the title (if any) a Loan Party may have to any asset over which security is intended to be created by any Collateral Document.

 
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Section 9.12.   Other Agents; Arrangers and Managers
 
None of the Persons identified on the facing page or signature pages of this Agreement as a syndication agent, joint bookrunner, transaction coordinator, documentation agent or joint lead arranger (in each case in their capacity as such) shall have any right, power, obligation, liability, responsibility or duty under this Agreement or in connection with any Loan Document or the transactions contemplated thereby.  Without limiting the foregoing, none of the Persons so identified shall have or be deemed to have any fiduciary relationship with any Secured Party.  Each Secured Party acknowledges that it has not relied, and will not rely, on any of the Persons so identified in deciding to enter into the Loan Documents or in taking or not taking action hereunder or thereunder and waives to the fullest extent permitted by Law all claims it may have against the Persons so identified under or in connection with the Loan Documents and the transactions contemplated thereby.

Section 9.13.   Appointment of Supplemental Agents
 
(a)           It is the purpose of this Agreement and the other Loan Documents that there shall be no violation of any Law of any jurisdiction denying or restricting the right of banking corporations or associations to transact business as agent or trustee in such jurisdiction.  It is recognized that in case of litigation under this Agreement or any of the other Loan Documents, and in particular in case of the enforcement of any of the Loan Documents, or in case the Administrative Agent or the Collateral Agent deems that by reason of any present or future Law of any jurisdiction it may not exercise any of the rights, powers or remedies granted herein or in any of the other Loan Documents or take any other action which may be desirable or necessary in connection therewith, the Administrative Agent and the Collateral Agent are hereby authorized to appoint an additional individual or institution selected by the Administrative Agent or the Collateral Agent in its sole discretion as a separate trustee, co-trustee, administrative agent, collateral agent, administrative sub-agent or administrative co-agent (any such additional individual or institution, a Supplemental Agent).

(b)           In the event that the Collateral Agent appoints a Supplemental Agent with respect to any Collateral, (i) each and every right, power, privilege or duty expressed or intended by this Agreement or any of the other Loan Documents to be exercised by or vested in or conveyed to the Collateral Agent with respect to such Collateral shall be exercisable by and vest in such Supplemental Agent to the extent, and only to the extent, necessary to enable such Supplemental Agent to exercise such rights, powers and privileges with respect to such Collateral and to perform such duties with respect to such Collateral, and every covenant and obligation contained in the Loan Documents and necessary to the exercise or performance thereof by such Supplemental Agent shall run to and be enforceable by either the Collateral Agent or such Supplemental Agent, and (ii) the provisions of this Article IX and of Sections 10.04 and 10.05 that refer to the Administrative Agent shall inure to the benefit of such Supplemental Agent and all references therein to the Collateral Agent shall be deemed to be references to the Collateral Agent and/or such Supplemental Agent, as the context may require.

(c)           Should any instrument in writing from any Loan Party be required by any Supplemental Agent so appointed by the Administrative Agent or the Collateral Agent for more fully and certainly vesting in and confirming to him or it such rights, powers, privileges and duties, such Loan Party shall execute, acknowledge and deliver any and all such instruments promptly upon request by the Administrative Agent or the Collateral Agent.  In case any Supplemental Agent, or a successor thereto, shall die, become incapable of acting, resign or be removed, all the rights, powers, privileges and duties of such Supplemental Agent, to the extent permitted by Law, shall vest in and be exercised by the Administrative Agent until the appointment of a new Supplemental Agent.

 
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Section 9.14.   Withholding Tax

To the extent required by any applicable law, the Administrative Agent may withhold from any payment to any Lender an amount equivalent to any applicable withholding tax.  If the Internal Revenue Service or any other Governmental Authority asserts a claim that the Administrative Agent did not properly withhold tax from amounts paid to or for the account of any Lender or Participant for any reason (including because the appropriate form was not delivered or not properly executed, or because such Lender or Participant failed to notify the Administrative Agent of a change in circumstance that rendered the exemption from, or reduction of, withholding tax ineffective), such Lender and Participant shall indemnify and hold harmless the Administrative Agent (to the extent that the Administrative Agent has not already been reimbursed by the Borrowers and without limiting the obligation of the Borrowers to do so) for all amounts paid, directly or indirectly, by the Administrative Agent as tax or otherwise, including any interest, additions to tax or penalties thereto, together with all expenses incurred, including legal expenses and any other out-of-pocket expenses.
 
ARTICLE X.

Miscellaneous

Section 10.01.        Amendments, Etc.
 
Except as otherwise set forth in this Agreement, no amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent to any departure by any Loan Party therefrom, shall be effective unless in writing signed by the Required Lenders and such Loan Party and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided that no such amendment, waiver or consent shall:

(a)           extend or increase the Commitment of any Lender without the written consent of each Lender adversely affected thereby (it being understood that a waiver of (or amendment to the terms of ) any condition precedent or of any Default, mandatory prepayment or mandatory reduction of the Commitments shall not constitute an extension or increase of any Commitment of any Lender);

(b)           postpone any date scheduled for, or reduce or forgive the amount of, any payment of principal or interest under Section 2.07 or 2.08 without the written consent of each Lender adversely affected thereby (it being understood that the waiver of (or amendment to the terms of) any mandatory prepayment of the Term Loans shall not constitute a postponement of any date scheduled for the payment of principal or interest and that any change to the definition of First Lien Senior Secured Leverage Ratio or in the component definitions thereof shall not constitute a reduction or forgiveness of any interest);

(c)           reduce or forgive the principal of, or the rate of interest specified herein on, any Loan or L/C Borrowing or (subject to clause (i) of the second proviso to this Section 10.01) any fees or other amounts payable hereunder or under any other Loan Document (or change the timing of payments of such fees or other amounts) without the written consent of each Lender holding such Loan, L/C Borrowing or to whom such fee or other amount is owed (it being understood that any change to the definition of First Lien Senior Secured Leverage Ratio or in the component definitions thereof shall not constitute a reduction or forgiveness of any interest);

 
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(d)           change any provision of this Section 10.01, the definition of Required Lenders, Required Class Lenders or Pro Rata Share or Section 2.12(a), 2.13 or 8.03 without the written consent of each Lender affected thereby;

(e)           release all or substantially all of the Collateral in any transaction or series of related transactions (for the avoidance of doubt no transaction permitted by Section 7.05 as in effect on the Closing Date shall be deemed a release of all or substantially all of the Collateral) without the written consent of each Lender;

(f)           release all or substantially all of the aggregate value of the Guarantees (for the avoidance of doubt no release of Guarantees permitted by the terms of this Agreement as in effect on the Closing Date shall be deemed a release of all or substantially all of the aggregate value of the Guarantees) without the written consent of each Lender;

(g)           change the order of maturity for repayments set forth in Section 2.05(b)(vi) or (b)(vii) without the written consent of each Lender affected thereby;

(h)           amend, modify or waive Section 4.02 (including amendment, modification or waiver of any representation or warranty referenced in Section 4.02(a)) in any manner which would permit a Credit Extension of Revolving Credit Loans after giving effect to such amendment, waiver or modification and would not permit such a Credit Extension before giving effect to such amendment, waiver or modification; in each case without the written consent of the Required Class Lenders with respect to the relevant Revolving Credit Commitments; or

(i)           without the written consent of the Required Class Lenders, adversely affect the rights of a Class in respect of payments or Collateral or Guarantees in a manner different to the effect of such amendment, waiver or consent on any other Class;

and providedfurther that (i) no amendment, waiver or consent shall, unless in writing and signed by each L/C Issuer in addition to the Lenders required above, affect the rights or duties of an L/C Issuer under this Agreement or any Letter of Credit Application relating to any Letter of Credit issued or to be issued by it; (ii) no amendment, waiver or consent shall, unless in writing and signed by a Swing Line Lender in addition to the Lenders required above, affect the rights or duties of such Swing Line Lender under this Agreement; (iii) no amendment, waiver or consent shall, unless in writing and signed by the Tranche A Lenders holding more than 50% of the Tranche A Term Loan Commitments or 50% of the principal amount of any Tranche A Term Loans outstanding, as applicable, in addition to the Lenders required above, affect the rights or duties of such Tranche A Term Lenders (but not the Tranche B Term Lenders) under this Agreement, (iv) no amendment, waiver or consent shall, unless in writing and signed by the Tranche B Term Lenders holding more than 50% of the Tranche B Term Loan Commitments or 50% of the principal amount of any Tranche B Term Loans outstanding in addition to the Lenders required above, affect the rights or duties of such Tranche B Term Lenders (but not the Tranche A Term Lenders) under this Agreement, (v) no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent or the Collateral Agent, as applicable, in addition to the Lenders required above, affect the rights or duties of, or any fees or other amounts payable to, the Administrative Agent or the Collateral Agent, as applicable, under this Agreement or any other Loan Document; and (vi) Section 10.07(h) may not be amended, waived or otherwise modified without the consent of each Granting Lender all or any part of whose Loans are being funded by an SPC at the time of such amendment, waiver or other modification.

 
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Notwithstanding the foregoing, this Agreement may be amended (or amended and restated) with only the written consent of the Administrative Agent and the Loan Parties (and not any other Lender, the Required Lenders or the Required Class Lenders) to exercise any rights under the Fee Letter.

Notwithstanding the foregoing, this Agreement may be amended (or amended and restated) with the written consent of the Required Lenders, the Administrative Agent and the Borrowers (a) to add one or more additional credit facilities to this Agreement and to permit the extensions of credit from time to time outstanding thereunder and the accrued interest and fees in respect thereof to share ratably in the benefits of this Agreement and the other Loan Documents with the Term Loans and the Revolving Credit Loans and the accrued interest and fees in respect thereof and (b) to include appropriately the Lenders holding such credit facilities in any determination of the Required Lenders.  Notwithstanding the foregoing, this Agreement may be amended to adjust the borrowing mechanics related to Swing Line Loans with only the written consent of the Administrative Agent, the applicable Swing Line Lender(s) and the Borrowers so long as the obligations of the Primary Revolving Credit Lenders and, if applicable, the other Swing Line Lender are not affected thereby.

In addition, notwithstanding the foregoing, this Agreement may be amended with the written consent of the Administrative Agent, the Borrowers Agent and the Lenders providing the relevant Replacement U.S. Tranche A Dollar Term Loans, Replacement U.S. Tranche B Dollar Term Loans, Replacement Dutch Tranche A Dollar Term Loans or Replacement German Tranche B Euro Term Loans (as defined below) to permit the refinancing of all outstanding U.S. Tranche A Dollar Term Loans (Refinanced U.S. Tranche A Dollar Term Loans), U.S. Tranche B Dollar Term Loans (Refinanced U.S. Tranche B Dollar Term Loans), Dutch Tranche A Dollar Term Loans (Refinanced Dutch Tranche A Dollar Term Loans) or German Tranche B Euro Term Loans (Refinanced German Tranche B Euro Term Loans), with a U.S. Tranche A Dollar Term Loan tranches denominated in Dollars (Replacement U.S. Tranche A Dollar Term Loans), U.S. Tranche B Dollar Term Loan tranches denominated in Dollars (Replacement U.S. Tranche B Dollar Term Loans), Dutch Tranche A Dollar Term Loan, tranches denominated in Dollars (Replacement Dutch Tranche A Dollar Term Loans) or German Tranche B Euro Term Loan tranches denominated in Euros (Replacement German Tranche B Euro Term Loans), respectively, hereunder; provided that (a) the aggregate principal amount of such Replacement U.S. Tranche A Dollar Term Loans, Replacement U.S. Tranche B Dollar Term Loans, Replacement Dutch Tranche A Dollar Term Loans or Replacement German Tranche B Euro Term Loans shall not exceed the aggregate principal amount of such Refinanced U.S. Tranche A Dollar Term Loans, Refinanced U.S. Tranche B Dollar Term Loans, Refinanced Dutch Tranche A Dollar Term Loans or Refinanced German Tranche B Euro Term Loans, respectively, (b) the Applicable Rate for such Replacement U.S. Tranche A Dollar Term Loans, Replacement U.S. Tranche B Dollar Term Loans, Replacement Dutch Tranche A Dollar Term Loans or Replacement German Tranche B Euro Term Loans shall not be higher than the Applicable Rate for such Refinanced U.S. Tranche A Dollar Term Loans, Refinanced U.S. Tranche B Dollar Term Loans, Refinanced Dutch Tranche A Dollar Term Loans or Refinanced German Tranche B Euro Term Loans respectively, (c) the Weighted Average Life to Maturity of such Replacement U.S. Tranche A Dollar Term Loans, Replacement U.S. Tranche B Dollar Term Loans, Replacement Dutch Tranche A Dollar Term Loans or Replacement German Tranche B Euro Term Loans shall not be shorter than the Weighted Average Life to Maturity of such Refinanced U.S. Tranche A Dollar Term Loans, Refinanced U.S. Tranche B Dollar Term Loans, Refinanced Dutch Tranche A Dollar Term Loans or Refinanced German Tranche B Euro Term Loans, respectively, at the time of such refinancing (except to the extent of nominal amortization for periods where amortization has been eliminated as a result of prepayment of the applicable Term Loans) and (d) all other terms applicable to such Replacement U.S. Tranche A Dollar Term Loans, Replacement U.S. Tranche B Dollar Term Loans, Replacement Dutch Tranche A Dollar Term Loans or Replacement German Tranche B Euro Term Loans shall be substantially identical to, or no less favorable to the Lenders providing such Replacement U.S. Tranche A Dollar Term Loans, Replacement U.S. Tranche B Dollar Term Loans, Replacement Dutch Tranche A Dollar Term Loans or Replacement German Tranche B Euro Term Loans than those applicable to such Refinanced U.S. Tranche A Dollar Term Loans, Refinanced U.S. Tranche B Dollar Term Loans, Refinanced Dutch Tranche A Dollar Term Loans or Refinanced German Tranche B Euro Term Loans, respectively, except to the extent necessary to provide for covenants and other terms applicable to any period after the latest final maturity of the Term Loans in effect immediately prior to such refinancing.

 
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Notwithstanding anything to the contrary contained in this Section 10.01, guarantees, collateral security documents and related documents executed by Foreign Subsidiaries in connection with this Agreement may be in a form reasonably determined by the Collateral Agent and may be, together with this Agreement, amended and waived with the consent of the Collateral Agent at the request of the Borrowers Agent without the need to obtain the consent of any other Lender if such amendment or waiver is delivered in order (i) to comply with the local Law or advice of local counsel, (ii) to cure ambiguities or defects or (iii) to cause such guarantee, collateral security document or other document to be consistent with this Agreement and the other Loan Documents.

Section 10.02.        Notices and Other Communications; Facsimile Copies
 
(a)           General.  Unless otherwise expressly provided herein, all notices and other communications provided for hereunder or under any other Loan Document shall be in writing (including by facsimile transmission).  All such written notices shall be mailed, faxed or delivered  to the applicable address, facsimile number or electronic mail address, and all notices and other communications expressly permitted hereunder to be given by telephone shall be made to the applicable telephone number, as follows:

(i)     if to the Borrowers Agent or the Administrative Agent, the Collateral Agent, or an L/C Issuer or a Swing Line Lender, to the address, facsimile number, electronic mail address or telephone number specified for such Person on Schedule 10.02 or to such other address, facsimile number, electronic mail address or telephone number as shall be designated by such party in a notice to the other parties; and

(ii)    if to any other Lender, to the address, facsimile number, electronic mail address or telephone number specified in its Administrative Questionnaire or to such other address, facsimile number, electronic mail address or telephone number as shall be designated by such party in a notice to the Borrowers Agent and the Administrative Agent, the Collateral Agent, or an L/C Issuer or a Swing Line Lender.

All such notices and other communications shall be deemed to be given or made upon the earlier to occur of (i) actual receipt by the relevant party hereto and (ii) (A) if delivered by hand or by courier, when signed for by or on behalf of the relevant party hereto; (B) if delivered by mail, four (4) Business Days after deposit in the mails, postage prepaid; (C) if delivered by facsimile, when sent and receipt has been confirmed by telephone; and (D) if delivered by electronic mail (which form of delivery is subject to the provisions of Section 10.02(c)), when delivered; provided that notices and other communications to the Administrative Agent, the Collateral Agent, an L/C Issuer and a Swing Line Lender pursuant to Article II shall not be effective until actually received by such Person.  In no event shall a voice mail message be effective as a notice, communication or confirmation hereunder.

(b)           Effectiveness of Facsimile Documents and Signatures.  Loan Documents may be transmitted and/or signed by facsimile.  The effectiveness of any such documents and signatures shall, subject to applicable Law, have the same force and effect as manually signed originals and shall be binding on all Loan Parties, the Agents and the Lenders.

 
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(c)           Reliance by Agents and Lenders.  The Administrative Agent, the Collateral Agent and the Lenders shall be entitled to rely and act upon any notices (including telephonic Committed Loan Notices and Swing Line Loan Notices) purportedly given by or on behalf of any Borrower even if (i) such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or (ii) the terms thereof, as understood by the recipient, varied from any confirmation thereof.  The Borrowers shall indemnify each Agent-Related Person and each Lender from all losses, costs, expenses and liabilities resulting from the reliance by such Person on each notice purportedly given by or on behalf of any Borrower in the absence of gross negligence or willful misconduct.  All telephonic notices to the Administrative Agent or Collateral Agent may be recorded by the Administrative Agent or the Collateral Agent, and each of the parties hereto hereby consents to such recording.

Section 10.03.         No Waiver; Cumulative Remedies
 
No failure by any Lender or the Administrative Agent or the Collateral Agent to exercise, and no delay by any such Person in exercising, any right, remedy, power or privilege hereunder or under any other Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.  The rights, remedies, powers and privileges herein provided, and provided under each other Loan Document, are cumulative and not exclusive of any rights, remedies, powers and privileges provided by applicable Law.

Section 10.04.        Attorney Costs and Expenses
 
Each Borrower agrees (a) if the Closing Date occurs, to pay or reimburse the Administrative Agent, the Collateral Agent and the Arrangers for all reasonable invoiced out-of-pocket costs and expenses and any taxes (other than Taxes indemnification, which is governed by Section 3.01) incurred in connection with the preparation, negotiation, syndication and execution of this Agreement and the other Loan Documents, and any amendment, waiver, consent or other modification of the provisions hereof and thereof (whether or not the transactions contemplated thereby are consummated), and the consummation and administration of the transactions contemplated hereby and thereby, including all Attorney Costs, and (b) to pay or reimburse the Administrative Agent, the Collateral Agent, the Arrangers and each Lender for all invoiced out-of-pocket costs and expenses incurred in connection with the enforcement (whether through negotiations, legal proceedings or otherwise) of any rights or remedies under this Agreement or the other Loan Documents (including all such costs and expenses incurred during any legal proceeding, including any proceeding under any Debtor Relief Law, and including all respective Attorney Costs of counsel to the Administrative Agent and the Collateral Agent).  The foregoing costs and expenses shall include all reasonable search, filing, recording and title insurance charges and fees related thereto, and other (reasonable, in the case of Section 10.04(a)) out-of-pocket expenses incurred by any Agent.  The agreements in this Section 10.04 shall survive the termination of the Aggregate Commitments and repayment of all other Obligations.  All amounts due under this Section 10.04 shall be paid promptly after receipt by the Borrowers Agent of an invoice relating thereto setting forth such expenses in reasonable detail.  If any Loan Party fails to pay when due any costs, expenses, taxes or other amounts payable by it hereunder or under any Loan Document, such amount may be paid on behalf of such Loan Party by the Administrative Agent in its sole discretion.

 
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Section 10.05.        Indemnification by the Borrowers
 
Whether or not the transactions contemplated hereby are consummated, the Borrowers shall, jointly and severally, indemnify and hold harmless each Arranger, Agent-Related Person, each Lender and their respective Affiliates, and directors, officers, partners, employees, counsel, agents, trustees, investment advisors and attorneys-in-fact of each of the foregoing (collectively, the Indemnitees) from and against any and all liabilities, obligations, losses, damages, penalties, claims, demands, actions, judgments, suits, costs, expenses and disbursements (including attorney costs) of any kind or nature whatsoever which may at any time be imposed on, incurred by or asserted against any such Indemnitee in any way relating to or arising out of or in connection with (a) the execution, delivery, enforcement, performance or administration of any Loan Document or any other agreement, letter or instrument delivered in connection with the transactions contemplated thereby or the consummation of the transactions contemplated thereby, (b) any Commitment, Loan or Letter of Credit or the use or proposed use of the proceeds therefrom including any refusal by an L/C Issuer to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit, or (c) any actual or alleged presence or Release of Hazardous Materials on, at, under or from any property or facility currently or formerly owned, leased or operated by the Loan Parties or any Subsidiary, or any Environmental Liability related in any way to the Loan Parties or any Subsidiary, or (d) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory (including any investigation of, preparation for, or defense of any pending or threatened claim, investigation, litigation or proceeding) and regardless of whether any Indemnitee is a party thereto (all the foregoing, collectively, the Indemnified Liabilities), in all cases, whether or not caused by or arising, in whole or in part, out of the negligence of the Indemnitee; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such liabilities, obligations, losses, damages, penalties, claims, demands, actions, judgments, suits, costs, expenses or disbursements resulted from the gross negligence, bad faith or willful misconduct of such Indemnitee or of any affiliate, director, officer, partner, employee, agent or attorney-in-fact of such Indemnitee, as determined by the final judgment of a court of competent jurisdiction.  No Indemnitee shall be liable for any damages arising from the use by others of any information or other materials obtained through IntraLinks or other similar information transmission systems in connection with this Agreement, nor shall any Indemnitee or the Borrowers or any Subsidiary have any liability for any special, punitive, indirect or consequential damages relating to this Agreement or any other Loan Document or arising out of its activities in connection herewith or therewith (whether before or after the Closing Date).  In the case of an investigation, litigation or other proceeding to which the indemnity in this Section 10.05 applies, such indemnity shall be effective whether or not such investigation, litigation or proceeding is brought by any Loan Party, any Subsidiary of any Loan Party, any Loan Partys directors, stockholders or creditors or an Indemnitee or any other Person, whether or not any Indemnitee is otherwise a party thereto and whether or not any of the transactions contemplated hereunder or under any of the other Loan Documents are consummated.  All amounts due under this Section 10.05 shall be paid within ten (10) Business Days after demand therefor; provided, however, that such Indemnitee shall promptly refund such amount to the extent that there is a final judicial or arbitral determination that such Indemnitee was not entitled to indemnification rights with respect to such payment pursuant to the express terms of this Section 10.05.  The agreements in this Section 10.05 shall survive the resignation of the Administrative Agent or the Collateral Agent, the replacement of any Lender, the termination of the Aggregate Commitments and the repayment, satisfaction or discharge of all the other Obligations.  This Section 10.05 shall not apply with respect to any Taxes (including Indemnified Taxes or any Other Taxes indemnifiable under Section 3.01) other than Taxes that represent liabilities, obligations, losses, damages, etc. arising from any non-Tax claim.

 
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Section 10.06.        Payments Set Aside

To the extent that any payment by or on behalf of any Borrower is made to any Agent or any Lender, or any Agent or any Lender exercises its right of setoff, and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by such Agent or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall, to the fullest extent possible under provisions of applicable Law, be revived and continued in full force and effect as if such payment had not been made or such setoff had not occurred, and (b) each Lender severally agrees to pay to the Administrative Agent upon demand its applicable share of any amount so recovered from or repaid by any Agent, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal to the applicable Overnight Rate from time to time in effect.

Section 10.07.        Successors and Assigns

(a)           The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that no Borrower may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (except as permitted by Section 7.04) and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an assignee pursuant to an assignment made in accordance with the provisions of Section 10.07(b) (an Assignee), (ii) by way of participation in accordance with the provisions of Section 10.07(e), (iii) by way of pledge or assignment of a security interest subject to the restrictions of Section 10.07(g) or (iv) to an SPC in accordance with the provisions of Section 10.07(h) (and any other attempted assignment or transfer by any party hereto shall be null and void).  Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in Section 10.07(e) and, to the extent expressly contemplated hereby, the Indemnitees) any legal or equitable right, remedy or claim under or by reason of this Agreement.

(b)           (i)  Subject to the conditions set forth in paragraphs (b)(ii) below, any Lender may assign to one or more Assignees, after consultation with (but not the consent of) the Company (provided that no such consultation of the Company shall be required for an assignment to a Lender, an Affiliate of a Lender, an Approved Fund or, if an Event of Default under Section 8.01(a), (f) or (g) has occurred and is continuing, any Assignee), all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it) with the prior written consent (such consent not to be unreasonably withheld or delayed) of:

(A)           the Administrative Agent;

(B)           the applicable L/C Issuer at the time of such assignment (including with respect to assignees with a corporate rating of less than A by S&P and A2 by Moodys, assignees who are not domiciled in a country that is a member state of the Organization for Economic Cooperation and Development and assignments in an amount greater than $25,000,000 (or its Alternative Currency equivalent)), provided that no consent of the L/C Issuers shall be required for any assignment not related to Revolving Credit Commitments or Revolving Credit Exposure or any assignment to an Agent or an Affiliate of an Agent; and

 
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(C)           the Swing Line Lenders; provided that no consent of a Swing Line Lender shall be required for any assignment not related to Primary Revolving Credit Commitments or Revolving Credit Exposure or any assignment to an Agent or an Affiliate of an Agent.

(ii)    Assignments shall be subject to the following additional conditions:

(A)           except in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund or an assignment of the entire remaining amount of the assigning Lenders Commitment or Loans of any Class, the amount of the Commitment or Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent), shall be in a minimum amount of $2,500,000, 2,500,000 or 2,500,000 (in the case of each Revolving Credit Loan) and $1,000,000 or 1,000,000 (in the case of each Term Loan), and shall be in increments of $2,500,000, 2,500,000 or 2,500,000 (in the case of each Revolving Credit Loan) and $1,000,000 or 1,000,000 as applicable (in the case of each Term Loan), in excess thereof unless each of the Company (provided that no such consent of the Company shall be required if an Event of Default under Section 8.01(a), (f) or (g) has occurred and is continuing) and the Administrative Agent otherwise consents, provided that such amounts shall be aggregated in respect of each Lender and its Affiliates or Approved Funds, if any;

(B)           the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500; provided that only one such fee shall be payable in the event of simultaneous assignments to or from two or more Approved Funds;

(C)           the Assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire; and

(D)           all Assignees of Loans to the Company shall qualify as professional market parties within the meaning of the Exemption Regulation dated June 26, 2002 (as amended from time to time) of the Ministry of Finance in The Netherlands, as promulgated in connection with the Dutch Banking Act.

This paragraph (b) shall not prohibit any Lender from assigning all or a portion of its rights and obligations among separate Facilities on a non-pro rata basis among such Facilities.

(c)           Subject to acceptance and recording thereof by the Administrative Agent pursuant to Section 10.07(d), from and after the effective date specified in each Assignment and Assumption, the Assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lenders rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 3.01, 3.04, 3.05, 10.04 and 10.05 with respect to facts and circumstances occurring prior to the effective date of such assignment).  Upon request, and the surrender by the assigning Lender of its Note, if any,  the relevant Borrower or Borrowers (at their expense) shall execute and deliver a Note to the assignee Lender.  Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this paragraph (c) shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with Section 10.07(e).

 
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(d)           The Administrative Agent, acting solely for this purpose as an agent of the Borrowers, shall maintain at the Administrative Agents Office a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts (and related interest amounts) of the Loans, L/C Obligations (specifying the Unreimbursed Amounts), L/C Borrowings and the amounts due under Section 2.03, owing to, each Lender pursuant to the terms hereof from time to time (the Register).  The entries in the Register shall be conclusive absent manifest error, and the Borrowers, the Agents and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary.  The Register shall be available for inspection by the Borrowers Agent and any Agent, at any reasonable time and from time to time upon reasonable prior notice.

(e)           Any Lender may at any time, sell participations to any Person (other than a natural Person) (each, a  Participant) in all or a portion of such Lenders rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the Loans (including such Lenders participations in L/C Obligations and/or Swing Line Loans) owing to it); provided that (i) such Lenders obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrowers, the Agents and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lenders rights and obligations under this Agreement.  Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and the other Loan Documents and to approve any amendment, modification or waiver of any provision of this Agreement or the other Loan Documents; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, waiver or other modification described in clauses (a)-(c) and (e)-(f) of the first proviso to Section 10.01 that requires the affirmative vote of such Lender.  Subject to Section 10.07(f), the Borrowers agree that each Participant shall be entitled to the benefits (subject to the requirements and limitations) of Sections 3.01, 3.04 and 3.05 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to Section 10.07(c).  To the extent permitted by applicable Law, each Participant also shall be entitled to the benefits of Section 10.09 as though it were a Lender; provided that such Participant agrees to be subject to Sections 2.11(c) and 2.13 as though it were a Lender.  Each Lender that sells a participation with respect to a Commitment or Loan to the U.S. Borrower shall, acting solely for this purpose as a non-fiduciary agent of the U.S. Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and related interest amounts) of each Participants interest in the Commitment and/or Loan (the Participant Register).  The entries in the Participant Register shall be conclusive, absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary.

(f)           A Participant shall not be entitled to receive any greater payment under Section 3.01, 3.04 or 3.05 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Companys prior written consent (not to be unreasonably withheld or delayed).

(g)           Any Lender may, without the consent of the Borrowers or the Administrative Agent, at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank, and this Section 10.07 shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.  In order to facilitate such pledge or assignment or for any other reason, the Borrowers hereby agree that, upon request of any Lender at any time and from time to time after any Borrower has made its initial borrowing hereunder, the Borrower shall provide to such Lender, at such Borrowers own expense, a promissory note, substantially in the form of Exhibit C-1, C-2, C-3, C-4, C-5, C-6 or C-7, evidencing the Dutch Tranche A Dollar Term Loans, U.S. Tranche A Dollar Term Loans, U.S. Tranche B Dollar Term Loans, German Tranche B Euro Term Loans, Revolving Credit Loans and Swingline Loans, respectively, owing to such Lender.  Notwithstanding anything to the contrary contained herein, any Lender (a Granting Lender) may grant to a special purpose funding vehicle identified as such in writing from time to time by the Granting Lender to the Administrative Agent and the Company (an SPC) the option to provide all or any part of any Loan that such Granting Lender would otherwise be obligated to make pursuant to this Agreement; provided that (i) nothing herein shall constitute a commitment by any SPC to fund any Loan, and (ii) if an SPC elects not to exercise such option or otherwise fails to make all or any part of such Loan, the Granting Lender shall be obligated to make such Loan pursuant to the terms hereof.  Each party hereto hereby agrees that (i) an SPC shall be entitled to the benefits of Sections 3.01, 3.04 and 3.05 (subject to the requirements and limitations therein), but neither the grant to any SPC nor the exercise by any SPC of such option shall increase the costs or expenses or otherwise increase or change the obligations of the Borrowers under this Agreement (including its obligations under Section 3.01, 3.04 or 3.05) unless the grant to the SPC was made with the Companys prior written consent (not to be unreasonably withheld or delayed), (ii) no SPC shall be liable for any indemnity or similar payment obligation under this Agreement for which a Lender would be liable, (iii) the Granting Lender shall for all purposes, including the approval of any amendment, waiver or other modification of any provision of any Loan Document, remain the lender of record hereunder and (iv) the Granting Lender shall keep a register substantially in the form of Participant Register described above of each SPC which has funded all or any part of any Loan that such Lender would have otherwise been obligated to make to the Borrowers pursuant to this Agreement.  The making of a Loan by an SPC hereunder shall utilize the Commitment of the Granting Lender to the same extent, and as if, such Loan were made by such Granting Lender.  Notwithstanding anything to the contrary contained herein, any SPC may (i) with notice to, but without prior consent of the Company and the Administrative Agent and with the payment of a processing fee of $3,500, assign all or any portion of its right to receive payment with respect to any Loan to the Granting Lender and (ii) disclose on a confidential basis any non-public information relating to its funding of Loans to any rating agency, commercial paper dealer or provider of any surety or Guarantee or credit or liquidity enhancement to such SPC.

 
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(h)           Notwithstanding anything to the contrary contained herein, without the consent of the Company or the Administrative Agent, (1) any Lender may in accordance with applicable Law create a security interest in all or any portion of the Loans owing to it and the Note, if any, held by it and (2) any Lender that is a Fund may create a security interest in all or any portion of the Loans owing to it and the Note, if any, held by it to the trustee for holders of obligations owed, or securities issued, by such Fund as security for such obligations or securities; provided that unless and until such trustee actually becomes a Lender in compliance with the other provisions of this Section 10.07, (i) no such pledge shall release the pledging Lender from any of its obligations under the Loan Documents and (ii) such trustee shall not be entitled to exercise any of the rights of a Lender under the Loan Documents even though such trustee may have acquired ownership rights with respect to the pledged interest through foreclosure or otherwise.

 
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(i)           Notwithstanding anything to the contrary contained herein, any L/C Issuer or Swing Line Lender may, upon thirty (30) days notice to the Company and the Lenders, resign as an L/C Issuer or Swing Line Lender, respectively; provided that on or prior to the expiration of such 30-day period with respect to such resignation, the relevant L/C Issuer or Swing Line Lender shall have identified a successor L/C Issuer or Swing Line Lender reasonably acceptable to the Company willing to accept its appointment as successor L/C Issuer or Swing Line Lender, as applicable.  In the event of any such resignation of an L/C Issuer or Swing Line Lender, the Company shall be entitled to appoint from among the Lenders willing to accept such appointment a successor L/C Issuer or Swing Line Lender hereunder; provided that no failure by the Company to appoint any such successor shall affect the resignation of the relevant L/C Issuer or the relevant Swing Line Lender, as the case may be, except as expressly provided above.  If an L/C Issuer resigns as an L/C Issuer, it shall retain all the rights and obligations of an L/C Issuer hereunder with respect to all Letters of Credit outstanding as of the effective date of its resignation as an L/C Issuer and all L/C Obligations with respect thereto (including the right to require the Lenders to make Base Rate Loans or fund risk participations in Unreimbursed Amounts pursuant to Section 2.03(c)).  If a Swing Line Lender resigns as Swing Line Lender, it shall retain all the rights of a Swing Line Lender provided for hereunder with respect to Swing Line Loans made by it and outstanding as of the effective date of such resignation, including the right to require the Lenders to make Base Rate Loans, Eurocurrency Rate Loans or fund risk participations in outstanding Swing Line Loans pursuant to Section 2.04(c).

(j)           In case of a transfer by way of novation:

(1)           in accordance with Articles 1278-1281 of the French Civil Code, the transferring Lender maintains all its rights and privileges arising under any Collateral Documents governed by French law and any Guarantee under this Agreement for the benefit of the transferee; and

(2)           each party to this Agreement (other than the transferring Lender and the transferee) irrevocably authorizes the Administrative Agent to execute any document evidencing such transfer on its behalf.

Section 10.08.        Confidentiality
 
Each of the Agents and the Lenders agrees to maintain the confidentiality of the Information, except that Information may be disclosed (a) to its Affiliates and its and its Affiliates directors, officers, employees, trustees, investment advisors and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential) solely for purposes of this Agreement and the Transactions contemplated hereby; (b) to the extent requested by any Governmental Authority; (c) to the extent required by applicable Law or regulations or by any subpoena or similar legal process; (d) to any other party to this Agreement; (e) subject to an agreement containing provisions substantially the same as those of this Section 10.08 (or as may otherwise be reasonably acceptable to the Company), to any pledgee referred to in Section 10.07(g), counterparty to a Swap Contract, Assignee of or Participant in, or any prospective Assignee of or Participant in, any of its rights or obligations under this Agreement; (f) with the written consent of the Company; (g) to the extent such Information becomes publicly available other than as a result of a breach of this Section 10.08; (h) to any Governmental Authority or examiner (including the National Association of Insurance Commissioners or any other similar organization) regulating any Lender; (i) to any rating agency when required by it (it being understood that, prior to any such disclosure, such rating agency shall undertake to preserve the confidentiality of any Information relating to Loan Parties and their Subsidiaries received by it from such Lender); or (j) in connection with the exercise of any remedies hereunder, under any other Loan Document or any action or proceeding relating to this Agreement or any other Loan Document or the enforcement or rights hereunder or thereunder.  In addition, the Agents and the Lenders may disclose the existence of this Agreement and publicly available information about this Agreement to market data collectors, similar service providers to the lending industry, and service providers to the Agents and the Lenders in connection with the administration and management of this Agreement, the other Loan Documents, the Commitments, and the Credit Extensions.  For the purposes of this Section 10.08, Information means all information received from the Loan Parties relating to any Loan Party or any Subsidiary or its business, other than any such information that is publicly available to any Agent or any Lender prior to disclosure by any Loan Party other than as a result of a breach of this Section 10.08; provided that, in the case of information received from a Loan Party after the Closing Date, such information is clearly identified at the time of delivery as confidential or is delivered pursuant to Section 6.01, 6.02 or 6.03.

 
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Section 10.09.        Setoff

In addition to any rights and remedies of the Lenders provided by Law, upon the occurrence and during the continuance of any Event of Default, each Lender and its Affiliates (the Administrative Agent and the Collateral Agent, in respect of any unpaid fees, costs and expenses payable hereunder) is authorized at any time and from time to time, without prior notice to the Company and the Borrowers, any such notice being waived by the Company and the Borrowers (on its own behalf and on behalf of each Loan Party and each of its Subsidiaries) to the fullest extent permitted by applicable Law, to setoff and apply any and all deposits (general or special, time or demand, provisional or final) at any time held by, and other Indebtedness at any time owing by, such Lender and its Affiliates, the Administrative Agent or the Collateral Agent to or for the credit or the account of the respective Loan Parties and their Subsidiaries against any and all Obligations owing to such Lender and its Affiliates or the Collateral Agent hereunder or under any other Loan Document, now or hereafter existing, irrespective of whether or not such Agent or such Lender or Affiliate shall have made demand under this Agreement or any other Loan Document and although such Obligations may be contingent or unmatured or denominated in a currency different from that of the applicable deposit or Indebtedness.  Each Lender agrees promptly to notify the Borrowers and the Administrative Agent after any such setoff and application made by such Lender; provided that the failure to give such notice shall not affect the validity of such setoff and application.  The rights of the Administrative Agent, the Collateral Agent and each Lender under this Section 10.09 are in addition to other rights and remedies (including other rights of setoff) that the Administrative Agent, the Collateral Agent and such Lender may have.

Section 10.10.        Interest Rate Limitation

Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable Law (the Maximum Rate).  If any Agent or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to the applicable Borrower.  In determining whether the interest contracted for, charged, or received by an Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by applicable Law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Obligations hereunder.

 
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Section 10.11.   Counterparts

This Agreement and each other Loan Document (where applicable under the relevant laws) may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  Delivery by telecopier of an executed counterpart of a signature page to this Agreement and each other Loan Document shall be effective as delivery of an original executed counterpart of this Agreement and such other Loan Document.  The Agents may also require that any such documents and signatures delivered by telecopier be confirmed by a manually signed original thereof; provided that the failure to request or deliver the same shall not limit the effectiveness of any document or signature delivered by telecopier.

Section 10.12.  Integration

This Agreement, together with the other Loan Documents, comprises the complete and integrated agreement of the parties on the subject matter hereof and thereof and supersedes all prior agreements, written or oral, on such subject matter except for any such prior agreements which by the express terms thereof survive the execution of this Agreement.  In the event of any conflict between the provisions of this Agreement and those of any other Loan Document, the provisions of this Agreement shall control unless, in the case of such other Loan Documents governed by any Law other than a state of the United States, such control would result, such other Loan Document being invalid or unenforceable, in which case, the relevant provision of the Loan Document will prevail; provided that the inclusion of supplemental rights or remedies in favor of the Agents or the Lenders in any other Loan Document shall not be deemed a conflict with this Agreement.  Each Loan Document was drafted with the joint participation of the respective parties thereto and shall be construed neither against nor in favor of any party, but rather in accordance with the fair meaning thereof.

Section 10.13.  Survival of Representations and Warranties
 
Such representations and warranties have been or will be relied upon by each Agent and each Lender, regardless of any investigation made by any Agent or any Lender or on their behalf and notwithstanding that any Agent or any Lender may have had notice or knowledge of any Default at the time of any Credit Extension, and shall continue in full force and effect as of the time made as long as any Loan or any other Obligation hereunder shall remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.

Section 10.14.  Severability

If any provision of this Agreement or any other Loan Document is held to be illegal, invalid or unenforceable, the legality, validity and enforceability of the remaining provisions of this Agreement and such other Loan Document shall not be affected or impaired thereby.  The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

Section 10.15.  GOVERNING LAW

THIS AGREEMENT AND EACH OTHER LOAN DOCUMENT (OTHER THAN ANY LOAN DOCUMENT EXPRESSLY GOVERNED BY THE LAWS OF ANOTHER JURISDICTION) SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 
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ANY LEGAL ACTION OR PROCEEDING ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK CITY OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH LOAN PARTY, EACH AGENT AND EACH LENDER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS.  EACH LOAN PARTY, EACH AGENT AND EACH LENDER IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED THERETO.  EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS IN THE MANNER PROVIDED FOR NOTICES (OTHER THAN TELECOPIER) IN SECTION 10.02.  NOTHING IN THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

Section 10.16.        WAIVER OF RIGHT TO TRIAL BY JURY
 
EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THE LOAN DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

Section 10.17.        Binding Effect
 
This Agreement shall become effective when it shall have been executed by the Loan Parties and the Administrative Agent shall have been notified by each Lender, the Swing Line Lenders and L/C Issuer that each such Lender, Swing Line Lender and L/C Issuer has executed it, and thereafter shall be binding upon and inure to the benefit of the Loan Parties, each Agent and each Lender and their respective successors and assigns, in each case in accordance with Section 10.07 (if applicable), and except that no Loan Party shall have the right to assign its rights hereunder or any interest herein without the prior written consent of the Lenders except as permitted by Section 7.04.

Section 10.18.        Judgment Currency
 
If, for the purposes of obtaining judgment in any court, it is necessary to convert a sum due hereunder or any other Loan Document in one currency into another currency, the rate of exchange used shall be that at which in accordance with normal banking procedures the Administrative Agent could purchase the first currency with such other currency on the Business Day preceding that on which final judgment is given.  The obligation of each Borrower in respect of any such sum due from it to the Administrative Agent, the Collateral Agent or the Lenders hereunder or under the other Loan Documents shall, notwithstanding any judgment in a currency (the Judgment Currency) other than that in which such sum is denominated in Dollars or an Alternative Currency, be discharged only to the extent that on the Business Day following receipt by the Administrative Agent or the Collateral Agent of any sum adjudged to be so due in the Judgment Currency, the Administrative Agent or the Collateral Agent may in accordance with normal banking procedures purchase Dollars or the relevant Alternative Currency with the Judgment Currency.  If the amount of Dollars or an Alternative Currency so purchased is less than the sum originally due to the Administrative Agent or the Collateral Agent from the Borrowers in Dollars or the relevant Alternative Currency, each Borrower agrees, as a separate obligation and notwithstanding any such judgment, to indemnify the Administrative Agent or the Collateral Agent or the Person to whom such obligation was owing against such loss.  If the amount of Dollars or the relevant Alternative Currency so purchased is greater than the sum originally due to the Administrative Agent or the Collateral Agent in such currency, the Administrative Agent or the Collateral Agent agrees to return the amount of any excess to the applicable Borrower (or to any other Person who may be entitled thereto under applicable Law).

 
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Section 10.19.         Lender Action
 
Each Lender agrees that it shall not take or institute any actions or proceedings, judicial or otherwise, for any right or remedy against any Loan Party or any other obligor under any of the Loan Documents or the Secured Hedge Agreements (including the exercise of any right of setoff, rights on account of any bankers lien or similar claim or other rights of self-help), or institute any actions or proceedings, or otherwise commence any remedial procedures, with respect to any Collateral or any other property of any such Loan Party, without the prior written consent of the Administrative Agent.  The provision of this Section 10.19 are for the sole benefit of the Lenders and shall not afford any right to, or constitute a defense available to, any Loan Party.

Section 10.20.        USA Patriot Act
 
Each Lender that is subject to the USA Patriot Act and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies each Loan Party that, pursuant to the requirements of the USA Patriot Act, it is required to obtain, verify and record information that identifies such Loan Party, which information includes the name, address and tax identification number of such Loan Party and other information regarding such Loan Party that will allow such Lender or the Administrative Agent, as applicable, to identify such Loan Party in accordance with the USA Patriot Act.  This notice is given in accordance with the requirements of the USA Patriot Act and is effective as to the Lenders and the Administrative Agent.

Section 10.21.        Agent for Service of Process
 
Each Foreign Subsidiary that is a Loan Party agrees that promptly following request by the Administrative Agent it will appoint and maintain an agent reasonably satisfactory to the Administrative Agent to receive service of process in New York City, and the Loan Parties agree to cause the same to occur.

Section 10.22.        No Advisory or Fiduciary Responsibility
 
In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document), each Loan Party acknowledges and agrees that:  (i) (A) the arranging and other services regarding this Agreement provided by the Agents and the Arrangers are arms-length commercial transactions between the Company and the Borrowers and their respective Affiliates, on the one hand, and the Administrative Agent and the Arrangers, on the other hand, (B) each Loan Party has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate and (C) each Loan Party is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents; (ii) (A) each Agent and each Arranger each is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for the Company and the Borrowers or any of their respective Affiliates, or any other Person and (B) neither the Administrative Agent nor any Arranger has any obligation to the Company and the Borrowers or any of their respective Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; and (iii) the Administrative Agent and the Arrangers and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of each Loan Party and their respective Affiliates, and no Agent or Arranger has any obligation to disclose any of such interests to the Loan Parties or their respective Affiliates.  To the fullest extent permitted by law, each Loan Party hereby waives and releases any claims that it may have against the Agents and the Arrangers with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.

 
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ARTICLE XI.

Guaranty

Section 11.01.        The Guaranty
 
Each Guarantor hereby jointly and severally with the other Guarantors guarantees, as a primary obligor and not as a surety to each Secured Party and their respective successors and assigns, the prompt payment in full when due (whether at Stated Maturity, by required prepayment, declaration, demand, by acceleration or otherwise) of the principal of and interest (including any interest, fees, costs or charges that would accrue but for the provisions of (i) the Title 11 of the United States Code after any bankruptcy or insolvency petition under Title 11 of the United States Code and (ii) any other Debtor Relief Laws) on the Loans made by the Lenders to, and the Notes held by each Lender of, any Borrower (other than such Guarantor), and all other Obligations from time to time owing to the Secured Parties by any Loan Party under any Loan Document or any Secured Hedge Agreement or any Treasury Services Agreement, in each case strictly in accordance with the terms thereof (such obligations being herein collectively called the Guaranteed Obligations).  The Guarantors hereby jointly and severally agree that if the Borrowers or other Guarantor(s) shall fail to pay in full when due (whether at Stated Maturity, by acceleration or otherwise) any of the Guaranteed Obligations, the Guarantors will promptly pay the same in cash, without any demand or notice whatsoever, and that in the case of any extension of time of payment or renewal of any of the Guaranteed Obligations, the same will be promptly paid in full when due (whether at extended maturity, by acceleration or otherwise) in accordance with the terms of such extension or renewal.

Section 11.02.         Obligations Unconditional
 
The obligations of the Guarantors under Section 11.01 shall constitute a guaranty of payment and to the fullest extent permitted by applicable Law, are absolute, irrevocable and unconditional, joint and several, irrespective of the value, genuineness, validity, regularity or enforceability of the Guaranteed Obligations of the Borrowers under this Agreement, the Notes, if any, or any other agreement or instrument referred to herein or therein, or any substitution, release or exchange of any other Guaranty of or security for any of the Guaranteed Obligations, and, irrespective of any other circumstance whatsoever that might otherwise constitute a legal or equitable discharge or defense of a surety or Guarantor (except for payment in full).  Without limiting the generality of the foregoing, it is agreed that the occurrence of any one or more of the following shall not alter or impair the liability of the Guarantors hereunder which shall remain absolute, irrevocable and unconditional under any and all circumstances as described above:

 
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(i)     at any time or from time to time, without notice to the Guarantors, the time for any performance of or compliance with any of the Guaranteed Obligations shall be extended, or such performance or compliance shall be waived;

(ii)    any of the acts mentioned in any of the provisions of this Agreement or the Notes, if any, or any other agreement or instrument referred to herein or therein shall be done or omitted;

(iii)   the maturity of any of the Guaranteed Obligations shall be accelerated, or any of the Guaranteed Obligations shall be amended in any respect, or any right under the Loan Documents or any other agreement or instrument referred to herein or therein shall be amended or waived in any respect or any other guaranty of any of the Guaranteed Obligations or any security therefor shall be released or exchanged in whole or in part or otherwise dealt with;

(iv)   any Lien or security interest granted to, or in favor of, an L/C Issuer or any Lender or Agent as security for any of the Guaranteed Obligations shall fail to be perfected; or

(v)    the release of any other Guarantor pursuant to Section 11.09.

The Guarantors hereby expressly waive diligence, presentment, demand of payment, protest and all notices whatsoever, and any requirement that any Secured Party exhaust any right, power or remedy or proceed against Borrowers under this Agreement or the Notes, if any, or any other agreement or instrument referred to herein or therein, or against any other Person under any other guaranty of, or security for, any of the Guaranteed Obligations.  The Guarantors waive any and all notice of the creation, renewal, extension, waiver, termination or accrual of any of the Guaranteed Obligations and notice of or proof of reliance by any Secured Party upon this Guaranty or acceptance of this Guaranty, and the Guaranteed Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred in reliance upon this Guaranty, and all dealings between Borrowers and the Secured Parties shall likewise be conclusively presumed to have been had or consummated in reliance upon this Guaranty.  This Guaranty shall be construed as a continuing, absolute, irrevocable and unconditional guaranty of payment without regard to any right of offset with respect to the Guaranteed Obligations at any time or from time to time held by Secured Parties, and the obligations and liabilities of the Guarantors hereunder shall not be conditioned or contingent upon the pursuit by the Secured Parties or any other Person at any time of any right or remedy against Borrowers or against any other Person which may be or become liable in respect of all or any part of the Guaranteed Obligations or against any collateral security or guaranty therefor or right of offset with respect thereto.  This Guaranty shall remain in full force and effect and be binding in accordance with and to the extent of its terms upon the Guarantors and the successors and assigns thereof, and shall inure to the benefit of the Lenders, and their respective successors and assigns, notwithstanding that from time to time during the term of this Agreement there may be no Guaranteed Obligations outstanding.

 
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Section 11.03.        Reinstatement
 
The obligations of the Guarantors under this Article XI shall be automatically reinstated if and to the extent that for any reason any payment by or on behalf of the Borrowers or other Loan Party in respect of the Guaranteed Obligations is rescinded or must be otherwise restored by any holder of any of the Guaranteed Obligations, whether as a result of any proceedings in bankruptcy or reorganization or otherwise.

Section 11.04.        Subrogation; Subordination
 
Each Guarantor hereby agrees that until the payment and satisfaction in full in cash of all Guaranteed Obligations and the expiration and termination of the Commitments of the Lenders under this Agreement it shall waive any claim and shall not exercise any right or remedy, direct or indirect, arising by reason of any performance by it of its guaranty in Section 11.01, whether by subrogation or otherwise, against any Borrower or any other Guarantor of any of the Guaranteed Obligations or any security for any of the Guaranteed Obligations.  
 
Section 11.05.        Remedies
 
The Guarantors jointly and severally agree that, as between the Guarantors and the Lenders, the obligations of the Borrowers under this Agreement and the Notes, if any, may be declared to be forthwith due and payable as provided in Section 8.02 (and shall be deemed to have become automatically due and payable in the circumstances provided in Section 8.02) for purposes of Section 11.01, notwithstanding any stay, injunction or other prohibition preventing such declaration (or such obligations from becoming automatically due and payable) as against the Borrowers and that, in the event of such declaration (or such obligations being deemed to have become automatically due and payable), such obligations (whether or not due and payable by the Borrowers) shall forthwith become due and payable by the Guarantors for purposes of Section 11.01.

Section 11.06.        Instrument for the Payment of Money
 
Each Guarantor hereby acknowledges that the guaranty in this Article XI constitutes an instrument for the payment of money, and consents and agrees that any Lender or Agent, at its sole option, in the event of a dispute by such Guarantor in the payment of any moneys due hereunder, shall have the right to bring a motion-action under New York CPLR Section 3213.

Section 11.07.        Continuing Guaranty
 
The guaranty in this Article XI is a continuing guaranty of payment, and shall apply to all Guaranteed Obligations whenever arising.

Section 11.08.        General Limitation on Guarantee Obligations
 
In any action or proceeding involving any state corporate limited partnership or limited liability company law, or any applicable state, federal or foreign bankruptcy, insolvency, reorganization or other Law affecting the rights of creditors generally, if the obligations of any Guarantor under Section 11.01 would otherwise be held or determined to be void, voidable, invalid or unenforceable, or subordinated to the claims of any other creditors, on account of the amount of its liability under Section 11.01, then, notwithstanding any other provision to the contrary, the amount of such liability shall, without any further action by such Guarantor, any Loan Party or any other Person, be automatically limited and reduced to the highest amount (after giving effect to the right of contribution established in Section 11.10) that is valid and enforceable and not subordinated to the claims of other creditors as determined in such action or proceeding.

 
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Section 11.09.        Release of Guarantors
 
If, in compliance with the terms and provisions of the Loan Documents, all or substantially all of the Equity Interests or property of any Guarantor are sold or otherwise transferred (a Transferred Guarantor) to a Person or Persons, none of which is a Loan Party, such Transferred Guarantor shall, upon the consummation of such sale or transfer, be automatically released from its obligations under this Agreement (including under Section 10.05) and its obligations to pledge and grant any Collateral owned by it pursuant to any Collateral Document and, in the case of a sale of all or substantially all of the Equity Interests of the Transferred Guarantor, the pledge of such Equity Interests to the Collateral Agent pursuant to the Collateral Documents shall be automatically released, and, so long as the Borrowers Agent shall have provided the Agents such certifications or documents as any Agent shall reasonably request, the Collateral Agent shall take such actions as are necessary to effect each release described in this Section 11.09 in accordance with the relevant provisions of the Collateral Documents.

Section 11.10.        Right of Contribution
 
Each Guarantor hereby agrees that to the extent that a Subsidiary Guarantor shall have paid more than its proportionate share of any payment made hereunder, such Subsidiary Guarantor shall be entitled to seek and receive contribution from and against any other Guarantor hereunder which has not paid its proportionate share of such payment.  Each Subsidiary Guarantors right of contribution shall be subject to the terms and conditions of Section 11.04.  The provisions of this Section 11.10 shall in no respect limit the obligations and liabilities of any Subsidiary Guarantor to the Administrative Agent, the L/C Issuer, the Swing Line Lenders and the Lenders, and each Subsidiary Guarantor shall remain liable to the Administrative Agent, the L/C Issuer, the Swing Line Lenders and the Lenders for the full amount guaranteed by such Subsidiary Guarantor hereunder.

Section 11.11.        Certain Dutch Matters
 
(a)           Any obligation, guaranty or undertaking granted or assumed by a Person incorporated or organized under the laws of The Netherlands pursuant to this Agreement (including but not limited to this Article XI) or any other Loan Document shall be deemed not to be undertaken or incurred by such Person to the extent that the same would constitute unlawful financial assistance within the meaning of Section 2:207c or 2:98c of the Dutch Civil Code or any other applicable financial assistance rules under any relevant jurisdiction (the Prohibition) and the provisions of this Agreement and the other Loan Documents shall be construed accordingly.  For the avoidance of doubt it is expressly acknowledged that the relevant Persons incorporated under the laws of The Netherlands will continue to guaranty and secure all such obligations which, if included, do not constitute a violation of the Prohibition.

(b)           Any amount which may be guaranteed by Basell Benelux B.V., Lyondell Chemie International B.V. or Lyondell Chemie Nederland B.V. shall not exceed the amount permitted to be guaranteed or otherwise incurred as Debt (as defined in the 2027 Notes) in accordance with the terms of the 2027 Notes after taking into account all other Debt of all Restricted Subsidiaries (as defined in the 2027 Notes), provided that such limitation on the amount guaranteed shall not operate so as to release Basell Benelux B.V., Lyondell Chemie International B.V. or Lyondell Chemie Nederland B.V. from their respective obligations under this Section 11 in excess of such amounts and further provided that upon the refinancing in full of the 2027 Notes, the limitations on guarantees which exist as a result of the provisions of the 2027 Notes shall be automatically removed from the date of such refinancing and, accordingly, this paragraph (b),  restricting it as a Guarantor in this Agreement, shall cease to operate and have any force and effect from the date of such refinancing.  Additionally, the respective obligations of Basell Benelux B.V., Lyondell Chemie International B.V. and Lyondell Chemie Nederland B.V. under this Section 11 shall apply only insofar as required to guaranty the payment obligations of any Loan Party with respect to any proceeds of any Facility or Swing Line Facility directly or indirectly made available by such Loan Party to Basell Benelux B.V., Lyondell Chemie International B.V. or Lyondell Chemie Nederland B.V. through intra-group loans or facilities and limited to the amount of such loans or facilities available to Basell Benelux B.V., Lyondell Chemie International B.V. or Lyondell Chemie Nederland B.V. as outstanding from time to time.

 
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Section 11.12.        Guaranty Limitations
 
(a) 
 To the extent that the guarantee created hereunder is granted by a Guarantor incorporatedin Germany as a limited liability company (Gesellschaftmit beschrnkter Haftung) (eacha "German GmbH Guarantor") or established in Germany as a limited partnership (Kommanditgesellschaft) with a limited liability company (Gesellschaft mit beschrnkter Haftung) as general partner (a German GmbH & Co. KG Guarantor, together with any German GmbH Guarantor hereinafter referred to as a German Guarantor) and secures debt other than debt of such German Guarantor itself or any of its Subsidiaries, the fol-lowing shall apply:

 
(i)
each German Guarantor guarantees the payment of all and any amounts, which correspond to funds that have been borrowed under this Agreement and have been on-lent to, or otherwise passed on to, the relevant German Guarantor or any of its Subsidiaries, to the extent that any such amount is still outstanding at the time the relevant demand is made against such German Guarantor; and

 
(ii)
each German Guarantor further guarantees the payment of any amount in excess of the amounts payable by the relevant German Guarantor pursuant to paragraph (a)(i) of this Section 11.12, its relevant liability is however limited as follows:

 
(A)
each Secured Party shall not be entitled to enforce the Guarantee in an amount exceeding the amounts payable under paragraph (a)(i) of this Section 11.12 to the extent that the German Guarantor is able to demonstrate that the further enforcement of the Guarantee exceeding the amounts payable under paragraph (a)(i) of this Section 11.12 has the effect of:

 
I.
reducing the relevant German Guarantor's or, where the German Guarantor is a German GmbH & Co. KG Guarantor, its general partners net assets (Nettovermgen) (the "Net Assets") to an amount less than its or, where the German Guarantor is a German GmbH & Co. KG Guarantor, its general partners stated share capital (Stammkapital); or

 
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II.
(if the Net Assets are already an amount less than the stated share capital) causing such amount to be further reduced,

and thereby affecting the assets required for the obligatory preservation of its stated share capital according to 30, 31 German GmbH-Act (GmbH-Gesetz) (the "GmbH-Act").

 
(B)
The value of the Net Assets shall be determined in accordance with GAAP consistently applied by the German Guarantor in preparing its unconsolidated balance sheets (Jahresabschluss according to 42 GmbH-Act, 242, 264 of the German Commercial Code (HGB)) in the previous years subject to applicable law, save that:

 
I.
the amount of any increase of the stated share capital (Stammkapital) of the German Guarantor or, where the German Guarantor is a German GmbH & Co. KG Guarantor, its general partner, registered after the date of this Agreement without the prior written consent of the Administrative Agent shall be deducted from the relevant stated share capital; and

 
II.
loans and other liabilities incurred in violation of the provisions of this Agreement shall be disregarded.

 
(C)
The limitations set out in paragraph (a)(ii) of this Section 11.12 shall only apply if and to the extent that within 15 Business Days following the demand against the relevant German Guarantor under the Guarantee by the Administrative Agent, the managing director(s) on behalf of such German Guarantor have confirmed in writing to the Administrative Agent (x) to what extent the Guarantee is an up-stream or cross-stream guarantee and (y) which amount of such cross-stream and/or up-stream guarantee cannot be enforced (only if exceeding the amounts payable under paragraph (a)(i) of this Section 11.12) as it would cause the Net Assets of such Guarantor or, where the German Guarantor is a German GmbH & Co. KG Guarantor, its general partner to fall below its stated share capital (Stammkapital) or, if the Net Assets are already less than the stated share capital (Stammkapital) of such German Guarantor or, where the German Guarantor is a German GmbH & Co. KG Guarantor, its general partner, would cause such amount to be further reduced (the "Management Determination").

 
(D)
If the Administrative Agent disagrees with the Management Determination, the Administrative Agent shall be entitled to enforce the Guarantee up to an amount exceeding the amounts payable under paragraph (a)(i) of this Section 11.12 which is undisputed between itself and the relevant German Guarantor in accordance with the provisions of paragraph (a)(i) of this Section 11.12. In relation to the amount which is disputed, the Administrative Agent and such German Guarantor shall within 35 calendar days (or such longer period as has been agreed between the Company and the Administrative Agent for such purpose) from the date the Administrative Agent has contested the Management Determination request a determination by auditors of international standing and reputation of the amount of the available Net Assets (the "Auditor's Determination"). The amount determined as the available Net Assets in the Auditor's Determination shall be (except for manifest error) binding for all Parties. The costs of the Auditor's Determination shall be borne by the Company.

 
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(E)
The limitation set out in paragraph (a)(ii) of this Section 11.12 shall not apply if (x) the German Guarantor and/or, where the German Guarantor is a German GmbH & Co. KG Guarantor, its general partner has filed for insolvency or temporary insolvency proceedings have been commenced and/or (y) the Management Determination is not delivered within the time limit set out in this Section 11.12.

 
(F)
If:

 
I.
and to the extent the Guarantee is enforced without regard to the limitation set forth in paragraph (a)(ii) of this Section 11.12 because the Management Determination was not delivered within the relevant time frame; or

 
II.
the amount of the available Net Assets pursuant to the Auditor's Determination is lower than the amount stated in the Management Determination,

the Lenders shall repay to the relevant German Guarantor upon demand of the relevant German Guarantor the amount exceeding any amount to be paid under paragraph (a)(i) of this Section 11.12 if and to the extent already paid to the Lenders which is necessary to maintain its stated share capital (Stammkapital), calculated as of the date the demand under the Guarantee was made and in accordance with paragraphs (a)(ii) of this Section 11.12, provided such demand is in written form addressed to the Administrative Agent on behalf of the Lenders and is submitted within six months (Ausschlussfrist) after the date the Guarantee is enforced without regard to the limitation set forth in paragraph (a)(ii)(A) of this Section 11.12. If pursuant to the Auditor's Determination the amount of the available Net Assets is higher than set out in the Management Determination the relevant German Guarantor shall pay such amount to the extent not already paid to the Lenders within five Business Days after receipt of the Auditor's Determination.

 
(G)
If the German Guarantor intends to demonstrate that the enforcement of the Guarantee in an amount exceeding any amount to be paid under paragraph (a)(i) of this Section 11.12 has led to one of the effects referred to in paragraph (a)(ii) of this Section 11.12, then the German Guarantor and, where the German Guarantor is a German GmbH & Co. KG Guarantor, also its general partner shall realise at market value any and all of its assets that are shown in its balance sheet with a book value (Buchwert) that is in the opinion of the Administrative Agent significantly lower than their market value if such assets are not necessary for the relevant German Guarantor's or, where the German Guarantor is a German GmbH & Co. KG Guarantor, its general partners, business (nicht betriebsnotwendig), to the extent necessary to satisfy the amounts requested under this paragraph (a)(ii).

 
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(H)
The limitation set out in paragraph (a)(ii) of this Section 11.12 does not affect the right of the Lenders to claim again any outstanding amount at a later point in time if and to the extent that paragraph (a)(ii) of this Section 11.12 would allow this at that later point.

 
(iii)
Notwithstanding the foregoing the Administrative Agent and the Lenders waive their rights to enforce the Guarantee as set out below to the extent that and as long as such enforcement would be in violation of the prohibition of an intervention threatening the existence of that German Guarantor (Versto gegen das Verbot des existenzvernichtenden Eingriffs).

The limitation and waiver of enforcement of the Guarantee set out in sub-paragraph (iii) of this Section 11.12 shall only apply:

 
(A)
if and to the extent that within 15 Business Days following the demand against the relevant German Guarantor under the Guarantee by the Administrative Agent, the managing directors on behalf of such German Guarantor have confirmed and proved in writing to the Administrative Agent to what extent the Guarantee cannot be enforced as it would cause a violation of the prohibition of an intervention threatening the existence of that German Guarantor (Verstogegen das Verbot des existenzvernichtenden Eingriffs), (the "Management Determination of an Intervention Threatening the Existence of the German Guarantor"); and

 
(B)
if the Administrative Agent disagrees with the Management Determination of an Intervention Threatening the Existence of the German Guarantor the proceedings set out in paragraph (a)(ii)(D) of this Section 11.12 shall apply mutatis mutandis.

This sub-paragraph (iii) shall apply mutatis mutandis if the Guarantee is granted by a Guarantor incorporated as a limited liability partnership (GmbH & Co. KG) and secures debt other than debt of such Guarantor itself or any of its Subsidiaries.

 
(iv)
If the law is changed to the effect that Sections 30 German GmbH-Act is not applicable when a domination agreement (Beherrschungsvertrag) or a profit and loss pooling (Ergebnisabfhrungsvertrag) between the relevant German Guarantor and a borrower/guarantor (the Relevant Borrower/Guarantor) exists (directly, or indirectly through a chain of domination or profit and loss pooling agreements between the Relevant Borrower and its subsidiaries and the German Guarantor) then the limitations provided for in this Section 11.12 shall no longer apply to the extent that the Guarantee covers the obligations of the Relevant Borrower/Guarantor.

 
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(b) 
For the avoidance of doubt, nothing in this Agreement shall be interpreted as a restriction or limitation of (i) the enforcement of the Guarantee covering obligations owed by any of the respective German Guarantors direct or indirect Subsidiaries or (ii) the enforcement of any claim of any Secured Party against a Borrower (in such capacity) under this Agreement.

Section 11.13.        Guaranty Limitations in Respect of Millennium Chemicals Inc.

Any amount that may be guaranteed by Millennium Chemicals Inc or any of its Subsidiaries, shall not exceed the amount permitted to be Incurred (as defined in the Millennium Indenture) as Funded Debt (as defined in the Millennium Indenture) as more fully set forth in Section 1009 of the Millennium Indenture; provided, however, that upon the refinancing in full of the Millennium Notes, this Section 11.13 shall cease to operate and have any force and effect as of the date of such refinancing.

Section 11.14.        Non-U.S. Guarantee Limitations.

The guarantee under this Agreement by any Loan Parties outside the United States does not apply to any liability to the extent that it would result in this guarantee constituting unlawful financial assistance within the meaning of Section 151 of the Companies Act 1985 or any equivalent and applicable provisions under the laws of the jurisdiction of incorporation of the relevant Loan Party and, with respect to any Guarantors which accede to this Agreement by way of joinder after the Closing Date, is subject to any limitations set out in the joinder agreement in respect of this Agreement applicable to such Guarantor.

Section 11.15.        Limitation on Guarantee by Additional Guarantors.

(a)           The guarantee of any Person which becomes a Loan Party pursuant to an appropriate joinder agreement in respect of this Agreement that is not a Loan Party domiciled in either the Grand Duchy of Luxembourg or Germany is subject to any limitations relating to that additional Loan Party set out in any such joinder agreement, including (to the extent applicable) certain restrictions under the 2027 Notes and the Millennium Indenture.

(b)           The guarantee of any Person which becomes a Loan Party pursuant to an appropriate joinder agreement in respect of this Agreement that is a Loan Party domiciled in The Netherlands shall be subject to the limitations set out in paragraph (a) of Section 11.11 and (to the extent applicable) certain restrictions under the 2027 Notes, in each case, as set out in such joinder agreement in form and substance satisfactory to the Administrative Agent (acting reasonably).
 
ARTICLE XII.

Foreign Currency Participations

Section 12.01.        U.S./Dutch Revolving Credit Loans; Intra-Lender Issues.

(a)           Specified Foreign Currency Participations.  Notwithstanding anything to the contrary contained herein, all Revolving Credit Loans that are denominated in the Specified Foreign Currency (each, a Specified Foreign Currency Loan) shall be made solely by the Revolving Credit Lenders (including Citibank, N.A., London Branch) who are not Participating Specified Foreign Currency Lenders (as defined below).  Each Re­volving Credit Lender acceptable to Citibank, N.A., London Branch that does not have Specified Foreign Currency Funding Capacity (a Participating Specified Foreign Currency Lender) shall irrevocably and unconditionally purchase and acquire and shall be deemed to irrevocably and unconditionally purchase and acquire from Citibank, N.A., London Branch, and Citibank, N.A., London Branch shall sell and be deemed to sell to each such Participating Specified For­eign Currency Lender, without recourse or any representation or warranty whatsoever, an undi­vided interest and participation (a Specified Foreign Currency Participation) in each Revolving Credit Loan which is a Specified Foreign Currency Loan funded by Citi­bank, N.A., London Branch in an amount equal to such Participating Specified Foreign Currency Lenders Pro Rata Share of the Borrowing that includes such Revolving Credit Loan. Such purchase and sale of a Specified Foreign Currency Participation shall be deemed to occur automatically upon the making of a Specified Foreign Currency Loan by Citibank, N.A., London Branch, without any further notice to any Participating Specified Foreign Currency Lender.  The purchase price payable by each Participating Specified Foreign Currency Lender to Citibank, N.A., London Branch for each Specified Foreign Currency Participation purchased by it from Citibank, N.A., London Branch shall be equal to 100% of the principal amount of such Specified Foreign Currency Participation (i.e., the product of (i) the amount of the Borrowing that includes the relevant Revolving Credit Loan and (ii) such Participating Specified Foreign Cur­rency Lenders Pro Rata Share), and such purchase price shall be payable by each Participating Specified Foreign Currency Lender to Citibank, N.A., London Branch in accordance with the settlement procedure set forth in Section 12.02 below.  Citibank, N.A., London Branch and the Administrative Agent shall record on their books the amount of the Revolving Credit Loans made by Citibank, N.A., London Branch and each Participating Specified Foreign Cur­rency Lenders Specified Foreign Currency Participation and Funded Specified Foreign Cur­rency Participation therein, all payments in respect thereof and interest accrued thereon and all payments made by and to each Participating Specified Foreign Currency Lender pursuant to this Section 12.01.

 
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Section 12.02.        Settlement Procedure for Specified Foreign Currency Participations.

Each Participating Specified Foreign Currency Lenders Specified Foreign Currency Par­ticipation in the Specified Foreign Currency Loans shall be in an amount equal to its Pro Rata Share of all such Specified Foreign Currency Loans.  However, in order to facilitate the admini­stration of the Specified Foreign Currency Loans made by Citibank, N.A., London Branch and the Specified Foreign Currency Participations, settlement among Citibank, N.A., London Branch and the Participating Specified Foreign Currency Lenders with regard to the Participating Speci­fied Foreign Currency Lenders Specified Foreign Currency Participations shall take place in ac­cordance with the following provisions:

(i)     Citibank, N.A., London Branch and the Participating Specified Foreign Currency Lenders shall settle (a Specified Foreign Currency Participation Settle­ment) by payments in respect of the Specified Foreign Currency Participations as fol­lows: so long as any Specified Foreign Currency Loans are outstanding, Specified For­eign Currency Participation Settlements shall be effected upon the request of Citibank, N.A., London Branch through the Administrative Agent on such Business Days as re­quested by Citibank, N.A., London Branch and as the Administrative Agent shall specify by a notice by telecopy, telephone or similar form of notice to each Participating Speci­fied Foreign Currency Lender requesting such Specified Foreign Currency Participation Settlement (each such date on which a Specified Foreign Currency Participation Settle­ment occurs herein called a Specified Foreign Currency Participation Settlement Date), such notice to be delivered no later than 1:00 p.m. (London, England time) at least one Business Day prior to the requested Specified Foreign Currency Participation Settlement Date; provided that Citibank, N.A., London Branch shall have the option but not the obligation to request a Specified Foreign Currency Participation Settlement Date and, in any event, shall not request a Specified Foreign Currency Participation Settlement Date prior to the occurrence of an Event of Default; provided further, that if (x) such Event of Default is cured or waived in writing in accordance with the terms hereof, (y) no Obligations have yet been declared due and payable under Article VIII (or a rescission has occurred) and (z) the Administrative Agent has actual knowledge of such cure or waiver, all prior to the Administrative Agents giving notice to the Participating Specified Foreign Currency Lenders of the first Specified Foreign Currency Participation Settlement Date under this Agreement, then the Administrative Agent shall not give notice to the Participating Specified Foreign Currency Lenders of a Specified Foreign Currency Participation Set­tlement Date based upon such cured or waived Event of Default.  If on any Specified Foreign Currency Participation Settlement Date the total principal amount of the Speci­fied Foreign Currency Loans made or deemed made by Citibank, N.A., London Branch during the period ending on (but excluding) such Specified Foreign Currency Participa­tion Settlement Date and commencing on (and including) the immediately preceding Specified Foreign Currency Participation Settlement Date (or the Closing Date in the case of the period ending on the first Specified Foreign Currency Participation Settlement Date) (each such period herein called a Specified Foreign Currency Participation Set­tlement Period) is greater than the principal amount of Specified Foreign Currency Loans repaid during such Specified Foreign Currency Participation Settlement Period to Citibank, N.A., London Branch, each Participating Specified Foreign Currency Lender shall pay to Citibank, N.A., London Branch (through the Administrative Agent), no later than 12 noon (London, United Kingdom time) on such Specified Foreign Currency Participation Settlement Date, an amount equal to such Participating Specified Foreign Currency Lenders ratable share of the amount of such excess.  If in any Specified Foreign Cur­rency Participation Settlement Period the outstanding principal amount of the Specified Foreign Currency Loans repaid to Citibank, N.A., London Branch in such period exceeds the total principal amount of the Specified Foreign Currency Loans made or deemed made by Citibank, N.A., London Branch during such period, Citibank, N.A., London Branch shall pay to each Participating Specified Foreign Currency Lender (through the Administrative Agent) on such Specified Foreign Currency Participation Settlement Date an amount equal to such Participating Specified Foreign Currency Lenders ratable share of such excess.  Specified Foreign Currency Participation Settlements in respect of Speci­fied Foreign Currency Loans shall be made in the currency in which such Specified For­eign Currency Loan was funded on the Specified Foreign Currency Participation Settle­ment Date for such Specified Foreign Currency Loans.

 
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(ii)    If any Participating Specified Foreign Currency Lender fails to pay to Citibank, N.A., London Branch on any Specified Foreign Currency Participation Settle­ment Date the full amount required to be paid by such Participating Specified Foreign Currency Lender to Citibank, N.A., London Branch on such Specified Foreign Currency Participation Settlement Date in respect of such Participating Specified Foreign Currency Lenders Specified Foreign Currency Participation (such Participating Specified Foreign Currency Lenders Specified Foreign Currency Participation Settlement Amount) with Citibank, N.A., London Branch, Citibank, N.A., London Branch shall be entitled to recover such unpaid amount from such Participating Specified Foreign Currency Lender, together with interest thereon (in the same respective currency or currencies as the rele­vant Specified Foreign Currency Loans) at the Base Rate plus 2.00% per annum.  With­out limiting Citibank, N.A., London Branchs rights to recover from any Participating Specified Foreign Currency Lender any unpaid Specified Foreign Currency Participation Settlement Amount payable by such Participating Specified Foreign Currency Lender to Citibank, N.A., London Branch, the Administrative Agent shall also be entitled to with­hold from amounts otherwise payable to such Participating Specified Foreign Currency Lender an amount equal to such Participating Specified Foreign Currency Lenders un­paid Specified Foreign Currency Participation Settlement Amount owing to Citibank, N.A., London Branch and apply such withheld amount to the payment of any unpaid Specified Foreign Currency Participation Settlement Amount owing by such Participating Specified Foreign Currency Lender to Citibank, N.A., London Branch.

 
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(iii)    (a) A Participating Specified Foreign Currency Lender which has a Funded Specified Foreign Currency Participation shall be entitled to receive interest on such Funded Specified Foreign Currency Participation to the same extent as if such Specified Foreign Currency Lender was the direct holder of the portion of the Loan in which it purchased a Specified Foreign Currency Participation (it being agreed that, promptly upon the receipt by Citibank, N.A., London Branch or any of its Affiliates of any interest in respect of any Loan in which a Participating Specified Foreign Currency Lender has a Funded Specified Foreign Currency Participation, Citibank, N.A., London Branch will pay or cause to be paid to such Participating Specified Foreign Currency Lender its ratable share of such interest in immediately available funds) and (b) for pur­poses of determining the Lenders comprising the Required Lenders from and after the termination of the Revolving Credit Commitments, (i) the Revolving Credit Exposure of a Lender that is a Participating Specified Foreign Currency Lender shall be deemed to in­clude the amount of the sum of each Specified Foreign Currency Participation of such Participating Specified Foreign Currency Lender and (ii) the amount of the Revolving Credit Exposure of Citibank, N.A., London Branch and its affiliates shall be reduced by an amount equal to the sum of each Specified Foreign Currency Participation of such Par­ticipating Specified Foreign Currency Lender.

Section 12.03.        Obligations Irrevocable.

The obligations of each Participating Specified Foreign Currency Lender to purchase from Citibank, N.A., London Branch a participation in each Specified Foreign Currency Loan made by Citibank, N.A., London Branch and to make payments to Citibank, N.A., London Branch with respect to such participation, in each case as provided herein, shall be irrevocable and not subject to any qualification or exception whatsoever, including any of the following cir­cumstances:

(i)     any lack of validity or enforceability of this Agreement or any of the other Loan Documents or of any Loans, against any Loan Party;

(ii)    the existence of any claim, setoff, defense or other right which the any Loan Party may have at any time against the Administrative Agent, any Participating Specified Foreign Currency Lender, or any other Person, whether in connection with this Agreement, any Specified Foreign Currency Loans, the transactions contemplated herein or any unrelated transactions;

(iii)   any application or misapplication of any proceeds of any Specified For­eign Currency Loans;

(iv)   the surrender or impairment of any security for any Specified Foreign Cur­rency Loans;

(v)    the occurrence of any Default or Event of Default;

(vi)   the commencement or pendency of any events specified in Section 8.01(f) or (g), in respect of any Loan Party or any Restricted Subsidiaries; or

(vii)          the failure to satisfy the applicable conditions precedent set forth in Arti­cle IV.
 
 
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Section 12.04.        Recovery or Avoidance of Payments.

In the event any payment by or on behalf of any Borrower or any other Loan Party re­ceived by the Administrative Agent with respect to any Specified Foreign Currency Loan made by Citibank, N.A., London Branch is thereafter set aside, avoided or recovered from the Admin­istrative Agent in connection with any insolvency proceeding or due to any mistake of law or fact, each Participating Specified Foreign Currency Lender shall, upon written demand by the Administrative Agent, pay to Citibank, N.A., London Branch (through the Administrative Agent) such Participating Specified Foreign Currency Lenders Pro Rata Share of such amount set aside, avoided or recovered, together with interest at the rate and in the currency required to be paid by Citibank, N.A., London Branch or the Administrative Agent upon the amount required to be re­paid by it.

Section 12.05.        Indemnification by Lenders.

Each Participating Specified Foreign Currency Lender agrees to indemnify Citibank, N.A., London Branch (to the extent not reimbursed by the Borrowers and without limiting the obligations of the Borrowers hereunder or under any other Loan Document) ratably for any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses (including attorneys fees) or disbursements of any kind and nature whatsoever that may be im­posed on, incurred by or asserted against Citibank, N.A., London Branch in any way relating to or arising out of any Specified Foreign Currency Loans or any action taken or omitted by Citi­bank, N.A., London Branch in connection therewith; provided that no Participating Specified Foreign Currency Lender shall be liable for any of the foregoing to the extent it arises from the gross negligence or willful misconduct of Citibank, N.A., London Branch (as determined by a court of competent jurisdiction in a final non-appealable judgment).  Without limiting the forego­ing, each Participating Specified Foreign Currency Lender agrees to reimburse Citibank, N.A., London Branch promptly upon demand for such Participating Specified Foreign Currency Lenders ratable share of any costs or expenses payable by the Borrowers to Citibank, N.A., London Branch in respect of the Specified Foreign Currency Loans to the extent that Citibank, N.A., London Branch is not promptly reimbursed for such costs and expenses by the Borrowers.  The agreement contained in this Section 12.05 shall survive payment in full of all Specified For­eign Currency Loans.

Section 12.06.        Specified Foreign Currency Loan Participation Fee.

In consideration for each Participating Specified Foreign Currency Lenders participation in the Specified Foreign Currency Loans made by Citibank, N.A., London Branch, Citibank, N.A., London Branch agrees to pay to the Administrative Agent for the account of each Partici­pating Specified Foreign Currency Lender, as and when Citibank, N.A., London Branch receives payment of interest on its Specified Foreign Currency Loans, a fee (the Specified Foreign Currency Participation Fee) at a rate per annum equal to the Applicable Rate on such Specified Foreign Currency Loans minus 0.25% on the unfunded Specified Foreign Currency Participation of such Participating Specified Foreign Currency Lender in such Specified Foreign Currency Loans of Citibank, N.A., London Branch.  The Specified Foreign Currency Participation Fee in respect of any unfunded Specified Foreign Currency Participation in a Specified Foreign Cur­rency Loan shall be payable to the Administrative Agent in the currency in which the respective Specified Foreign Currency Loan was funded when interest on such Specified Foreign Currency Loan is received by Citibank, N.A., London Branch.  If Citibank, N.A., London Branch does not receive payment in full of such interest, the Specified Foreign Currency Participation Fee in re­spect of the unfunded Specified Foreign Currency Participation in such Specified Foreign Cur­rency Loans shall be reduced proportionately.  Any amounts payable under this Section 12.06 by the Administrative Agent to the Participating Specified Foreign Currency Lenders shall be paid in the currency in which the respective Specified Foreign Currency Loan was funded (or, if different, the currency in which such interest payments are actually received).

 
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.


 
BASELL AF S.C.A., as the Company
     
     
 
By:
 /s/ Bruce Dresbach 
   
Name:  Bruce Dresbach
   
Title:    Authorized Representative
     
     
 
BIL ACQUISITION HOLDINGS LIMITED (to be merged with LYONDELL CHEMICAL COMPANY substantially concurrently with the initial Credit Extension), as the U.S. Borrower
     
     
 
By:
 /s/ Bruce Dresbach 
   
Name:  Bruce Dresbach
   
Title:    Authorized Representative
     
     
 
BASELL FINANCE COMPANY B.V.
BASELL HOLDINGS B.V., as Dutch Borrowers
     
     
 
By:
 /s/ Francesco Svelto 
   
Name:  Francesco Svelto
   
Title:    Authorized Representative
     
     
 
BASELL GERMANY HOLDINGS GmbH, as the
 
German Borrower
     
     
 
By:
 /s/ Bruce Dresbach 
   
Name:  Bruce Dresbach
   
Title:    Authorized Representative

 
 

 
SUBSIDIARY GUARANTORS
   
HOUSTON REFINING LP
LYONDELL CHEMICAL PRODUCTS EUROPE LLC
LYONDELL CHEMICAL TECHNOLOGY 1 INC.
LYONDELL CHEMICAL TECHNOLOGY, L.P.
LYONDELL CHIMIE FRANCE LLC
LYONDELL EUROPE HOLDINGS INC.
LYONDELL LP3 PARTNERS, LP
LYONDELL PETROCHEMICAL L.P. INC.
LYONDELL REFINING I LLC
EQUISTAR CHEMICALS, LP
MILLENNIUM PETROCHEMICALS INC.
MILLENNIUM SPECIALTY CHEMICALS INC.
LYONDELL REFINING COMPANY LLC
LYONDELL HOUSTON REFINERY INC.
LYONDELL CHEMICAL NEDERLAND, LTD.
LYONDELL-EQUISTAR HOLDINGS PARTNERS
LYONDELL (PELICAN) PETROCHEMICAL L.P.1, INC.
LYONDELL LP4 INC.
LYONDELL LP3 GP, LLC
MILLENNIUM PETROCHEMICALS PARTNERS, LP
MILLENNIUM US OP CO LLC
MILLENNIUM AMERICA INC.
MILLENNIUM AMERICA HOLDINGS INC.
MILLENNIUM WORLDWIDE HOLDINGS I INC.
MILLENNIUM CHEMICALS INC.
MILLENNIUM PETROCHEMICALS GP LLC

 
 
 
(CONTINUED FROM PREVIOUS PAGE)
LYONDELL CHEMICAL TECHNOLOGY MANAGEMENT, INC.,
as Guarantors
     
     
 
By:
 /s/ Karen A. Twitchell 
   
Name:  Karen A. Twitchell
   
Title:    Authorized Representative
     
     
 
 
 
 
 
 
BASELL ASIA PACIFIC LIMITED
BASELL BAYREUTH CHEMIE GMBH
BASELL CANADA INC.
BASELL FINANCE USA INC.
BASELL FUNDING S.A.R.L.
BASELL NORTH AMERICA INC.
BASELL POLYOLEFINE GMBH
BASELL USA INC.
LBI ACQUISITION LLC
LBIH LLC
LYONDELLBASELL FINANCE COMPANY
BASELL AF S.C.A.
LYONDELLBASELL NETHERLANDS HOLDINGS B.V.,
as Guarantors
     
     
 
By:
 /s/ Bruce Dresbach 
   
Name:  Bruce Dresbach
   
Title:    Authorized Representative
     
     
 
 
 
 
BASELL AF S.C.A.
BASELL EUROPE HOLDINGS B.V.
BASELL FINANCE & TRADING COMPANY B.V.
BASELL FINANCE COMPANY B.V.
BASELL GERMANY HOLDINGS GMBH
BASELL HOLDINGS B.V.
BASELL INTERNATIONAL HOLDINGS B.V.
BASELL POLYOLEFINS UK LIMITED
BASELL SALES & MARKETING COMPANY B.V.
BASELL UK HOLDINGS LIMITED
NELL ACQUISITION (US) LLC,
as Guarantors
     
     
 
By:
 /s/ Francesco Svelto 
   
Name:  Francesco Svelto
   
Title:    Authorized Representative
     
     
 
 
 
 
 
Acknowledged and Agreed:
 
LYONDELL CHEMICAL COMPANY
     
     
 
By:
 /s/ Karen A. Twitchell 
   
Name:  Karen A. Twitchell
   
Title:    Authorized Representative
     
 
 
 
 
 
CITIBANK, N.A., as Administrative Agent,
Collateral Agent, Swing Line Lender and as a Lender
     
     
 
By:
 /s/ Edward Cook 
   
Name:  Edward Cook
   
Title:    Vice President
 
 
 
 
 
 
CITIBANK, N.A., LONDON BRANCH, as Swing
Line Lender and as a Lender
     
     
 
By:
 /s/ [not legible]
   
Name:  [not legible]
   
Title:    Vice President
 
 
 
 
 
 
GOLDMAN SACHS CREDIT PARTNERS, L.P.,
as Syndication Agent and as a Lender
     
     
 
By:
 /s/ Michael Narsh 
   
Name:  Michael Narsh
   
Title:    Vice President
 
 
 
 
 
 
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED, as Documentation Agent
     
     
 
By:
 /s/ Anand Melvani 
   
Name:  Anand Melvani
   
Title:    Managing Director
 
 
 
 
 
 
MERRILL LYNCH CAPITAL CORPORATION,
as Lender
     
     
 
By:
 /s/ Anand Melvani 
   
Name:  Anand Melvani
   
Title:    VP
 
 
 
 
 
 
MERRILL LYNCH INTERNATIONAL BANK
LIMITED, LONDON BRANCH, as Lender
     
     
 
By:
 /s/ [not legible]
   
Name:  [not legible]
   
Title:   
 
 
 
 
 
 
ABN AMRO INCORPORATED,
as Joint Lead Arranger and Documentation Agent
     
     
 
By:
 /s/ David Kanter
   
Name:  David Kanter
   
Title:    Managing Director
 
 
 
 
 
 
ABN AMRO BANK, N.V., as L/C Issuer and as a
Lender
     
     
 
By:
 /s/ Erwin deJong / [not legible]
   
Name:  Erwin deJong / [not legible]
   
Title:    Executive Director / Assistant Director
 
 
 
 
 
 
UBS SECURITIES LLC, as Joint Lead Arranger
and as Documentation Agent
     
     
 
By:
 /s/ Mary E. Evans
   
Name:  Mary E. Evans
   
Title:    Associate Director
 
 
     
 
By:
 /s/ Irja R. Otsa 
   
Name:  Irja R. Otsa
   
Title:    Associate Director
 
 
 
 
 
 
UBS Loan Finance LLC, as Lender
     
     
 
By:
 /s/ Mary E. Evans
   
Name:  Mary E. Evans
   
Title:    Associate Director
 
 
     
 
By:
 /s/ Irja R. Otsa 
   
Name:  Irja R. Otsa
   
Title:    Associate Director
 
 
 
 
 
 
UBS AG, STAMFORD BRANCH, as Lender
     
     
 
By:
 /s/ Mary E. Evans
   
Name:  Mary E. Evans
   
Title:    Associate Director
 
 
     
 
By:
 /s/ Irja R. Otsa 
   
Name:  Irja R. Otsa
   
Title:    Associate Director
 
 

 
SCHEDULE 1.01A

COMMITMENTS


Dutch Tranche A Dollar Term Commitment
 

Lender
Amount
CITIBANK N.A.
$100,000,000
GOLDMAN SACHS CREDIT PARTNERS L.P.
$100,000,000
MERRILL LYNCH CAPITAL CORPORATION
$100,000,000
ABN AMRO BANK N.V.
$100,000,000
UBS LOAN FINANCE LLC
$100,000,000
TOTAL
$500,000,000


German Tranche B Euro Term Commitment
 

Lender
Amount
CITIBANK N.A., LONDON BRANCH
€ 260,000,000
GOLDMAN SACHS CREDIT PARTNERS L.P.
€ 260,000,000
MERRILL LYNCH INTERNATIONAL BANK LIMITED, LONDON BRANCH
€ 260,000,000
ABN AMRO BANK N.V.
€ 260,000,000
UBS AG, STAMFORD BRANCH
€ 260,000,000
TOTAL
€ 1,300,000,000




 
 
 

U.S. Tranche A Dollar Term Commitment
 

Lender
Amount
CITIBANK N.A.
$300,000,000
GOLDMAN SACHS CREDIT PARTNERS L.P.
$300,000,000
MERRILL LYNCH CAPITAL CORPORATION
$300,000,000
ABN AMRO BANK N.V.
$300,000,000
UBS LOAN FINANCE LLC
$300,000,000
TOTAL
$1,500,000,000



U.S. Tranche B Dollar Term Commitment
 

Lender
Amount
CITIBANK N.A.
$1,510,00,000
GOLDMAN SACHS CREDIT PARTNERS L.P.
$1,510,00,000
MERRILL LYNCH CAPITAL CORPORATION
$1,510,00,000
ABN AMRO BANK N.V.
$1,510,00,000
UBS LOAN FINANCE LLC
$1,510,00,000
TOTAL
$7,550,000,000




 
 
 

Primary Revolving Credit Commitment
 
Lender
Amount
CITIBANK N.A.
$160,000,000
GOLDMAN SACHS CREDIT PARTNERS L.P.
$160,000,000
MERRILL LYNCH CAPITAL CORPORATION
$160,000,000
ABN AMRO BANK N.V.
$160,000,000
UBS LOAN FINANCE LLC
$160,000,000
TOTAL
$800,000,000



Dutch Revolving Credit Commitment

Lender
Amount
CITIBANK N.A.
$40,000,000
GOLDMAN SACHS CREDIT PARTNERS L.P.
$40,000,000
MERRILL LYNCH CAPITAL CORPORATION
$40,000,000
ABN AMRO BANK N.V.
$40,000,000
UBS LOAN FINANCE LLC
$40,000,000
TOTAL
$200,000,000


 

 
 
 

SCHEDULE 1.01B
 

UNRESTRICTED SUBSIDIARIES

None.

 
 
 


 
SCHEDULE 1.01F

MORTGAGED PROPERTIES

Real Property - Domestic

Entity of Record
Address
Lyondell Chemical Company
Bayport Choate Plant, 10801 Choate Road, Pasadena, Texas 77507
Lyondell Chemical Company
Channelview Chemical Complex (South) 2502 Sheldon Road, Channelview, Texas 77530
Equistar Chemicals, LP
Bayport Underwood Plant, 5761 Underwood Drive, Pasadena, Texas 77507
Equistar Chemicals, LP
Equistar Chemicals (North) 8280 Sheldon Road, Channelview, Texas 77530
Equistar Chemicals, LP
12 miles south of Alvin on FM 2917, Alvin, Texas 77512
Equistar Chemicals, LP
3400 Anamosa Road, Clinton, Iowa 52732
Equistar Chemicals, LP
1501 McKinzie Road, Corpus Christi, Texas 78410
Equistar Chemicals, LP
1515 Miller Cut-Off Road, La Porte, Texas 77571
Equistar Chemicals, LP
US Highway 60, 13 miles south of Bay City, Bay City, Texas 77414
Equistar Chemicals, LP
8805 N. Tabler Road, Morris, Illinois 60450
Equistar Chemicals, LP
Old Bloomington Highway, Victoria, Texas 77902
Equistar Chemicals, LP
11530 Northlake Drive, Cincinnati, Ohio 45249
Houston Refining LP
12000 Lawndale, Houston, Texas 77017
Basell USA Inc.
Jackson Plant, 1035 Bendix Drive, Jackson, Madison County, TN 38301
Basell USA Inc.
Bayport Plant, 12001 Bay Area Blvd., Pasadena, TX 77507
Basell USA Inc.
Lake Charles Plant, 14101 Highway 108 South, Westlake, Louisiana 70669
Basell USA Inc.
Section 23, Township 10 South, Range 12 West, Vinton, Calcasieu Parish, Louisiana
Basell USA Inc.
340 Meadow Road Edison, NJ 08817


Real Property - International

Basell Polyolefins UK Limited
Mount Farm Industrial Estate on the North East Side of Saxon Street, Bletchley, UK
Basell Polyolefins UK Limited
Land and Buildings Lying to the South of Manchester Road, Carrington, UK
Basell Polyolefine GmbH
Brühler Str. 60, 50389 Wesseling, Germany
Basell Bayreuth Chemie GmbH
Bindlacher Str., Bayreuth, Germany



Easement Instruments

All rights, titles and interests created or evidenced by the instruments, writings and understandings referenced on Exhibit I to this Schedule 1.01F (attached).

 
 
 
 
 

Exhibit 1

System File ID
County
Grantor
Grantee
Recording Information
Notes On Agreement
21-NU-002
Nueces County, TX
Annie Blake Morgan Head
Oxy Petrochemicals, Inc.
v2207/p495
A right of way for (4) pipelines only, not more than 12".  Grantor to pay taxes levied on pipeline and any other attributed to pipeline.
21-NU-002
Nueces County, TX
City of Corpus
Oxy Petrochemicals, Inc.
v2207/p466
Lots 65-85, A.B. & M Svy 413, A553.
21-NU-002X
Nueces County, TX
City of Corpus Christi
Oxy Petrochemicals, Inc.
None
A road crossing for (1) 8" pipeline with  60" of cover. McKinzie Rd..
21-NU-003
Nueces County, TX
Jerry McCulloch, Jr. and  wife Donna F. McCulloch
Oxy Petrochemicals, Inc.
v2227/762
A 30' wide right of way with 60" cover.  Ratified on 12/06/90 by Roy J. Pickens and Laura Pickens.
21-NU-004
Nueces County, TX
Donald Ray Peel and  Alice Faye Peel
Oxy Petrochemicals, Inc.
v2227/p766
A right of way with 60" of cover.  Ratified on 03/25/91 by Alece Marston Brooks, recorded at v2244/p496.
21-NU-005
Nueces County, TX
Jacqueline Beth Jamison
Oxy Petrochemicals, Inc.
v2227/p770
A 30' wide right of way with 60" of cover
21-NU-006
Nueces County, TX
Wayne Thomas Whitaker and Joan M. Whitaker
Oxy Petrochemicals, Inc.
v2227/p774
A 30' wide right of way with 60" of cover.  Lot 8, Block 19; replat of Highway Village Subdivision Section 3.
21-NU-007
Nueces County, TX
Miles R. Stanley and wife Debra A. Stanley
Oxy Petrochemicals, Inc.
v2227/p778
A 30' wide right of way with 60" of cover.  Lot 9, Block 19, Replats, Highway Village Subdivision, Section 3.
21-NU-008
Nueces County, TX
Grimes B. Archer and wife Jeanette Archer
Oxy Petrochemicals, Inc.
v2227/p782
A 30' wide right of way with 60" of cover. Lot 10, Block 19; Highway Village Subdivision Section 3.
21-NU-009
Nueces County, TX
Emilio Gonzales and wife Elva Gonzales
Oxy Petrochemicals, Inc.
v2217/p377
A 30' wide right of way with 60" of cover.  Lots 11,12, 13, Block 19; Replats Highway Village Subdivision Section 3.
21-NU-010
Nueces County, TX
Joe Marroquin and wife Lucia Marroquin
Oxy Petrochemicals, Inc.
v2227/p786
A 30' wide right of way.  Lots 14, 15, Block 19; Replat Highway Village subdivision, Section 3.
21-NU-011
Nueces County, TX
James Everett Russell and wife Mary Veta Russell and Evelyn  P. Russell
Oxy Petrochemicals, Inc.
v2227/p790
A 30' wide right of way with 60" of cover.  Tract No. 2, Block 19 Highway Village Subdivision, Section 3.
21-NU-012
Nueces County, TX
Arnold M. Adams and Catherine A. Adams
Oxy Petrochemicals, Inc.
v2227/p803
A 30' wide right of way with 60" of cover.  Lot 16, Block 19 Highway Village Subdivision, Section 3.
21-NU-012X
Nueces County, TX
City of Corpus Christi
Oxy Petrochemicals, Inc.
None
Easement crossing Turkey Creek with (1) 8" pipeline.  Original documents in 21-NU-2X.
21-NU-013
Nueces County, TX
Hardy Family Trust of San Diego, CA
Oxy Petrochemicals, Inc.
v2227/p807
A 30' wide right of way with 60" of cover.  Lot 5, Block 7 Highway Village Subdivision Section 2.
21-NU-014X
Nueces County, TX
City of Corpus Christi
Oxy Petrochemicals, Inc.
None
Easement crossing Leopard Street with (1) 8" pipeline with 60" of cover.  Original documents in 21-NU-002X.
21-NU-015
Nueces County, TX
Maurine Manshiem, widow; Diane Maurine Speed and Daniel Manshiem
Oxy Petrochemicals, Inc.
v2227/p811
A 30' wide right of way for pipelines.  Ratified on 05/08/90 by Jesse Laing and Elaine Laing.
21-NU-015.1
Nueces County, TX
Jesse Laing and wife Elaine Laing
Oxy Petrochemicals, Inc.
v2227/p817
A 30' wide right of way for pipelines.
21-NU-016
Nueces County, TX
Raul Adame and wife Lydia Adame
Oxy Petrochemicals, Inc.
v2227/p845
A 30' wide right of way.  Lot 5, Block 6 Highway Village Subdivision, Section 1.
21-NU-017
Nueces County, TX
Jeff Scott, Jr.
Oxy Petrochemicals, Inc.
v2227/p849
A 30' wide right of way.  Lot 6, Block 6 Highway Village Subdivision Section 1.
21-NU-018
Nueces County, TX
Jack O. Ganders and wife Barbara E. Ganders
Oxy Petrochemicals, Inc.
v2227/p853
A 30' wide right of way.  Lot 7, Block 6 Highway Village Subdivision Section 1.
21-NU-019
Nueces County, TX
Dana S. Green and wife Leonora A. Green
Oxy Petrochemicals, Inc.
v2227/p857
Lot 8, Block 6 Highway Village Subdivision, Section 1.  Ratified on 08/15/90 by Lydia L. Adame.
21-NU-020
Nueces County, TX
Janet R. Brownlee
Oxy Petrochemicals, Inc.
v2227/p862
A 30' wide right of way.  Lot 9, Block 6 Highway Village Subdivision, Section 1.
21-NU-021
Nueces County, TX
Jose T. Chaves
Oxy Petrochemicals, Inc.
v2227/p866
A 30' wide right of way with 60" of cover.
21-NU-022
Nueces County, TX
Juan DeLeon Vallejo and Emeteria V.Vallejo
Oxy Petrochemicals, Inc.
v2227/p870
A 30' wide right of way.  Lot 11, 12, Block 6, Highway Village Subdivision, Section 1
21-NU-023
Nueces County, TX
Irene Garcia
Oxy Petrochemicals, Inc.
v2227/p874
A 30' wide right of way with 60" of cover.  Lot 13, Block 6, Highway Village Subdivision Section 1.
21-NU-024
Nueces County, TX
Anthony F. Constant
Oxy Petrochemicals, Inc.
v2227/p878
A 30' wide right of way.  Lot 14, Block 6 Highway Village Subdivision, Section 1.
21-NU-025
Nueces County, TX
Ruben Rocha Cantu
Oxy Petrochemicals, Inc.
v2227/p882
A 30' wide right of way with 60" of cover.  Lot 15, Block 6, Highway Village Subdivision, Section 1.
21-NU-025
Nueces County, TX
Eva T. Cantu
Oxy Petrochemicals, Inc.
v2227/p886
A 30' wide right of way with 60" of cover.  Lot 15, Block 6, Highway Village Subdivision, Section 1.
21-NU-026
Nueces County, TX
Henry Carranza and wife Oralia Carranza
Oxy Petrochemicals, Inc.
v2227/p890
A 30' wide right of way with 60" of cover.  Lot 16, Block 6, Highway Village Subdivision, Section 1.
21-NU-027
Nueces County, TX
Robert F. Johnson
Oxy Petrochemicals, Inc.
v2227/p894
A 30' wide right of way with 60" of cover.  Lot 17, Block 6, Highway Village Subdivision, Section 1.
21-NU-028
Nueces County, TX
Imogene E. Walker
Oxy Petrochemicals, Inc.
v2227/p898
A 30' wide right of way with 60" of cover.  Lot 18, Block 6 Highway Village Subdivision, Section 1.
21-NU-029
Nueces County, TX
Conrado Villanueva and wife Maria G. Villanueva
Oxy Petrochemicals, Inc.
v2227/p902
A 30' wide right of way with 60" of cover.  Lot 19, Block 6, Highway Village Subdivision, Section 1.
21-NU-030
Nueces County, TX
Juan Salazar and wife Rebecca Salazar
Oxy Petrochemicals, Inc.
v2227/p821
A 30' wide right of way with 60" of cover.  Lot 10, Block 6, Highway Village Subdivision, Section 1.
21-NU-031
Nueces County, TX
Bobby L. Byrd and wife Sarah M. Byrd
Oxy Petrochemicals, Inc.
v2227/p825
A 30' wide right of way with 60" of cover.  Lot 11, Block 6, Highway Village Subdivision, Section 1.
21-NU-032
Nueces County, TX
Charles McKinzie and William McKinzie, Jr., Tenant
Oxy Petrochemicals, Inc.
v2227/p829
A 30' wide right of way with 60" of cover.  35.26 acres in Beatty Seale and Forwood Survey A-571 as tract 3.  20" pipe limitations.  No above ground facilities.
21-NU-032.1
Nueces County, TX
Charles McKinzie
Oxy Petrochemicals, Inc.
v2227/p838
A 3.6 acre tract of land out of 24.12 acres and a 1.68 acre tract of land out of 10.452 acres as described in v1450/p517.  Surface rights only, no mineral or royalties.  Reserves a 30' wide easement on northern boundary of said tract.
21-NU-032X
Nueces County, TX
City of Corpus Christi
Oxy Petrochemicals, Inc.
None
Easement to cross Up River Rd..  Original documents in file 21-NU-002X.
21-NU-032XX
Nueces County, TX
Texas Department of Transportation
Oxy Petrochemicals, Inc.
None
Permit No. 7439 across I-37.
21-NU-033
Nueces County, TX
Koch Refining Company
Oxy Petrochemicals, Inc.
v2227/p906
A 30' wide right of way with 60" of cover.  30.43 acres out of McKenzie 143.73 lying west of Carbon Plant Rd. and North of McKenzie.  Permit No. 7439.  Ownership: Flint Hill Resources, C/O Chris Meitler, 4111 East 37th Street North, Wichita, KS, 67220.
21-NU-033X
Nueces County, TX
Nueces County
Oxy Petrochemical Pipeline Company
v21/p345
A right of way for (1) 8" pipeline crossing McKinzie Lane.
21-NU-034
Nueces County, TX
Betty Jane Grant Armstrong and Douglas W. Grant, Jr.
Oxy Petrochemicals, Inc.
v2227/p912
A 30' wide right of way with 60" of cover.  34.66 acre tract in Beatty Seale and Forwood Survey as parcel 1.  No above ground facilities.
21-NU-035
Nueces County, TX
City of Corpus Christi
Oxy Petrochemicals, Inc.
None
A revocable right of way 30' in width for (1) 8" pipeline.   5284' across Sid Allison Water Treatment Plant.
21-NU-036
Nueces County, TX
Corps of Engineers
Oxy Petrochemicals, Inc.
None
Directional drill application for ground permit, No. 14114 (01)/148 across the Nueces River.  Note in file says "as built" to be sent.
21-SP-001
San Patricio County, TX
O. S. Wyatt, Jr.
Oxy Petrochemicals, Inc.
406233
(2) pipelines across 172.2 acre in the John Smith Survey, A-234.
21-SP-002
San Patricio County, TX
Thomas Drought, Trustee of Kathleen L. Drought deceased, Thomas Drought individually, Anna D. W
Oxy Petrochemicals, Inc.
395345
A 30' wide right of way for (1) 6" and (1) 8" pipeline.
21-SP-003
San Patricio County, TX
Elida L. Pena
Oxy Petrochemicals, Inc.
393745
A 30' wide right of way with 36" of cover.
21-SP-004
San Patricio County, TX
Roy & Larue Morris by Larue Morris, Attorney in fact and Roy Morris by Patricia Morris Sorenson, ATT
Oxy Petrochemicals, Inc.
394937
A 30' wide right of way with 36" of cover.
21-SP-004X
San Patricio County, TX
Missouri Pacific Railroad Company (UPRR)
Oxy Petrochemical Pipeline Company
None
A right of way for (1) ethylene pipeline.  Audit No. 151807, Folder No. 94515.  MP 136.12.  Crossing near Viola, TX.  Ownership: UPRC, C/O Joan Preble, 1800 Farnam St., Omaha, NE 68102.
21-SP-005
San Patricio County, TX
Griffith and Associates
Oxy Petrochemicals, Inc.
394316
A 30' wide right of way with 36" of cover.
21-SP-005
San Patricio County, TX
Griffith and Associates
Oxy Petrochemicals, Inc.
394315
A 50' by 50' surface site out of 3413.03 acres, more or less, for communications tower.
21-SP-006
San Patricio County, TX
Charles H. Mayo and wife Mabel Jo Mayo
Oxy Petrochemicals, Inc.
393746
A 30' wide right of way with 36" of cover.
21-SP-007
San Patricio County, TX
Douglas Ray Hart et ux Marilyn C. Hart
Oxy Petrochemicals, Inc.
395047
A 30' wide right of way with 36" of cover.
21-SP-008
San Patricio County, TX
Ulus E. Ray and Rolar E. Ray
Oxy Petrochemicals, Inc.
393748
A 30' wide right of way for (1) 6" and (1) 8" pipeline with 36" of cover.
21-SP-008A
San Patricio County, TX
San Patricio County Drainage District
Oxy Petrochemicals, Inc.
None
Permit for an 8" pipeline crossing 4 canals/ditches.
21-SP-009
San Patricio County, TX
Winnie Jo Vickers, individually and as executrix of the Estate of Cecil Vickers
Oxy Petrochemicals, Inc.
394747
A 30' wide right of way for (1) 6" and (1) 8" pipeline.
21-SP-010
San Patricio County, TX
Stanley Webb III and Loretta Webb
Oxy Petrochemicals, Inc.
396243
A 30' wide right of way.  This easement supercedes and replaces easement dated 07/23/90 recorded at 393749.
21-SP-010X
San Patricio County, TX
San Patricio County Commissioners
Oxy Petrochemicals, Inc.
v35/p433
A right of way for an 8" pipeline across CR 59.
21-SP-011
San Patricio County, TX
Loretta Webb
Oxy Petrochemicals, Inc.
393750
A 30' wide right of way with 36" of cover.
21-SP-012
San Patricio County, TX
Oscar E. Mayfield and Sons
Oxy Petrochemicals, Inc.
394314
A 30' wide right of way with 36" of cover.  Same as file SP-14, 15 and 16.
21-SP-012X
San Patricio County, TX
Texas Department of Transportation
Oxy Petrochemical Pipeline Company
None
Permit No. 7467 for FM 1074.
21-SP-013
San Patricio County, TX
Henry Klanika
Oxy Petrochemicals, Inc.
393751
A 30' wide right of way.
21-SP-014
San Patricio County, TX
Oscar E. Mayfield and Sons
Oxy Petrochemicals, Inc.
394314
Refer to 21-SP-012.
21-SP-015
San Patricio County, TX
Oscar E. Mayfield and Sons
Oxy Petrochemicals, Inc.
394314
Refer to SP-012.
21-SP-015X
San Patricio County, TX
San Patricio County Drainage District
Oxy Petrochemicals, Inc.
None
A right of way for (1) 8" pipeline crossing canal.
21-SP-016
San Patricio County, TX
Oscar E. Mayfield and Sons
Oxy Petrochemicals, Inc.
394314
Refer to SP-012.
21-SP-016X
San Patricio County, TX
San Patricio County Commissioners
Oxy Petrochemicals, Inc.
None
A right of way for (1) 8" pipeline across CR 67.
21-SP-017
San Patricio County, TX
Annie Blake Morgan Head, et al
Coastal Petroleum Inc.
v315/p8
A right of way for a 10' by 20' valve site.
21-SP-018
San Patricio County, TX
21 West, Inc.
Oxy Petrochemicals, Inc.
393752
A 30' wide right of way.
21-SP-018X
San Patricio County, TX
San Patricio County Commissioners
Oxy Petrochemicals, Inc.
None
A right of way for (1) 8" pipeline across CR 69.
21-SP-019
San Patricio County, TX
O. R. Flinn, individually and as attorney in fact for Luther C. Flinn, Jr. and Mary Flinn Bennett
Oxy Petrochemicals, Inc.
394936
A 30' wide right of way with 36" of cover.
21-SP-020
San Patricio County, TX
Normagene Dowell,et al
Oxy Petrochemicals, Inc.
393753
A 30' right of way.
21-SP-020X
San Patricio County, TX
San Patricio County Commissioners
Oxy Petrochemicals, Inc.
None
Permit to cross CR 72.
21-SP-021
San Patricio County, TX
Oma Lee Phillips, individually and as executor of Estate of Luther P.Phillips
Oxy Petrochemicals, Inc.
395046
A 30' right of way.
21-SP-021X
San Patricio County, TX
Texas Department of Transportation
Oxy Petrochemicals, Inc.
None
Permit to cross SH 893.  Permit No. 7466
21-SP-022
San Patricio County, TX
Elizabeth Gail McIntosh, Melissa Mathis and Walter D. Mayo
Oxy Petrochemicals, Inc.
396147
A 30' wide right of way.
21-SP-023
San Patricio County, TX
Robert M. Meuth and Eleanor Meuth Blanchard
Oxy Petrochemicals, Inc.
393755
A 30' wide right of way.  Counterpart signature.
21-SP-024
San Patricio County, TX
Elizabeth Gail McIntosh, Melissa Mathis and Walter D. Mayo, Mallery Mayo Hoerke
Oxy Petrochemicals, Inc.
393756
A 30' wide right of way.
21-SP-024X
San Patricio County, TX
San Patricio County Commissioners
Oxy Petrochemicals, Inc.
None
Permit for cross CR  75 with (1) 8" pipeline.
21-SP-025
San Patricio County, TX
Jefferson E. Bell, Jr.
Oxy Petrochemicals, Inc.
394290
A 30' wide right of way.
21-SP-025X
San Patricio County, TX
San Patricio County Commissioners
Oxy Petrochemicals, Inc.
None
Easement for crossing Midway Rd./CR  72 with (1) 8" pipeline.
21-SP-026
San Patricio County, TX
Charles Mayo, et al
Oxy Petrochemicals, Inc.
393757
A 30' wide right of way.
21-SP-027
San Patricio County, TX
Q. M. Priday, Jr. et al
Oxy Petrochemicals, Inc.
393758
A 20' wide right of way.
21-SP-028
San Patricio County, TX
Alfred A. Kopecky, M.D.
Oxy Petrochemicals, Inc.
393759
A 20' wide right of way for pipelines no larger than 8".
21-SP-029
San Patricio County, TX
William F. Miller, Sara M. Neary, Bethine W. Miller
Oxy Petrochemicals, Inc.
393760
A right of way for (2) 8" pipelines with 48" of cover.
21-SP-030
San Patricio County, TX
Glenn E. McKamey
Oxy Petrochemicals, Inc.
393761
A 30' wide right of way with 36" of cover.  No valves above ground.
21-SP-031
San Patricio County, TX
Don Duprie, et al
Oxy Petrochemicals, Inc.
393762, -763, -764, -765
A 25' wide right of way.  Executed in counterparts.
21-SP-031X
San Patricio County, TX
San Patricio County Drainage District
Oxy Petrochemicals, Inc.
None
A permit for (4) 8" crossings.  Gum Hollow Drainage Ditch Field Rd..
21-SP-032
San Patricio County, TX
NCNB Texas Trustee for Ruth W. Baines Trust, et al
Oxy Petrochemicals, Inc.
393766
A 25' wide right of way with 36" of cover.
21-SP-033
San Patricio County, TX
Jefferson E. Bell, Jr.
Oxy Petrochemicals, Inc.
394289
A 30' wide right of way.  $500.00 annual valve site rental.
21-SP-033X
San Patricio County, TX
San Patricio County Drainage District
Oxy Petrochemicals, Inc.
None
Procedures for laying an 8" pipeline in San Patricio County, specifically, across Midway Rd..
21-SP-034
San Patricio County, TX
Virginia Beggs Simmons
Oxy Petrochemicals, Inc.
393769
A 30' wide right of way with 36" of cover.
21-SP-035
San Patricio County, TX
Marquerite Lang
Oxy Petrochemicals, Inc.
393771
A 30' wide right of way for (1) 6" and (1) 8" pipeline with 48" of cover.  Lang gave to Billy Graham Evangelistic Association in 1984.  Lang gave Oxy this in 1990.
21-SP-036
San Patricio County, TX
Samuel H. Floerke and wife Angeline E. Floerke
Oxy Petrochemicals, Inc.
393772
A 30' wide right of way.
21-SP-037
San Patricio County, TX
Tropic Land Company, Inc.
Oxy Petrochemicals, Inc.
393774
A 30' wide right of way with 48" of cover.
21-SP-037
San Patricio County, TX
John T. Schultz, Jr. and Mary D. Schultz
Oxy Petrochemicals, Inc.
393773
A 30' wide right of way with 48" of cover.  New owner information:  Nathan and Blair Taggart, 633 Colonial, Portland, TX 78374.  New ownership: Portland United Pentacostal, C/O Haynes & Breithaupt, P. O. Box 539, Portland, TX 78374.
21-SP-037X
San Patricio County, TX
San Patricio County Commissioners
Oxy Petrochemicals, Inc.
None
Permit to cross CR 81.
21-SP-038
San Patricio County, TX
Douglas Trees and Judy Trees
Oxy Petrochemicals, Inc.
393775
A 30' wide right of way with 48" of cover.
21-SP-039
San Patricio County, TX
George S. Garza and wife Candida P.Garza
Oxy Petrochemicals, Inc.
393776
A 30' wide right of way for (2) 8" pipelines with 48" of cover.
21-SP-040
San Patricio County, TX
James R. Petru and Charleen E. Petru
Oxy Petrochemicals, Inc.
393777
A 30' wide right of way for (2) 8" pipelines with 48" of cover.
21-SP-041
San Patricio County, TX
Leta Ryman widow of Robert C. Ryman
Oxy Petrochemicals, Inc.
394748
A 30' wide right of way for (2) 8" pipelines with 48" of cover.
21-SP-042
San Patricio County, TX
John H. Aigner and Mary A. Aigner
Oxy Petrochemicals, Inc.
393778
A 30' wide right of way for (2) 8" pipelines with 48" of cover.
21-SP-043
San Patricio County, TX
Joe Alfred Sauceda and Diana Sauceda
Oxy Petrochemicals, Inc.
393779
A 30' wide right of way for (2) 8" pipelines with 48" of cover.
21-SP-044
San Patricio County, TX
Harold E. Willis and Vicki Willis
Oxy Petrochemicals, Inc.
393780
A 30' wide right of way for (2) 8" pipelines with 48" of cover.
21-SP-045
San Patricio County, TX
Robert M. Garza and Angelita Garza Martinez
Oxy Petrochemicals, Inc.
394749
A 30' wide right of way for (2) 8" pipelines with 48" of cover.
21-SP-046X
San Patricio County, TX
San Patricio County Commissioners
Oxy Petrochemicals, Inc.
None
Permit to cross CR 72.
21-SP-047
San Patricio County, TX
John R. Bonner, et al
Oxy Petrochemicals, Inc.
393781
A 15' wide right of way with 36" of cover.
21-SP-047X
San Patricio County, TX
San Patricio County Commissioners
Oxy Petrochemicals, Inc.
None
Permit to cross CR 72A.
21-SP-048
San Patricio County, TX
Citizen Bank, Trustee, of the George Henry Guy Testamentary Trust
Oxy Petrochemicals, Inc.
393783
A 30' wide right of way for ((1) pipeline with 48" of cover.
21-SP-049
San Patricio County, TX
Ramiro G. Pena and wife Rosa B. Pena and Rene B. Pena and wife Norma Pena
Oxy Petrochemicals, Inc.
393784
A 30' wide right of way with 36" of cover.
21-SP-050
San Patricio County, TX
Lionel Galvan and Jose M. Galvin
Oxy Petrochemicals, Inc.
393785
A 30' wide right of way with 36" of cover.
21-SP-051
San Patricio County, TX
Wildcat Enterprises
Oxy Petrochemicals, Inc.
393786
A 20' wide right of way with 48" of cover.
21-SP-052
San Patricio County, TX
Max Million Floerke, Roy James Floerke and Mildred Floerke Irving
Oxy Petrochemicals, Inc.
393787
A 30' wide right of way.
21-SP-052X
San Patricio County, TX
Texas Department of Transportation
Oxy Petrochemicals, Inc.
None
Permit No. 7465 for crossing FM 2986.  District 13.
21-SP-053
San Patricio County, TX
Joseph D. Cable and Joseph E. Garrett, III, et al
Oxy Petrochemicals, Inc.
394101
A 15" wide right of way for (1) 8" pipeline.
21-SP-053A
San Patricio County, TX
G. Phil Berryman
Oxy Petrochemicals, Inc.
390804
A 30' wide right of way for (1) 8" pipeline with 36" of cover.
21-SP-053X
San Patricio County, TX
Texas Department of Transportation
Oxy Petrochemicals, Inc.
None
Permit No. 7468 crossing US 181.
21-SP-053XX
San Patricio County, TX
Southern Pacific Transportation Company (UPRR)
Oxy Petrochemical Pipeline Company
None
A right of way for (1) 8" ethylene pipeline.  Lease No. 211120.  Mile post 139.18.  Crossing near Gregory, TX.  Ownership: UPRC, C/O Joan Preble, 1800 Farnam St., Omaha, NE 68102.
21-SP-054
San Patricio County, TX
Land Ventures, Inc.
Oxy Petrochemicals, Inc.
393788
A 30' wide right of way for (1) 8" pipelines with 48" of cover.
21-SP-055
San Patricio County, TX
Reynolds Metals Company
Oxy Petrochemicals. Inc.
393789
A 2' wide right of way for (1) 8" pipeline.
21-SP-056
San Patricio County, TX
E. I. Du Pont De Nemours and Company
Oxy Petrochemicals, Inc.
393790
A 40' wide right of way for (1) 8" pipeline.
21-SP-057
San Patricio County, TX
Sun Pipeline Company
Oxy Petrochemicals, Inc.
None
Signed by Sun to encroach on their 40' easement.
22-NU-001
Nueces County, TX
Blanche B. Longnecker
Champlin Petroleum Company
v1632/p866
A 20' wide right of way for (2) pipelines with 36" of cover.
22-NU-002X
Nueces County, TX
City of Corpus Christi
South Texas Pipeline Company
v1682/p545
A 10' wide right of way for (2) pipelines with 36" of cover within McKinzie Rd.  Easement also includes various street crossings and across city owned property.
22-NU-003
Nueces County, TX
Annie Blake Morgan Head
South Texas Pipeline Company
v1662/p1023
A 10' wide right of way for (2) pipelines with 30" of cover.  New ownership: D. H. Braman, C/O Venable Proctor, One O'Connor Plaza, Suite 1100, Victoria, TX 77901.
22-NU-003X-4-3X
Nueces County, TX
Delis Smith Lenox and Betty S. French
Oxy Petrochemicals, Inc.
8709060
A 15' wide right of way for (2) pipelines with 36" of cover.
22-NU-004X
Nueces County, TX
City of Corpus Christi
South Texas Pipeline Company
v1682/p545
Easement for a 10' wide right of way for (2) pipelines with 36" of cover within McKinzie Rd.  Easement also inlcudes various road crossings.
22-NU-005
Nueces County, TX
City of Corpus Christi
South Texas Pipeline Company
v1647/p35
A 10' wide right of way for (2) pipelines with 36" of cover.  Pipeline centerline description filed in v1721/p515.
22-NU-006
Nueces County, TX
Housing Authority, City of Corpus Christi
South Texas Pipeline Company
v1658/p954
A 10' wide right of way for (2) pipelines with 36" of cover.  Tract is across 4.998 acres in Lot 1, Block 1, Hwy Village No. 4.  Amended 01/02/80 in v1728/p605.
22-NU-006X
Nueces County, TX
City of Corpus Christi
South Texas Pipeline Company
v1682/p545
Easement crossing Mobile Drive.  A 10' wide right of way for (2) pipelines with 36" of cover within McKinzie Rd.  Easement also includes various street crossings and across city owned property.  Refer to NU-002X for documents.
22-NU-007
Nueces County, TX
Southwestern Bell Telephone Company
South Texas Pipeline Company
v1847/p42
A 10' wide right of way for (2) pipelines with 36" of cover.  Lot 12, Block 11, Highway Village, Section 2.  Amended 05/09/80 in v1740/p735.
22-NU-008
Nueces County, TX
Betty Jane Grant Armstrong
South Texas Pipeline Company
v1631/p753
A 10' wide right of way for (2) pipelines with 36" of cover.  Lots 13 and 14, Block 11, Section 2.
22-NU-009
Nueces County, TX
Bernice R. Ramfield
South Texas Pipeline Company
v16569p367
A 10' wide right of way for (2) pipelines with 36" of cover.  Amended 02/13/80 in v1730/p89.
22-NU-009X
Nueces County, TX
City of Corpus Christi
South Texas Pipeline Company
v1682/p545
Leopard/SH 9 crossing.
22-NU-010
Nueces County, TX
City of Corpus Christi
South Texas Pipeline Company
v1682/p545
A 10' wide right of way for (2) pipelines with 36" of cover in ditches and 4' under roads.
22-NU-010A
Nueces County, TX
Maverick Markets, Inc.
Oxy Petrochemicals, Inc.
None
A 5' wide right of way with 48" of cover.  This is part of NU-010.
22-NU-011
Nueces County, TX
City of Corpus Christi
South Texas Pipeline Company
v1644/p214
A 10' wide right of way for (2) pipelines with 36" of cover.
22-NU-012
Nueces County, TX
William E. McKinzie
South Texas Pipeline Company
v1663/p218
A 10' wide right of way for (2) pipelines with 30" of cover.  New ownership: Elaine McKinzie, P. O. Box 4418, Corpus Christi, TX 78469.
22-NU-013
Nueces County, TX
Charles McKinzie
South Texas Pipeline Company
v1663/p279
A 10' wide right of way for (2) pipelines with 30" of cover.  New ownership: William E. McKinzie, P. O. Box 4418, Corpus Christi, TX 78469.
22-NU-014
Nueces County, TX
Rupert Harold Kronke, et al
Champlin Pipeline Inc., Imperial Pipeline Inc., and SolTex Pipeline Inc.
v708/p1922;v1788/p575
A 15' wide right of way for (2) pipelines with 3' of cover.
22-NU-014X
Nueces County, TX
City of Corpus Christi
South Texas Pipeline Company
v1682/p545
(Revocable easement)  A 10' wide right of way for (2) pipelines with 36" of cover within McKinzie Rd.  Easement also includes various street crossings and across city owned property.  Up River Rd.
22-NU-015
Nueces County, TX
Jr. Food Marts of Texas, Inc.
South Texas Pipeline Company
v1634/p696
A 10' wide right of way for (2) pipelines with 36" of cover.  Amended 02/20/81 in v1773/p448.
22-NU-015X
Nueces County, TX
Texas Department of Transportation
South Texas Pipeline Company
None
Permit No. 1365, Control No. 74 for (1) 6" and (1) 8" pipeline East of McKenzie Rd. and I-37.
22-NU-015X
Nueces County, TX
Texas Department of Transportation
South Texas Pipeline Company
None
Permit No. 4516 for magnesium anode bed.
22-NU-016
Nueces County, TX
William E. McKinzie
South Texas Pipeline Company
v1663/p226
ROLL: v534/p1498.  A 10' wide right of way for (2) pipelines with 30" of cover.  Amended 03/12/80 in v1732/p813.  New ownership: Billy and Gracie Laural, DBA Chela's Mexican Restaurant, 9840 Leopard, Corpus Christi, TX 78410.
22-NU-016X
Nueces County, TX
City of Corpus Christi
South Texas Pipeline Company
v1682/p545
Easement crossing McKinzie Lane.  Refer to NU-002X for documents.
22-NU-017X
Nueces County, TX
City of Corpus Christi
South Texas Pipeline Company
v1682/p545
Sid Allison Rd. Refer to NU-002X for documents.
22-NU-018
Nueces County, TX
City of Corpus Christi
South Texas Pipeline Company
v1664/p220
A 35' wide right of way for (2) pipelines with 36" of cover.
22-NU-018X
Nueces County, TX
State of Texas General Land Office
Oxy Petrochemicals, Inc.
1998022155
ME 880005 for (1) 6" and (1) 8" pipeline across the Nueces River.
22-NU-018XX
Nueces County, TX
Corps of Engineers
South Texas Pipeline Company
None
Permit No. 12587 across the Nueces River with (1) 6" and (1) 8" pipelines.
22-SP-001
San Patricio County, TX
August A. McGregor
South Texas Pipeline Company
v570/p64
A 35' wide right of way for (2) pipelines with 36" of cover.
22-SP-002
San Patricio County, TX
Kathleen L. Drought, Individually & as Independent Executrix, et al
South Texas Pipeline Company
v587/p302
A 35' wide right of way for (2) pipelines with 36" of cover.  No saltwater or saltbrine.
22-SP-003
San Patricio County, TX
Al Pena
South Texas Pipeline Company
v567/p411
A 35' wide right of way for (2) pipelines with 36" of cover.
22-SP-004
San Patricio County, TX
Patricia Morris Sorensen, et al
South Texas Pipeline Company
v568/p325
A 35' wide right of way for (2) pipelines with 36" of cover.
22-SP-004X
San Patricio County, TX
Missouri Pacific Railroad Company (UPRR)
South Texas Pipeline Company
None
A right of way for (1) 6" propylene and (1) 8" ethylene pipelines at MP 136.19.  Audit No. CA77855.  Crossing near Odom, TX.  Ownership: UPRC, C/O Joan Preble, 1800 Farnam St., Omaha, NE 68102.
22-SP-005
San Patricio County, TX
Griffith and Associates, Inc.
South Texas Pipeline Company
v567/p413
A 35' wide right of way for (2) pipelines with 36" of cover.
22-SP-006
San Patricio County, TX
Ralf E. Andrews
South Texas Pipeline Company
v570/p363
A 35' wide right of way for (2) pipelines with 36" of cover.
22-SP-006X
San Patricio County, TX
San Patricio County Commissioners Court
South Texas Pipeline Company
v22/p500
A 10' wide right of way for (2) 8" pipelines with 40" of cover.  Permit covers SP-006X, SP-008X, SP-009X, SP-012X, SP-016X, SP-020X.
22-SP-007
San Patricio County, TX
Charles H. Mayo and wife Mabel Jo Mayo
South Texas Pipeline Company
v574/p330
A 30' wide right of way for (2) pipelines with 42" of cover.
22-SP-007X
San Patricio County, TX
San Patricio County
  
None
No documents in file.  Map refers to CR 74.
22-SP-008
San Patricio County, TX
Stanley L. Web, Jr. et al
South Texas Pipeline Company
v578/p279
A 30' wide right of way for (2) pipelines with 42" of cover.
22-SP-008X
San Patricio County, TX
San Patricio County Commissioners Court
South Texas Pipeline Company
None
Permit to cross CR 57.  Documents in SP-006X.
22-SP-009
San Patricio County, TX
W. B. Denman, Independent Executor of the Will & Estate of F. D. Kolkernot, Jr., Deceased, et al
South Texas Pipeline Company
v575/p295
A 35' wide right of way for pipelines with 42" of cover.
22-SP-009X
San Patricio County, TX
San Patricio County Commissioners Court
South Texas Pipeline Company
None
Permit to cross CR 59.
22-SP-010
San Patricio County, TX
Marie Edness Roots, et al
South Texas Pipeline Company
v574/p342
A 30' wide right of way for (2) pipelines with 42" of cover.
22-SP-010X
San Patricio County, TX
Texas Department of Transportation
South Texas Pipeline Company
None
Permit No. 1370.  Control No. 507.  A 10' wide right of way for (1) 6" and (1) 8" pipeline with 6' of cover crossing within FM 631.
22-SP-010X
San Patricio County, TX
Texas Department of Transportation
South Texas Pipeline Company
None
Permit No. 1366 for (1) 6" and (1) 8" pipeline crossing within the Fur Highway (FM-631).
22-SP-011
San Patricio County, TX
W. S. Foley, Jr.
South Texas Pipeline Company
v579/p19
A 30' wide right of way for (2) pipelines with 42" of cover.
22-SP-012
San Patricio County, TX
Addie Christine Vickers, et al
South Texas Pipeline Company
v568/p331
A 35' wide right of way for (2) pipelines with 36" of cover.
22-SP-012X
San Patricio County, TX
San Patricio County Commissioners Court
South Texas Pipeline Company
None
Permit to cross CR 61.  See SP-006X for documents.
22-SP-013
San Patricio County, TX
Roy Schmalstieg
South Texas Pipeline Company
v579/p27
A 30' wide right of way for (2) pipelines not to exceed 8" in diameter with 42" of cover.
22-SP-014
San Patricio County, TX
H. B. Briscoe and wife Allene Briscoe
South Texas Pipeline Company
v582/p154
A 30' wide right of way for (2) pipelines with 42" of cover.
22-SP-015
San Patricio County, TX
William E. McDaniel Estate
South Texas Pipeline Company
v580/p12
A 30' wide right of way for (2) pipelines with 42" of cover.
22-SP-016
San Patricio County, TX
Gilbert C. Oelschlegel
South Texas Pipeline Company
v572/p236
A 35' wide right of way for (2) pipelines with 36" of cover.
22-SP-016X
San Patricio County, TX
San Patricio County Commissioners Court
South Texas Pipeline Company
None
Permit to cross CR 42.  See SP-006X for documents.
22-SP-017
San Patricio County, TX
W. T. West
South Texas Pipeline Company
v572/p125
A 35' wide right of way for (2) pipelines with 36" of cover.
22-SP-017X
San Patricio County, TX
Texas Department of Transportation
South Texas Pipeline Company
Control No. 1559
Permit No. 1367 Control No. 1559.  A 10' wide right of way for (1) 6" and (1) 8" pipeline with 4' of cover, within FM 1074.
22-SP-018
San Patricio County, TX
Guaranty National Bank and Trust of Corpus Christi, Trustee
South Texas Pipeline Company
v576/p287
A 35' wide right of way for (2) pipelines with 36" of cover.
22-SP-019
San Patricio County, TX
Guaranty National Bank and Trust of Corpus Christi, Trustee
South Texas Pipeline Company
v576/p287
A 35' wide right of way for (2) pipelines with 36" of cover.
22-SP-020
San Patricio County, TX
Marie D. Williams
South Texas Pipeline Company
v576/p145
A 30' wide right of way for (2) pipelines with 42" of cover.
22-SP-020X
San Patricio County, TX
San Patricio County Commissioners Court
South Texas Pipeline Company
None
Permit to cross CR 65.  See SP-006X for documents.
22-SP-021
San Patricio County, TX
Joan Coggin
South Texas Pipeline Company
v588/p92
A 35' wide right of way for (2) pipelines with 36" of cover.
22-SP-021X
San Patricio County, TX
Texas Department of Transportation
South Texas Pipeline Company
None
Permit No. 1368 for a  5' wide right of way for (1) 6" and (1) 8" pipeline with 6' of cover, crossing FM 1944.
22-SP-022
San Patricio County, TX
F. C. Schmalstieg
South Texas Pipeline Company
v587/p307
A 35' wide right of way for (2) pipelines and (1) vent pipeline, with 42" of cover.  Line must be 300' from existing residence.  Amended in v620/p324 that updates centerline description.
22-SP-023
San Patricio County, TX
Woodrow W. Hart, et al
South Texas Pipeline Company
v574/p320
A 30' wide right of way for (2) pipelines with 42" of cover.
22-SP-023X
San Patricio County, TX
San Patricio County Commissioners Court
South Texas Pipeline Company
None
Right of way with 40" of cover.
22-SP-024
San Patricio County, TX
J. D. Patrick, Jr., Trustee
South Texas Pipeline Company
v579/p23
A 30' wide right of way for (2) pipelines with 42" of cover.  Pipelines must be at least 10' apart.
22-SP-025
San Patricio County, TX
Donald F. Swann and wife Kay P.Swann
South Texas Pipeline Company
v576/p299
A 30' wide right of way for (2) pipelines with 42" of cover.
22-SP-026
San Patricio County, TX
M. Warren Ivey
South Texas Pipeline Company
v575/p163
A 30' wide right of way for (2) pipelines with 42" of cover.
22-SP-027
San Patricio County, TX
Warren Ivey
South Texas Pipeline Company
v575/p167
A 30' wide right of way for (2) pipelines with 42" of cover.
22-SP-028
San Patricio County, TX
Douglas Ray Hart
South Texas Pipeline Company
v575/p171
A 30' wide right of way for (2) pipelines with 42" of cover.
22-SP-029
San Patricio County, TX
IMA Hogg Foundation, by Allen Shivers, President
South Texas Pipeline Company
v587/p490
A 30' wide right of way for (2) pipelines with 42" of cover.
22-SP-029X
San Patricio County, TX
Southern Pacific Transportation Company (UPRR)
South Texas Pipeline Company
None
A 35' wide right of way for (1) 6" propylene and (1) 8" ethylene pipelines at MP 129.29.  Crossing in Taft, TX.  Audit No. 185457.
22-SP-030
San Patricio County, TX
Alice Cynthia Simkins
South Texas Pipeline Company
v580/p247
A 35' wide right of way for (2) pipelines with 42" of cover.
22-SP-030X
San Patricio County, TX
Texas Department of Transportation
South Texas Pipeline Company
None
Permit No. 1369 for (1) 6" and (1) 8" pipeline crossing US 181.  Cover must be 6' below road and 4' below ditches.
22-SP-031
San Patricio County, TX
Laura Mary Patterson
South Texas Pipeline Company
v590/p84
A 30' wide right of way for (2) pipelines with 42" of cover.  File also contains easement dated 03/10/78 in v578/p275 by E. N. Tutt and Jack Owens Tutt, Executor of the Estate of A. C. Tutt, deceased.  According to title contained in file, this represents
22-SP-032
San Patricio County, TX
Mrs. Huberta Pyron and James Roy Pyron
South Texas Pipeline Company
v576/p294
A 30' wide right of way for (2) pipelines with 42" of cover.
22-SP-032A
San Patricio County, TX
San Patricio County Commissioners Court
South Texas Pipeline Company
None
Permit to cross CR 100.
22-SP-032X
San Patricio County, TX
Taft Properties
South Texas Pipeline Company
v586/p132
A 35' wide easement across canal in Lots 5-9, Coleman-Fulton Pasture Company, Manuel Ramon Survey, A-224 and Juan Garcia Survey, A-129 and George Clark Survey, A-86, San Patricio County, TX.
22-SP-033
San Patricio County, TX
Marie Edness Roots and Mabel Jo Mayo, Trustee, et al
South Texas Pipeline Company
v574/p325
A 30' wide right of way for (2) pipelines with 42" of cover.
22-SP-033X
San Patricio County, TX
San Patricio County Commissioners Court
South Texas Pipeline Company
None
Permit to cross CR 71.  Right of way with 40" of cover.  See SP-023X for documents.
22-SP-034
San Patricio County, TX
John W. Hunt, Jr. et al
South Texas Pipeline Company
v589/p47
A 30' wide right of way for (2) pipelines with 42" of cover.
22-SP-034X
San Patricio County, TX
San Patricio County Commissioners Court
South Texas Pipeline Company
None
Permit to cross CR 73.  Right of way with 40" of cover.  See SP-023X for documents.
22-SP-035
San Patricio County, TX
James R. Rosson and wife Edna Claire Rosson
South Texas Pipeline Company
v579/p31
A 30' wide right of way for (2) pipelines with 42" of cover.
22-SP-036
San Patricio County, TX
Inez Nelson Blackman, et al
South Texas Pipeline Company
v587/p315
A 35' wide right of way for (2) pipelines with 36" of cover.
22-SP-036X
San Patricio County, TX
San Patricio County Commissioners Court
South Texas Pipeline Company
None
Right of way with 40" of cover.  See SP-023X for documents.
22-SP-037
San Patricio County, TX
550
South Texas Pipeline Company
v582/p129
A 30' wide right of way for (2) pipelines with 42" of cover.
22-SP-037X
San Patricio County, TX
Texas Department of Transportation
South Texas Pipeline Company
None
Approval for a 5' and  a 10' wide right of way for (1) 6" and (1) 8" pipeline crossing FM 631 with 4' of cover.
22-SP-038
San Patricio County, TX
Max C. Kluge and wife Myrtle E. Kluge, et al
South Texas Pipeline Company
v586/p189
A 30' wide right of way for (2) pipelines with 42" of cover.
22-SP-038A
San Patricio County, TX
Max C. Kluge and wife Myrtle E. Kluge, et al
South Texas Pipeline Company
v583/311
A 500' by 500' right of way for a microwave tower and control equipment building.
22-SP-038A
San Patricio County, TX
Max C. Kluge and wife Myrtle E. Kluge, et al
South Texas Pipeline Company
v583/p306
A 30' wide right of way for (2) pipelines with 42" of cover.
22-SP-038X
San Patricio County, TX
San Patricio County Commissioners Court
South Texas Pipeline Company
None
Permit to cross CH 96.  Right of way with 40" of cover.  See SP-023X for documents.
22-SP-041
San Patricio County, TX
Tom Paterson and wife Clara Paterson
South Texas Pipeline Company
v576/p283
A 30' wide right of way for (2) pipelines with 42" of cover.
22-SP-042
San Patricio County, TX
Cody Overton Thomas, et al
South Texas Pipeline Company
v617/p685
A 30' wide right of way for (2) pipelines with 42" of cover.  NOTE: Unknown if easement obtained by Mary V. Thomas Brown, and husband.
22-SP-042
San Patricio County, TX
Cody Overton Thomas
South Texas Pipeline Company
v517/p218
A 30' wide right of way for (2) pipelines with 42" of cover.
22-SP-043
San Patricio County, TX
Calixto Garcia
South Texas Pipeline Company
v574/p352
A 35' wide right of way for (2) pipelines with 36" of cover.
22-SP-043X
San Patricio County, TX
San Patricio County Commissioners Court
South Texas Pipeline Company
None
Permit to cross CR 77.
22-SP-044
San Patricio County, TX
Roots and Roots, Inc., et al
South Texas Pipeline Company
v575/p278
A 30' wide right of way for (2) pipelines with 42" of cover.
22-SP-044X
San Patricio County, TX
Texas Department of Transportation
South Texas Pipeline Company
None
Permit No. 1371 for FM 881.  A right of way for (1) 6" and (1) 8" pipeline with 6' of cover below road surface and 4' of cover below drainage ditch.
22-SP-045
San Patricio County, TX
E. N. Tutt, Individually and as Independent Executor of the Estate of Geneve D. Tutt, deceased.
South Texas Pipeline Company
v578/p263
A 30' wide right of way for (2) pipelines with 42" of cover.
22-SP-046
San Patricio County, TX
Edness L. Roots, Individual Executrix of the Estate of W. L. Roots
South Texas Pipeline Company
v575/p284
A 30' wide right of way for (2) pipelines with 42" of cover.
22-SP-047
San Patricio County, TX
Ella Galler
South Texas Pipeline Company
v576/p394
A 35' wide right of way for (2) pipelines with 36" of cover.
22-SP-047.1
San Patricio County, TX
Faye Galler
South Texas Pipeline Company
v576/p142
A 35' wide right of way for (2) pipelines with 36" of cover.
22-SP-047.1X
San Patricio County, TX
San Patricio County Commissioners Court
South Texas Pipeline Company
None
Permit to cross CR 79.
22-SP-048
San Patricio County, TX
Walter L. Roots, et al
South Texas Pipeline Company
v613/p471
A 30' wide right of way for (2) pipelines with 42" of cover.
22-SP-048X
San Patricio County, TX
San Patricio County
  
None
No documents in file.  Map refers to CH 92.
22-SP-049
San Patricio County, TX
W. K. Morgan and wife Alma Morgan
South Texas Pipeline Company
v528/p268
A 30' wide right of way for (2) pipelines with 42" of cover.  Property sold 03/29/78 to Leopold Haas & August Koell.  Recording info unavailable.
22-SP-050
San Patricio County, TX
Edness Marie Roots and Mabel Jo Mayo, Trustees
South Texas Pipeline Company
v574/p347
A 30' wide right of way for (2) pipelines with 42" of cover.
22-SP-051
San Patricio County, TX
Frank L. Jones, et al
South Texas Pipeline Company
v582/p133
A 30' wide right of way for (2) pipelines with 42" of cover.
22-SP-051X
San Patricio County, TX
San Patricio County Commissioners Court
South Texas Pipeline Company
None
Permit to cross CR 90A.  Refer to SP-047.1X for documents.
22-SP-052
San Patricio County, TX
Charles H. Mayo, et al
South Texas Pipeline Company
v574/p335
A 30' wide right of way for (2) pipelines with 42" of cover.  This is for also for a valve site.
22-SP-052
San Patricio County, TX
C. H. Mayo, et al
South Texas Pipeline Company
None
Valve site lease for a term of 20 years.  Renewed for another 10 years on 03/09/98.
22-SP-052X
San Patricio County, TX
State of Texas General Land Office
Equistar Chemicals, LP
v589/p35
ME 880022 for (1) 6" and (1) 8" pipeline across Chiltipin Creek.
22-SP-052XX
San Patricio County, TX
Corps of Engineers
South Texas Pipeline Company
None
Permit No. 12587 crossing the Chiltipin Creek with (1) 6" and (1) 8" pipelines.
22-SP-053
San Patricio County, TX
Marie Welder Ford, et al
South Texas Pipeline Company
v582/p82
A 35' wide right of way for (2) lines not to exceed 8" in diameter.  Amended in v582/p82
22-SP-054
San Patricio County, TX
John J. Welder, et al
South Texas Pipeline Company
v582/p367
A 35' wide right of way for (1) 6" and (1) 8" pipeline with 30" of cover.
22-SP-054X
San Patricio County, TX
State of Texas General Land Office
Oxy Petrochemicals, Inc.
464349
ME 880005 for (1) 6" and (1) 8" pipeline crossing the Aransas River.
22-SP-055
San Patricio County, TX
Reynolds Metals Company
Oxy Petrochemicals, Inc.
393789
A right of way for (1) 8" line with a width, one foot on either side of the centerline.
22-R-001
Refugio County, TX
Refugio County Drainage District
South Texas Pipeline Company
None
5' of cover between tops of pipe and bottom of drainage ditch.  No date included on permit.
22-R-002
Refugio County, TX
Hal Parks, Trustee, J. R. Barry Estate
South Texas Pipeline Company
v223/p148
A 35' wide right of way for (2) pipelines with 36" of cover.
22-R-003
Refugio County, TX
Elmo H. Niemann
South Texas Pipeline Company
v220/p465
A 35' wide right of way for (2) pipelines with 36" of cover.  Includes valve site.
22-R-004
Refugio County, TX
Henry Schubert and wife Bernice Schubert
South Texas Pipeline Company
v220/p469
A 35' wide right of way for (2) pipelines with 36" of cover.
22-R-004X
Nueces County, TX
Refugio County Commissioners Court
South Texas Pipeline Company
v14/p190
(1) page agreement allowing pipelines to cross Refugio County roads.  07/03/03: Mary Melvin spoke with County Clerk who said this letter agreement was the only thing for the order.
22-R-005
Refugio County, TX
Rudolph Schubert and wife Lillian A. Schubert
South Texas Pipeline Company
v223/p145
A 35' wide right of way for (2) pipelines with 36" of cover.
22-R-006
Refugio County, TX
Arthur F. Beck
South Texas Pipeline Company
v220/p522
A 35' wide right of way for (2) pipelines with 36" of cover.
22-R-007
Refugio County, TX
Robert J. Kloesel and wife Emilio Kloesel
South Texas Pipeline Company
v222/p53
A 35' wide right of way for (2) pipelines with 30" of cover.
22-R-008
Refugio County, TX
John H. Scott and wife Sharon M. Scott
South Texas Pipeline Company
v223/p137
A 35' wide right of way for (2) pipelines with 30" of cover.
22-R-009X
Refugio County, TX
Texas Department of Transportation
South Texas Pipeline Company
None
Permit No. 1372, Control No. 1423 for a 10' wide right of way for (2) pipelines with 6' of cover, crossing FM 1360.
22-R-010
Refugio County, TX
Hertha Mae Lala, et al
South Texas Pipeline Company
v222/p42
A 35' wide right of way for (2) pipelines with 36" of cover.
22-R-011
Refugio County, TX
Frankie Marlene Davis, et al
South Texas Pipeline Company
v220/p128
A 35' wide right of way for (2) pipelines with 30" of cover.
22-R-012
Refugio County, TX
Erwin Zable and wife Mauverine Zable
South Texas Pipeline Company
v219/p458
A 35' wide right of way for (2) pipelines with 36" of cover.
22-R-012X
Refugio County, TX
Refugio County Commissioners Court
South Texas Pipeline Company
v14/p190
Commissioners Court minutes: v14/p190.
22-R-013
Refugio County, TX
Lee Nell Boenig
South Texas Pipeline Company
v223/p392
A 35' wide right of way for (2) pipelines with 30" of cover.
22-R-013X
Refugio County, TX
Refugio County Commissioners Court
South Texas Pipeline Company
v14/p190
Permit to cross Refugio County roads.
22-R-014
Refugio County, TX
Dorothy Mae Breaker, et al
South Texas Pipeline Company
v220/p135
A 35' wide right of way for (2) pipelines with 36" of cover.
22-R-015
Refugio County, TX
Celestine M. Schubert
South Texas Pipeline Company
v220/p299
A 35' wide right of way for (2) pipelines with 30" of cover.
22-R-015X
Refugio County, TX
Refugio County Commissioners Court
South Texas Pipeline Company
v14/p190
Permit/order for County road crossings.  Commissioner Court minutes: v14/p190.
22-R-016
Refugio County, TX
Leander Niemann
South Texas Pipeline Company
v226/p495
A 35' wide right of way for (2) pipelines with 36" of cover.
22-R-016A
Refugio County, TX
Annie Schirmer Harsdorff
South Texas Pipeline Company
v222/p59
A 35' wide right of way for (2) pipelines with 36" of cover.
22-R-016C
Refugio County, TX
Rueben L. Niemann
South Texas Pipeline Company
v224/p401
A 35' wide right of way for (2) pipelines with 36" of cover.
22-R-016D
Refugio County, TX
Nora Lee Clawson Dewveall
South Texas Pipeline Company
v224/p262
A 35' wide right of way for (2) pipelines with 36" of cover.
22-R-017
Refugio County, TX
Herman E. Schirmer
South Texas Pipeline Company
v220/p467
A 35' wide right of way for (2) pipelines with 36" of cover.
22-R-017X
Refugio County, TX
Refugio County Commissioners Court
South Texas Pipeline Company
v14/p190
Permit for road crossings.
22-R-018
Refugio County, TX
Aubrey Messer
South Texas Pipeline Company
v202/p199
A 35' wide right of way for (2) pipelines with 36" of cover.
22-R-019
Refugio County, TX
George W. Dahse
South Texas Pipeline Company
v220/p144
A 35' wide right of way for (2) pipelines with 30" of cover.
22-R-020
Refugio County, TX
Frank W. Hartman, Jr.
South Texas Pipeline Company
v220/p121
A 35' wide right of way for (2) pipelines with 30" of cover.
22-R-020X
Refugio County, TX
Texas Department of Transportation
South Texas Pipeline Company
None
Permit No. 1373, control No. 738 for a 10' wide right of way with (1) 6" and (1) 8" pipeline and 6' of cover crossing FM 136.
22-R-021
Refugio County, TX
Louise Stromberger, et al
South Texas Pipeline Company
v223/p123
A 35' wide right of way for (2) pipelines with 36" of cover.
22-R-022
Refugio County, TX
Jack F. Houghton
South Texas Pipeline Company
v221/p371
A 35' wide right of way for (2) pipelines with 36" of cover.
22-R-023
Refugio County, TX
Ormond Mallett Lee Crews, et al
South Texas Pipeline Company
v220/p137
A 35' wide right of way for (2) pipelines with 36" of cover.
22-R-024
Refugio County, TX
Elise Schubert
South Texas Pipeline Company
v220/p119
A 35' wide right of way for (2) pipelines with 36" of cover.  Amended in v234/p116 and v235/p90 and v235/p94.
22-R-025
Refugio County, TX
Jimmie C. Morgan
South Texas Pipeline Company
v222/p47
A 35' wide right of way for (2) pipelines with 36" of cover.
22-R-025X
Refugio County, TX
State of Texas General Land Office
Oxy Petrochemicals, Inc.
v86/p441
ME 880005 crossing the Mission River.   Consolidates several river and stream crossing easements.
22-R-025XX
Refugio County, TX
Corps of Engineers
South Texas Pipeline Company
None
Permit No. 12587 across the Mission River with (1) 6" and (1) 8" pipelines.
22-R-026
Refugio County, TX
Gloria G. O' Connor Shouse and Earl Edward Shouse
Equistar Chemicals, LP
v94/p194
A 35' wide right of way for (2) pipelines not to exceed 8 5/8" in diameter with 36" of cover, a 50' by 50' valve site, and a 30' by 50' Stopphe Tee.  This easement replaces easement dated 08/14/78 in v225/p61 and amendment (illegible).  They have not been
22-R-026X
Refugio County, TX
Texas Department of Transportation
South Texas Pipeline Company
None
Permit No. 1374 for FM 2678.
22-R-026XX
Refugio County, TX
State of Texas General Land Office
Oxy Petrochemicals, Inc.
v86/p460
ME 880005 for Melon Creek allowing (1) 6" and (1) 8" pipeline.
22-R-026XXX
Refugio County, TX
Corps of Engineers
South Texas Pipeline Company
None
Permit No. 12587 across Melon Creek with (1) 6" and (1) 8" pipelines.
22-R-027
Refugio County, TX
Dennis O' Conner, et al
South Texas Pipeline Company
v224/p178
A 35' wide right of way for (2) pipelines with 42" of cover.  Notify grantors of assignment.  New ownership: D. H. Braman, Jr., C/O Venable Proctor, One O'Connor Plaza, Suite 1100, Victoria, TX 77901.
22-R-027
Refugio County, TX
Dennis O' Conner, et al
South Texas Pipeline Company
v230/p466
5.739 acres for a microwave tower, control equipment building with other appropriate equipment and appurtenances.  Site is confined to the 5.739 acre site, but may occupy additional portion as reasonably necessary during construction.
22-R-027X
Refugio County, TX
Texas Department of Transportation
South Texas Pipeline Company
None
Permit No. 1375 for (2) pipelines within FM 774.
22-R-028
Refugio County, TX
John Francis Tatton
South Texas Pipeline Company
v225/p192
A 35' wide right of way for (2) pipelines with 36" of cover.
22-R-029
Refugio County, TX
Maude O'Connor Williams, et al
South Texas Pipeline Company
v224/p146
A 35' wide right of way for (2) pipelines.  New ownership: O'Connor Ranch., C/O Venable Proctor, One O'Connor Plaza, Suite 1100, Victoria, TX 77901.
22-R-030
Refugio County, TX
Maude O'Conner Williams, et al
South Texas Pipeline Company
v224/p160
A 35' wide right of way for (2) pipelines with 42" of cover.  Notify grantor of assignment.  Also for a 50' by 50' valve site.  New ownership: O'Connor Ranch., C/O Venable Proctor, One O'Connor Plaza, Suite 1100, Victoria, TX 77901.
22-R-031
Refugio County, TX
Maude O'Conner Williams, et al
South Texas Pipeline Company
v224/p169
A 35' wide right of way for (2) pipelines with 42" of cover.  New ownership: O'Connor Ranch., C/O Venable Proctor, One O'Connor Plaza, Suite 1100, Victoria, TX 77901.
22-R-032
Refugio County, TX
Maud O'Conner Williams, et al
South Texas Pipeline Company
v224/p153
A 35' wide right of way for (2) pipelines with 42" of cover.  Includes Tee and valve site.  New ownership: O'Connor Ranch., C/O Venable Proctor, One O'Connor Plaza, Suite 1100, Victoria, TX 77901.
22-R-032-A
Refugio County, TX
Refugio County Commissioners Court
South Texas Pipeline Company
v14/p190
Permit to cross Refugio County roads.
22-R-032X
Refugio County, TX
Texas Department of Transportation
South Texas Pipeline Company
None
Permit No. 1376, control No. 349.  A right of way for (1) 6" and (1) 8" pipeline with 6' of cover below the road crossing FM 239.
22-R-033
Refugio County, TX
Leona Marie Glover, by George E. Glover, attorney in fact
South Texas Pipeline Company
v221/p380
A 35' wide right of way for (2) pipelines with 36" of cover.
22-R-034
Refugio County, TX
H. B. Bickford
South Texas Pipeline Company
v221/p5
A 35' wide right of way for (2) pipelines with 36" of cover.
22-R-035
Refugio County, TX
J. H. Adams and wife Bessie May Adams, et al
South Texas Pipeline Company
v221/p7
A 35' wide right of way for (2) pipelines with 36" of cover.
22-R-035
Refugio County, TX
J. H. Adams, et al
South Texas Pipeline Company
v230/p153
A 200' by 200' tract of land for a micro-wave tower and control equipment building.  Tower and building restricted to tract 100' by 100'.
22-R-035X
Refugio County, TX
Refugio County Commissioners Court
South Texas Pipeline Company
v14/p190
Commissioners Court Minutes v14/p190.  Certification only in file.
22-R-036
Refugio County, TX
J. H. Adams and wife Bessie May Adams, et al
South Texas Pipeline Company
v221/p16
A 35' wide right of way for (2) pipelines with 36" of cover.
22-R-037
Refugio County, TX
Ernest E. Schultz and wife Reatha Schultz
South Texas Pipeline Company
v226/p129
A 15' wide road right of way.
22-R-037
Refugio County, TX
Ernest E. Schultz and Reatha Schultz
South Texas Pipeline Company
v223/p159
A 35' wide right of way for (1) 6" and (1) 8" pipeline with 30" of cover.  This includes a tower site, but amendment releases it.
22-R-037X
Refugio County, TX
State of Texas General Land Office
Equistar Chemicals, LP
  
ME 20030140.  A 10' wide right of way for (1) 6" and (1) 8" pipeline with 4' of cover crossing the Guadalupe River.
22-R-037XX
Refugio County, TX
Corps of Engineers
South Texas Pipeline Company
None
Permit No. 12587 crossing the Guadalupe River with (1) 6" and (1) 8" pipelines.
22-C-001
Calhoun County, TX
Hampton C. Robinson, Jr., et al
South Texas Pipeline Company
v311/p60
A 35' wide right of way for (1) 6" and (1) 8" pipeline.  Ownership: Anthony and Dorothy Daniel, P. O. Box 181, Tivoli, TX 77990.  Ownership: Hampton C. Robinson Jr. Estate, C/O Ms. Louise Fenton Robinson, 3711 San Felipe St. Apt. 9-E, Houston, TX, 77027.
22-C-001X0
Calhoun County, TX
Corps of Engineers
South Texas Pipeline Company
None
Permit No. 12589 across Schwings Bayou with (1) 6" and (1) 8" pipelines.
22-C-001X0
Calhoun County, TX
State of Texas General Land Office
South Texas Pipeline Company
v311/p1131
ME 3837 which provides a right of way for (1) 6" and (1) 8" pipeline across Schwings Bayou. ME 880007.  No under state jurisdiction.
22-C-002X
Calhoun County, TX
Corps of Engineers
None
None
Hog Bayou.  No permit required per Janet Botello with the Corps.
22-C-003X
Calhoun County, TX
Corps of Engineers
South Texas Pipeline Company
None
Permit No. 12587 crossing the Victoria Barge Canal with (1) 6" and (1) 8" pipeline.
22-C-004
Calhoun County, TX
Hampton C. Robinson, Jr.
South Texas Pipeline Company
v311/p54
A 35' wide right of way for (1) 6" and (1) 8" pipeline with 35" of cover.  Ownership: Anthony and Dorothy Daniel, P. O. Box 181, Tivoli, TX 77990.  Ownership: Hampton C. Robinson Jr. Estate, C/O Ms. Louise Fenton Robinson, 3711 San Felipe St. Apt. 9-E, Ho
22-C-005X
Calhoun County, TX
Missouri Pacific Railroad Company (UPRR)
South Texas Pipeline Company
None
License No. CA77851 for (1) 6" propylene and (1) 8" ethylene pipelines at MP 6.68.  Crossing near  Bloomington, TX.  Ownership: UPRC, C/O Joan Preble, 1800 Farnam St., Omaha, NE 68102.
22-C-006X
Calhoun County, TX
Texas Department of Transportation
South Texas Pipeline Company
None
Permit to cross SH 185 for (1) 6" and (1) 8" pipeline, 6' below road surface and 4' below lowest point in drainage ditch.
22-C-008
Calhoun County, TX
Patrick H. Welder
South Texas Pipeline Company
v309/p1125
A 35' wide right of way for (2) pipelines with 30" of cover.
22-C-008A
Calhoun County, TX
Patrick H. Welder
Champlin Pipeline Inc., Imperial Pipeline Inc., and SolTex Pipeline Inc.
v370/p1002
A right of way for (2) 4" pipelines with 30" of cover and a 100' by 100' above ground metering assembly site.  Letter from Patrick Welder dated 11/05/80 requests that upon completion of the work in connection with the construction of the meter station, th
22-C-009
Calhoun County, TX
Jake W. Koehn and wife Ila Koehn
South Texas Pipeline Company
v308/p481
A 35' wide right of way for (2) pipelines with 36" of cover.
22-C-009
Calhoun County, TX
Jake W. Koehn and wife, Ila Koehn
South Texas Pipeline Company
v311/p928
5.739 acres for a microwave tower.
22-C-009A
Calhoun County, TX
Helen McKamey
Champlin Pipeline, Inc., Imperial Pipeline, SolTex Pipeline, Inc.
v398/p21
5.4776 (500' by 500') acres in the Thacher and Leonard Survey, A-180 & 181.  Tax ID # 13690, A0181-00000-0007-AO.  NE
22-C-010X
Calhoun County, TX
Texas Department of Transportation
South Texas Pipeline Company
None
A right of way for (2) pipelines crossing US 87.
22-C-011X
Calhoun County, TX
Southern Pacific Transportation Company (UPRR)
South Texas Pipeline Company
None
Audit No. S185455 crossing  Port Lavaca Branch Track. Mile post 9.85.  Crossing near Placedo, TX.  Right of way for (1) 6" propylene and (1) 8" ethylene pipeline.
22-C-012
Calhoun County, TX
Jesse Parenica, Frankie Parnica, Johnnie Parenica and Rose Lee Parenica Migl
South Texas Pipeline Company
v309/p594
A 35' wide right of way for (2) pipelines.
22-CL-001
Calhoun County, TX
Patrick H. Welder
CCPC Chemical, Inc.
v2/p133
A 30' wide right of way for (1) 8" pipeline.
22-CL-002
Calhoun County, TX
Marie Marshall Drost and husband Felix Drost
CCPC Chemical, Inc.
v24/p143
A 75' wide right of way for (2) 4" pipelines with 36" of cover and a 130' by 130' easement for above ground metering assembly.
22-CL-003
Calhoun County, TX
M-Trust Corp, N. A., Trustee (Dr. W. H. Bennett, et al)
CCPC Chemical, Inc.
v24/p118
A 30' wide right of way for (1) pipeline with 36" of cover.  This easement represents 1/2 of the interest.
22-CL-003
Calhoun County, TX
Lois Bearden and husband, Fred D. Bearden
CCPC Chemical, Inc.
v24/p126
A 30' wide right of way for (1) pipeline with 36" of cover.  This easement represents the remaining 1/2 interest in property (M-Trust Corp has the other 1/2).
22-V-001
Victoria County, TX
DeLona Foester, Curtis M. Foester, Jr., Ada Beth Bone and James Bone
South Texas Pipeline Company
v961/p894
A 35' wide right of way for (2) lines with 36" of cover.  Centerline description filed in v1038/p739.
22-V-001X
Victoria County, TX
Victoria County Drainage District No. 3
South Texas Pipeline Company
None
Pipeline proposal accepted.
22-V-002
Victoria County, TX
D. H. Braman, Jr. Jack Miller, Jr. and Stephen Scott Miller
South Texas Pipeline Company
v976/p541
A 35' wide right of way for (1) 6" and (1) 8" pipeline with 42" of cover.  Ingress and egress limited to right of way only.
22-V-003
Victoria County, TX
Theresa Irene Clanton
South Texas Pipeline Company
v962/p495
A 35' wide right of way for (1) 6" and (1) 8" pipeline with 30" of cover.
22-V-003X
Victoria County, TX
Victoria County
South Texas Pipeline Company
v41/p529
Permit to cross Lake Placedo road crossing.  FM 1090.
22-V-004
Victoria County, TX
Guillermo S. Guerra and wife Rita Guerra
South Texas Pipeline Company
v975/p54
A 35' wide right of way for (1) 6" and (1) 8" pipeline with 36" of cover.
22-V-005
Victoria County, TX
Theresa Irene Clanton
South Texas Pipeline Company
v962/p495
A 35' wide right of way for (1) 6" and (1) 8" pipeline with 30" of cover.
22-V-006
Victoria County, TX
F. Ben Shelton, a.k.a. Francis Benjamin Shelton, Charlotte Shelton Ellis, and Miguelita Fin Scanio
South Texas Pipeline Company
v1022/p736
A 35' wide right of way for (2) pipelines with 42" of cover.
22-V-006X
Victoria County, TX
State of Texas General Land Office
Oxy Petrochemicals, Inc.
8388
ME 3840. A 10' wide right of way for (1) 6" and (1) 8" pipeline, crossing Placedo Creek.  ME 880005.  Amendment to easements and renewal dated 1998 put into file.  Signatures incomplete.
22-V-006XX
Victoria County, TX
Corps of Engineers
South Texas Pipeline Company
None
Permit No. 12589 for (1) 6" and (1) 8" pipeline across Placedo Creek.
22-V-007
Victoria County, TX
Emily Keeran Campbell
South Texas Pipeline Company
v962/p488
A 35' wide right of way for (1) 8" pipeline and (1) 6" pipeline with 3' of cover.  Ownership: Mary Ann Tucker, 4513 Ragsdale, Inez, TX 77968; Robert L. Massey, 403 Navajo, Victoria, TX 77904; Gertrude Emily Dial, 2083 Keeran Rd., Inez, TX 77968.
22-V-008
Victoria County, TX
John M. Keeran
South Texas Pipeline Company
v961/p413
A 35' wide right of way for (1) 8" pipeline and (1) 6" pipeline with 5' of cover.  Amended in v1023/p563.  Ownership: Betty Keeran Trust, C/O First Victoria National Bank, Rob Engerstein, P. O. Box 1338, Victoria, TX 77900.
22-V-008X
Victoria County, TX
State of Texas General Land Office
Oxy Petrochemicals, Inc.
8388
ME 3289.  A 10' wide right of way for (1) 8" and (1) 6" pipelines.  Garcitas Creek Crossing.  ME 880005.  See file 22-NU-18X for most recent renewal.
22-V-008XX
Victoria County, TX
Corps of Engineers
South Texas Pipeline Company
None
Permit No. 12589 for crossing Garcitas Creek with (1) 6" and (1) 8" pipelines.
22-VL-001
Victoria County, TX
R. W. Briggs, Jr.
CCPC Chemical, Inc.
v1488/p541
A 30' wide right of way for (1) 8" pipeline with 36" of cover.
22-VL-002
Victoria County, TX
Luther W. Welch and Fay K. Welch
CCPC Chemical, Inc.
v1488/p506
A 30' wide right of way for (1) pipeline with 36" of cover.
22-VL-003X
Victoria County, TX
Missouri Pacific Railroad Company (UPRR)
CCPC Chemical, Inc.
None
Folder No. 1292-15.  A license for (1) 8" pipeline crossing at mile post 3.85.  Audit No. 144288.  Crossing near Bloomington, TX.  Ownership: UPRC, C/O Joan Preble, 1800 Farnam St., Omaha, NE 68102.
22-VL-003X
Victoria County, TX
Missouri Pacific Railroad Company (UPRR)
CCPC Chemical, Inc.
None
Audit No. 143958.  License for (1) 8" ethylene pipeline crossing at MP 218.20  Folder No. 1289-85.  Crossing near Bloomington, TX.  Ownership: UPRC, C/O Joan Preble, 1800 Farnam St., Omaha, NE 68102.
22-VL-004
Victoria County, TX
Robert and Kristy Finley
CCPC Chemical, Inc.
v1488/p478
A 30' wide right of way for (1) pipeline with 36" of cover.
22-VL-005X
Victoria County, TX
Victoria County
South Texas Pipeline Company
None
Permit to cross Black Bayou Road. No. 2
22-VL-006
Victoria County, TX
Victoria Bank and Trust Company, Trustee James S. Kiening, vice president and trust officer
CCPC Chemical, Inc.
v1488/p499
A 30' wide right of way for (1) pipeline with 36" of cover.
22-VL-007
Victoria County, TX
Sybil S. Coffey and Joe W. Coffey
CCPC Chemical, Inc.
v1488/p485
A 30' wide right of way for (1) pipeline with 36" of cover.
22-VL-008X
Victoria County, TX
Victoria County
South Texas Pipeline Company
None
Permit to cross Black Bayou Road.
22-VL-009
Victoria County, TX
Mae Jean Willemin and Marslin L. Willemin
CCPC Chemical, Inc.
v1488/p534
A 30' wide right of way for (1) pipeline with 36" of cover.
22-VL-010
Victoria County, TX
Elizabeth Ann Tagliabue and Allison A. Tagliabue
CCPC Chemical, Inc.
v1488/p527
A 30' wide right of way for (1) pipeline with 36" of cover.
22-VL-011
Victoria County, TX
J. B. Clark
CCPC Chemical, Inc.
v1488/p492
A 10' wide right of way for (1) pipeline with 36" of cover.
22-VL-012X
Victoria County, TX
Victoria County
South Texas Pipeline Company
None
Permit to cross Old Victoria-Bloomington Rd.
22-VL-013X
Victoria County, TX
Victoria County
South Texas Pipeline Company
v91/p592
Permit to cross Victoria-McCoy Rd.
22-VL-014
Victoria County, TX
Dennis O' Conner, et al
CCPC Chemical, Inc.
v1489/p402
A 20' wide right of way for (1) 8" pipeline with 42" of cover.
22-VL-015
Victoria County, TX
E. I. Du Pont De Nemours and Company
South Texas Pipeline Company
None
Letter license for (1) 8" pipeline.
22-VL-017X
Victoria County, TX
Victoria County
South Texas Pipeline Company
None
Permit to cross Old Victoria-Bloomington Rd.
22-J-001
Jackson County, TX
Otti Silwedel
South Texas Pipeline Company
v567/p709
A 35' wide right of way for (2) pipelines with 36" of cover.  Amendment dated 11/21/79 in v583/p532.  Easement provides for valves, drips, meters, fittings, tie overs, markers and other equipment and appurtenances.  Plat includes meter station.
22-J-001X
Jackson County, TX
Jackson County Drainage District No. 9
South Texas Pipeline Company
None
Approval for (2) pipeline crossing 16 drainage district ditches in District No. 9.
22-J-001X
Jackson County, TX
Jackson County Drainage District No. 4
South Texas Pipeline Company
None
Approval for pipelines to cross drainage district.
22-J-002
Jackson County, TX
Victor H. Tlucek
South Texas Pipeline Company
v565/p873
A 35' wide right of way for (2) pipelines with 36" of cover.  Amended 10/22/79 in v582/p751.
22-J-002X
Jackson County, TX
Jackson County Rd. Commissioners Court
South Texas Pipeline Company
None
License for road crossings pertaining to precincts 3 and 4.
22-J-003
Jackson County, TX
Irma Schuech
South Texas Pipeline Company
v567/p397; v568/p1114
A 35' wide right of way for (2) pipelines.  Amended 11/23/79 in v583/p941.
22-J-003X
Jackson County, TX
Jackson County Commissioners Court
South Texas Pipeline Company
None
Permit to cross precincts 3 and 4.  See
22-J-004
Jackson County, TX
John S. Bennett
South Texas Pipeline Company
v566/p896
A right of way for (2) pipelines buried below plow depth.  Amended 10/9/79 in v583/p759.
22-J-005
Jackson County, TX
Vera Frances Rozsypal and husband Victor Rozsypal
South Texas Pipeline Company
v566/p960
A 35' wide right of way for (2) pipelines.  May change size of existing pipeline.  Amended 01/9/80 in v585/p177.
22-J-006
Jackson County, TX
Irma Schuech
South Texas Pipeline Company
v567/p397; v568/p1114
A 35' wide right of way for (2) pipelines.  Amended 11/23/79 in v583/p941.
22-J-007
Jackson County, TX
Nellie B. West (life Estate) and Sol West (remainder)
South Texas Pipeline Company
v568/p1109
A 35' wide right of way for (2) pipelines buried below plow depth.  Must notify grantor of assignment.
22-J-008
Jackson County, TX
Alfred West Ward and Bexar County National Bank of San Antonio, Independent Executors of the Estate of Mary West Ward
South Texas Pipeline Company
v691/p525
A 35' wide right of way for (2) pipelines.
22-J-008X
Jackson County, TX
State of Texas General Land Office
Oxy Petrochemicals, Inc.
v121/p422
ME 880005.   A right of way for (1) 6" and (1) 8" pipeline in Menefee Bayou.  Amended 5/14/78 in v121/p255.
22-J-009
Jackson County, TX
Thomas E. Toney, Jr., et al
South Texas Pipeline Company
v569/p263
A 35' wide right of way for (2) pipelines not to exceed 8" with 36" of cover.
22-J-010
Jackson County, TX
W. H. Bauer
South Texas Pipeline Company
v568/p43
A 35' wide right of way for (2) pipelines not to exceed 8" with 36" of cover.
22-J-010X
Jackson County, TX
State of Texas General Land Office
Cain Chemicals, Inc.
None
ME 880004 for (1) 6" and (1) 8" pipeline crossing the Lavaca River.   Now under the jurisdiction of the Jackson County Navigation District.
22-J-010X
Jackson County, TX
Corps of Engineers
South Texas Pipeline Company
None
Permit No. 12588 across the channel for Red Bluff, Lavaca River,  West Carancahua Creek and East Carancahua Creek with (1) 6" and (1) 8" pipelines.
22-J-011
Jackson County, TX
L. Anthony Wolfskill
South Texas Pipeline Company
v569/p395
A 35' wide right of way for (2) pipelines and a valve site.
22-J-012
Jackson County, TX
Ethel Mitchell and Michael  Mitchell
South Texas Pipeline Company
v566/p1051
A 35' wide right of way for (2) pipelines not to exceed 8" with 36" of cover.
22-J-012
Jackson County, TX
Michael W. Mitchell and Ethel Mitchell
South Texas Pipeline Company
v568/p1049
5.97 acres in the George Ewing League.  For a microwave tower and control equipment building.
22-J-013X
Jackson County, TX
Point Comfort and Northern Railway Company
South Texas Pipeline Company
None
Agree to cross under track at station no. 96 + or -.
22-J-014
Jackson County, TX
R. S. Thedford and wife Thelma Fox Thedford
South Texas Pipeline Company
v565/p1054
A 35' wide right of way for (2) pipelines not to exceed 8" with 36" of cover.  Amended 8/15/79 in v580/p549.
22-J-014X
Jackson County, TX
Jackson County Commissioners Court
South Texas Pipeline Company
None
Permit to cross precincts 3 and 4.
22-J-015.1
Jackson County, TX
Veteran's Land Board of Texas, Rudy Elwin Podhora
South Texas Pipeline Company
v567/p393
A 35' wide right of way for (2) pipelines with 36" of cover.
22-J-015.2
Jackson County, TX
Rudy E. Podhora and wife Betty May Podhora
South Texas Pipeline Company
v567/p388
A 35' wide right of way for (2) pipelines with 36" of cover.
22-J-015.3
Jackson County, TX
John Joseph Gerace, Jr., and wife Grace Sturm Gerace
South Texas Pipeline Company
v566/p1056
A 35' wide right of way for (2) pipelines with 36" of cover.
22-J-015X
Jackson County, TX
Texas Department of Transportation
South Texas Pipeline Company
None
Permit to cross FM 1593 with (1) 6" and (1) 8" pipeline 60" under pavement and 48" below ditch.
22-J-016
Jackson County, TX
Annie Srubar, et al
South Texas Pipeline Company
v567/p106
A 35' wide right of way for (2) pipelines with 36" of cover.
22-J-016X
Jackson County, TX
Jackson County Commissioners Court
South Texas Pipeline Company
None
Permit to cross Jackson County Roads.
22-J-017
Jackson County, TX
Edith A. Bragdon
South Texas Pipeline Company
v566/p1046
A 35' wide right of way for (2) pipelines with 36" of cover.  Pipelines must be 10' apart.
22-J-017
Jackson County, TX
Edith A. Bragdon
South Texas Pipeline Company
v574/p260
A 35' wide right of way for (2) pipelines with 36" of cover.
22-J-018, 19
Jackson County, TX
Mary Katherine Dickey and Craig M. Dickey
South Texas Pipeline Company
v571/p86; v566/p195
A 35' wide right of way for (2) pipelines with 36" of cover.
22-J-019X
Jackson County, TX
Jackson County Commissioners Court
South Texas Pipeline Company
None
Permit to cross Jackson County Roads.
22-J-020
Jackson County, TX
W. H. Bauer
South Texas Pipeline Company
v568/p43
A 35' wide right of way for (2) pipelines.  La Ward Farm.
22-J-021X
Jackson County, TX
Missouri Pacific Railroad Company (UPRR)
South Texas Pipeline Company
None
License for (1) 6" propylene and (1) 8" ethylene  pipelines at MP 147.02 near Lolita, TX.  CA77853.  Ownership: UPRC, C/O Joan Preble, 1800 Farnam St., Omaha, NE 68102.
22-J-022X
Jackson County, TX
Texas Deparment of Transportation
South Texas Pipeline Company
None
Permit for (1) 6" and (1) 8" pipeline 60" under pavement and 48" below bottom ditch.  Crossing FM 616,  2.5 miles west of state highway no. 172.
22-J-023
Jackson County, TX
Pablo R. Gonzales and wife Manuela Gonzales
South Texas Pipeline Company
v568/p280
A 35' wide right of way for (2) pipelines with 36" of cover.
22-J-024
Jackson County, TX
Lurlie J. McCall a.k.a. Lurlie J. Betts
South Texas Pipeline Company
v568/p284
A 35' wide right of way for (2) pipelines with 36" of cover.
22-J-024X
Jackson County, TX
Jackson County Commissioners Court
South Texas Pipeline Company
None
Permit to cross Ward Ranch Rd.
22-J-025
Jackson County, TX
Donald R. White and wife Audrey M. White
South Texas Pipeline Company
v568/p692
A 35' wide right of way for (2) pipelines with 36" of cover.
22-J-026
Jackson County, TX
William T. Chumney, Jr. and San Antonio Bank Trust
South Texas Pipeline Company
v575/p1029
A 35' wide right of way for (2) pipelines with 5' of cover.
22-J-027
Jackson County, TX
Alma A. Cooper
South Texas Pipeline Company
v565/p731
A 35' wide right of way for (2) pipelines with 36" of cover.
22-J-028
Jackson County, TX
J. C. Baker and wife Hallie
South Texas Pipeline Company
v565/p875
A 35' wide right of way for (2) pipelines with 36" of cover.
22-J-029
Jackson County, TX
William T. Chumney, Jr. and San Antonio Bank and Trust Company as Trustees under will of Alfred P.W
South Texas Pipeline Company
v575/p1029
A 35' wide right of way for (2) pipelines.
22-J-030
Jackson County, TX
Harry Mauritz Estate
South Texas Pipeline Company
v569/p448
A 35' wide right of way for (2) pipelines with 60" of cover.
22-J-031X
Jackson County, TX
Texas Department of Transportation
South Texas Pipeline Company
None
Permit to cross SH 172, for (2) pipelines with 60" of cover under pavement and 48" below the lowest point in ditch.
22-J-032
Jackson County, TX
Alma C. Mehrens, Independent and as Executor of the Estate of Clarence C. Mehrens, Deceased
South Texas Pipeline Company
v568/p685
A 35' wide right of way for (2) pipelines not to exceed 8" with 36" of cover.  $50.00 per assignment.
22-J-033
Jackson County, TX
Louise Bonnot
South Texas Pipeline Company
v571/p319
A 35' wide right of way for (2) pipelines with 48" of cover.
22-J-034
Jackson County, TX
Charles Joseph Bonnot
South Texas Pipeline Company
v571/p329
A 35' wide right of way for (2) pipelines with 48" of cover.
22-J-035
Jackson County, TX
Mary Louise Bonnot
South Texas Pipeline Company
v571/p309
A 35' wide right of way for (2) pipelines with 48" of cover.  Amendment to description of easement dated 08/25/78 in v585/p267, which corrects description of easement.
22-J-035X
Jackson County, TX
State of Texas General Land Office
South Texas Pipeline Company
v569/p1255
ME 880006 (ME 3839) for (2) pipelines across West Carancahua Creek.  This easement has expired.
22-J-035XX
Jackson County, TX
Corps of Engineers
South Texas Pipeline Company
None
Permit No. 12588 across the West Carancahua Creek with (1) 6" and (1) 8" pipelines.
22-J-036
Jackson County, TX
Mary Louise Bonnot
South Texas Pipeline Company
v571/p309
A 35' wide right of way for (2) pipelines with 48" of cover.
22-J-037
Jackson County, TX
M. H. Brock, executor Trustee, et al
South Texas Pipeline Company
v569/p55
A 35' wide right of way for (2) pipelines with 60" of cover.
22-J-038
Jackson County, TX
Esther S. Mullin, administrator
South Texas Pipeline Company
v570/p668
A 35' wide right of way for (2) pipelines with 36" of cover.
22-J-038X
Jackson County, TX
Jackson County Commissioners Court
South Texas Pipeline Company
None
Permit to cross Shell Co. Rd...  Approval for road crossings in Jackson County.
22-J-039
Jackson County, TX
A. W. Swenson and wife Claudia  P. Swenson
South Texas Pipeline Company
v566/p480
A 35' wide right of way for (2) pipelines with 36" of cover.
22-J-039X
Jackson County, TX
Jackson County Commissioners Court
South Texas Pipeline Company
None
Permit to cross Shell Co. Rd...  Approval for road crossings in Jackson County.
22-J-040
Jackson County, TX
Carl W. Swenson and wife Ethel Swenson
South Texas Pipeline Company
v566/p320
A 35' wide right of way for (2) pipelines with 36" of cover.
22-J-041
Jackson County, TX
Harry M. Engelmohr and Jessie M. Engelmohr
South Texas Pipeline Company
v568/p286
A 35' wide right of way for (2) pipelines with 36" of cover.
22-J-041X
Jackson County, TX
Jackson County Commissioners Court
South Texas Pipeline Company
None
Permit to cross Shell Co. Rd.
22-M-001
Matagorda County, TX
Thelma Lucille Reeves
South Texas Pipeline Company
v596/p829
A 35' wide right of way for (2) pipelines with 36" of cover.
22-M-001A
Matagorda County, TX
Frances Strarup Reece
South Texas Pipeline Company
v607/p868
A 35' wide right of way for (2) pipelines with 48" of cover.  SW 100 acres  out of 150 acres.  Section 4, Block 7 of the I & G. N. RR Co. Survey, A-319.
22-M-001B
Matagorda County, TX
Leroy Strarup
South Texas Pipeline Company
v607/p872
A 35' wide right of way for (2) pipelines with 48" of cover.
22-M-001X
Matagorda County, TX
State of Texas General Land Office
South Texas Pipeline Company
v569/p1270
ME 3847/ ME 880012 for (1) 6" and (1) 8" pipelines crossing East Carancahua Creek.  ME 880012.  In 1988, GLO determined that they did not have authority over this creek and confirmed in fax dated 01/01/03 that GLO still doesn't have any jurisdiction over
22-M-001XX
Matagorda County, TX
Corps of Engineers
South Texas Pipeline Company
None
Permit No. 12588 across East Carancahua Creek with (1) 6" and (1) 8" pipelines.
22-M-002
Matagorda County, TX
Gertrude Hansen, Executrix
South Texas Pipeline Company
v607/p882
A 35' wide right of way for (2) pipelines with 48" of cover.
22-M-003
Matagorda County, TX
F. W. Trojak, et al
South Texas Pipeline Company
v607/p859
A 35' wide right of way for (2) pipelines with 40" of cover.
22-M-006
Matagorda County, TX
F. W. Trojak, et al
South Texas Pipeline Company
v607/p864
A 35' wide right of way for (2) pipelines with 40" of cover.
22-M-007
Matagorda County, TX
Doris Stovall Shillings, Trustee
South Texas Pipeline Company
v602/p153
A 35' wide right of way for (2) pipelines with 36" of cover.
22-M-009
Matagorda County, TX
Guy F. Stovall, et al
South Texas Pipeline Company
v600/p483
A 35' wide right of way for (2) pipelines with 36" of cover.
22-M-009A
Matagorda County, TX
Edith I. Stovall, et al
South Texas Pipeline Company
v615/p717
A 35' wide right of way for (2) pipelines with 36" of cover.
22-M-011X
Matagorda County, TX
Texas Department of Transportation
South Texas Pipeline Company
None
Permit No. 78-2223.  Permit for (2) pipelines crossing state highway 111, west of state highway 71.
22-M-012
Matagorda County, TX
Guy F. Stovall, et al
South Texas Pipeline Company
v600/p481
A 35' wide right of way for (2) pipelines with 36" of cover.
22-M-013
Matagorda County, TX
Mallory Kountze and Ira L. Couch, Jr.
South Texas Pipeline Company
v6002/p155
A 35' wide right of way for (2) pipelines with 36" of cover.
22-M-013X
Matagorda County, TX
Matagorda County Commissioners Court
South Texas Pipeline Company
None
Permit for (2) pipelines with 4' of cover below the bottom of the ditch.
22-M-013X
Matagorda County, TX
Matagorda County Drainage District No. 1 and 2
South Texas Pipeline Company
None
Permit for (1) 6" and (1) 8" pipeline with 5' of cover.  Application and approval from District No. 1 and 2.
22-M-014
Matagorda County, TX
Fred C. Cornelius, Jr., and Elva Cornelius
South Texas Pipeline Company
v603/p397
A 35' wide right of way for (2) pipelines not to exceed 8" with 48" of cover.  $50.00 per assignment.
22-M-015
Matagorda County, TX
R. B. Trull, individually and as agent, et al
South Texas Pipeline Company
v598/p836
A 35' wide right of way for (2) pipelines with 36" of cover and 43" below on all roads, ditches, drains, canals and laterals.  Includes relocation clause.
22-M-016
Matagorda County, TX
Farmers Canal Company, R. B. Trull, President
South Texas Pipeline Company
v598/p831
A 35' wide right of way for (2) pipelines with 36" of cover and 42" below all roads, etc.  Includes relocation clause.
22-M-017
Matagorda County, TX
Stuart H. Johnson and Cindy Johnson
South Texas Pipeline Company
v604/p340
A 35' wide right of way for (2) pipelines with 36" of cover and 42" below all roads, etc.  Includes relocation clause.
22-M-018
Matagorda County, TX
Martin Herman and Mary L. Herman
South Texas Pipeline Company
v597/p773
A 35' wide right of way for (2) pipelines with 36" of cover.
22-M-019
Matagorda County, TX
Sophie H. McGraw
South Texas Pipeline Company
v597/p507
A 35' wide right of way for (2) pipelines with 36" of cover.
22-M-020
Matagorda County, TX
Martin Herman and Mary L. Herman
South Texas Pipeline Company
v597/p773
A 35' wide right of way for (2) pipelines with 36" of cover.  See file M-018 for documents.
22-M-020X
Matagorda County, TX
Texas Department of Transportation
South Texas Pipeline Company
None
Permit No. 78-2222 for (2) pipelines crossing state highway no. 71 with a 10' wide right of way with 4' of cover at the lowest point and 6' of cover on the road.
22-M-021
Matagorda County, TX
Eugene G. Cornelius
South Texas Pipeline Company
v601/p397
A 35' wide right of way for (2) pipelines not exceeding 8" with 48" of cover.  Grantees must pay grantors $25.00 for each assignment.
22-M-022
Matagorda County, TX
James T. Cornelius and Nellie L. Cornelius
South Texas Pipeline Company
v601/p392
A 35' wide right of way for (2) pipelines not to exceed 8" with 48" of cover.  Grantee must pay to grantor $25.00 for each and every assignment made.
22-M-023
Matagorda County, TX
W. D. Cornelius and Julie Cornelius
South Texas Pipeline Company
v602/p161
A 35' wide right of way for (2) pipelines not to exceed 8" with 48" of cover.  Grantee must pay to grantor $25.00 for each and every assignment made.
22-M-024
Matagorda County, TX
Floyd G. Cornelius and Doris M. Cornelius
South Texas Pipeline Company
v597/p37
A 35' wide right of way for (2) pipelines with 36" of cover.
22-M-025
Matagorda County, TX
Mallory Kountze and Ira L. Couch, Jr.
South Texas Pipeline Company
v602/p155
A 35' wide right of way for (2) pipelines with 36" of cover.  Must secure written permission to enter.  Grantee shall provide written notice of assignment to grantor.
22-M-026
Matagorda County, TX
Lewis Edwin Smith and Thelma S. Smith
South Texas Pipeline Company
v635/p511
A 35' wide right of way for (2) pipeline with 36" of cover and (1) lateral pipeline with a 20' wide right of way with 36" of cover.
22-M-026A
Matagorda County, TX
Thelma S. Smith and Lewis Edwin Smith
Texas Brine Corporation
v469/p390
Lease of lands described as the North 1/2 of Lot 14 of a subdivision of the Henry Parker Leage, A-68, for the purpose of the production of salt brine and storage, not taking up more than 20 acres.  Allows for (1) pipeline.  Lessors must be notified with c
22-M-026S
Matagorda County, TX
Marion Myers, et al
South Texas Pipeline Company
v611/p626
A 20' wide right of way for (1) pipeline with 36" of cover.  Easement is North lateral to Seadrift Facility along East property line.
22-M-026SX
Matagorda County, TX
CCPC
Champlin Pipeline Inc., Imperial Pipeline Inc., and SolTex Pipeline Inc.
v644/p856
Surface lease for Markham Dome Microwave Site.  Lease effective 11/1/79.
22-M-026X
Matagorda County, TX
Matagorda County Commissioners Court
South Texas Pipeline Company
None
Amendment for crossing County roads in Precincts 1 and 4 without venting or casing at crossing points.  Original in 22-M-013X.
22-M-027
Matagorda County, TX
Lawrence J. Peterson and Gloria Peterson
South Texas Pipeline Company
v600/p476
A 35' wide right of way for (2) pipelines with 36" of cover
22-M-027X
Matagorda County, TX
State of Texas General Land Office
South Texas Pipeline Company
v604/p756
ME 003833/ME 3833 for (1) 6" and (1) 8" pipelines across Tres Palacious Creek.  $25.00 per assignment.  Letter from GLO states that they no longer have jurisdiction over Tres Palacious Creek.
22-M-027XX
Matagorda County, TX
Corps of Engineers
South Texas Pipeline Company
None
Permit No. 12590 across Tres Palacios Creek with (1) 6" and (1) 8" pipeline.
22-M-028
Matagorda County, TX
Mignon Doman
South Texas Pipeline Company
v601/p401
A 35' wide right of way for (2) pipelines not to exceed 8" with 36" of cover.  $50.00 per assignment.
22-M-028X
Matagorda County, TX
Texas Department of Transportation
South Texas Pipeline Company
None
Permit No. 78-2187 for (2) pipelines across FM 1468.
22-M-029
Matagorda County, TX
Louis Harper
South Texas Pipeline Company
v602/p649
A 35' wide right of way for (2) pipelines with 36" of cover.
22-NT-001
Nueces County, TX
South Texas Pipeline Company
CCPC Chemical, Inc. with Champlin, Imperial, and SolTex
v1683/p714
Microwave tower.
22-NT-001
Nueces County, TX
South Texas Pipeline Company
Houston Rental Towers
None
(3) microwave dishes and (3) UHF or similar antennas.  Refers to sublease between CCPC and South Texas Pipeline Company.  Must notify sublessors (grantor) of assignment in writing.
23-N-C1
Nueces County, TX
CCPC
Champlin Pipeline, Inc., Imperial Pipeline, Inc., and SolTex Pipeline, Inc.
v1764/p21
Roll 674/Image 698.  Easement, metering, launcher site and valve site on 1211.58 acre tract in A-854 & A-852 for (1) pipeline with 36" if cover.
23-N-C1
Nueces County, TX
CCPC
Valero Marketing Company
None
A right of way for (1) 6" pipeline with 36" of cover.
23-N-C2
Nueces County, TX
John E. Matocha and wife Margaret Weaver Matocha
Champlin Petroleum Company
v1672/p110
A 50' wide right of way  with 36" of cover.  Matocha granted a 3.79 acre tract in Warranty Deed recorded in Document No. 200105356.  This is being taxed to Equistar.  Need to pick up document.
23-N-C3
Nueces County, TX
George W. Hoelscher and wife, Camilia M. Hoelscher
Oxy Petrochemicals, Inc.
v2176/p941
18.87 acres out of 28.08 acre tract in N 1/2 NW 1/4, Survey No. 409, A-555.
23-N-C3-R
Nueces County, TX
George W. Hoelscher and wife, Camilla M. Hoelscher
CCPC
v1599/p290
South 150' of 28.06 acres out of the N 1/2 NW 1/4 Survey No. 409, A. B. & M Survey, A-555 containing 2.67 acres out of a 9.21 acre tract.  NTCE
23-N-C3-R
Nueces County, TX
George W. Hoelscher and wife, Camilla M. Hoelscher
Oxy Petrochemicals, Inc.
v2176/p941
18.87 acres out of 28.08 acre tract in N 1/2 NW 1/4, Survey No. 409, A-555.  NTCE
23-N-001
Nueces County, TX
Peter Siracusa and Obdulia Roldan Siracusa
Champlin Petroleum Company
v1632/p184
A 35' wide right of way for no more than (9) pipelines with 36" of cover.
23-N-002
Nueces County, TX
Gertrude Kathryn Hoelscher Gajdos, et al
Oxy Petrochemicals, Inc.
906925
Fee for 5.0 acres out of 80 acres in the A. B. M. Survey 409,  A-555.
23-N-002R
Nueces County, TX
City of Corpus Christi
Champlin Petroleum Company
v1680/p684
Easement crossing McKinzie Rd..  See file 23-N-025 for documents.
23-N-002RX
Nueces County, TX
Texas Department of Transportation
Champlin Petroleum Company
None
Permit to cross McKinzie Rd. with (1) 12" pipeline.
23-N-003
Nueces County, TX
Gladys Jane Olson, et al
Champlin Petroleum Company
v1844/p948
A 35' wide right of way for no more than (9) pipelines with 36" of cover.  Copy of assignment to grantors by registered mail.  New ownership:  Donald P. Olson, C/O Nicolas & Morris & Galbreath, 5926 S. Staples, Suite A-2, Corpus Christi, TX 78413.
23-N-004
Nueces County, TX
KLL Company
Champlin Petroleum Company
v1677/p82
A 35' wide right of way for one or more pipelines with 36" of cover.  This easement supercedes one granted by Herco Truck Service, Inc. 10/14/77 in v1632/p188.
23-N-005
Nueces County, TX
Annie Blake Morgan Head, indivually and as testamentary Trustee
Champlin Petroleum Company
v1644/p920
A 35' wide right of way for (9) pipelines with 30" of cover.  Amended 09/06/78 allowing no more than (10) pipelines. (not recorded)  New ownership: D. H. Braman, C/O Venable Proctor, One O'Connor Plaza, Suite 1100, Victoria, TX 77901.
23-N-005-RX
Nueces County, TX
Texas Department of Transportation
CCPC
None
Permit No. 1600 for (12) pipelines.
23-N-005R
Nueces County, TX
City of Corpus Christi
Champlin Petroleum Company
v1680/p684
Rand Morgan Rd.  See N-025 for documents.
23-N-006
Nueces County, TX
Dinero Oil Company
Champlin Petroleum Company
v1651/p48
A 35' wide right of way for (9) pipelines with 36" of cover.  Term is for a period of 5 years and as long thereafter as any of such pipelines are used.  True copy of assignment to grantors by registered or certified mail.
23-N-006
Nueces County, TX
Bruce Anderson and Cecil R. Payne, D/B/A Dinero Oil Company
Champlin Petroleum Company
None
Undetermined width for (1) 8" pipeline.
23-N-006R
Nueces County, TX
City of Corpus Christi
Champlin Petroleum Company
v1680/p684
Clarkwood Rd..  Refer to N-025 for documents.
23-N-007
Nueces County, TX
John C. Brooke, Trustee
CCPC
v1748/p359
A 4' wide right of way with 36" of cover across Farm Lot 21, Lt. B Shephard Farm Lots, Section 406, John Dunn Survey, A-970, Nueces County, TX.
23-N-007
Nueces County, TX
Shirley  P. Hale and J. Stanley Hale
Champlin Petroleum Company
v1659/p604
A 35' wide right of way for one or more pipelines with 30" of cover.  Renewal based on CPI.
23-N-007A
Neuces County, TX
Josephine Perkins Myler, Independent Executrix
Champlin Petroleum Company
None
A 35' wide right of way for (14) pipelines with 36" of cover.
23-N-007A-R
Nueces County, TX
City of Corpus Christi
Champlin Petroleum Company
v1680/p684
Spillwell Rd..  Refer to N-025 for documents.
23-N-007B
Nueces County, TX
Chris Rae Corporation
Champlin Petroleum Company
v1659/p269
A 35' wide right of way for (9) pipelines with 36" of cover.
23-N-007C & D
Nueces County, TX
John C. Brooke, Trustee
Champlin Petroleum Company
v1722/p837
A 35' wide right of way for and unlimited number of pipelines with 36" of cover.  This tract acquired by CCPC 4/30/80.
23-N-007E.1
Nueces County, TX
Guadalupe H. Iglesias and Agapita Iglesias
Champlin Petroleum Company
v1651/p40
A 35' wide right of way for (9) pipelines with 36" of cover.
23-N-007E.1-R
Nueces County, TX
City of Corpus Christi
Champlin Petroleum Company
v1680/p684
Main Drive.  Refer to N-025 for documents.
23-N-007F.1
Nueces County, TX
Apolinar B. Iglesias and Yolanda Iglesias
Champlin Petroleum Company
v1651/p43
A 35' wide right of way for (9) pipelines with 36" of cover.
23-N-007G
Nueces County, TX
John C. Brooke, Trustee
Champlin Petroleum Company
Clerk File 175674
A (various widths)  right of way for an unlimited amount of pipelines with 36" of cover.  This tract acquired by CCPC 4/30/80.
23-N-007H
Nueces County, TX
Iris Powell Grant
Champlin Petroleum Company
v1697/p784
A 35' wide right of way for (8) pipelines with 36" of cover across 175.998 acre tract, State Survey A-311, 312 & 585.  Need a recorded copy of this easement.
23-N-007H-R
Nueces County, TX
City of Corpus Christi
Champlin Petroleum Company
v1680/p684
Rhew Rd..  Refer to N-025 for documents.
23-N-007I
Nueces County, TX
E. J. Hood, Trustee
Champlin Petroleum Company
v1681/p117
A 35' wide right of way for one or more pipelines with 36" of cover.
23-N-007I-R
Nueces County, TX
City of Corpus Christi
Champlin Petroleum Company
v1680/p684
Sedwick Rd..  Refer to N-025 for documents.
23-N-007R
Nueces County, TX
City of Corpus Christi
Champlin Petroleum Company
v1680/p684
Sedwick Rd..  Refer to N-025 for documents.
23-N-008
Nueces County, TX
E. J. Hood, Trustee
Champlin Petroleum Company
v1681/p117
Amendment corrects centerline description of easement dated 12/09/78.
23-N-009
Nueces County, TX
Annie Blake Morgan Head, Individually and as Trustee
Champlin Petroleum Company
v1664/p115
A 35' wide right of way for (7) pipelines with 30" of cover.  Must notify grantor in writing on assignment.  New ownership: D. H. Braman, et al, C/O Venable Proctor, One O'Connor Plaza, Suite 1100, Victoria, TX 77901.
23-N-010
Nueces County, TX
Charles Vartan Walker and Anna Berneice Walker, feme sole
Champlin Petroleum Company
v1632/p194
A 35' wide right of way for (7) pipelines with 36" of cover.
23-N-011
Nueces County, TX
Lucy  V. Welch
Champlin Petroleum Company
v1632/p199
A 35' wide right of way for (7) pipelines with 36" of cover.
23-N-012
Nueces County, TX
Mesog V.Donigan
Champlin Petroleum Company
v1632/p204
A 35' wide right of way for (7) pipelines with 36" of cover.
23-N-013
Nueces County, TX
Marilyn Ruth Donigan
Champlin Petroleum Company
v1645/p347
A 35' wide right of way for (7) pipelines with 36" of cover.
23-N-014
Nueces County, TX
Parnot V.Donigan
Champlin Petroleum Company
v1644/p946
A 35' wide right of way for (7) pipelines with 36" of cover.  Parallel and adjacent to existing LoVaca Pipeline Company easement.
23-N-015
Nueces County, TX
M. Harvey Weil
Champlin Petroleum Company
v1674/p649
Terminates former easement in v1644/p928.  A 35' wide right of way for (8) pipelines, not exceeding 12"  with 30" of cover.  Must notify grantor of assignment by registered or certified mail.
23-N-015A
Nueces County, TX
John C. Brooke, Trustee
Champlin Petroleum Company
v1713/p880
A 35' wide right of way for and unlimited amount of pipelines with 36" of cover.  Lot 3B of the McCampbell tract.  This tract acquired by CCPC 4/30/80.
23-N-015A-R
Nueces County, TX
City of Corpus Christi
Champlin Petroleum Company
v1680/p684
SH 9 (Leopard Street).  Refer to N-025 for documents.
23-N-015A-RX
Nueces County, TX
Texas Department of Transportation
CCPC
None
Permit No. 1627 for (8) pipelines.
23-N-017
Nueces County, TX
William A. Davis, E. Michael Harding and Roy L. Seikel
Champlin Petroleum Company
v1661/p957
A 35' wide right of way for (10) pipelines with 48" of cover.  Ingress and egress from Leopard Street, on the southern boundary.
23-N-018
Nueces County, TX
John C. Brooke, Trustee
Champlin Petroleum Company
None
An 80' wide right of way for an unlimited amount of lines with 36" of cover.  Subject to terms and conditions in deed from Brooke in favor of L. J. Cohen, W. A. Cohen and  T. D. Cohen, recorded in v1683/p119.  This tract acquired by CCPC 4/30/80.
23-N-019
Nueces County, TX
Louis Jay Cohen, et al
Champlin Petroleum Company
v1664/p466
A 35' wide right of way for (7) pipelines not to exceed 12" with 30" of cover.  Ingress and egress on right of way only with written consent.  Must notify grantor of assignment by registered or certified mail.
23-N-019A
Nueces County, TX
Champlin Petroleum Company
    
A letter informing Mr. Mendez that they are purchasing Lot No. 121 next to his lot (No. 120) and when this is done, Champlin grants Mendez the existing fence located on the property line.
23-N-020
Nueces County, TX
Radio KCCT, Inc.
Champlin Petroleum Company
v1658/p447
A 35' wide right of way for one or more pipelines with 36" of cover.
23-N-020A
Nueces County, TX
Max C. Kluge
Champlin Petroleum Company
v1677/p68
A 35' wide right of way for one or more pipelines with 36" of cover.  This documents supercedes easement in v1644/p935.
23-N-020A-R
Nueces County, TX
City of Corpus Christi
Champlin Petroleum Company
v1680/p684
Benys Rd..  Refer to N-025 for documents.
23-N-021
Nueces County, TX
Max C. Kluge
Champlin Petroleum Company
v1659/p247
A 25' wide right of way for (8) pipelines with 36" of cover.  This tract acquired by Champlin 1/1/78.
23-N-022
Nueces County, TX
Champlin Petroleum Company
CCPC
None
A 50' wide right of way for one or more pipelines.  Property of Max Kluge, easement to Champlin, v1636/p976.  Lots 1 and 22, sold to Champlin.  This tract acquired by Champlin 1/1/78.
23-N-022-R
Nueces County, TX
City of Corpus Christi
Champlin Petroleum Company
v1680/p684
Horizon Drive.  Refer to N-025 for documents.
23-N-023
Nueces County, TX
Max C. Kluge and C. C. Speed
Champlin Petroleum Company
v1632/p209
A 50' wide right of way for (7) pipelines with 36" of cover.
23-N-023-R
Nueces County, TX
City of Corpus Christi
Champlin Petroleum Company
v1680/p684
I-37.  Refer to N-025 for documents.
23-N-023-RX
Nueces County, TX
Texas Department of Transportation
CCPC
None
Permit No. 1312 for (3) pipelines.
23-N-024
Nueces County, TX
Champlin Petroleum Company
CCPC
v1706/p616
Surface easement for maintaining pipelines and automated valve site, etc.  No storage tanks.  Term is year to year, unless written notice of termination or cancellation.  This tract acquired by Champlin 9/23/78.
23-N-024
Nueces County, TX
Champlin Petroleum Company
CCPC
v1706/p596
A 10' wide right of way for one water pipeline with 30" of cover.  Ingress and egress to pipeline with knowledge of refinery manager and refinery security department.  This tract acquired by Champlin 5/24/74.
23-N-024-R
Nueces County, TX
City of Corpus Christi
Champlin Petroleum Company
v1680/p684
A right of way for up to (12) pipelines.  Covers city roads on map  The following are reference numbers for the map only: Clarkwood Rd.: N-6R, Sedwick Rd.: N-7R, Spillwell Rd.: N-7AR, Main Drive: N-7E1R, Rhew Rd.: N-7HR, Sedwick Rd.: N-71R, SH 9 (Leopard
23-N-024RR
Nueces County, TX
Missouri Pacific Railroad Company (UPRR)
Champlin Petroleum Company
None
License for (1) 12.75" effluent water pipeline.  Audit No. CA 77948.  Folder No. 1270-76.  MP 144.55.  Crossing near Corpus Christi, TX.  Ownership: UPRC, C/O Joan Preble, 1800 Farnam St., Omaha, NE 68102.
23-N-025
Nueces County, TX
City of Corpus Christi
Champlin Petroleum Company
v1680/p684
A right of way for up to (12) pipelines.  Covers city roads on map  The following are reference numbers for the map only: Clarkwood Rd.: N-6R, Sedwick Rd.: N-7R, Spillwell Rd.: N-7AR, Main Drive: N-7E1R, Rhew Rd.: N-7HR, Sedwick Rd.: N-71R, SH 9 (Leopard
23-N-026
Nueces County, TX
Academy Heights, Inc.
Champlin Petroleum Company
v1634/p444
Lots No. 6-14, both inclusive, Block No. 1, Academy Heights, Unit 2.  NTCE
23-N-027
Nueces County, TX
Benedictine Fathers of Texas
Champlin Petroleum Company
v1658/p435
A 35' wide right of way for (6) pipelines with 36" of cover.
23-N-028
Nueces County, TX
Benedictine Fathers of Texas
Champlin Petroleum Company
v1658/p439
A 35' wide right of way for (6) pipelines with 36" of cover.
23-N-028-R
Nueces County, TX
City of Corpus Christi
Champlin Petroleum Company
v1680/p684
Lantana Rd..  Refer to N-025 for documents.
23-N-029
Nueces County, TX
Frances Lee Grant, et al
Champlin Petroleum Company
v1692/p149
A 35' wide right of way for (9) pipelines not to exceed 12" with 48" of cover.
23-N-030
Nueces County, TX
Frances Lee Grant, et al
Champlin Petroleum Company
v1692/p149
A 35' wide right of way for (9) pipelines not to exceed 12" with 48" of cover.
23-N-031
Nueces County, TX
Frances Lee Grant, et al
Champlin Petroleum Company
v1692/p149
A 35' wide right of way for (9) pipelines not to exceed 12" with 48" of cover.
23-N-032
Nueces County, TX
John C. Brooke, Trustee and Margaret Clare Whelanbath
Champlin Petroleum Company
v1678/p222
A 35' wide right of way for an unlimited amount of pipelines with 36" of cover on a 18.14 acre tract.
23-N-033
Nueces County, TX
Vallen Corporation
Champlin Petroleum Company
None
A 35' wide right of way for lots 32-A, 33,34, and 35 with an unlimited amount of pipelines and 36" of cover.  Lot 31-A is restricted to a 25' wide right of way.  NOTE: Sold to John C. Brook 05/29/80.  It was recorded, but document illegible.
23-N-033-R
Nueces County, TX
City of Corpus Christi
Champlin Petroleum Company
v1680/p684
Manchester Avenue.  Refer to N-025 for documents.
23-N-034
Nueces County, TX
John C. Brooke, Trustee
Champlin Petroleum Company
v1713/p875
A 35' wide right of way for an unlimited amount of pipelines with 36" of cover.  This tract acquired by CCPC 4/30/80.
23-N-035
Nueces County, TX
Ricardo Garcia and Lisa Garcia
Champlin Petroleum Company
v1659/p243
A 20' wide right of way for 6 pipelines with 36" of cover.
23-N-035-R
Nueces County, TX
City of Corpus Christi
Champlin Petroleum Company
v1680/p684
Dona Rd..  Refer to N-025 for documents.
23-N-035B
Nueces County, TX
John C. Brooke, Trustee
Champlin Petroleum Company
v1713/p900
A 35' wide right of way for an unlimited amount of pipelines with 36" of cover.  This tract acquired by CCPC 4/30/80.
23-N-036
Nueces County, TX
John C. Brooke, Trustee
Champlin Petroleum Company
v1706/p870
A 100' wide right of way for an unlimited amount of pipelines with 36" of cover.
23-N-037
Nueces County, TX
Alton Todd White, Jr., et al
Champlin Petroleum Company
v1683/p792
A 35' wide right of way for an unlimited amount of pipelines with 36" of cover.
23-N-037-R
Nueces County, TX
City of Corpus Christi
Champlin Petroleum Company
v1680/p684
McBride Lane.  Refer to N-025 for documents.
23-N-038
Nueces County, TX
John C. Brooke, Trustee and Norris Hall, Sr.
Champlin Petroleum Company
v1692/p256
A 35' wide right of way for an unlimited amount of pipelines with 36" of cover.
23-N-038-R
Nueces County, TX
City of Corpus Christi
Champlin Petroleum Company
v1680/p684
Dedicated Rd..  Refer to N-025 for documents.
23-N-039
Nueces County, TX
John C. Brooke, Trustee, Trustee
Champlin Petroleum Company
v1713/p912
A 35' wide right of way  for an unlimited amount of pipelines with 36" of cover.
23-N-040
Nueces County, TX
Nueces County Navigation District No. 1
Champlin Petroleum Company
v1691/p205
License for (1) 8", (2) 10", (4) 6" pipelines and (1) 8" nitrogen pipeline, all over the Savage Lane Railroad right of way.  Written consent on assignment.  For any alterations, etc, must notify at least 48 hours in advance.  09/26/97 notice given to chan
23-N-041
Nueces County, TX
John C. Brooke, Trustee
Champlin Petroleum Company
v1713/p869
A 35' wide right of way for an unlimited amount of pipelines with 36" of cover.  This tract acquired by CCPC 4/30/80.
23-N-041A
Nueces County, TX
City of Corpus Christi
Champlin Petroleum Company
v1680/p684
Revocable easement with various right of ways in public streets of the city for (12) pipelines.  Prior approval and concurrence of grantor on assignment.  Map refers to this ID No. as the Dunn Lane Extension.
23-N-041A-R
Nueces County, TX
City of Corpus Christi
Champlin Petroleum Company
v1680/p684
Navigation Boulevard.  Refer to N-025 for documents.
23-N-042A
Nueces County, TX
Betty Mathis
Champlin Petroleum Company
v1666/p981
A 35' wide right of way for an unlimited amount of pipelines with 36" of cover.
23-N-042B
Nueces County, TX
Slovak Brothers, Inc. and Adolf A. Slovak
Champlin Petroleum Company
v1666/p870
A 35' wide right of way for one or more pipelines with 36" of cover.
23-N-043
Nueces County, TX
Olivia Gouger Mason and Tom Morris Gouger
Champlin Petroleum Company
v1666/p995
A 35' wide right of way for one or more pipelines with 36" of cover.
23-N-044, 45, 45A
Nueces County, TX
W. L. Harris and Jewel M. Spangler, formerly Jewel M. Harris
Champlin Petroleum Company
v1664/p123
A 35' wide right of way for one or more pipelines with 36" of cover.
23-N-045-R
Nueces County, TX
City of Corpus Christi
Champlin Petroleum Company
v1680/p684
Savage Lane.  Refer to N-025 for documents.
23-N-045B
Nueces County, TX
Corpus Christi Independent School District
Champlin Petroleum Company
v1681/p22
A 50' wide right of way for an unlimited amount of pipelines with at least 36" of cover.
23-N-045C
Nueces County, TX
Marshall Hinman Company
Champlin Petroleum Company
v1684/p596
A 35' wide right of way for one or more pipelines with 36" of cover.
23-N-045D
Nueces County, TX
Valley Ditch Witch, Inc.
Champlin Petroleum Company
v1681/p988
A 35' wide right of way for one or more pipelines with 36" of cover.
23-N-045D-R
Nueces County, TX
City of Corpus Christi
Champlin Petroleum Company
v1680/p684
Cantwell Rd..  Refer to N-025 for documents.
23-N-050
Nueces County, TX
Richard T. Bailey
Champlin Petroleum Company
v1683/p207
A 35' wide right of way for (9) pipelines not to exceed 12.75" with 36" of cover.
23-N-050A
Nueces County, TX
James A. Green and wife Dovie Green
Champlin Petroleum Company
v1681/p875
A 17.5 and a 35'' wide right of way for one or more pipelines with 36" of cover for laterals 1 and 2, respectively.
23-N-052
Nueces County, TX
James H. Belanger, Jr. and Margaret H. Belanger
Champlin Petroleum Company
v1672/p116
A 35' wide right of way for one or more pipelines with 36" of cover.
23-N-053A
Nueces County, TX
Earl C. Hardy and Ann Hardy Bratton, Individually and as duly authorized agent and attorney in fact for Georgia R. Hardy and Jessie Jean Hardy Yates
Champlin Petroleum Company
v1717/p317
A 35' across a 40' wide franchise right of way along west side of Lots 1-4, Block 2, Geistman Add for pipelines with 36" of cover.
23-N-054
Nueces County, TX
John C. Brooke, Trustee
Champlin Petroleum Company
v1713/p885
A 35' wide right of way for one or more pipelines with 36" of cover.  This tract acquired by CCPC 4/30/80.
23-N-054-R
Nueces County, TX
City of Corpus Christi
Champlin Petroleum Company
v1680/p684
Up River Rd..  Refer to N-025 for documents.
23-N-055
Nueces County, TX
Citgo Refining and Chemical Inc.
Oxy Petrochemicals, Inc.
None
A right of way for (2) 10"; (1) 8"; and (4) 6" pipelines and a 30' by 80' area for meter station.  Check document for additional assignment requirements.
23-N-056
Nueces County, TX
Nueces County
CCPC
None
Permit to cross Tribble Lane.
23-N-057
Nueces County, TX
Amerada Hess Corporation
Champlin Petroleum Company
v1694/p427
A 35' wide right of way for (1) 10" gas oil line, (1) 10" naphtha line, (1) 6" motor gasoline, (1) 6" fuel gas line, (2) 6" spare lines, (1) 6" benzene line, (1) 8" nitrogen line.  All have 36" of cover.
23-N-057-R
Nueces County, TX
City of Corpus Christi
Champlin Petroleum Company
v1680/p684
Poth Lane.  Refer to N-025 for documents.
23-N-057A
Nueces County, TX
John C. Brooke, Trustee
CCPC
v1738/p133
Lots 6-8, Block C.  Harbor View Estates.  NTCE
23-N-057A-R
Nueces County, TX
City of Corpus Christi
Champlin Petroleum Company
v1680/p684
Huisache Street.  Refer to N-025 for documents.
23-N-057AA
Nueces County, TX
John C. Brooke, Trustee
Champlin Petroleum Company
v1713/p905
A 35' wide right of way for one or more pipelines with 36" of cover.  This tract acquired by CCPC 4/30/80.
23-N-057B-F, 58, 59
Nueces County, TX
John C. Brooke, Trustee
CCPC
v1738/p133
Lots 1-15, Block D.  Harbor View Estates.  NTCE
23-N-059-R
Nueces County, TX
City of Corpus Christi
Champlin Petroleum Company
v1680/p684
Noakes Street.  Refer to N-025 for documents.
23-N-060
Nueces County, TX
John C. Brooke, Trustee
CCPC
v1738/p133
Lots 22, 23, Harbor View Estates.  NTCE
23-N-061
Nueces County, TX
Amerada Hess Corporation
Champlin Petroleum Company
v1694/p427
A 35' wide right of way for (1) 10" gas oil line, (1) 10" naphtha line, (1) 6" motor gasoline, (1) 6" fuel gas line, (2) 6" spare lines, (1) 6" benzene line, (1) 8" nitrogen line.  All have 36" of cover.
23-N-062
Nueces County, TX
John C. Brooke, Trustee
CCPC
v1738/p133
Lots 16 and 17, Block M.  Harbor View Estates.  NTCE
23-N-063
Nueces County, TX
Amerada Hess Corporation
Champlin Petroleum Company
v1694/p427
A 35' wide right of way for (1) 10" gas oil line, (1) 10" naphtha line, (1) 6" motor gasoline, (1) 6" fuel gas line, (2) 6" spare lines, (1) 6" benzene line, (1) 8" nitrogen line.  All have 36" of cover.
23-N-063-R
Nueces County, TX
City of Corpus Christi
Champlin Petroleum Company
v1680/p684
Gibson Street.  Refer to N-025 for documents.
23-N-064
Nueces County, TX
CCPC
Champlin Petroleum Company
v1706/p608
Surface easement for a pipeline measurement station.  No storage tanks allowed.  Term from year to year unless written notice of cancellation given.
23-N-064
Nueces County, TX
Champlin Petroleum Company
CCPC
v1706/p602
A 35' wide right of way for one or more pipelines with 36" of cover.  New ownership: Citgo Refining and Chemicals  Company, LP., P. O. Box 3758, Tulsa, OK 74102-3758.
23-NL-001
Nueces County, TX
Iris Powell Grant, et al
Champlin Petroleum Company
v1659/p256
A 35' wide right of way for (3) pipelines with 36" of cover.  See also NL2-05
23-NL-002
Nueces County, TX
Saber Refining Company
Champlin Petroleum Company
v1677/p72
A 15' wide right of way for one or more pipelines with 36" of cover.
23-NL-003
Nueces County, TX
Maxine McClendon Nichols
Champlin Petroleum Company
v1734/p543
Release and exchange for new easement with a 50' wide right of way.  There are 9 counterparts to this document.
23-NL-003
Nueces County, TX
W. Preston Pittman, Trustee of the Robert Driscoll and Julia Driscoll and Robert Driscoll, Jr. Foundation, et al
CCPC
v1655/p925
Dredge Material Disposal Easement on 1783.33 acre tract.
23-NL-003.1
Nueces County, TX
Koch Refining Company, LP
Oxy Petrochemicals, Inc.
1996049343
A non-exclusive easement for a 10' by 50' right of way for multiple pipelines on a 96.2345 acre tract in v2334/p675.
23-NL-003.2
Nueces County, TX
Dr. McIver Furman, et al
CCPC
v1655/p754
South 150' of 28.06 acres out of the N 1/2 NW 1/4 Survey No. 409, A. B. & M Survey, A-555 containing 2.67 acres out of a 9.21 acre tract.  NTCE
23-NL-003X
Nueces County, TX
Missouri Pacific Railroad Company (UPRR)
Champlin Petroleum Company
None
License for (1) 3.5" water pipeline.  Audit No. CA 78199.  Folder No. 1270-74.  MP 141.71 near Corpus Christi, TX.  Ownership: UPRC, C/O Joan Preble, 1800 Farnam St., Omaha, NE 68102.
23-NL-003X
Nueces County, TX
Missouri Pacific Railroad Company (UPRR)
Champlin Petroleum Company
None
License for (3) pipelines of which (1) 6" Benzene and (1) 4.5"  mixed C-4, plus (1) 8.5" spare line.  MP 141.71 near Corpus Christi, TX.  Audit No. CA 77947.  Folder No. 1270-73.  Ownership: UPRC, C/O Joan Preble, 1800 Farnam St., Omaha, NE 68102.
23-NL-003X
Nueces County, TX
Missouri Pacific Railroad Company (UPRR)
Champlin Petroleum Company
None
License for (3) pipelines of which (1) 6.6" Benzene, (1) 4.5" mixed C-4, plus (1) 8"spare line.  Audit No. 77949.  MP 141.71.  Folder No. 1270-75.  Ownership: UPRC, C/O Joan Preble, 1800 Farnam St., Omaha, NE 68102.
23-NL1-R
Nueces County, TX
City of Corpus Christi
Champlin Petroleum Company
v1680/p684
SH 9.  Refer to N-025 for documents.
23-NL1-R1
Nueces County, TX
City of Corpus Christi
Champlin Petroleum Company
v1680/p684
Bearden Drive.  Refer to N-025 for documents.
23-NL1-R2
Nueces County, TX
City of Corpus Christi
Champlin Petroleum Company
v1680/p684
I-37.  Refer to N-025 for documents.
23-NL2-01
Nueces County, TX
C. C. Speed
Champlin Petroleum Company
v1659/p274
A 50' wide right of way for one or more pipelines with 36" of cover.
23-NL2-02
Nueces County, TX
D and P Partnership
Champlin Petroleum Company
v1659/p265
A 34' wide right of way for one or more pipelines with 36" of cover.
23-NL2-03
Nueces County, TX
Garey A. Maiden and Judy Maiden
Champlin Petroleum Company
None
A 10' wide right of way with 48" of cover.  Refers to Lundstrom easement in v1661/p373.
23-NL2-03
Nueces County, TX
Richard Lundstrom
Champlin Petroleum Company
v1661/p373
A 50' wide right of way for one or more pipelines with 36" of cover.
23-NL2-04
Nueces County, TX
E. N. Fulghum and C. C. Speed
Champlin Petroleum Company
v1659/p590
A 50' wide right of way for one or more pipelines with 36" of cover.
23-NL2-05
Nueces County, TX
Iris Powell Grant
Champlin Petroleum Company
v1859/p256
A 35' wide right of way for (3) pipelines.  Amended in v1672/p736 for (3) more pipelines.
23-NL2-2R
Nueces County, TX
City of Corpus Christi
Champlin Petroleum Company
v1680/p684
Leopard Street a.k.a. SH 9.  Refer to N-025 for documents.
23-NL2-R
Nueces County, TX
City of Corpus Christi
Champlin Petroleum Company
v1680/p684
Up River Rd..  Refer to N-025 for documents.
23-NL3-R
Nueces County, TX
City of Corpus Christi
Champlin Petroleum Company
v1680/p684
Future Rd..  Refer to N-025 for documents.
23-NSL-001
Nueces County, TX
Louis Swetlick and wife, Emily Swetlick
CCPC
v1850/p367
A 10' wide right of way for (1) 6" pipeline with 36" of cover.  This easement also includes a 40' by 60' metering site. A-592, A-606
23-NSL-002
Nueces County, TX
Hedie Shutz, widow; Meta K. Naumann, widow; Relo F. Naumann, et ux and Martha Jean Naumann
CCPC
v1850/p376
A 10' wide right of way for (1) 6" pipeline with 36" of cover.  A-592
23-NSL-003
Nueces County, TX
Stephan Swetlick and wife, Mary Swetlick
CCPC
v1850/p383
A 10' wide right of way for (1) 6" pipeline with 36" of cover.  A-592.
23-NSL-004
Nueces County, TX
T. C. Hilton
CCPC
v1850/p389
A 10' wide right of way for (1) 6" pipeline with 36" of cover.  A-592
23-NSL-005
Nueces County, TX
Anna M. Wendland, aka Mrs. Paul Wendland
CCPC
v1850/p394
A 10' wide right of way for (1) 6" pipeline with 36" of cover.  A-592
23-NSL-006
Nueces County, TX
William Swetlick and wife, Mary Swetlick
CCPC
v1850/p399
A 10' wide right of way for (1) 6" pipeline with 36" of cover.
23-001X
Nueces County, TX
Texas Department of Transportation
South Texas Pipeline Company
None
Permit No. 1978 for crossing Highway 44 with (1) 4" pipeline.
39136
Nueces County, TX
Ralf E. Andrews, et al
Celanese Pipeline Company
v1716/p649
Easement for a valve site on existing pipeline right of way.
39164
Nueces County, TX
J. W. Jalufka, et ux
South Texas Pipeline Company
v1713/p673
A 35' wide right of way for (1) pipeline with 36" of cover.
39195
Nueces County, TX
Farreal J. Hoelscher, et al
South Texas Pipeline Company
v1713/p689
A 35' wide right of way for (1) pipeline with 36" of cover.
39225
Nueces County, TX
Jerome Rektorik
South Texas Pipeline Company
v1713/p679
A 35' wide right of way for (1) pipeline with 36" of cover.
23-005X
Nueces County, TX
Nueces County Commissioners Court
South Texas Pipeline Company
v21/p345 (Commish. Court)
Permit to cross CR 36.
39256
Nueces County, TX
Doris Ann Usener, et vir
South Texas Pipeline Company
v1713/p706
A 35' wide right of way for (1) pipeline with 36" of cover.
23-006X
Nueces County, TX
Nueces County Commissioners Court
South Texas Pipeline Company
None
Permit to cross CR 34.
39286
Nueces County, TX
J. Kenneth Baker, et vir
South Texas Pipeline Company
None
A 35' wide right of way for (1) pipeline with 36" of cover.
39317
Nueces County, TX
F. S. Burkhardt, Sr., et ux
South Texas Pipeline Company
v1713/p722
A 35' wide right of way for (1) pipeline with 36" of cover.
23-008X
Nueces County, TX
Nueces County Commissioners Court
South Texas Pipeline Company
v21/p345 (Commish. Court)
Permit to cross CR 30.
39348
Nueces County, TX
Anna Beth Simpson, et al
South Texas Pipeline Company
v1716/p658
A right of way for (1) 4.5" pipeline.
23-009X
Nueces County, TX
Nueces County Commissioners Court
South Texas Pipeline Company
v21/p345 (Commish. Court)
Permit to cross CR 28.
39378
Nueces County, TX
Mary Edith Floerke, et al
South Texas Pipeline Company
v1713/p727
A 35' wide right of way for (1) pipeline with 36" of cover.
39409
Nueces County, TX
Aileen Moore Waters, et al
South Texas Pipeline Company
v1713/p732
A 35' wide right of way for (1) pipeline with 36" of cover.
23-011A
Nueces County, TX
Dorothy Mae Barclay, et vir
South Texas Pipeline Company
v1713/p737
A 35' wide right of way for (1) pipeline with 36" of cover.
23-012A
Nueces County, TX
B. E. S. Company
South Texas Pipeline Company
v1716/p665
A 35' wide right of way for (1) pipeline with 36" of cover.
23-013A
Nueces County, TX
John C. Brooke, Trustee
Champlin Pipeline Inc., Imperial Pipeline Inc., and SolTex Pipeline Inc.
v1725/p910
2.494 acres, Survey No. 38, patented to E. R. Oliver by Patent No. 348, volume 16, A-792, Nueces County, TX.  Also for a valve site for the Bishop Lateral.
25-M-030
Matagorda County, TX
Tres Palacios Corporation
South Texas Pipeline Company
v598/p842
A 35' wide right of way for (2) pipelines with 42" of cover below roads, ditches, drains, canals and laterals.
25-M-030XX
Matagorda County, TX
Matagorda County Commissioners
South Texas Pipeline Company
None
CR  2175.  Permit authorizes South Texas to cross County roads within Matagorda County with (1) 6" and (1) 8" pipeline.
25-M-030X
Matagorda County, TX
Texas Department of Transportation
South Texas Pipeline Company
None
Permit crossing FM 1162 with (2) pipelines.
25-M-031
Matagorda County, TX
Margarite H. Poole, indivually and as independent executor
South Texas Pipeline Company
v602/p169
A 35' wide right of way for (2) pipelines not to exceed 8" with 36" of cover.  Must have consent for ingress and egress.  $50.00 per assignment.
25-M-031X
Matagorda County, TX
Matagorda County Commissioners
South Texas Pipeline Company
None
Permit authorizes South Texas to cross County roads within Matagorda County with (1) 6" and (1) 8" pipeline.  See file M-30X for documents.
25-M-032
Matagorda County, TX
Thomas B. LeTulle
South Texas Pipeline Company
v602/p164
A 35' wide right of way for (2) pipelines with 36" of cover.
25-M-033
Matagorda County, TX
George W. Townsend
South Texas Pipeline Company
v600/p684
A 35' wide right of way for (2) pipelines with 36" of cover.
25-M-034X
Matagorda County, TX
Corps of Engineers
South Texas Pipeline Company
None
Permit No. 12590 crossing the Colorado River with (1) 6" and (1) 8" pipelines.
25-M-034XX
Matagorda County, TX
State of Texas General Land Office
Equistar Chemicals, LP
  
ME 20030142.  Right of Way for (1) 6" and (1) 8" pipelines crossing the Colorado River near Bay City, TX.
25-M-035
Matagorda County, TX
John S. Runnells d/b/a Runnells-Pierce Ranch
South Texas Pipeline Company
v603/p389
A 35' wide right of way for (2) pipelines with 36" of cover.  Also included is (1) valve site and (1) stopper-fee facility.
25-M-036
Matagorda County, TX
Clive Runnells
South Texas Pipeline Company
v603/p393
A 35' wide right of way for (2) pipelines with 36" of cover as well as (1) valve site.
25-M-036X
Matagorda County, TX
Texas Department of Transportation
South Texas Pipeline Company
None
Permit No. 78-2221 for (2) pipelines with 4' of cover at the lowest point of ditch and 6' below road surface.  Crosses SH 60.
25-M-037X
Matagorda County, TX
Matagorda County Commissioners
South Texas Pipeline Company
None
Permit authorizes South Texas to cross County roads within Matagorda County with (1) 6" and (1) 8" pipeline.  See file M-30X for documents.
25-M-038X
Matagorda County, TX
Atchison, Topeka and Santa Fe Railroad Company (BNSF)
South Texas Pipeline Company
None
License No. 155162, Folder No. 2262,  for (2) pipelines near Runnels Station in Runnells, TX.  CT 27748, mile post 61 + 2871.0
25-M-039X
Matagorda County, TX
Southern Pacific Transportation Company (UPRR)
South Texas Pipeline Company
None
Audit No. 185456 for (2) pipelines near Palacios Branch Track.  MP 21.46.  Crossing in Don Tol, TX.
25-M-040X
Matagorda County, TX
State of Texas General Land Office
South Texas Pipeline Company
v604/p770
ME 3836/ ME 003836 for (2) pipelines across Caney Creek.  GLO no longer has jurisdiction over this crossing.  No renewal required.
25-M-040XX
Matagorda County, TX
Corps of Engineers
South Texas Pipeline Company
None
Permit No. 12590crossing Caney Creek with (1) 6" and (1) 8" pipeline.
25-M-041X
Matagorda County, TX
Texas Department of Transportation
South Texas Pipeline Company
None
Permit No. 78-2227 across FM 1728 for (2) pipelines with a 10' wide right of way and 4' of cover in ditches and 6' on road surface.
25-M-042X
Matagorda County, TX
State of Texas General Land Office
  
None
No documents in file.  Alligator Creek.
25-M-042XX
Matagorda County, TX
Corps of Engineers
South Texas Pipeline Company
None
Permit No. 12590 crossing Alligator Lake with (2) pipelines.
25-BR-001
Brazoria County, TX
First International Bank in Houston, Trustee
South Texas Pipeline Company
v1409/p83
A 35' foot right of way for (1) 8" pipeline.  Permits construction of microwave tower and control equipment building.  New ownership: Barada Family Trust, C/O Andrew Barada, 87 Juniper Rd., New Canaan, CT 06840-5138.  Ownership: U. S. Fish and Wildlife Se
25-BR-001
Brazoria County, TX
Brazoria County
South Texas Pipeline Company
None
Building Permit No. 2690 for a microwave tower.
25-BR-001X
Brazoria County, TX
Texas Department of Transportation
South Texas Pipeline Company
None
A right of way for a  6" propylene and an 8" ethylene line, permit No. 78-2172, FM Highway No. 1301; 0.8 miles NW of FM 524 interSection with FM 1301; 30 day notice to relocate.
25-BR-002
Brazoria County, TX
Lone Star Salt Water Company
South Texas Pipeline Company
v1419/p845
A 35' wide right of way for (1) 6" pipeline and (1) 8" pipeline.
25-BR-003
Brazoria County, TX
J. D. Yelderman and Sue Yelderman, husband and wife
South Texas Pipeline Company
v1385/p348
A 35' right of way.  Beginning at a point in the west line; said point being 583' north along said line from the southwest corner; thence North 43.05' East a distance of 6,711'; thence North 44.31' East a distance of 9,187'; thence North 69.29' East a dis
25-BR-004X
Harris and Brazoria
Corps of Engineers
South Texas Pipeline Company
None
Permit No. 12592 crossing the San Bernard River with (1) 6" and (1) 8" pipelines. Permit transferred to CCPC Chemical, Inc. on 07/06/87.
25-BR-004XX
Brazoria County, TX
State of Texas General Land Office
South Texas Pipeline Company
v1408/p252
ME 880003 across the San Bernard River.  Formerly ME 3842 for (1) 6" and (1) 8" pipeline across the San Bernard River.
25-BR-005
Brazoria County, TX
Jules Todd, Jr. and Blanche Todd, his wife
South Texas Pipeline Company
v1428/p236
A 35' wide right of way  for (1) 6" and (1) 8" pipeline.
25-BR-005A
Brazoria County, TX
Allen Rhodes and Nanie Rhodes
South Texas Pipeline Company
v1399/p861
A 35' wide right of way  for (2) pipelines.
25-BR-006
Brazoria County, TX
Abbie Rhodes Johnson
South Texas Pipeline Company
v1406/p649
A 35' wide right of way for (2) pipelines.
25-BR-006X
Brazoria County, TX
Corps of Engineers
South Texas Pipeline Company
None
Permit No. 12591 crossing Mound Creek with (1) 6" propylene and (1) 8" ethylene pipelines. Permit transferred to CCPC Chemical, Inc. on 07/06/87.
25-BR-007
Brazoria County, TX
John David Heath, Jr. et al
South Texas Pipeline Company
v1446/p169
A  35' wide right of way for (2) pipelines, not to exceed 8 5/8" in outside diameter.
25-BR-007X
Brazoria County, TX
Brazoria County Commissioners Court
South Texas Pipeline Company
None
Permit to cross CR 4
25-BR-007X.1
Brazoria County, TX
Corps of Engineers
South Texas Pipeline Company
None
Permit No. 12591 crossing Varner Creek with (1) 6" propylene and (1) 8" ethylene pipelines.
25-BR-008
Brazoria County, TX
Baldwin Nash Young and Dorothy Long Cousins, et al
South Texas Pipeline Company
v1430/p828
A 30' right of way for (1) 6" and (1) 8" pipeline, (2) tracts of land (50' by 50') and (1) tract of land 100' by 100' for valve sites.  Ratification of easement recorded at v1430/p853.
25-BR-008A
Brazoria County, TX
Frank Maroul and wife Anna C. Maroul
South Texas Pipeline Company
v1464/p94
A 20' right of way for (2) pipelines. Pipeline centerline description recorded at v1485/p458.
25-BR-011
Brazoria County, TX
Raymon Matula and Grace Matula
South Texas Pipeline Company
v1390/p293
A 35' right of way for (2) pipelines.  Pipeline centerline description recorded at v1485/p462.
25-BR-012
Brazoria County, TX
Rosie Matula Phillips
South Texas Pipeline Company
v1407/p997
A 35' right of way for (2) pipelines.
25-BR-013
Brazoria County, TX
U.  V. Whatley and Mildred C. Whatley
South Texas Pipeline Company
v1408/p685
Right of way for (2) pipelines.  This agreement has a 20 year term, but is renewable.  The next renewable time is 07/09/2018.
25-BR-013X
Brazoria County, TX
Texas Department of Transportation
South Texas Pipeline Company
None
Permit No. 78-2235.  Right of way for (1) 6" propylene and (1) 8" ethylene pipeline, crossing highway 36.  Thirty days written notice is required to relocate the line.
25-BR-014
Brazoria County, TX
Charles Jackson Hooper, Jr.
South Texas Pipeline Company
v1547/p263
A 35' right of way for (2) pipelines.
25-BR-015
Brazoria County, TX
Curbie Vogler and Effie Mae Vogler
South Texas Pipeline Company
v1401/p127
A 35' right of way for (2) pipelines
25-BR-016
Brazoria County, TX
Elizabeth Shirley
South Texas Pipeline Company
v1396/p393
A 35' right of way for (2) pipelines covering all of lots 1 through 26, lots 29 through 39.  Both are inclusive of the McKay subdivision of lot 3 of the Lockwood subdivision in the NE 1/4 of Section 9, HT and B Survey, Abstract 262
25-BR-016
Brazoria County, TX
Marion Vaughn Shirley
South Texas Pipeline Company
v1415/p991
A 35' right of way for (2) pipelines covering all of lots 1 through 26, lots 29 through 39.  Both are inclusive of the McKay subdivision of lot 3 of the Lockwood subdivision in the NE 1/4 of Section 9, HT and B Survey, Abstract 262.
25-BR-017
Brazoria County, TX
Joseph Broz and Bernice Broz
South Texas Pipeline Company
v1408/p689
A 35' wide right of way for pipelines located in the north 1/2 of the southeast 1/4 of Section 9, H.T. & B.R.R. Co. survey, abstract No. 262, patent No. 226,  dated 11/19/1870
25-BR-017X
Brazoria County, TX
Brazoria County Commissioners Court
South Texas Pipeline Company
None
Permit to cross CR 20.
25-BR-019
Brazoria County, TX
George R. Burke, Jr. et al
South Texas Pipeline Company
v1440/p847
A 30' wide right of way for (2) pipelines.
25-BR-020
Brazoria County, TX
Baldwin Nash Young and Dorothy Long Cousins, et al
South Texas Pipeline Company
v1430/p828
A 30' wide right of way for (1) 6" and (1) 8" pipeline.
25-BR-020.1
Brazoria County, TX
Mrs. F. O. Donley
South Texas Pipeline Company
v1426/p715
A 35' wide right of way for (2) pipelines.  Proof of heirship recorded at v1426/p718.
25-BR-021
Brazoria County, TX
Stella Mons
South Texas Pipeline Company
v1394/p46
A 35' wide right of way for (2) pipelines.
25-BR-022
Brazoria County, TX
Baldwin Nash Young and Dorothy Long Cousins, et al
South Texas Pipeline Company
v1430/p828
A 30' wide right of way for (1) 6" and (1) 8" pipeline.
25-BR-023
Brazoria County, TX
Joseph W. Hasty and Wanda Louise Hasty, husband and wife, and the Texas Veteran's Land Board
South Texas Pipeline Company
v1394/p49
A 35' wide right of way for (1) 6" propylene and (1) 8" ethylene pipeline.
25-BR-023
Brazoria County, TX
Joseph W. Hasty and Wanda Louise Hasty, husband and wife
South Texas Pipeline Company
v1392/p396
A 35' wide right of way for (2) pipelines.
25-BR-024
Brazoria County, TX
Baldwin Nash Young and Dorothy Long Cousins, et al
South Texas Pipeline Company
v1430/p828
A 30' wide right of way for (1) 6" and (1) 8" pipeline.
25-BR-024X
Brazoria County, TX
Brazoria County Commissioners Court
South Texas Pipeline Company
None
Permit to cross  CR 18.
25-BR-025
Brazoria County, TX
Gilbert J. Gutjahr, et al
South Texas Pipeline Company
v1408/p4
A 35' wide right of way for (2) pipelines.
25-BR-025
Brazoria County, TX
Gilbert J. Gutjahr, et al
South Texas Pipeline Company
v1411/p378
A right of way encompassing 5.739 total acres.  These facilities include a microwave tower (Ramsey Tower) and control equipment building, with other appropriate equipment and appurtenances.  Facility is not limited to 5.739 acre site during construction.
25-BR-025
Brazoria County, TX
Brazoria County
South Texas Pipeline Company
None
Building Permit No. 2687 for a microwave tower.
25-BR-026
Brazoria County, TX
Baldwin Nash Young and Dorothy Long Cousins, et al
South Texas Pipeline Company
v1430/p828
A 30' wide right of way for (1) 6" and (1) 8" pipeline.
25-BR-027
Brazoria County, TX
Dorothea Wynema Brown Gerson, heir of Lillian Brown, deceased
South Texas Pipeline Company
v1394/p43
A 35' wide right of way for (2) pipelines.
25-BR-028
Brazoria County, TX
Adam Kubeczka and  Adelia Kubeczka, husband and wife
South Texas Pipeline Company
v1386/p184
A 35' wide right of way for (2) pipelines.
25-BR-029
Brazoria County, TX
Robert C. Lane
South Texas Pipeline Company
v1408/p9
A 35' wide right of way containing (2) pipelines.
25-BR-030
Brazoria County, TX
Baldwin Nash Young and Dorothy Long Cousins, et al
South Texas Pipeline Company
v1430/p828
A 30' wide right of way for (1) 6" and (1) 8" pipeline.
25-BR-030X
Brazoria County, TX
Brazoria County Commissioners Court
South Texas Pipeline Company
None
Permit to cross CR 25 .
25-BR-030X.1
Brazoria County, TX
Corps of Engineers
South Texas Pipeline Company
None
Permit No. 12591 crossing the Brazos River with (1) 6" propylene and (1) 8" ethylene pipelines.
25-BR-030X.2
Brazoria County, TX
State of Texas General Land Office
Equistar Chemicals, LP
  
ME 880023 across the Brazos River near Rusharon, Texas.
25-BR-031
Brazoria County, TX
Texas Board of Corrections
South Texas Pipeline Company
v1408/p694
A 35' wide right of way for (2) pipelines.
25-BR-032
Brazoria County, TX
Diamond J. Land and Cattle Company
South Texas Pipeline Company
v1403/p344
A 35' wide right of way for (2) pipelines.
25-BR-033
Brazoria County, TX
Manveltex, Inc.
South Texas Pipeline Company
v1422/p825
A 35' wide right of way for (2) pipelines.
25-BR-033X
Brazoria County, TX
Corps of Engineers
None
None
Oyster Creek. No permit required per Janet Botello with the Corps.
25-BR-034R
Brazoria County, TX
Eric Charles Burrage and Alice Burrage, husband and wife
South Texas Pipeline Company
v1431/p731
A 35' wide right of way for (2) pipelines.
25-BR-035
Brazoria County, TX
Charles A. Habermacher, Sr. and Camille F. Habermacher, husband and wife
South Texas Pipeline Company
v1395/p611
A 35' wide right of way for (2) pipelines.
25-BR-035A
Brazoria County, TX
Charles A. Habermacher, Sr. and Camille F. Habermacher, husband and wife
South Texas Pipeline Company
v681/p717
A 35' wide right of way for (2) pipelines.
25-BR-036
Brazoria County, TX
Louis M. Pearce, Jr.
South Texas Pipeline Company
v1413/p133
A 35' wide right of way containing (2) pipelines.
25-BR-036X
Brazoria County, TX
Texas Department of Transportation
South Texas Pipeline Company
None
A right of way for (1) 6" propylene and (1) 8" ethylene pipeline.  Permit No. 78-2232.  Highway 1462
25-BR-037
Brazoria County, TX
R. P. Doherty, Jr.
South Texas Pipeline Company
v1418/p405
A 35' wide right of way for (2) pipelines.
25-BR-038
Brazoria County, TX
Rosalie Hagar, feme sole
South Texas Pipeline Company
v1450/p268
A 25' wide right of way containing (2) pipelines.
25-BR-044
Brazoria County, TX
Charlie Lee Green
Champlin Pipeline Inc., Imperial Pipeline Inc., and SolTex Pipeline Inc.
v1546/p103
A 35' wide right of way for (2) pipelines.
25-BR-044
Brazoria County, TX
C. J. Williams, Anna Bell Williams and Rachel Franklin
South Texas Pipeline Company
v1420/p294
A 35' wide right of way for the (2) pipelines.
25-BR-045
Brazoria County, TX
John B. Holmes, et al
South Texas Pipeline Company
v1429/p652
A 35' wide right of way for (2) pipelines.
25-BR-045.1
Brazoria County, TX
Albert Fay, et al
South Texas Pipeline Company
v1443/p148
A 35' wide right of way for (2) pipelines.
25-BR-046
Brazoria County, TX
Clayton Foundation Company
South Texas Pipeline Company
v1407/p991
A 35' wide right of way for (2) pipelines.
25-BR-047
Brazoria County, TX
Crawford  Buford and Marie Buford, husband and wife
South Texas Pipeline Company
v1395/p615
A 35' wide right of way for (2) pipelines.
25-BR-049
Brazoria County, TX
Amanda Mack
South Texas Pipeline Company
v1408/p6
A 35' wide right of way for (2) pipelines.
25-BR-050
Brazoria County, TX
Fred D. Johnson, et al
South Texas Pipeline Company
v1424/p606
A 35' wide right of way for (2) pipelines.  Easement includes valve site.  All pipelines and appurtenances must be buried a minimum of 4'.
25-BR-050X
Brazoria County, TX
Brazoria County Commissioners Court
South Texas Pipeline Company
None
Permit to cross CR 526.
25-BR-051
Brazoria County, TX
Lee M. Duggan, Jr. (individually) and as Trustee
South Texas Pipeline Company
v1422/p822
A 35' wide right of way for (2) pipelines.
25-BR-053
Brazoria County, TX
Curtis Joe Mowery, Jr. and  Dorothy Sue Mowery, husband and wife
South Texas Pipeline Company
v1403/p350
A 35' wide right of way for (2) pipelines.
25-BR-053X
Brazoria County, TX
Missouri Pacific Railroad Company (UPRR)
South Texas Pipeline Company
None
A right of way for (1) 6" propylene and (1) 8" ethylene pipelines.   Audit No. 77856, Mile post 27.82; Crossing near Rosharon, TX.    Ownership: UPRC, C/O Joan Preble, 1800 Farnam St., Omaha, NE 68102.
25-BR-054
Brazoria County, TX
Claud B. Hamill
South Texas Pipeline Company
v1390/p298
A 35' wide right of way for (2) pipelines.
25-BR-054A
Brazoria County, TX
General Crude Oil Company
South Texas Pipeline Company
None
A 20' wide right of way for (1) 6" and (1) 8" pipeline crossing Chocolate Bayou Canal.
25-BR-054X
Brazoria County, TX
Texas Department of Transportation
South Texas Pipeline Company
None
Permit No. 78-2230.  A right of way for (1) 6" propylene and (1) 8" ethylene pipeline across highway 288.  1.5 miles north of interSection FM 1462 in Chester S. Corbett Survey Abstract 64
25-BR-055
Brazoria County, TX
James A. Fite and Valerie Allen
South Texas Pipeline Company
v1403/p341
A 35' wide right of way for (2) pipelines.
25-BR-055X
Brazoria County, TX
Brazoria County Commissioners Court
South Texas Pipeline Company
None
Permit to cross CR 53.
25-BR-056
Brazoria County, TX
C.C. Kirkpatrick and Mrs. C. C. Kirkpatrick
South Texas Pipeline Company
v1390/p650
A 35' wide right of way for (2) pipelines.
25-BR-056X
Brazoria County, TX
Brazoria County Commissioners Court
South Texas Pipeline Company
None
Permit to cross  CR 48.
25-BR-057
Brazoria County, TX
James A. Fite, Jr. and Valerie White Fite Allen
South Texas Pipeline Company
v1403/p341
A 35' wide right of way for (2) pipelines.
25-BR-058
Brazoria County, TX
Barbara Stewart Rawson
South Texas Pipeline Company
v1411/p376
A 35' right of way containing (2) pipelines.  There are 2 counterparts to this document.
25-BR-058A
Brazoria County, TX
Brazoria County Drainage District
South Texas Pipeline Company
None
Permit to cross ditches/canals in districts 3, 4, and 5.
25-BR-058X
Brazoria County, TX
Corps of Engineers
None
None
Hayes Creek/Canal.  No permit required per Janet Botello with the Corps.
25-BR-059
Brazoria County, TX
W.R. Wallace
South Texas Pipeline Company
v1391/p535
A 35' wide right of way for (2) pipelines.
25-BR-059X
Brazoria County, TX
Brazoria County Commissioners Court
South Texas Pipeline Company
None
Permit for (2) pipelines crossing in Brazoria County Precincts 2 and 3.
25-BR-060
Brazoria County, TX
Dale T. Keast
South Texas Pipeline Company
v1398/p71
A 35' wide right of way containing (2) pipelines.
25-BR-062
Brazoria County, TX
Richard H. Bayless and the Veteran's Land Board
South Texas Pipeline Company
v1453/p942
A 20' wide right of way for (2) pipelines.
25-BR-062X
Brazoria County, TX
Brazoria County Commissioners Court
South Texas Pipeline Company
None
Permit to cross CR 62.
25-BR-061
Brazoria County, TX
Constance E. Staves and  Ethel L. Staves
South Texas Pipeline Company
v1401/p673
A 35' wide right of way for (2) pipelines.
25-BR-062A
Brazoria County, TX
Richard H. Bayless
South Texas Pipeline Company
v1425/p741
A 20' wide right of way for (2) pipelines.
25-BR-063
Brazoria County, TX
James W. McAnally and  Ruby E. McAnally, husband and wife
South Texas Pipeline Company
v1396/p395
A 35' wide right of way for (2) pipelines.
25-BR-064
Brazoria County, TX
Exxon Gas Systems, Inc.
South Texas Pipeline Company
v1467/p741
A 20' wide right of way for (2) pipelines.
25-BR-065
Brazoria County, TX
Ruby Rosa Gerhart
South Texas Pipeline Company
v1545/p170
A 20' wide right of way for (2) pipelines.
25-BR-065
Brazoria County, TX
Minnie Gerhart Krotky, et al
South Texas Pipeline Company
v1453/p937
A 20' wide right of way for (2) pipelines.
25-BR-065X
Brazoria County, TX
Texas Department of Transportation
South Texas Pipeline Company
None
Permit No. 78-2236.  State highway No. 288.
25-BR-067
Brazoria County, TX
James Chernosky and Norma Chernosky
South Texas Pipeline Company
v1404/p458
A 35' wide right of way for (2) pipelines.
25-BR-067X
Brazoria County, TX
Brazoria County Commissioners Court
South Texas Pipeline Company
None
Permit granting right of way to cross  CR 63.
25-BR-068
Brazoria County, TX
A.O.Susholtz, Trustee
South Texas Pipeline Company
v1429/p660
A 25' wide right of way for (2) pipelines.  Easement is non-exclusive.
25-BR-068X
Brazoria County, TX
Brazoria County Drainage District
South Texas Pipeline Company
None
Permit to cross drainage ditches/canals in districts 3, 4 and 5.
25-BR-069
Brazoria County, TX
Clarence S. Kucera and Milady Ann Kucera
South Texas Pipeline Company
v1399/p859
A 35' wide right of way for (2) pipelines.
25-BR-069X
Brazoria County, TX
Brazoria County Drainage District
South Texas Pipeline Company
None
Permit to cross drainage ditches/canals in districts 3, 4 and 5.
25-BR-070
Brazoria County, TX
Emma Feyfar Blazek
South Texas Pipeline Company
v1399/p864
A 35' wide right of way for (2) pipelines.  There is one counterpart to this document.
25-BR-071
Brazoria County, TX
Albina Duorak
South Texas Pipeline Company
v1387/p698
A 35' wide right of way containing (2) pipelines.
25-BR-072
Brazoria County, TX
Joe Tijerina and Matilda Cardenos
South Texas Pipeline Company
v1407/p989
A 35' wide right of way for (2) pipelines.
25-BR-072X
Brazoria County, TX
Brazoria County Commissioners Court
South Texas Pipeline Company
None
Permit to cross CR 65.
25-BR-073
Brazoria County, TX
Willie Prcin, et al
South Texas Pipeline Company
v1393/p260
A 35' wide right of way for (2) pipelines.
25-BR-074
Brazoria County, TX
O. S. Jenkins and Wann Jenkins, husband and wife
South Texas Pipeline Company
v1416/p433
A 1 acre right of way for placement of a microwave tower and control equipment.
25-BR-074
Brazoria County, TX
Brazoria County
South Texas Pipeline Company
None
Building Permit No. 2689 for a microwave tower.
25-BR-074
Brazoria County, TX
O. S. Jenkins and Wann Jenkins, husband and wife
South Texas Pipeline Company
v1416/p430
A 35' wide right of way for (2) pipelines.
25-BR-074
Brazoria County, TX
O. S. Jenkins and Wann Jenkins
South Texas Pipeline Company
v1388/p616
A 35' wide right of way for (2) pipelines.
25-BR-074A
Brazoria County, TX
Richard J. Caron and wife, Patricia A. Caron
  
None
Richard and Patricia Caron are current owners.  Original easement is in file 25-BR-74.
25-BR-074B
Brazoria County, TX
Gonzalo Acosta and Romona Acosta
  
None
Gonzalo and Romona Acosta are current owners.  Original right of way is in 25-BR-074.
25-BR-076
Brazoria County, TX
Eulah McIlvaine and Grace McIlvaine
South Texas Pipeline Company
v1417/p520
A 35' wide right of way containing (2) pipelines.
25-BR-076X
Brazoria County, TX
Brazoria County Commissioners Court
South Texas Pipeline Company
None
Permit granting right of way to cross  CR 64.
25-BR-077
Brazoria County, TX
Joe J. Kucera and  Mary Kucera, husband and wife
South Texas Pipeline Company
v1397/p518
A 35' wide right of way for (2) pipelines.  No relocation, relaying or changing the size of the pipelines.
25-BR-077X
Brazoria County, TX
Brazoria County Commissioners Court
South Texas Pipeline Company
None
Permit to cross CR 786.
25-BR-078
Brazoria County, TX
Board of Trustees of Hermann Hospital Estate
South Texas Pipeline Company
v1406/p381
A 35' wide right of way for (2) pipelines.
25-BR-078X
Brazoria County, TX
Brazoria County Drainage District No. 4
South Texas Pipeline Company
None
Permission to cross drainage districts in District No. 4.
25-BR-078X
Brazoria County, TX
Brazoria County Drainage District No. 5
South Texas Pipeline Company
None
Permission to cross Drainage District No. 5.
25-BR-079A
Brazoria County, TX
Charles Stephen Williamson and Yreva L. Williamson, husband and wife
South Texas Pipeline Company
v1395/p613
A 35' wide right of way containing (2) pipelines.
25-BR-079AX
Brazoria County, TX
Brazoria County Drainage District
South Texas Pipeline Company
None
Permit to cross drainage ditches/canals in districts 3, 4 and 5.
25-BR-079X
Brazoria County, TX
City of Manvel
South Texas Pipeline Company
None
Permit to cross CR 76.
25-BR-079B
Brazoria County, TX
Lawrence J. Armstrong and  Francis B. Armstrong, husband and wife
South Texas Pipeline Company
v1396/p397
A 35' wide right of way for (2) pipelines.
25-BR-079G
Brazoria County, TX
C. H. Booth and Olga Booth, husband and wife
South Texas Pipeline Company
v1414/p976
A 35' wide right of way for (2) pipelines.  (1) pipeline not to exceed 8 5/8"; (1) pipeline not to exceed 6 5/8".
25-BR-079
Brazoria County, TX
Tranquilo Gubert, Trustee , et al
South Texas Pipeline Company
v1408/p20
A 35' wide right of way for (2) pipelines.
25-BR-102X
Brazoria County, TX
Brazos River Authority
South Texas Pipeline Company
None
A permit for (1) 6" and (1) 8" pipeline crossing Greenwall Lateral and System B Main Canal.  New ownership: Gulf Coast Water Authority, C/O Raymond Macek, 3630 Texas Ave., Texas City, TX 77591-4824
25-BR-080
Brazoria County, TX
Gary Wayne Klopp and Suzanne Gail Klopp
South Texas Pipeline Company
v1407/p994
A 35' wide right of way for (2) pipelines.
25-BR-081
Brazoria County, TX
Terry Austin Newman
South Texas Pipeline Company
v1386/p186
A 35' wide right of way containing (2) pipelines.
25-BR-082A
Brazoria County, TX
Manvel Development Company, Inc., William J. Walker and Agnes Walker, husband and wife
South Texas Pipeline Company
v1426/p722
A 35' wide right of way for (2) pipelines.  (1) containing ethylene 8 5/8" and (1) containing propylene 6 5/8".
25-BR-082B
Brazoria County, TX
Manvel Development Company, Inc.
South Texas Pipeline Company
v1434/p772
A grant to convey (2) assets of land being part of out lots 123 and 124 of Dr. A. A. Luther Subdivision of the town of Manvel.  Subject to pipeline rights of way described in document.  A grant to convey 2 acres of land being part of outlots 123 and 124 o
25-BR-082C
Brazoria County, TX
Gregario Salazar, Jr. and Josephine Salazar
South Texas Pipeline Company
v1388/p618
A 35' wide right of way containing (2) pipelines.
25-BR-082D
Brazoria County, TX
Weyman C. Autrey and Jeanette S. Autrey
South Texas Pipeline Company
v1403/p347
A 35' wide right of way containing (2) pipelines.
25-BR-082E
Brazoria County, TX
Kenneth D. Malcom and Denise K. Malcom, husband and wife
South Texas Pipeline Company
v1414/p982
A 35' wide right of way containing (2) pipelines.
25-BR-082H
Brazoria County, TX
Manvel Development Company, Inc.
South Texas Pipeline Company
v1426/p729
A 35' wide right of way for 2 pipelines.
25-BR-082F
Brazoria County, TX
John F. Euler and Cheri Fuller (husband and wife)
South Texas Pipeline Company
v1414/p990
A 35' right of way for 2 pipelines.
25-BR-082G
Brazoria County, TX
Gilbert Haferkamp, Jr.
South Texas Pipeline Company
v1414/p996
A 35' wide right of way containing two pipelines.
25-BR-082GX
Brazoria County, TX
Brazoria County Drainage District
South Texas Pipeline Company
None
Permit to cross drainage ditches/canals in districts 3, 4 and 5.
25-BR-082J
Brazoria County, TX
Fredrick Huckabee and Rita Huckabee (husband and wife)
South Texas Pipeline Company
v1415/p1
A 35' wide right of way containing 2 pipelines on 1.957 acres of land.
25-BR-082K
Brazoria County, TX
Dale A. Johnson and Brenda S Johnson (husband and wife)
South Texas Pipeline Company
v1415/p7
A 35' wide right of way for (2) pipelines.
25-BR-083
Brazoria County, TX
Thomas Herman Stancliff and Jeanne R Stancliff (husband and wife)
South Texas Pipeline Company
v410/p861
A 35' wide right of way for (2) pipelines
25-BR-083X
Brazoria County, TX
City of Manvel
South Texas Pipeline Company
None
CR 190.  Letter states that at this time the City of Manvel does not require a permit be issues for pipelines.
25-BR-083X.1
Brazoria County, TX
Atchison, Topeka and Santa Fe Railroad Company
South Texas Pipeline Company
None
A right of way for (1) 6" propylene and (1) 8" ethylene pipelines.  File No. CT 27748.  MP 35+1220.  Crossing near Manvel, TX.  Ownership: BNSF Corporate Support, C/O Gunnar Rasmussen, 2400 Western Central Blvd, P. O. Box 961038, Fort Worth, TX 76161-0038
25-BR-084
Brazoria County, TX
Houston Lighting and Power Company
South Texas Pipeline Company
None
Letter agreement granting easement for 2 pipelines.  (1) 6" and (1) 8" in diameter.  See drawings in file.
25-BR-085
Brazoria County, TX
Edward E. Smith and Dietra K. Smith (husband and wife)
South Texas Pipeline Company
v1394/p52
A 35' wide right of way for 2 pipelines.
25-BR-086
Brazoria County, TX
W. H. Black, Trustee
South Texas Pipeline Company
v1435/p883
A warranty deed granting 7.23 acres.  NTCE.
25-BR-087
Brazoria County, TX
Co Trustees of the AB Kennedy Jr. and Betty Sue Kennedy family trust
South Texas Pipeline Company
v1485/p451
A 7' wide right of way for 2 pipelines.
25-BR-087X
Brazoria County, TX
Texas Department of Transportation
South Texas Pipeline Company
None
Permit No. 78-2228 providing right of way for 2 pipelines across SH 6.
25-BR-088
Brazoria County, TX
Donald E White and Ruby Ann White
South Texas Pipeline Company
v1431/p137
A warranty deed granting .830 acres of land for pipeline use.  NTCE.
25-BR-088A
Brazoria County, TX
Scott Brocker
South Texas Pipeline Company
v1420/p871
A 30' wide right of way for 2 pipelines.
25-BR-089A
Brazoria County, TX
Thomas James Hayes and Iris Ann Hayes (husband and wife)
South Texas Pipeline Company
v1421/p739
A 30' wide right of way agreement for 2 pipelines for Lot No 65 in the Manvel Plaza
25-BR-089
Brazoria County, TX
R. C. Guajardo
South Texas Pipeline Company
v1412/p554
A 35' wide right of way for 2 pipelines in Lot No. 63.
25-BR-089
Brazoria County, TX
R. C. Guajardo
South Texas Pipeline Company
v1412/p551
A 35' wide right of way for (2) pipelines in Lot No. 64.
25-BR-090
Brazoria County, TX
R. C. Guajardo
South Texas Pipeline Company
v1412/p554
A 35' wide right of way for (2) pipelines in Lot No. 63.
25-BR-090
Brazoria County, TX
R. C. Guajardo
South Texas Pipeline Company
v1412/p551
A 35' wide right of way for (2) pipelines in Lot No. 64.
25-BR-091-95
Brazoria County, TX
HM  White and Grace Pearl White
South Texas Pipeline Company
v1407/p986
A part of the NWSW of Manvel Outlot No. 150 and the extreme NW ten acres of Manvel Outlot No 150, a 35' wide right of way for 2 pipelines.
25-BR-091-95
Brazoria County, TX
HM White and Grace Pearl White
South Texas Pipeline Company
v1407/p980
A 35' wide right of way for two pipelines in Section 24 H.T. and B Railroad Company Survey Abstract #476.
25-BR-092
Brazoria County, TX
Douglas D. Henderson and Suzanne H Henderson (husband and wife)
South Texas Pipeline Company
v1443/p155
A 35' wide right of way for 2 pipelines.
25-BR-093
Brazoria County, TX
Lazzerus C. Davis and Jewel Davis (husband and wife)
South Texas Pipeline Company
v1426/p719
A 35' wide right of way for 2 pipelines.
25-BR-094
Brazoria County, TX
Larry Sidney Stavinoha and Sue Stavinoha
South Texas Pipeline Company
v1407/p983
A 35' wide right of way for 2 pipelines
25-BR-096A
Brazoria County, TX
Joy D. Watkins and Bette I Watkins
South Texas Pipeline Company
v1401/p137
A 35' wide right of way for 2 pipelines.
25-BR-096B
Brazoria County, TX
Terrance R. LaChance and Linda E LaChance (husband and wife)
South Texas Pipeline Company
v1426/p923
A 35' wide right of way for (2) pipelines covering 3.0 acres known as tract 15 of Manvel Heights Subdivision
25-BR-096C
Brazoria County, TX
Mario Mendez and Eva S Mendez (husband and wife)
South Texas Pipeline Company
v1426/p926
A 35' wide right of way for (2) pipelines covering 4.296 acres, being known as tract #17 in Manvel Heights Subdivision.
25-BR-096E
Brazoria County, TX
Stephen L. Schwettmann and Marilyn L Schwettmann
South Texas Pipeline Company
v1422/p954
A 35' right of way for 2 pipelines covering a tract of land containing 3.794 acres.
25-BR-096D
Brazoria County, TX
WC McClelland and Mallie McClelland
South Texas Pipeline Company
v1422/p957
A 35' wide right of way for 2 pipelines covering 5.842 acres known as Tract 21 of Manvel Heights Subdivision.
25-BR-097
Brazoria County, TX
R. F. Lenarduzzi and Josephine Lenarduzzi
South Texas Pipeline Company
v1414/p970
A 35' wide right of way for (2) pipelines.
25-BR-097X
Brazoria County, TX
Corps of Engineers
None
None
Mustang Bayou.  No permit required per Janet Botello with the Corps.
25-BR-099
Brazoria County, TX
William C. Maurer, et al
South Texas Pipeline Company
v1410/p852
A 30' wide right of way for (2) pipelines.
25-BR-100
Brazoria County, TX
William C. Mauer et al
South Texas Pipeline Company
v1410/p856
A 30' wide right of way for two pipelines crossing a 96.839 acres tract.
25-BR-101
Brazoria County, TX
Sarah E. Hayes and Mary M Kenney
South Texas Pipeline Company
v1410/p864
A 35' wide right of way for 2 pipelines.
25-BR-101X
Brazoria County, TX
Brazoria County Commissioners Court
South Texas Pipeline Company
None
Permit to cross CR 98.
25-BR-102
Brazoria County, TX
Leon W. Davis and Marcella D Oldaker, independent co-executors of the Elsie F Davis Estate
South Texas Pipeline Company
v1422/p944
A 35' wide right of way for 2 pipelines.
25-BR-102
Brazoria County, TX
Brazoria County
South Texas Pipeline Company
None
Building Permit No. 2688 for a microwave tower.
25-BR-103
Brazoria County, TX
Vernon D. Way and Robert G Way
South Texas Pipeline Company
v1403/p363
A 35' wide right of way for (2) pipelines.
25-BR-104
Brazoria County, TX
John Alexander, et al
South Texas Pipeline Company
South Texas Pipeline Company
v1450/p275
A 35' wide right of way for (2 )pipelines.
25-BR-104X
Brazoria County, TX
Brazoria County Commissioners Court
South Texas Pipeline Company
None
Permit to cross CR 128.
25-BR-105
Brazoria County, TX
Frank M. Baker
South Texas Pipeline Company
v1423/p784
A 35' wide right of way for (2) pipelines.
25-BR-106
Brazoria County, TX
Berry Miller Sr.
South Texas Pipeline Company
v1421/p748
A 35' wide right of way for (2) pipelines.
25-BR-108
Brazoria County, TX
Gayle Cayce and Bonnie M Cayce
South Texas Pipeline Company
v1424/p829
A 20' wide right of way for (2) pipelines.
25-BR-108X
Brazoria County, TX
Brazoria County Commissioners Court
South Texas Pipeline Company
None
Permit to cross CR 143.
25-BR-111
Brazoria County, TX
Jack A. Russo and Mildred M Russo (husband and wife)
South Texas Pipeline Company
v1427/p577
A 35' wide right of way for (2) pipelines.
25-BR-111A
Brazoria County, TX
Daniel E. Dare and Maureen Dare (husband and wife)
South Texas Pipeline Company
v1431/p736
A 35' wide right of way for (2) pipelines.
25-BR-120
Brazoria County, TX
Louise Read a/k/a Louise Read Ratz
South Texas Pipeline Company
v1428/p359
A 35' wide right of way for (2) pipelines.
25-BR-121
Brazoria County, TX
Rufus McFarlin and Annabell McDeed, individuall and as co executors of the Estate of WG Mc Deed
South Texas Pipeline Company
v1411/p652
A 35' wide right of way for (2) pipelines.
25-BR-121X
Brazoria County, TX
Atchison, Topeka and Santa Fe Railroad Company (BNSF)
South Texas Pipeline Company
None
A right of way for (1) 6" propylene and (1) 8" ethylene pipelines.  NOTE: Product Limitation issues.  CT27748.  MP6+4922.0 near Hastings, TX.  Ownership: BNSF Corporate Support, C/O Gunnar Rasmussen, 2400 Western Central Blvd, P. O. Box 961038, Fort Worth
25-BR-122X
Brazoria County, TX
Brazoria County Commissioners Court
South Texas Pipeline Company
None
Permit to cross CR 413.
25-BR-138
Brazoria County, TX
Rufus McFarlin and Annabell McDeed, individuall and as co executors of the Estate of WG Mc Deed
South Texas Pipeline Company
v1411/p652
A 35' wide right of way for (2) pipelines.
25-BR-016R
Brazoria County, TX
Lula Belle Jenkins
South Texas Pipeline Company
v1408/p1
A 35' wide right of way for (2) pipelines.
25-BR-017R
Brazoria County, TX
Orlan W. O'Day and Blanche O'Day Massey
South Texas Pipeline Company
v1450/p261
A 35' wide right of way for (2) pipelines.
25-BP-017X
Brazoria County, TX
Texas Department of Transportation
South Texas Pipeline Company
None
A right of way for (1) 6" propylene and (1) 8" ethylene pipeline.  Permit No. 79-2910, amending permit No. 78-2229.  May relocate this line with 30 days prior notice.
25-BP-017X
Brazoria County, TX
Texas Department of Transportation
South Texas Pipeline Company
None
Permit No. 78-2229 for (2) pipelines crossing SH 35, 3125' North of Dixie Farm Rd..
25-BP-033
Brazoria County, TX
Swinging "A" Corporation
South Texas Pipeline Company
v1450/p259
A 20' wide right of way for 2 pipelines.
25-BP-030-32
Brazoria County, TX
Arden C. Hill Jr and Fleta Hill (husband and wife)
South Texas Pipeline Company
v1450/p266
A 20' wide right of way for 2 pipelines lying on 34.088 acres out of Section 28, H. T. & B. R. R. Company Survey, A-551.
25-BP-030-32
Brazoria County, TX
Arden C. Hill, Jr
South Texas Pipeline Company
v1450/264
A 20' wide right of way for 2 pipelines lying on 42.719 acres out of G.C. Smith and H. T. & B. R. R. Co. Survey, Sec 28, Abstract 551.
25-BP-32X
Brazoria County, TX
Brazoria County Commissioners Court
South Texas Pipeline Company
None
Pipeline crossing CR 126 (Dixie Farm Rd.).
25-BP-009, 9A
Brazoria County, TX
Alma Barnes Snyder a/k/a Alma Marie Snyder
South Texas Pipeline Company
v1443/p152
A 20' wide right of way for (2) pipelines.
25-BP-009X
Brazoria County, TX
No permit required
No permit required
None
Cowart Creek.  No permit required per Janet Botello with the Corps dated 7/31/03, according Navigable Water List used by the Corps.
25-BP-010
Brazoria County, TX
Wheaton College
South Texas Pipeline Company
v1448/p203
A 20' wide right of way for (2) pipelines.
25-BP-022
Brazoria County, TX
Dr. Thomas R. Sawyer, Trustee
South Texas Pipeline Company
v1471/p752
19.744 acres, being Lot 14, George W. Jenkins Subdivision and S 1/2 of Lots 1 & 2 of Narregang's Subdivision in W. D. C. Hall League, A-70.  Tax ID # R232418, 6750-0001-000.  A 50' wide corridor retained in fee in WD from Oxy to Willow Partners, Ltd., dat
25-BP-022.1
Brazoria County, TX
Oxy Petrochemicals, Inc.
Willow Partners, Ltd.
None
Easement retained.  29.6010  (Dixie Farm Rd. Property) acres located in the W.D.C. Hall League, A-70.  Save and except 1.7060 acres in 50' wide strip.  This is the combined file of BP-022 and BP-023 for the sale of 27.8950 acres located in the W. D. C. Ha
25-BP-023
Brazoria County, TX
W. H. Black, Trustee
South Texas Pipeline Company
v1471/p755
Southeast 10 acres of Lot 25 of the O. W. Willets Subdivision, W. D. C. Hall League, A-70.  This property being part of property sold from Oxy to Willow Partners, Ltd., dated 11/25/97.  A 50' strip retained in fee and described as 29.6010 acres in W. D. C
25-BP-024
Brazoria County, TX
Floyd N Brown Jr., et al
South Texas Pipeline Company
v1453/p429
A 20' wide right of way for 2 pipelines.
25-BR-158A
Brazoria County, TX
William J. Wise, Trustee
South Texas Pipeline Company
v1440/p613
A 20' wide right of way for 2 pipelines
25-BR-158A
Brazoria County, TX
William J. Wise, Trustee
South Texas Pipeline Company
v1440/p610
A 20' wide right of way for(2) pipelines.
25-BR-158A
Brazoria County, TX
William J. Wise, Trustee
South Texas Pipeline Company
v1462/p468
Being a 150' by 150' part of Lot 18 of the Jenkins Subdivision, W.D.C. Hall Survey, A-70, for a microwave tower acquired in fee.  NTCE.
25-BR-158X
Brazoria County, TX
Brazoria County Commissioners Court
South Texas Pipeline Company
None
A permit granting permission to install (2) pipelines crossing CR 126 (Dixie Farm Rd.).
25-BR-158XX
Brazoria County, TX
Texas Department of Transportation
South Texas Pipeline Company
None
A right of way for the cathodic protection groundbed at FM 518.  Permit No. 79-3073.
25-BR-158XX
Brazoria County, TX
Texas Department of Transportation
South Texas Pipeline Company
None
Permit No. 78-2909 for (2) pipelines crossing FM 518.
25-BR-165
Brazoria County, TX
George E. Young, individually and as Trustee
South Texas Pipeline Company
v1537/p355
A 10' wide right of way for 2 pipelines
25-BR-165
Brazoria County, TX
George E. Young, Individually and as Trustee and B-2 Towing Company
South Texas Pipeline Company
v1448/p18
A 10' wide right of way for 2 pipelines.
25-BR-166X
Brazoria County, TX
Brazoria County Commissioners Court
South Texas Pipeline Company
None
Permit to cross McDonald Rd..
25-BR-167
Brazoria County, TX
South Corridor One, Ltd
South Texas Pipeline Company
v1455/p266
A 10' wide right of way for 2 pipelines
25-BR-167X
Brazoria County, TX
Brazoria County Commissioners Court
South Texas Pipeline Company
None
Permit to cross Choate Rd..
25-H-001A
Harris County, TX
Clear Creek Property Ltd
South Texas Pipeline Company
###-##-####
A 35' wide right of way for 2 pipelines covering Lots 61,62, & 63 of the Geo W Jenkins subdivision
25-H-001X
Brazoria and Harris
State of Texas General Land Office
South Texas Pipeline Company
###-##-####
ME 3845 for (1) 6" and (1) 8" pipeline.  Clear Creak crossing.  GLO no longer has jurisdiction over this crossing.
25-H-001XX
Brazoria and Harris
Corps of Engineers
South Texas Pipeline Company
None
Permit No. 12592 crossing Clear Creek with (2) pipelines..
25-H-001XXX
Harris County, TX
Harris County Flood Control District
South Texas Pipeline Company
None
Clear Creek.
25-H-001
Harris County, TX
Pearland Sportsmans' Club, Jack Waithall, Trustee
South Texas Pipeline Company
###-##-####
A 35' wide right of way for 2 pipelines.
25-H-002
Harris County, TX
Farm and Home Savings Association
South Texas Pipeline Company
###-##-####
A 35' wide easement for 2 pipelines.
25-H-003
Harris County, TX
Truman B. Douty, Trustee, et al
South Texas Pipeline Company
###-##-####
A 35' wide right of way for 2 pipelines.
25-H-004
Harris County, TX
United Sports Association of Southeast Houston, Inc.
South Texas Pipeline Company
###-##-####
A 35' wide right of way for 2 pipelines.
25-H-005
Harris County, TX
Ralph L. Lowe
South Texas Pipeline Company
###-##-####
A 35' wide right of way for 2 pipelines.
25-H-005
Harris County, TX
Ralph L. Lowe
South Texas Pipeline Company
###-##-####
A 20' wide right of way for (2) pipelines across lots 67 and 74 of subdivision with 2069 acres in the Perry and Austin Survey, A-55.
25-H-005A
Harris County, TX
Ralph L. Lowe
South Texas Pipeline Company
###-##-####
A 20' wide right of way for (2) pipelines across lots 66 and 67 of subdivision with 2069 acres in the Perry and Austin Survey, A-55.
25-H-005X
Harris County, TX
Harris County Commissioners Court
South Texas Pipeline Company
None
Permit to cross Choate Rd. and Beamer Rd. with (2) pipelines.
25-H-005X
Harris County, TX
Harris County Commissioners Court
Champlin Pipeline Inc., Imperial Pipeline Inc., and SolTex Pipeline Inc.
None
Permit from I-45 to Beamer Rd. for Choate Rd..  Permit No. 1200-4.
25-H-006
Harris County, TX
Republic National Bank of Dallas, Trustee
South Texas Pipeline Company
###-##-####
A 20' wide right of way for 2 pipelines on Lot 66 and 67 out of the Perry and Austin League, A 55.  This easement replaces easement dated 07/05/78 and recorded in ###-##-####.
25-H-008
Harris County, TX
Robert S. Durward and Harrietta Durward
South Texas Pipeline Company
###-##-####
A 20' wide right of way for 2 pipelines.
25-H-008X
Harris County, TX
Harris County Commissioners Court
South Texas Pipeline Company
None
Permit to cross Choate Rd. and Beamer Rd. with (2) pipelines.
25-H-008X
Harris County, TX
Harris County Commissioners Court
Champlin Pipeline Inc., Imperial Pipeline Inc., and SolTex Pipeline Inc
None
Permit from I-45 to Beamer Rd. for Choate Rd..  Permit No. 1200-4.
25-H-008X.1
Harris County, TX
Harris County Commissioners Court
South Texas Pipeline Company
None
Permit to cross Choate Rd. and Beamer Rd. with (2) pipelines.
25-H-008X.1
Harris County, TX
Harris County Commissioners Court
Champlin Pipeline Inc., Imperial Pipeline Inc., and SolTex Pipeline Inc
None
Permit from I-45 to Beamer Rd. for Choate Rd..  Permit No. 1200-4.
25-H-007
Harris County, TX
First International Bank of Houston, N. A., Trustee
South Texas Pipeline Company
###-##-####
A 35' wide right of way for 2 pipelines crossing a tract of 309.26 acres in the WK Smith Survey, Abstract No. 735, being lots 3 through 8.  New ownership: Dixie Farm Partners, LLC, 2310 Baker Rd., Houston, TX 77094-3119.
25-H-009
Harris County, TX
SolTex Polymer Corporation
Champlin Pipeline Inc., Imperial Pipeline Inc., and SolTex Pipeline Inc.
###-##-####
A 6" right of way for a pipeline.
25-H-012, 12.5
Harris County, TX
Exxon Corporation
Oxy Petrochemicals, Inc.
###-##-####
A right of way for (1) 6" and (1) 8" pipeline, a 100' by 100' microwave tower site and a 20' wide roadway.
25-H-012, 12.5
Harris County, TX
Harris County Commissioners Court
South Texas Pipeline Company
None
Building Permit No. 97227 for a microwave tower.
25-H-012, 12.5
Harris County, TX
Exxon Corporation
South Texas Pipeline Company
###-##-####
A right of way for (1) 6" and (1) 8" pipeline, a 100' by 100' microwave tower site and a 10' wide roadway.  This easement is released per agreement dated 02/03/94 and recorded in ###-##-####.
25-H-012.5X
Harris County, TX
Harris County Flood Control District
South Texas Pipeline Company
None
Turkey Creek.
25-H-012.6
Harris County, TX
Emma K. Dixon Trust, et al
South Texas Pipeline Company
###-##-####
A 10' wide right of way for (2) pipelines.
25-H-012.1
Harris County, TX
Exxon Corporation
Oxy Petrochemicals, Inc.
###-##-####
A right of way for (1) 6" and (1) 8" pipeline.  Replaces easement recorded in ###-##-####.
25-H-013X
Harris County, TX
Texas Department of Transportation
South Texas Pipeline Company
None
Permit No. 78-2237 across I-45.
25-H-202
Harris County, TX
Houston Lighting and Power Company
South Texas Pipeline Company
None
A right of way for (2) pipelines crossing HL&P's rights of way at Webster, Bayport, Bertrum-LaPorte, Parrish-Robinson, Bertrom-Webster, Deepwater-Strang-Bertrom, and Deepwater-Bertrom.
25-H-202
Harris County, TX
Houston Lighting and Power Company
South Texas Pipeline Company
None
Letter granting right of way on Bayport Fee ROW and Bertrum-Webster ROW for commencement at Miller Cut-Off Rd. for (2) pipelines.
25-H-014X
Harris County, TX
Texas Department of Transportation
South Texas Pipeline Company
None
Permit No. 78-2233 across SH 3.
25-H-015X
Harris County, TX
Galveston, Houston and Henderson Railroad Company (UPRR)
South Texas Pipeline Company
None
License for (1) 6" propylene pipeline.  MP 17.566 near Webster, TX.  Audit No. GH2208.
25-H-015X
Harris County, TX
Galveston, Houston and Henderson Railroad Company (UPRR)
South Texas Pipeline Company
None
License for (1) 8" ethylene pipeline.  MP 17.566 near Webster, TX.  Audit No. GH2209.
25-HS-001
Harris County, TX
Exxon Corporation, Red Bluff Development Company and Friendswood Development Company
Oxy Petrochemicals, Inc.
###-##-####
A right of way for (1) 6" and (1) 8" pipeline in Corridor 500.  Replaces easement recorded in ###-##-####.
25-HS-001
Harris County, TX
Exxon Corporation, Red Bluff Development Company and Friendswood Development Company
South Texas Pipeline Company
###-##-####
Subject to terms and conditions of easement dated 07/27/78 for Corridor 500.  This easement is released per agreement dated 02/03/94 and recorded at ###-##-####.
25-HS-001
Harris County, TX
Exxon Corporation, Red Bluff Development Company and Friendswood Development Company
South Texas Pipeline Company
None
A right of way for (1) 6" and (1) 8" pipeline in Corridor 500.
25-H-016X
Harris County, TX
Harris County Flood Control District
South Texas Pipeline Company
None
Horse Pen Bayou crossing H. C. F. C. D. No. B-104-00-00.
25-H-017X
Harris County, TX
Harris County Commissioners Court
South Texas Pipeline Company
None
Permit No. 4687 for crossing Genoa Red Bluff Rd..
25-H-017XX
Harris County, TX
Harris County Flood Control District
South Texas Pipeline Company
None
Genoa-Red Bluff Rd..  H.C.F.C. Ditch No. B-116-00-00.
25-H-018X
Harris County, TX
Corps of Engineers
South Texas Pipeline Company
None
Permit No. 12593 crossing Armond Bayou with (2) pipelines.
25-H-019X
Harris County, TX
Harris County Commissioners Court
South Texas Pipeline Company
None
Permit No. 4687 for crossing Red Bluff Rd..
25-H-202.1
Harris County, TX
Houston Lighting and Power Company
South Texas Pipeline Company
None
A right of way for (2) pipelines crossing HL&P's rights of way at Webster, Bayport, Bertrum-LaPorte, Parrish-Robinson, Bertrom-Webster, Deepwater-Strang-Bertrom, and Deepwater-Bertrom.
25-H-020X
Harris County, TX
Coastal Industrial Water Authority
South Texas Pipeline Company
None
Letter giving permission to lay (1) 6" pipeline.
25-H-013
Harris County, TX
Ora M. Ausmus, et al
South Texas Pipeline Company
###-##-####
For a microwave site in La Porte out lots 710 and 711 in the WB Lawrence Subdivision, A-482.
25-H-013
Harris County, TX
Ora M. Ausmus, et al
South Texas Pipeline Company
###-##-####
A 20' wide right of way for (2) pipelines out of LaPorte Outlets 710 and 711, W. B. Lawrence Subdivision, Wlm. M. Jones Survey, A-482.  This easement is released by easement dated 12/12/78 and recorded at ###-##-####.
25-H-013
Harris County, TX
Ora M. Ausmus, et al
South Texas Pipeline Company
###-##-####
A 20' wide right of way for (2) pipelines out of LaPorte Outlets 710 and 711, W. B. Lawrence Subdivision, Wlm. M. Jones Survey, A-482.  This easement is released by easement dated 10/11/78 and recorded at ###-##-####.
25-HS-004
Harris County, TX
Friendswood Development Company
Oxy Petrochemicals, Inc.
###-##-####
A right of way for (2) pipelines.  Releases all rights from easement dated 03/13/79.
25-HS-004
Harris County, TX
Exxon Pipeline Company
South Texas Pipeline Company
None
(2) Corridor agreements for (1) 6" and (1) 8" pipeline to pas through Exxon Corridor.
25-HS-003
Harris County, TX
Friendswood Development Company
Oxy Petrochemicals, Inc.
###-##-####
A right of way for (2) pipelines.  Releases all rights from easement dated 03/13/79.  Corridors 10, 30, 510 and 520.
25-HS-003
Harris County, TX
Exxon Pipeline Company
South Texas Pipeline Company
None
(2) Corridor agreements for (1) 6" and (1) 8" pipeline to pass through the Exxon Corridor.
25-HS-021X
Harris County, TX
Harris County Flood Control District
South Texas Pipeline Company
South Texas Pipeline Company
None
Spring Gully, H. C. F. C. Ditch No. B-109-00-00
25-HS-022X
Harris County, TX
Harris County Commissioners Court
South Texas Pipeline Company
None
Permit to cross Underwood Rd..
25-H-023X
Harris County, TX
Harris County Flood Control District
South Texas Pipeline Company
None
Big Island Slough; H. C. F. C. Ditch No. D-106-00-00.
25-HS-008
Harris County, TX
Friendswood Development Company
Oxy Petrochemicals, Inc.
###-##-####
A right of way for (2) pipelines.  Releases all rights from easement dated 03/13/79.
25-HS-008
Harris County, TX
Exxon Pipeline Company
South Texas Pipeline Company
None
(2) Corridor agreements for (1) 6" and (1) 8" pipeline to pas through Exxon Corridor.
25-H-024X
Harris County, TX
Harris County Commissioners Court
South Texas Pipeline Company
None
Permit No. 4802 for Baypark Rd..
25-H-025X
Harris County, TX
Harris County Commissioners Court
South Texas Pipeline Company
None
Permit to cross Permit No. 4687 for Fairmont Parkway.
25-H-025X.1
Harris County, TX
Harris County Commissioners Court
South Texas Pipeline Company
None
Permit No. 4864 for a cable crossing Fairmont Parkway.
25-HS-005
Harris County, TX
Texas Department of Transportation
South Texas Pipeline Company
None
Permit No. 82-4817 to construct a 10' access driveway facility on highway right of way.  Exxon "fee" tract.
25-H-025XX
Harris County, TX
Harris County Flood Control District
South Texas Pipeline Company
None
West Main (Spencer Highway).  H.C.F.C. Ditch No. A-104-07-00.
25-H-026X
Harris County, TX
Harris County Commissioners Court
South Texas Pipeline Company
None
Permit No. 4687 for W. Main (Spencer Highway).
25-H-027X
Harris County, TX
City of LaPorte
South Texas Pipeline Company
None
Permit to cross North "D" Street
25-H-028X
Harris County, TX
City of Lomax
South Texas Pipeline Company
None
Permit to cross North "H" Street.
25-H-029X
Harris County, TX
City of Lomax
South Texas Pipeline Company
None
Permit to cross North "L" Street
25-H-029XX
Harris County, TX
Harris County Flood Control District
South Texas Pipeline Company
None
North "L" Street.  H.C.F.C. Ditch No. F-101-03-00.
25-H-029XXX
Harris County, TX
Harris County Flood Control District
South Texas Pipeline Company
None
H.C.F.C. Ditch No. F-101-06-00
25-H-030X
Harris County, TX
City of Lomax
South Texas Pipeline Company
None
Permit to cross North "P" Street
25-H-030XX
Harris County, TX
Harris County Flood Control District
South Texas Pipeline Company
None
H.C.F.C. Ditch No. F-101-00-00.
25-H-031X
Harris County, TX
City of Lomax
South Texas Pipeline Company
None
Permit to cross Old LaPorte Rd.
25-H-203X.1
Harris County, TX
Southern Pacific Transportation Company (UPRR)
South Texas Pipeline Company
None
License No. 185458 for (1) 6" propylene and (1) 8" ehtylene pipelines crosisng Galveston Branch Track at MP 19.71 near Link Five, TX
25-H-203X.2
Harris County, TX
Southern Pacific Transportation Company (UPRR)
South Texas Pipeline Company
None
License No. 186572.   A license for (1) 6" propylene and (1) 8" ethylene pipeline at MP 1.32 near Strang, TX on an HL& P spur.
25-H-033X
Harris County, TX
Texas Department of Transportation
South Texas Pipeline Company
None
Permit No. 78-2234 for (1) pipeline crossing SH 225.
25-H-202.2
Harris County, TX
Houston Lighting and Power Company
South Texas Pipeline Company
None
A right of way for (2) pipelines crossing HL&P's rights of way at Webster, Bayport, Bertrum-LaPorte, Parrish-Robinson, Bertrom-Webster, Deepwater-Strang-Bertrom, and Deepwater-Bertrom.
25-H-202.2X
Harris County, TX
E. I. Du Pont De Nemours and Company
Equistar Chemicals, LP
###-##-####
A right of way for (4) 8" and (2) 6" pipelines with 48" of cover in the Enoch Brinson Survey, A-5.  This is the same tract as 27-HA-114.1, 27-H-001 and 27-H-001X.
25-H-202.2X
Harris County, TX
E. I. Du Pont De Nemours and Company
Equistar Chemicals, LP
None
Easement to install and replace (1) 6" and (1) 8" pipelines as well as removing pipe from abandoned 6" and 8" easement-New easement granted on the condition that it obtains a Right of Entry from Reliant Energy (obtained).  Easement is located in the Enoch
25-H-202.2X
Harris County, TX
E. I. Du Pont De Nemours and Company
Equistar Chemicals, LP
###-##-####
T358837.  Lease of .3328 acres for a valve site in the Enoch Brinson Survey, A-5.   This is the same tract as 27-HA-114.1, 27-H-001 and 27-H-001X.
25-H-035X
Harris County, TX
City of LaPorte
South Texas Pipeline Company
None
Permit to cross Strang Rd.
25-H-035XX
Harris County, TX
Harris County Flood Control District
South Texas Pipeline Company
None
Strang Rd..  H.C.F.C. Ditch No. F-103-00-00.
25-H-199X.1
Harris County, TX
Port of Houston Authority
Equistar Chemicals, LP
None
A right of way for (1) 6" and (1) 8" pipeline East of Miller Cut-Off Rd. and other various crossings.  PHA 89-0187, formerly 79-0128.
25-HS-005X
Harris County, TX
Port of Houston Authority
Equistar Chemicals, LP
None
A right of way for (1) 6" and (1) 8" pipeline East of Miller Cut-Off Rd. and other various crossings.  License No. 89-0187, formerly 79-0128.
25-H-199X.2
Harris County, TX
Port of Houston Authority
Equistar Chemicals, LP
None
A right of way for (1) 6" and (1) 8" pipeline East of Miller Cut-Off Rd. and other various crossings.  License No. 89-0187, formerly 79-0128.
25-H-037X
Harris County, TX
Harris County Commissioners Court
South Texas Pipeline Company
None
Permit No. 4802 for Miller Cut-Off Rd..
25-H-202.3
Harris County, TX
Houston Lighting and Power Company
South Texas Pipeline Company
None
A right of way for (2) pipelines crossing HL&P's rights of way at Webster, Bayport, Bertrum-LaPorte, Parrish-Robinson, Bertrom-Webster, Deepwater-Strang-Bertrom, and Deepwater-Bertrom.
25-H-203X.3
Harris County, TX
Port of Houston Authority
South Texas Pipeline Company
None
A right of way for (1) 6" and (1) 8" pipeline East of Miller Cut-Off Rd. and other various crossings.  License No. 79-128.
25-H-202.4
Harris County, TX
Houston Lighting and Power Company
South Texas Pipeline Company
None
A right of way for (2) pipelines crossing HL&P's rights of way at Webster, Bayport, Bertrum-LaPorte, Parrish-Robinson, Bertrom-Webster, Deepwater-Strang-Bertrom, and Deepwater-Bertrom.
25-H-199X
Harris County, TX
Private Rd.
None
None
Private Rd.
25-H-199X.3
Harris County, TX
Port of Houston Authority
South Texas Pipeline Company
None
A right of way for (1) 6" and (1) 8" pipeline East of Miller Cut-Off Rd. and other various crossings.  License No. 89-0187, formerly 79-0128.
25-HC-005
Harris County, TX
Diamond Shamrock Corporation
South Texas Pipeline Company
###-##-####
A right of way for (1) 6" and (1) 8" pipeline.
25-HC-006
Harris County, TX
SolTex Petroleum Corporation
Champlin Pipeline Inc., Imperial Pipeline Inc., and SolTex Pipeline Inc
###-##-####
A right of way for one 8" pipeline for the transportation of ethylene.  New ownership: BP Solvay Polyethylene North America, P. O. Box 1000, Deer Park, TX 77536.
25-HC-006
Harris County, TX
SolTex Polymer Corporation
Champlin Pipeline Inc., Imperial Pipeline Inc., and SolTex Pipeline Inc
###-##-####
A right of way for (1) 6" pipeline.  Ownership: Solvay Chemicals, 3333 Richmond Ave., Houston, TX 77098.
25-H-199X.4
Harris County, TX
Port of Houston Authority
Equistar Chemicals, LP
None
A right of way for (1) 6" and (1) 8" pipeline East of Miller Cut-Off Rd. and other various crossings.  License No. 89-0187, formerly 79-0128.
25-H-202.5
Harris County, TX
Houston Lighting and Power Company
South Texas Pipeline Company
None
A right of way for (2) pipelines crossing HL&P's rights of way at Webster, Bayport, Bertrum-LaPorte, Parrish-Robinson, Bertrom-Webster, Deepwater-Strang-Bertrom, and Deepwater-Bertrom.
25-H-199X.5
Harris County, TX
Port of Houston Authority
Equistar Chemicals, LP
None
A right of way for (1) 6" and (1) 8" pipeline East of Miller Cut-Off Rd. and other various crossings.  License No. 89-0187, formerly 79-0128.
25-H-202.6
Harris County, TX
Houston Lighting and Power Company
South Texas Pipeline Company
None
A right of way for (2) pipelines crossing HL&P's rights of way at Webster, Bayport, Bertrum-LaPorte, Parrish-Robinson, Bertrom-Webster, Deepwater-Strang-Bertrom, and Deepwater-Bertrom.
25-H-199X.6
Harris County, TX
Port of Houston Authority
Equistar Chemicals, LP
None
A right of way for (1) 6" and (1) 8" pipeline East of Miller Cut-Off Rd. and other various crossings.  License No. 89-0187, formerly 79-0128.
25-H-202.7
Harris County, TX
Houston Lighting and Power Company
South Texas Pipeline Company
None
A right of way for (2) pipelines crossing HL&P's rights of way at Webster, Bayport, Bertrum-LaPorte, Parrish-Robinson, Bertrom-Webster, Deepwater-Strang-Bertrom, and Deepwater-Bertrom.
25-HS-007
Harris County, TX
Exxon Pipeline Company
South Texas Pipeline Company
None
(2) Corridor agreements for (1) 6" and (1) 8" pipeline to pas through Exxon Corridor.
25-HS-007
Harris County, TX
Friendswood Development Company
Oxy Petrochemicals, Inc.
###-##-####
A right of way for (2) pipelines.  Releases all rights from easement dated 03/13/79.
25-H-199X.7
Harris County, TX
Port of Houston Authority
Equistar Chemicals, LP
None
A right of way for (1) 6" pipeline across the Port Authority's Southside Main Line, immediately East of SH 134.  File No. 89-0185 (formerly 78-82.)
25-H-199X.7
Harris County, TX
Port of Houston Authority
Cain Chemicals, Inc.
None
A right of way for (1) 8" pipeline across the port authority's Southside main line, East of Battleground Rd..  File No. 89-0186 (formerly 78-0197). A-46.
25-HS-006
Harris County, TX
Exxon Pipeline Company
South Texas Pipeline Company
None
(2) Corridor agreements for (1) 6" and (1) 8" pipeline to pas through Exxon Corridor.
25-HS-006
Harris County, TX
Friendswood Development Company
South Texas Pipeline Company
None
A right of way for (1) 6" pipeline.
25-HS-006
Harris County, TX
Friendswood Development Company
Oxy Petrochemicals, Inc.
###-##-####
A right of way for (2) pipelines.  Releases all rights from easement dated 03/13/79.
25-HC-006.1
Harris County, TX
SolTex Polymer Corporation
Champlin Pipeline Inc., Imperial Pipeline Inc., and SolTex Pipeline Inc.
###-##-####
A right of way for a 8" pipeline for the transportation of ethylene.  Ownership: Solvay Chemicals, 3333 Richmond Ave., Houston, TX 77098.
25-H-202.8
Harris County, TX
Houston Lighting and Power Company
South Texas Pipeline Company
None
A right of way for (2) pipelines crossing HL&P's rights of way at Webster, Bayport, Bertrum-LaPorte, Parrish-Robinson, Bertrom-Webster, Deepwater-Strang-Bertrom, and Deepwater-Bertrom.
25-HS-009
Harris County, TX
Exxon Pipeline Company
South Texas Pipeline Company
None
(2) Corridor agreements for (1) 6" and (1) 8" pipeline to pas through Exxon Corridor.
25-HS-009
Harris County, TX
Friendswood Development Company
Oxy Petrochemicals, Inc.
###-##-####
A right of way for (2) pipelines.  Releases all rights from easement dated 03/13/79.
25-HS-009X
Harris County, TX
Harris County Flood Control District
South Texas Pipeline Company
None
Big Island Slough.  H.C.F.C. Ditch No. B-106-00-00.
25-HS-009X
Harris County, TX
Harris County Flood Control District
South Texas Pipeline Company
None
Big Island Slough.  H.C.F.C. Ditch No. B-106-00-00 on the Celanese Lateral.
25-HS-010
Harris County, TX
Houston Lighting and Power Company
  
None
No file
25-HS-011
Harris County, TX
Celanese Chemical Company
Conoco, Inc.
###-##-####
A 20' wide right of way for (1) pipeline and (1) 50' by 80' metering assembly site.  Notify in writing for any work done.
25-HS-008X
Harris County, TX
Harris County Flood Control District
South Texas Pipeline Company
None
Big Island Slough. H.C.F.C. Ditch No. B-106-00-00.
25-HS-012
Harris County, TX
Exxon Pipeline Company
South Texas Pipeline Company
None
(2) Corridor agreements for (1) 6" and (1) 8" pipeline to pas through Exxon Corridor.
25-HS-012
Harris County, TX
Friendswood Development Company
Oxy Petrochemicals, Inc.
###-##-####
A right of way for (2) pipelines.  Releases all rights from easement dated 03/13/79.
25-HS-013
Harris County, TX
ICI Americas, Inc.
Champlin Pipeline Inc., Imperial Pipeline Inc., and SolTex Pipeline Inc.
###-##-####
A right of way for (1) pipeline and valve site.  Equistar now owns this tract of land.  Cain purchased.
25-HS-013
Harris County, TX
ICI Americas, Inc.
Cain Chemicals, Inc.
###-##-####
Grant of (8) non-exclusive easements to Cain.    This tract acquired by Cain 7/7/87.
25-HS-013
Harris County, TX
ICI Americas, Inc.
Champlin Pipeline Inc., Imperial Pipeline Inc., and SolTex Pipeline Inc.
None
A right of way for a microwave building and tower site.
25-H-202.9
Harris County, TX
Houston Lighting and Power Company
South Texas Pipeline Company
None
A right of way for (2) pipelines crossing HL&P's rights of way at Webster, Bayport, Bertrum-LaPorte, Parrish-Robinson, Bertrom-Webster, Deepwater-Strang-Bertrom, and Deepwater-Bertrom.
25-HS-004X
Harris County, TX
Southern Pacific Railroad Company (UPRR)
  
None
Bay Area Boulevard on 6" products lateral.  Line currently not in use.  License will not be acquired per ROW meeting 02/02/04.
25-HC-013
Harris County, TX
Hercules, Inc.
South Texas Pipeline Company
None
A 50' wide right of way for (1) 6" pipeline.
25-HC-013
Harris County, TX
Hercules, Inc.
Champlin Pipeline Inc., Imperial Pipeline Inc., and SolTex Pipeline Inc.
###-##-####
A 50' wide right of way for (1) pipeline with 36" of cover.
25-HC-013
Harris County, TX
Hercules, Inc.
South Texas Pipeline Company
None
A 70' by 30' surface site.  Do not have signed and recorded document in file.
25-1113
Harris County, TX
Exxon Pipeline Company
Champlin Pipeline Inc., Imperial Pipeline Inc., and SolTex Pipeline Inc.
###-##-####
A right of way for (1) pipeline.
25-1112
Harris County, TX
Southern Pacific Transportation Company (UPRR)
Champlin Petroleum Company
None
Audit No. 190173 for a 4" propylene pipeline.  MP 22.66 in Strang, TX.  Ownership: UPRC, C/O Joan Preble, 1800 Farnam St., Omaha, NE 68102.
25-1109-1110
Harris County, TX
E. I. Du Pont De Nemours and Company
Imperial Pipeline, Inc.
###-##-####
A right of way for (1) pipeline across a portion of Du Pont's Deer Park Plant.
25-1111
Harris County, TX
Port of Houston Authority
Equistar Chemicals, LP
None
(1) 4" propylene pipeline.  PHA 2000-0176 (formerly 80-0156 and 89-0188).
25-1108
Harris County, TX
Harris County Commissioners Court
Champlin Pipeline Inc., Imperial Pipeline Inc., and SolTex Pipeline Inc.
None
Permit No. 6467 for Miller Cut-Off Rd..
25-1107, 1107A
Harris County, TX
Air Products and Chemicals, Inc.
Champlin Pipeline Inc., Imperial Pipeline Inc., and SolTex Pipeline Inc.
None
A 10" wide right of way for (1) pipeline.
25-1107, 1107A
Harris County, TX
Air Products and Chemicals, Inc.
Champlin Pipeline Inc., Imperial Pipeline Inc., and SolTex Pipeline Inc.
None
A 10" wide right of way for (1) pipeline.
25-1106
Harris County, TX
A-B Chemical Corporation
Champlin Pipeline Inc., Imperial Pipeline Inc., and SolTex Pipeline Inc.
###-##-####
A 3' wide right of way for (1) 4" pipeline.
25-1105A
Harris County, TX
Houston Lighting and Power Company
Champlin Pipeline Inc., Imperial Pipeline Inc., and SolTex Pipeline Inc
###-##-####
A right of way for a 4" pipeline.
25-1105A
Harris County, TX
Houston Lighting and Power Company
Champlin Pipeline Inc., Imperial Pipeline Inc., and SolTex Pipeline Inc
###-##-####
A right of way for a 4" pipeline.
25-1105X.1
Harris County, TX
Houston Lighting and Power Company
Champlin Pipeline Inc., Imperial Pipeline Inc., and SolTex Pipeline Inc.
###-##-####
A right of way for a 4" pipeline.
25-1105X.1
Harris County, TX
Houston Lighting and Power Company
Champlin Pipeline Inc., Imperial Pipeline Inc., and SolTex Pipeline Inc.
###-##-####
A right of way for a 4" pipeline.
25-1104
Harris County, TX
Southern Pacific Transportation Company (UPRR)
Champlin Pipeline Inc., Imperial Pipeline Inc., and SolTex Pipeline Inc.
None
Audit No. 190172 for a 4" propylene pipeline.  MP 2.44.  Crossing HL&P Lead Track near Strang, TX.  Ownership: UPRC, C/O Joan Preble, 1800 Farnam St., Omaha, NE 68102.
25-1103
Harris County, TX
Pearsale Chemical Corporation
Champlin Pipeline Inc., Imperial Pipeline Inc., and SolTex Pipeline Inc.
###-##-####
A 3' wide right of way for (1) pipeline.
25-1102
Harris County, TX
USS Novamont, Inc.
Champlin Pipeline Inc., Imperial Pipeline Inc., and SolTex Pipeline Inc.
###-##-####
A right of way for a 4.5" pipeline.  Ownership: Sunoco Chemicals, C/O Bruce Davis, 1801 Market St., Philadelphia, PA 19103.
25-1101
Harris County, TX
USS Novamont, Inc.
Champlin Pipeline Inc., Imperial Pipeline Inc., and SolTex Pipeline Inc.
###-##-####
A right of way for a 4.5" pipeline and a 30' by 89' valve site.  Ownership: Sunoco Chemicals, C/O Bruce Davis, 1801 Market St., Philadelphia, PA 19103.
26-BR-001
Brazoria County, TX
Monsanto Co.
Conoco, Inc.
v1601/p26
Chocolate Bayou Facilities Lease.  Documents regarding specifics, including the restoration of plant and dock with improvements.  Consent is conditional.  Rental payments and amount paid is determined by appraisers per 5 year periods, and is complicated.
26-BR-001
Brazoria County, TX
Monsanto Company
Conoco, Inc.
v1677/p511
A 15' wide right of way for (1) 10" pipeline.
26-BR-001X
Brazoria County, TX
State of Texas General Land Office
Equistar Chemicals, LP
1574621
ME 810230 for a 30' wide right of way in Chocolate Bayou for (1) 10" ethylene pipeline.
26-BR-001XX
Brazoria County, TX
Corps of Engineers
Conoco, Inc.
None
Permit No. 15859 and No. 14114/20 crossing Chocolate Bayou with (1) 10" pipeline.
26-BR-001XXX
Brazoria County, TX
Chocolate Bayou Water Company
Cain Chemicals, Inc.
89684-394
Permit No. 1324, Permit No. 1256B and Permit No. 1256A
26-BR-002
Brazoria County, TX
W. Cecil Sisson
Conoco, Inc.
v1633/p739
A 30' wide right of way.
26-BR-002.1
Brazoria County, TX
Dow Chemical Company
Conoco, Inc.
v86356/p324
Amendment substitutes as built marked "exhibit I"
26-BR-003
Brazoria County, TX
Republic National Bank, individual executor and Trustee for the Estate of Wirt Davis, deceased, and Wirt Davis II, as agent and atty in fact for Mrs. Kate Davis
Dow Chemical Company
v1070/p838
A 50' wide right of way.
26-BR-003X
Brazoria County, TX
I. P. Farms, Inc.
Conoco, Inc.
None
South Texas Water Canal, a. k. a Rice Canal
26-BR-004
Brazoria County, TX
Texaco, Inc.
Conoco, Inc.
v1772/p660
A .014 acre tract of land for a Block valve site.
26-BR-004
Brazoria County, TX
Texaco, Inc.
Gulf Oils Chemical Company
None
A 30' wide right of way for (1) 6" pipeline with 4' of cover.  Unknown who the current owner is.  Easement is NOT Assignable.
26-BR-004X.1
Brazoria County, TX
Brazoria County Commissioners Court
Conoco, Inc.
None
Permit No. 11 to cross CR 203 and CR 208.
26-BR-004X.2
Brazoria County, TX
Brazoria County Drainage District
Conoco, Inc.
None
Permit approval for crossing the following ditches with a 10" pipeline; Drainage ditches 2, 3, 7, 8 and 9 with a 5' minimum clearance and ditches 10, 11, 12, 13, 14 and 1 with an 8' minimum clearance.
26-BR-004X.3
Brazoria County, TX
I. P. Farms, Inc.
Conoco, Inc.
None
Permit for crossing all Chocolate Bayou Water Canals in the pipeline right of way.
26-BR-005
Brazoria County, TX
Kate W. Davis
Continental Oil Company
v1281/p210
Fee Simple.  3456 acres from J. C. Paul Subdivision of Henry Auction Survey, Abstract 11, and H and H League, Abstract 612.  Same as BR-003.  3456 acres from J. C. Paul Subdivision of Henry Auction Survey, Abstract 11 and H and H League,  Abstract 612.  2
26-BR-005X
Brazoria County, TX
Corps of Engineers
Conoco, Inc.
None
Salt Bayou- This body of water is classified a Section 404 crossing by the Corps and does not require a permit.
26-BR-006
Brazoria County, TX
Texaco, Inc.
Conoco, Inc.
v1682/p917
A 30' wide right of way for (1) 10" pipeline.  Ownership: Texaco, Inc, C/O Matt Hutchison, P. O. Box 1404, Houston, TX 77251-1404
26-BR-006
Brazoria County, TX
Texaco, Inc.
Conoco, Inc.
v1772/p660
A .014 acre tract of land for a Block valve site.
26-BR-007
Brazoria County, TX
Kate W. Davis
Continental Oil Company
v1281/p210
Fee Simple.  3456 acres from J. C. Paul Subdivision of Henry Auction Survey, Abstract 11 and H and H League, Abstract 612.  Same as BR-003.  3456 acres from J. C. Paul Subdivision of Henry Auction Survey, Abstract 11 and H and H League,  Abstract 612.  24
26-BR-007X.1
Brazoria County, TX
I. P. Farms, Inc.
Conoco, Inc.
None
Permit for crossing all Chocolate Bayou Water Canals in the pipeline right of way.
26-BR-007X.2
Brazoria County, TX
I. P. Farms, Inc.
Conoco, Inc.
None
Permit for crossing all Chocolate Bayou Water Canals in the pipeline right of way.
26-BR-007X.3
Brazoria County, TX
Brazoria County Drainage District
Conoco, Inc.
None
Permit approval for crossing the following ditches with a 10" pipeline; Drainage ditches 2, 3, 7, 8 and 9 with a 5' minimum clearance and ditches 10, 11, 12, 13, 14 and 1 with an 8' minimum clearance.
26-BR-008
Brazoria County, TX
Texaco, Inc.
Conoco, Inc.
v1772/p660
A .014 acre tract of land for a Block valve site.
26-BR-008
Brazoria County, TX
Texaco, Inc.
Conoco, Inc.
v1682/p917
A 30' wide right of way for (1) 10" pipeline.  Ownership: U. S. Fish & Wildlife Service, C/O Jennifer Sanchez, 1212 N. Velasco Suite 200, Angleton, TX 77575.
26-BR-008X.1
Brazoria County, TX
I. P. Farms, Inc.
Conoco, Inc.
None
Permit for crossing all Chocolate Bayou Water Canals in the pipeline right of way.
26-BR-008X.2
Brazoria County, TX
I. P. Farms, Inc.
Conoco, Inc.
None
Permit for crossing all Chocolate Bayou Water Canals in the pipeline right of way.
26-BR-008X.3
Brazoria County, TX
Brazoria County Drainage District
Conoco, Inc.
None
Permit approval for crossing the following ditches with a 10" pipeline; Drainage ditches 2, 3, 7, 8 and 9 with a 5' minimum clearance and ditches 10, 11, 12, 13, 14 and 1 with an 8' minimum clearance.
26-BR-008X.4
Brazoria County, TX
Brazoria County Drainage District
Conoco, Inc.
None
Permit approval for crossing the following ditches with a 10" pipeline; Drainage ditches 2, 3, 7, 8 and 9 with a 5' minimum clearance and ditches 10, 11, 12, 13, 14 and 1 with an 8' minimum clearance.
26-BR-008X.5
Brazoria County, TX
Brazoria County Drainage District
Conoco, Inc.
None
Permit approval for crossing the following ditches with a 10" pipeline; Drainage ditches 2, 3, 7, 8 and 9 with a 5' minimum clearance and ditches 10, 11, 12, 13, 14 and 1 with an 8' minimum clearance.
26-BR-008X.6
Brazoria County, TX
Texas Department of Transportation
None
None
No permit in file to cross FM 1561 which is now FM 2004.  Letter in file states no permit was acquired and it says that is was NOT needed.
26-BR-008X.7
Brazoria County, TX
Brazoria County Drainage District
Conoco, Inc.
None
Permit approval for crossing the following ditches with a 10" pipeline; Drainage ditches 2, 3, 7, 8 and 9 with a 5' minimum clearance and ditches 10, 11, 12, 13, 14 and 1 with an 8' minimum clearance.
26-BR-008X.8
Brazoria County, TX
Brazoria County Commissioners Court
Conoco, Inc.
None
Permit to cross CR 203 and 208.
26-BR-008X.9
Brazoria County, TX
Brazoria County Drainage District
Conoco, Inc.
None
Permit approval for crossing the following ditches with a 10" pipeline; Drainage ditches 2, 3, 7, 8 and 9 with a 5' minimum clearance and ditches 10, 11, 12, 13, 14 and 1 with an 8' minimum clearance.
26-BR-008X.10
Brazoria County, TX
Brazoria County Drainage District
Conoco, Inc.
None
Permit approval for crossing the following ditches with a 10" pipeline; Drainage ditches 2, 3, 7, 8 and 9 with a 5' minimum clearance and ditches 10, 11, 12, 13, 14 and 1 with an 8' minimum clearance.
26-BR-008X.11
Brazoria County, TX
Brazoria County Drainage District
Conoco, Inc.
None
Permit approval for crossing the following ditches with a 10" pipeline; Drainage ditches 2, 3, 7, 8 and 9 with a 5' minimum clearance and ditches 10, 11, 12, 13, 14 and 1 with an 8' minimum clearance.
26-BR-008X.12
Brazoria County, TX
Brazoria County Drainage District
Conoco, Inc.
None
Permit approval for crossing the following ditches with a 10" pipeline; Drainage ditches 2, 3, 7, 8 and 9 with a 5' minimum clearance and ditches 10, 11, 12, 13, 14 and 1 with an 8' minimum clearance.
26-BR-008X.13
Brazoria County, TX
Brazoria County Drainage District
Conoco, Inc.
None
Permit approval for crossing the following ditches with a 10" pipeline; Drainage ditches 2, 3, 7, 8 and 9 with a 5' minimum clearance and ditches 10, 11, 12, 13, 14 and 1 with an 8' minimum clearance.
26-BR-008X.15A
Brazoria County, TX
State of Texas General Land Office
Equistar Chemicals, LP
03-017959
ME 810231 for (1) 10" pipeline across Austin Bayou.
26-BR-008X.15B
Brazoria County, TX
Corps of Engineers
Cain Chemicals, Inc.
None
Transfer approval of permit No. 15800/002 for Austin Bayou with (1) 10" pipeline.
26-BR-009
Brazoria County, TX
Dow Chemical Company
Conoco, Inc.
v1702/p430
A 10' wide right of way for telephone transmission and communication lines, etc.
26-BR-009
Brazoria County, TX
Dow Chemical Company
Conoco, Inc.
v1633/p754
A right of way for (1) 10" pipeline with 36" of cover that must be 24" between new and existing lines.  Notify prior to any work.
26-BR-009X.1
Brazoria County, TX
State of Texas General Land Office
Equistar Chemicals, LP
03-017958
ME810232  crossing Bastrop Bayou with (1) 10.75" pipeline.
26-BR-009X.2
Brazoria County, TX
Corps of Engineers
Cain Chemicals, Inc.
None
Permit No. 15800/002 crossing Bastop Bayou with (1) 10" pipeline.
26-BR-009X.3
Brazoria County, TX
Angleton Drainage District No. 1
Conoco, Inc.
None
Approval letter for a 10.75" pipeline across Austin Bayou.
26-BR-010
Brazoria County, TX
John Albert Madeley, Trustee, et al
Conoco, Inc.
v1668/p744
A right of way for (1) 10" pipeline with 36" of cover.
26-BR-011
Brazoria County, TX
Lucille J. Sahol
Dow Chemical Company
v1059/p507
A right of way with 36" of cover.
26-BR-012
Brazoria County, TX
Maurice Smith, individually and as executor ,  P. M. Smith, Jr., deceased, Mary Jeanette Smith, indiv
Conoco, Inc.
v1674/p383
A 12.5' wide right of way for (1) 10.75" pipeline with 48" of cover
26-BR-013
Brazoria County, TX
John Albert Madeley, Trustee, et al
Conoco, Inc.
v1668/p744
A right of way for (1) 10" pipeline with 36" of cover.  See BR-10 for original documents.
26-BR-013X
Brazoria County, TX
Corps of Engineers
Conoco, Inc.
None
Permit No. 15800/002 across Little Slough with (1) 10" pipeline.
26-BR-014
Brazoria County, TX
Eugene J. Wilson, Helen Hawkins, co-executors of Mildrid Harris and attorney for Josephine Wilson
Dow Chemical Company
v1069/p198
A 40' wide right of way with 30" of cover.
26-BR-015
Brazoria County, TX
Valley I. Kramer
Dow Chemical Company
v1069/p194
A 40' wide right of way.
26-BR-016
Brazoria County, TX
W. J. Boggs and Betty Boggs, husband and wife
Dow Chemical Company
v1061/p56
A right of way for pipelines within a 25 acre tract.
26-BR-016.1
Brazoria County, TX
Margaret Boggs Milhoan and Carl L. Milhoan
Dow Chemical Company
v1061/p80
A right of way for pipelines within a 25 acre tract.
26-BR-017
Brazoria County, TX
Amoco Chemicals Company
Dow Chemical Company
v1171/p208
Corrects v1068/p360.  Adjusted easements says a 60' wide and 23.93 rods.
26-BR-018
Brazoria County, TX
C. A. Moller and Minnie S. Moller
Dow Chemical Company
v1536/p784
A 30' wide right of way for pipelines.
26-BR-019
Brazoria County, TX
Eugene Rich Sr. & Doris Rich
Dow Chemical Company
v1069/p182
A right of way within a 107.5 acre tract for pipelines.
26-BR-019XX
Brazoria County, TX
Corps of Engineers
Conoco, Inc.
None
Big Slough- This body of water is classified as Section 404 crossing by the Corps and does not require a permit.
26-BR-020
Brazoria County, TX
W. O. Hudgins and Sibyl Hudgins
Dow Chemical Company
v1059/p503
A right of way with additional line rights.
26-BR-020X
Brazoria County, TX
Brazoria County Commissioners Court
Conoco, Inc.
None
A right of way for (1) 10.75" gas products line for the crossing of CR  232.
26-BR-021
Brazoria County, TX
Mary Lee Hudgins, a widow
Dow Chemical Company
v1061/p52
A right of way with 30" of cover in the J. E. Groce League, Abstract 66.  Multiple line rights for additional consideration.
26-BR-022
Brazoria County, TX
Dow Chemical Company
Conoco, Inc.
v1633/p744
A right of way in the J. E. Groce League, Abstract 66.  Width of pipeline will equal the ground occupied with 36" of cover.  Ownership: BP Amoco Chemicals/ BP America Inc., C/O Marcie Foster, P. O. Box 3092, Houston, TX 77253-3092.
26-BR-022X
Brazoria County, TX
Texas Department of Transportation
Conoco, Inc.
None
Permit No. 81-7026 for (2) 10" pipelines.  Crossing of FM 523, 947' Southeast of CR  226.
26-BR-023
Brazoria County, TX
Mrs. Carrie S. Brock, et al
Dow Chemical Company
v775/p594
Brock Lease
26-BR-023X
Brazoria County, TX
Houston Lighting and Power Company
Conoco, Inc.
None
No right of way is required for this crossing.  See memo for more information.
26-BR-023.1
Brazoria County, TX
Dow Chemical Company
Conoco, Inc.
v1659/p27
A right of way for (1) 10" and (1) 6" pipeline.
26-BR-024
Brazoria County, TX
Dow Chemical Company
Conoco, Inc.
v1633/p754
A right of way for (1) 10" pipeline with 36" of cover that must be 24" between new and existing lines.  Notify prior to any work.  See file 26-BR-Assignments and Mergers for assignment.
26-BR-024
Brazoria County, TX
Dow Chemical Company
Conoco, Inc.
v1702/p430
A 10' wide right of way for telephone transmission and communication lines, etc.
26-BR-024X.1A
Brazoria County, TX
State of Texas General Land Office
Equistar Chemicals, LP
-248669
ME 810234 across Oyster Creek for (1) 10" ethylene pipeline.
26-BR-024X.1B
Brazoria County, TX
Corps of Engineers
Conoco, Inc.
None
Permit No. 15859 across Oyster Creek with (1) 10" pipeline.
26-BR-024X.2
Brazoria County, TX
Valesco Drainage District
Conoco, Inc.
None
A right of way for (1) 10.75.00 pipeline.  Multiple crossings.
26-BR-024X.3
Brazoria County, TX
Valesco Drainage District
Conoco, Inc.
None
A right of way for (1) 10.75" pipeline.
26-BR-024X.4
Brazoria County, TX
Houston Lighting and Power Company
Conoco, Inc.
None
No right of way is required for this crossing.  See memo for more information.
26-BR-024X.5
Brazoria County, TX
Brazoria County Commissioners Court
Conoco, Inc.
None
Permit to cross CR 434.
26-BR-024X.6
Brazoria County, TX
Missouri Pacific Railroad Company (UPRR)
Conoco, Inc.
None
License  for (1) 10" Ethylene pipeline.  Audit No. CA83653.  MP 10.2 in Clute, TX.  Folder No. 1206-56.
26-BR-024X.7
Brazoria County, TX
Houston Lighting and Power Company
Conoco, Inc.
None
No right of way is required for this crossing.  See memo for more information.
26-BR-024X.8
Brazoria County, TX
Texas Department of Transportation
Conoco, Inc.
None
Permit No. 81-7025.  A permit to cross South of Plantation Rd. on State Highway 288.
26-BR-024X.9
Brazoria County, TX
City of Clute, Texas
Conoco, Inc.
None
Commerce Street and Brockman Rd..  Note to file: City purges files every five years.  Pipeline is covered under Dow Partial Assignment of Leasehold in BR-023.
26-BR-024X.10
Brazoria County, TX
Texas Department of Transportation
Conoco, Inc.
None
Permit No. 81-7024 for a 10" pipeline across State Highway 332.
26-BR-024X.11
Brazoria County, TX
Valesco Drainage District
Conoco, Inc.
None
A right of way for (1) 10.75" pipeline.
26-BR-024X.16
Brazoria County, TX
Houston Lighting and Power Company
Conoco, Inc.
None
No right of way is required for this crossing.  See memo for more information.
26-BR-024X.17
Brazoria County, TX
Corps of Engineers
Conoco, Inc.
None
Flagg Lake: This body of water is classified as Section 404 crossing by the Corps and does not require a permit.
26-BR-024X.19
Brazoria County, TX
Valesco Drainage District
Conoco, Inc.
None
A right of way for (1) 10.75" pipeline.
26-BR-024X.20
Brazoria County, TX
Valesco Drainage District
Conoco, Inc.
None
A right of way for (1) 10.75" pipeline.
26-BR-024X.21A
Brazoria County, TX
State of Texas General Land Office
Equistar Chemicals, LP
-248303
ME 810235 for (1) 10" ethylene pipeline in the Brazos River.
26-BR-024X.21B
Brazoria County, TX
Corps of Engineers
Conoco, Inc.
None
Permit No. 14114/18 across the Brazos River with (1) 10" pipeline.
26-BR-024X.21B
Brazoria County, TX
Corps of Engineers
Conoco, Inc.
None
Permit No. 15859 across the  Brazos River with (1) 10" pipeline.
26-BR-025
Brazoria County, TX
Bertha Spencer
Conoco, Inc.
v1594/p71
A 30' wide right of way for (1) 10" pipeline.
26-BR-025
Brazoria County, TX
Bertha Spencer
Conoco, Inc.
v1654/p794
A 20' by 35' valve site.
26-BR-025X
Brazoria County, TX
Brazoria County Commissioners Court
Conoco, Inc.
None
Permit to cross CR 400
26-BR-026
Brazoria County, TX
Robert W. Spencer
Conoco, Inc.
v1613/p647
A 30' wide right of way for (1) 10" pipeline.
26-BR-026
Brazoria County, TX
Quida Spencer Capps
Conoco, Inc.
v1613/p639
A 30' wide right of way for (1) 10" pipeline.
26-BR-026X
Brazoria County, TX
Corps of Engineers
Conoco, Inc.
None
Jones Creek: This body of water is classified a Section 404 crossing by the Corps and does not require a permit.
26-BR-027
Brazoria County, TX
Barry D. Bailey and wife Judy L. Bailey
Conoco, Inc.
v1651/p442
A 30' wide right of way for (1) 10" pipeline.
26-BR-028
Brazoria County, TX
Cuthbert C. Burton and wife  V. Lou Burton
Conoco, Inc.
v1591/p657
A 30' wide right of way for (1) 10" pipeline.
26-BR-029
Brazoria County, TX
Harold S. Dingle
Conoco, Inc.
v1596/p298
A 30' wide right of way for (1) 10" pipeline.
26-BR-030
Brazoria County, TX
Malcolm S. Bauer
Conoco, Inc.
v1594/p65
A 30' wide right of way for (1) 10" pipeline with 36" of cover.
26-BR-030X
Brazoria County, TX
Brazoria County Commissioners Court
Conoco, Inc.
None
Permit crossing CR 304.
26-BR-031
Brazoria County, TX
Harold S. Dingle
Conoco, Inc.
v1596/p298
A 30' wide right of way for (1) 10" pipeline.  See BR-29 for more information.
26-BR-031X.1A
Brazoria County, TX
Texas Department of Transportation
Conoco, Inc.
None
Permit No. 81-7023 crossing SH 36.
26-BR-031X.1B
Brazoria County, TX
Village of Jones Creek
Cain Chemicals, Inc.
None
Letter reflects city ordinance, permit No. 148 which required resolution by the city board to approve assignment to Cain Chemical, Inc.  Letter also provides permit for SH 36 which is in-city.
26-BR-031X.2
Brazoria County, TX
Brazoria County Commissioners Court
Conoco, Inc.
None
Permit to cross  CR 301.
26-BR-032
Brazoria County, TX
C. D. C. Properties
Conoco, Inc.
v1585/p317
A 30' wide right of way with "plow depth" cover.
26-BR-033
Brazoria County, TX
R. L. McKnight, Jr., Irene Blake Hardesty, Gordon Weisser
Conoco, Inc.
v1584/p565
A right of way across 14.25 acres in the Stephen Austin Survey, Abstract 20.  Multiple line rights for additional consideration.
26-BR-034
Brazoria County, TX
Seadock, Inc.
Conoco, Inc.
v1653/p536
A  30' wide right of way for (1) 10" pipeline with 36" of cover. Property now owned by Texas Parks and Wildlife Dept.  Owership: Texas Parks & Wildlife, C/O John Foschee, 4200 Smith School Rd., Austin, TX 78744-3291.
26-BR-035
Brazoria County, TX
Phillips Petroleum Company
Continental Oil Company
v1612/p986
A 30' wide right of way with 36" of cover.
26-BR-035
Brazoria County, TX
Phillips Petroleum Company
Oxy Petrochemicals, Inc.
96-013979
A 15' by 20' surface site.
26-BR-036
Brazoria County, TX
Texas Board of Corrections
Conoco, Inc.
v1651/p658
A 30' wide right of way for one pipeline.
26-BR-036
Brazoria County, TX
Texas Board of Criminal Justice
Phillips Petroleum Company
92-29224
29 acres for pipeline metering site (Clemens Unit).  Letter in file grants permission from Phillips to the Texas Department of Criminal Justice to install Oxy Communications Tower in Phillip's easement.
26-BR-036X
Brazoria County, TX
Texas Department of Transportation
Conoco, Inc.
81-7022
Permit No.81-7022, control 2524 Section 2 for a 10" pipeline.  Highway FM 2611 with (4) locations between FM 2918-SH 36.
26-BR-036X.2
Brazoria County, TX
Brazoria County Commissioners Court
Conoco, Inc.
None
Permit crossing CR 311.
26-BR-037
Brazoria County, TX
Raymond Ward, Ethel Dunn, Delores Edwards
Conoco, Inc.
v1599/p97
A 30' wide right of way for pipelines.  There are 4 counterparts for this document.
26-BR-038
Brazoria County, TX
Lorenzo Ferneil, Jr., Helen Girtman and Bobbie Ray Ferneil (Forneil Family Heirs)
Conoco, Inc.
v1606/p160
A 30' wide right of way for pipelines.  There are 6 counterparts for this document.
26-BR-039
Brazoria County, TX
Lupe Randon, et al (Caesar Goodwin Heirs)
Conoco, Inc.
v1597/p748
A 30' wide right of way for pipelines.  There are 2 counterparts for this document.
26-BR-039X
Brazoria County, TX
Brazoria County Commissioners Court
Conoco, Inc.
None
Permit crossing CR 629
26-BR-040
Brazoria County, TX
Lue Ella Randon, et al
Conoco, Inc.
v1599/p990
A 30' wide right of way.  There is one counterpart for this document.
26-BR-041
Brazoria County, TX
Frankie Ward
Conoco, Inc.
v1612/p989
A 30' wide right of way.  There are 5 counterparts for this document.
26-BR-041X
Brazoria County, TX
Brazoria County Commissioners Court
Conoco, Inc.
None
Permit to cross CR  432.
26-BR-042
Brazoria County, TX
Stephen S. Perry, Jr.
Conoco, Inc.
v1666/p647
A 10' wide right of way with 48" of cover.
26-BR-043
Brazoria County, TX
Gregory H. Laughlin
Conoco, Inc.
v1608/p315
A 20' wide right of way for a 10.75" pipeline.
26-BR-043X
Brazoria County, TX
Texas Department of Transportation
Conoco, Inc.
None
Permit No. 81-7022, for a 10" pipeline crossing FM 2611(4) times between FM 2918 and SH 36.
26-BR-044
Brazoria County, TX
Oral R. Ferris and wife Marie Ferris
Conoco, Inc.
v1610/p264
A 30' wide right of way.
26-BR-045
Brazoria County, TX
Eugene Christian
Conoco, Inc.
v1641/p308
A 30' wide right of way.
26-BR-046
Brazoria County, TX
James L. Christian
Conoco, Inc.
v1650/p828
A 30' wide right of way for a 10" pipeline.
26-BR-047
Brazoria County, TX
Marlene Mays Clark Forrester
Conoco, Inc.
v1641/p689
A 30' wide right of way for (1) 10" pipeline with 36" of cover.
26-BR-047X
Brazoria County, TX
State of Texas General Land Office
Equistar Chemicals, LP
-247938
ME 810236 across the San Bernard River for (1) 10" ethylene pipeline.
26-BR-047XX
Brazoria County, TX
Corps of Engineers
Conoco, Inc.
None
Permit No. 15858 across the San Bernard River with (1) 10" pipeline.
26-BR-047XX
Brazoria County, TX
Corps of Engineers
Conoco, Inc.
None
Permit No. 1411/19 across San Bernard River with (1) 10" pipeline.
26-BR-048
Brazoria County, TX
Bettylee Hampil and Terese Hampil Charlton
Conoco, Inc.
v1619/p673
A 30' wide right of way.
26-BR-048X
Brazoria County, TX
Texas Department of Transportation
Conoco, Inc.
None
Permit No. 81-7022 for a 10" pipeline crossing FM 2611 (4) times between FM 2918 and SH 36.
26-BR-048XX
Brazoria County, TX
Brazoria County Commissioners Court
Conoco, Inc.
None
Permit crossing CR 659.
26-BR-049
Brazoria County, TX
Carl F. Fink, Jr. and Douglas Allums
Conoco, Inc.
v1619/p662
A 30' wide right of way with 48" of cover.  Consent requires 60 days written notice.
26-BR-049
Brazoria County, TX
Carl F. Fink, Jr. and Douglas Allums
Conoco, Inc.
v1650/p831
A 20' by 30' valve site easement.
26-BR-049X
Brazoria County, TX
Texas Department of Transportation
Conoco, Inc.
None
Permit No. 81-7022 for a 10" pipeline crossing FM 2611 (4) times between FM 2918 and SH 36.
26-BR-050
Brazoria County, TX
St. Joseph Hospital Foundation
Conoco, Inc.
v1619/p678
A 30' wide right of way for (1) 11" pipeline with 48" of cover.  Easement restricts above ground appurtenances to vents, manholes and cathodic protection only.
26-BR-050X
Brazoria County, TX
Houston Lighting and Power Company
Conoco, Inc.
None
No right of way is required for this crossing.  See memo for more information.
26-BR-050XX
Brazoria County, TX
Texas Department of Transportation
Conoco, Inc.
None
Permit No. 81-7021, control No. 2939 along FM 2918, SW of FM 2611 for a 10" pipeline.
26-BR-051
Brazoria County, TX
Carl F. Fink, Jr. and Douglas Allums
Conoco, Inc.
v1619/p662
A 30' wide right of way with 48" of cover.
26-BR-051X
Brazoria County, TX
Houston Lighting and Power Company
Conoco, Inc.
None
No right of way is required for this crossing.  See memo for more information.
26-BR-052
Brazoria County, TX
Otto A. Berge and wife Evelyn C. Berge
Conoco, Inc.
v1591/p88
A 30' wide right of way for (1) 10" pipeline with 36" of cover.
26-BR-053
Brazoria County, TX
Carl F. Fink, Jr. and Douglas Allums
Conoco, Inc.
v1619/p662
A 30' wide right of way with 48" of cover.
26-BR-054
Brazoria County, TX
Herbert H. Hinkle and wife Lois Jean Hinkle
Conoco, Inc.
v1647/p785
A 30' wide right of way for (1) 10" pipeline with 48" of cover.  No above ground appurtenances.
26-BR-054X
Brazoria County, TX
Corps of Engineers
Conoco, Inc.
None
Cocklebur Slough: This body of water is classified Section 404 crossing by the Corps and does not require a permit.
26-BR-055
Brazoria County, TX
Charlene C. Padgett, et al
Conoco, Inc.
v1653/p513
A 30' wide right of way for (1) 10.75" pipeline with 48" of cover.
26-BR-056
Brazoria County, TX
Percival T. Beacroft, Jr., individually and as Trustee and Independent executor
Conoco, Inc.
v1601/p474
A 30' wide right of way.
26-BR-057
Brazoria County, TX
Ethel Ducroz Wilson
Conoco, Inc.
v1644/p953
A 30' wide right of way for (1) 10.75" pipeline with 48" of cover.
26-BR-058
Brazoria County, TX
Francis Ann Craig Freeman, et al
Conoco, Inc.
v1653/p526
A right of way for (1) 10.75" pipeline with 48" of cover.
26-BR-058X
Brazoria County, TX
Texas Department of Transportation
Conoco, Inc.
None
Permit No. 81-7020, control 2524 Section 2;  for a 10" pipeline on FM 2611, NE of CR  306
26-BR-059
Brazoria County, TX
Henrietta S. Glick
Continental Oil Company
v1595/p332
A 30' wide right of way with 48" of cover.  No above ground appurtenances.  Acknowledgement missing.  V1595/p333.
26-BR-060
Brazoria County, TX
Johnnie Dudley Glick
Continental Oil Company
v1595/p336
A 30' wide right of way with 48" of cover.
26-BR-061
Brazoria County, TX
Francis S. Glick
Continental Oil Company
v1595/p340
A 30' wide right of way with 48" of cover.  No above ground appurtenances.
26-BR-062
Brazoria County, TX
Henrietta S. Glick
Continental Oil Company
v1595/p332
A 30' wide right of way with 48" of cover. No above ground appurtenances.  Acknowledgment missing v1595/p333.
26-BR-062X
Brazoria County, TX
State of Texas General Land Office
Equistar Chemicals, LP
3001217
ME 810237 for (1) 10" pipeline crossing Cedar Lake Creek.
26-BR-062XX
Brazoria County, TX
Corps of Engineers
Conoco, Inc.
None
Permit No. 15858 across Cedar Lake Creek with (1) 10" pipeline.
26-MA-063
Matagorda County, TX
Lucile Craig Foreman, individually and as executrix of the Estate of John H. Craig, Sr., et al
Conoco, Inc.
v708/p877
A 30' wide right of way for (1) 10" pipeline with 48" of cover.  See 26-MA-Assignments and mergers for assignment.
26-MA-064
Matagorda County, TX
Dow Chemical Company
Conoco, Inc.
v701/p650
A right of way for (1) 10" pipeline with 36" of cover.  (5) pages of special instruments.  Limits right of way occupied by pipeline.  See 26-MA-Assignments and mergers for assignment.
26-MA-064X
Matagorda County, TX
Texas Department of Transportation
Conoco, Inc.
None
Permit to cross SH 457, Abstract No. 56 crossing.  (1) 10" pipeline only.  Permit No. 81-7019.  See 26-MA-Assignments and mergers for assignment.
26-MA-065
Matagorda County, TX
Estate of Willie Lou Stevens and Anna Ve Stevens Farr Trust
Conoco, Inc.
v693/p371
A 30' right of way for (1) 10" pipeline with 48" of cover.  $50 per assignment.  Consent obtained via notification to Cain Chemical assignment.  See 26-MA-Assignments and mergers for assignment.
26-MA-065X.1
Matagorda County, TX
State of Texas General Land Office
Equistar Chemicals, LP
30106
ME 810238 crossing Caney Creek with (1) 10" pipeline.
26-MA-065X.2
Matagorda County, TX
Corps of Engineers
Conoco, Inc.
None
Permit No. 15858 across Caney Creek with (1) 10" pipeline.
26-MA-065X.3
Matagorda County, TX
Houston Lighting and Power Company
Conoco, Inc.
None
A right of way for (1) 10" pipeline.  No objection letter to the right of way with landowner approval.    See 26-MA-Assignments and mergers for assignment.
26-MA-066
Matagorda County, TX
Joe C. Yelderman
Conoco, Inc.
v93/p826
A right of way for a pipeline, cathodic protection and appurtenances.  See 26-MA-Assignments and mergers for assignment.
26-MA-066
Matagorda County, TX
Carolyn Yelderman Waters, Trustee Exec., et al
Conoco, Inc.
v688/p72
A 1' wide right of way for (1) 10" pipeline with 48" of cover on the same space as HL&P  No above ground appurtenances except markers.  See.
26-MA-066X
Matagorda County, TX
Houston Lighting and Power Company
Conoco, Inc.
None
A right of way for (1) 10" pipeline.  No objection letter to the right of way with landowner approval.  See 26-MA-Assignments and mergers for assignment.
26-MA-067
Matagorda County, TX
Frank H. Lewis, individually and Trustee, J. C. Lewis Family Trust (1974), et al
Conoco, Inc.
v714/p810
A 100' wide right of way for (1) 10" pipeline with 48" of cover and (1) Block valve site.  See 26-MA-Assignments and mergers for assignment.
26-MA-067X
Matagorda County, TX
Houston Lighting and Power Company
Conoco, Inc.
None
A right of way for (1) 10" pipeline.  No objection letter to the right of way with landowner approval.    See 26-MA-Assignments and mergers for assignment.
26-MA-067XX
Matagorda County, TX
Houston Lighting and Power Company
Conoco, Inc.
None
A right of way for (1) 10" pipeline.  No objection letter to the right of way with landowner approval.    See 26-MA-Assignments and mergers for assignment.
26-MA-068
Matagorda County, TX
Vineyard  Ranch Company, Inc.
Conoco, Inc.
v691/p152
A 1' wide right of way for (1) 10" pipeline with 48" of cover.  Grantor requests a recorded copy of any assignments within 30 days following its execution.  See 26-MA-Assignments and mergers for assignment.
26-MA-068X
Matagorda County, TX
Corps of Engineers
None
None
Boggy Bayou.  No permit required per Janet Botello with the Corps.
26-MA-068XX
Matagorda County, TX
Houston Lighting and Power Company
Conoco, Inc.
None
A right of way for (1) 10" pipeline.  No objection letter to the right of way with landowner approval.  See 26-MA-Assignments and mergers for assignment.
26-MA-070
Matagorda County, TX
Estate of Willie Lou Stevens, et al
Conoco, Inc.
v693/p359
A 20' wide right of way with 48" of cover.  $50.00 per assignment.  Consent obtained on assignment to Cain Chemical.  See 26-MA-Assignments and mergers for assignment.
26-MA-070
Matagorda County, TX
E. M. Huitt, Jr., Independent Executor
Conoco, Inc.
v735/p834
A right of way for a pipeline, cathodic protection and appurtenances.
26-MA-070X.1
Matagorda County, TX
Houston Lighting and Power Company
Conoco, Inc.
None
A right of way for (1) 10" pipeline.  No objection letter to the right of way with landowner approval.
26-MA-070X.2
Matagorda County, TX
Houston Lighting and Power Company
Conoco, Inc.
None
A right of way for (1) 10" pipeline.  No objection letter to the right of way with landowner approval.
26-MA-071
Matagorda County, TX
Irving M. Rayburn
Conoco, Inc.
v718/p543
A 20' by 30' valve site.
26-MA-071
Matagorda County, TX
Irving M. Rayburn
Conoco, Inc.
v693/p365
A 20' wide right of way for (1) 10" pipeline with 48" of cover.  $50.00 per assignment.  Consent obtained on assignment to Cain Chemical.  See 26-MA-Assignments and mergers for assignment.
26-MA-071
Matagorda County, TX
Irving M. Rayburn
Conoco, Inc.
v735/p831
A right of way for a pipeline, cathodic protection and appurtenances.
26-MA-071X
Matagorda County, TX
Houston Lighting and Power Company
Conoco, Inc.
None
A right of way for (1) 10" pipeline.  No objection letter to the right of way with landowner approval.  See 26-MA-Assignments and mergers for assignment.
26-MA-071XX
Matagorda County, TX
Corps of Engineers
  
None
Permit across Live Oak Bayou.
26-MA-072
Matagorda County, TX
Frank H. Lewis, individually and Trustee, J. C. Lewis Family Trust (1974), et al
Conoco, Inc.
v714/p810
A 100' wide right of way for (1) 10" pipeline with 48" of cover and (1) Block valve site.  See 26-MA-Assignments and mergers for assignment.
26-MA-072X.1
Matagorda County, TX
Houston Lighting and Power Company
Conoco, Inc.
None
A right of way for (1) 10" pipeline.  No objection letter to the right of way with landowner approval.
26-MA-072X.2
Matagorda County, TX
Houston Lighting and Power Company
Conoco, Inc.
None
A right of way for (1) 10" pipeline.  No objection letter to the right of way with landowner approval.  See 26-MA-Assignments and mergers for assignment.
26-MA-072X.3
Matagorda County, TX
Corps of Engineers
None
None
Canoe Bayou.  No permit required per Janet Botello with the Corps.
26-MA-072X.4
Matagorda County, TX
Houston Lighting and Power Company
Conoco, Inc.
None
A right of way for (1) 10" pipeline.  No objection letter to the right of way with landowner approval.  See 26-MA-Assignments and mergers for assignment.
26-MA-072X.5
Matagorda County, TX
Houston Lighting and Power Company
Conoco, Inc.
None
A right of way for (1) 10" pipeline.  No objection letter to the right of way with landowner approval.  See 26-MA-Assignments and mergers for assignment.
26-MA-072X.6
Matagorda County, TX
Corps of Engineers
Conoco, Inc.
None
Peyton Creek.  This body of water is classified as Section 404 crossing by the Corps of Engineers and does not require a permit.
26-MA-073
Matagorda County, TX
Simon C. Cornelius
Conoco, Inc.
v735/p836
Allows for the pipeline, cathodic protection and appurtenances.
26-MA-073
Matagorda County, TX
Simon C. Cornelius
Conoco, Inc.
v697/p406
A 20' wide right of way for (1) 10" pipeline with 48" of cover.  $50 per assignment.  Consent obtained on assignment to Cain Chemical from grantor.  See 26-MA-Assignments and mergers for assignment.
26-MA-073X
Matagorda County, TX
Lower Colorado River Authority
Conoco, Inc.
v700/p892
Easement for (6) crossings.  See 26-MA-Assignments and mergers for assignment.
26-MA-074
Matagorda County, TX
Russell A. Matthes and Juanita LeTulle Matthes
Conoco, Inc.
v697/p326
A 20' wide right of way for (1) 10" pipeline with 48" of cover.  $50 assignment fee.  Consent obtained on assignment to Cain Chemical from grantor.  $50.00 fee paid.
26-MA-074X
Matagorda County, TX
Matagorda County Commissioners Court
Conoco, Inc.
None
Authorization to cross (2) County roads in Matagorda County with pipeline width to 10.75."    See 26-MA-Assignments and mergers for assignment.
26-MA-074XX
Matagorda County, TX
Lower Colorado River Authority
Conoco, Inc.
v700/p892
Easement for (6) crossings.  See MA-073X for documents.
26-MA-075
Matagorda County, TX
Virginia LeTulle Peden
Conoco, Inc.
v700/p882
A 20' wide right of way for (1) 10" pipeline with 48" of cover.  See 26-MA-Assignments and mergers for assignment.
26-MA-075X
Matagorda County, TX
Matagorda County Commissioners Court
Conoco, Inc.
None
Chinquapin Rd.  Authorization to cross (2) County roads in Matagorda County.  See 26-MA-Assignments and mergers for assignment.
26-MA-075XX
Matagorda County, TX
Lower Colorado River Authority
Conoco, Inc.
v700/p892
Easement  for (6) crossings.  See 26-MA-Assignments and mergers for assignment.
26-MA-076
Matagorda County, TX
Julia Bell Coleman
Conoco, Inc.
v692/p822
A 20" wide right of way for (1) 10" pipeline with 48" of cover.  No above ground appurtenances except markers.  Condemnation.  See 26-MA-Assignments and mergers for assignment.
26-MA-077
Matagorda County, TX
J. D. Sutherland and Betty Ruth Sutherland
Conoco, Inc.
v690/p212
A 20' wide right of way for (1) 10.75" pipeline with 36" of cover.  $50 for each assignment.  Consent obtained on assignment to Cain Chemical from grantor.  See 26-MA-Assignments and mergers for assignment.
26-MA-078
Matagorda County, TX
Willie Doss and wife, Ida E. Doss
Conoco, Inc.
v688/p81
A 30' wide right of way for (1) pipeline.  See 26-MA-Assignments and mergers for assignment.
26-MA-079
Matagorda County, TX
Dorothy Ann Baer Huebner, Trustee
Conoco, Inc.
v708/p868
A right of way for (1) 10.75" pipeline with 48" of cover.  See 26-MA-Assignments and mergers for assignment.
26-MA-080
Matagorda County, TX
Ruby L. Petrucha Phillips
Conoco, Inc.
v692/p829
A 20' wide right of way for (1) 10" pipeline with 48" of cover.  See 26-MA-Assignments and mergers for assignment.
26-MA-080X.1
Matagorda County, TX
Corps of Engineers
Conoco, Inc.
None
Big Boggy Creek.  This body of water is classified as Section 404 by the Corps of Engineers and does not require a permit.
26-MA-080X.2
Matagorda County, TX
Lower Colorado River Authority
Conoco, Inc.
v750/p892
Permit for (6) crossings.  See 26-MA-Assignments and mergers for assignment.
26-MA-080X.3
Matagorda County, TX
Atchison, Topeka and Santa Fe Railroad Company (BNSF)
Conoco, Inc.
None
A license for (2) pipelines.  Main Track MP 82 + 103.8, near Wadsworth, TX.  Folder No. 165823.  Audit No. CT31136.
26-MA-081
Matagorda County, TX
Ruby Landrum Phillips
Conoco, Inc.
v687/p693
14.42 acres out of FW Dempsey League, Abstract No. 26.  Reserved oil, gas, mineral and agriculture rights for future plant.  NTCE
26-MA-081X
Matagorda County, TX
Atchison, Topeka and Santa Fe Railroad Company (BNSF)
Conoco, Inc.
None
A license for (2) pipelines.   MP 82 + 103.8 and station 4346 + 63.8, near Wadsworth, TX.  Folder No. 165823.   Audit No. CT31136.
26-MA-081XX
Matagorda County, TX
Texas Department of Transportation
Conoco, Inc.
None
Permit to construct across driveway.    See 26-MA-Assignments and mergers for assignment.
26-MA-081XX
Matagorda County, TX
Texas Department of Transportation
Conoco, Inc.
None
Permit No. 81-7018 for a 10" Ethylene pipeline across SH 60.
26-MA-082
Matagorda County, TX
Tom J. Petrucha and wife Connie Petrucha
Conoco, Inc.
v687/p697
2 acres in F. W. Dempsey Survey, Abstract No. 26.  Excepts minerals and rights to lease to Inexco Oil.  NTCE
26-MA-083
Matagorda County, TX
Tom J. Petrucha and wife, Connie Petrucha
Conoco, Inc.
v697/p902
A 30' wide right of way for (2) pipelines not to exceed 16" with 36" of cover.  See 26-MA-Assignments and mergers for assignment.
26-MA-083X
Matagorda County, TX
Houston Lighting and Power Company
Conoco, Inc.
None
No right of way required for this crossing.
26-MA-084
Matagorda County, TX
Doris Leggett and Elton Leggett
Conoco, Inc.
v692/p815
A 30' wide right of way for a pipeline not exceeding 16" with 36" of cover.  See 26-MA-Assignments and mergers for assignment.
26-MA-084X
Matagorda County, TX
Texas Department of Transportation
Conoco, Inc.
None
Permit No. 81-7017 for (1) 10" ethylene pipeline.  Control 846 Section 3, Highway FM 521.  See 26-MA-Assignments and mergers for assignment.
26-MA-085
Matagorda County, TX
Frances Butter, Trustee for John A. Butter
Conoco, Inc.
v690/p85
A 30' wide right of way for (2) pipelines not exceeding 16."  See 26-MA-Assignments and mergers for assignment.
26-MA-086
Matagorda County, TX
Kathleen R. Tatum
Continental Oil Company
v688/p311
A 30' wide right of way.  Multiple line rights with additional consideration.  See 26-MA-Assignments and mergers for assignment.
26-MA-087
Matagorda County, TX
Evelyn Butter Baas
Conoco, Inc.
v690/p92
A 30' wide right of way for (2) pipelines with 36" of cover.  See 26-MA-Assignments and mergers for assignment.
26-MA-088
Matagorda County, TX
Francis Butter, Trustee for John A. Butter
Conoco, Inc.
v690/p99
A 30' wide right of way for (2) pipelines not to exceed 16" with 36" of cover.  See 26-MA-Assignments and mergers for assignment.
26-MA-089
Matagorda County, TX
Wilburn George Doss and William Walter Doss, Jr.
Continental Oil Company
v687/p638
A 30' wide right of way.  Check document for exact multiple line rights language.
26-MA-090
Matagorda County, TX
William G. Burkhart and Edward Y. Browning
Conoco, Inc.
v717/p186
A 30' wide right of way for (2) pipelines with 48" of cover.
26-MA-091
Matagorda County, TX
Lloyd E. Ryman
Conoco, Inc.
v701/p748
A 30' wide right of way with 48" of cover.  See 26-MA-Assignments and mergers for assignment.
26-MA-091X
Matagorda County, TX
Texas Department of Transportation
Conoco, Inc.
81-706
Permit No. 81-706, for a 10" ethylene pipeline across FM 2078.  See 26-MA-Assignments and mergers for assignment.
26-MA-092
Matagorda County, TX
Jessie M. Ryman, Jr.
Conoco, Inc.
v710/p717
A 30' wide right of way with 48" of cover.  See 26-MA-Assignments and mergers for assignment.
26-MA-093
Matagorda County, TX
Irma  P. Ryman
Conoco, Inc.
v711/p319
A 30' wide right of way with 48" of cover.  See 26-MA-Assignments and mergers for assignment.
26-MA-094
Matagorda County, TX
William M. Broughton, et ux Carolyn R. Broughton
Conoco, Inc.
v703/p279
A 30' wide right of way with 48" of cover.  See 26-MA-Assignments and mergers for assignment.
26-MA-095
Matagorda County, TX
Tom J. Petrucha, Connie Petrucha, Doug Kain, Grace Kain and Nancy Kain
Conoco, Inc.
v698/p433
A 30' wide right of way for (2) pipelines not to exceed 16" in diameter with 36" of cover.  See 26-MA-Assignments and mergers for assignment.
26-MA-095X
Matagorda County, TX
Texas Department of Transportation
Conoco, Inc.
None
Permit No. 81-7015, crossing FM 2668.  See 26-MA-Assignments and mergers for assignment.
26-MA-096
Matagorda County, TX
Betty Armatta, Sidney Armatta, individually and as Testamentary Trustee under the will of Ida Katherine Armatta
Conoco, Inc.
v690/p158
A 30' wide right of way for (2) pipelines not to exceed 16" with 36" of cover.  See 26-MA-Assignments and mergers for assignment.
26-MA-097
Matagorda County, TX
Anton S. Dziuk, guardian of Anton Stephen Dziek and Christopher Dziek, minors
Conoco, Inc.
v696/p473
A 30' wide right of way for (2) pipelines not to exceed 16" with 36" of cover.  See 26-MA-Assignments and mergers for assignment.
26-MA-098
Matagorda County, TX
Tasie Petrucha Culver
Conoco, Inc.
v689/p851
A 30' wide right of way for (2) pipelines not exceeding 16" with 36" of cover.  See 26-MA-Assignments and mergers for assignment.
26-MA-099
Matagorda County, TX
Dow Chemical Company
Conoco, Inc.
v701/p650
A right of way for (1) 10" pipeline with 36" of cover.  Limits right of way occupied by pipeline.    See 26-MA-Assignments and mergers for assignment.
26-MA-100
Matagorda County, TX
Cities Service Company
Conoco, Inc. and Big Three Industries
v712/p583
A right of way for (1) 10" ethylene pipeline and (1) 6 1/2" nitrogen pipeline.  See 26-MA-Assignments and mergers for assignment.  Includes railroad spur crossing.
26-MA-100XX
Matagorda County, TX
Texas Department of Transportation
Conoco, Inc.
None
Permit No. 81-7013 across FM 3057.  See 26-MA-Assignments and mergers for assignment.
26-MA-101
Matagorda County, TX
Walter W. Fondren, Jr.
Monsanto Chemical Company
v376/p525
A 7' wide right of way for (1) pipeline.  If additional lines are laid within the 7' wide ROW, Grantee will pay the sum of $8,836.65.
26-MA-101
Matagorda County, TX
Doris Ledwidge Fondren, et al
Conoco, Inc.
v714/p828
A 7' wide right of way for (1) 10" pipeline and a 15' by 25' valve site.
26-MA-101X
Brazoria County, TX
Lower Colorado River Authority
Conoco, Inc.
v700/p892
Permit for (6) crossings.
26-MA-102
Matagorda County, TX
Celanese Chemical Company, Inc.
Conoco, Inc.
v714/p147
A 10' wide right of way with 36" of cover.  Included is letter of consent by grantor for assignment to Cain Chemical, Inc.
26-MA-102X
Matagorda County, TX
Atchison, Topeka and Santa Fe Railway Company (BNSF)
Conoco, Inc.
None
A license for (1) 10" ethylene pipeline crossing railroad near Bay City, TX at station 2 + 53.6 on Track No. 8.  Folder No. 165822.  Audit No. CT31138.
26-MA-102XX
Matagorda County, TX
Texas Department of Transportation
Conoco, Inc.
None
Permit No. 81-7014 for a 6" line crossing FM 3057.  See 26-MA-Assignments and mergers for assignment.
26-J-M-024
Matagorda County, TX
Ray M. Culver, et al
Conoco, Inc.
v674/p690
A 491.29 acre tract being 405.5 acre tract and an 87.24 acre tract, F. W. Dempsey League, A-26 and Wm. Selkirk Survey, A-87, Matagorda County, TX, Matagorda Plant Site.  Counterpart in v674/p698.  NTCE.
26-J-M-024X
Matagorda County, TX
Lower Colorado River Authority
Conoco, Inc.
None
Easement for (1) 6" pipeline crossing a canal in the F. W. Dempsey League, A-26.
26-J-M-024.1
Matagorda County, TX
Ray M. Culver, et al
Conoco, Inc.
v674/p698
A 491.29 acre tract being 405.5 acre tract and an 87.24 acre tract, F. W. Dempsey League, A-26 and Wm. Selkirk Survey, A-87, Matagorda County, TX, Matagorda Plant Site. Counterpart in v674/p690.  NTCE.
26-MA-001
Matagorda County, TX
Lewis Edwin Smith and Thelma S. Smith
South Texas Pipeline Company
v635/p511
A 35' wide right of way for (2) pipelines and (1) lateral with 36" of cover.  (See MA-Assignments and Mergers)
26-MA-002
Matagorda County, TX
Matagorda County
None
None
Lease Rd.  No permit required.
26-MA-003
Matagorda County, TX
Lawrence J. Petersen and Gloria Petersen
Cain Chemicals, Inc.
v282/p936
A 30' wide right of way for (1) 10" pipeline with 36" of cover.  No above ground appurtenances.
26-MA-003X
Matagorda County, TX
Corps of Engineers
  
None
Permit No. ________ across Tres Palacios Creek with (1) 10" pipeline.
26-MA-004
Matagorda County, TX
Carrie Larsen Vance and Cullen Vance
Cain Chemicals, Inc.
v478/p542
A 30' wide right of way for (1) 10" pipeline with 36" of cover.
26-MA-005X
Matagorda County, TX
Matagorda County Commissioners Court
  
None
Larson Rd.  No documents in file.
26-MA-006
Matagorda County, TX
Carrie Larsen Vance and Cullen Vance
Cain Chemicals, Inc.
v478/p542
A 30' wide right of way for (1) 10" pipeline with 36" of cover.
26-MA-007
Matagorda County, TX
E. T. Rose, Jr., life Estate, Bowen David Rose, and Mark Larsen Rose, Remaindermen
Cain Chemicals, Inc.
v478/p560
A 30' wide right of way for (1) 10" pipeline with 36" of cover.
26-MA-008
Matagorda County, TX
Elsie Larsen Rhea, life Estate, Lanella Wells, remainderman
Cain Chemicals, Inc.
v478/p554
A 30' wide right of way for (1) 10" pipeline with 36" of cover.
26-MA-009
Matagorda County, TX
Emma Larsen Graddy, life Estate, Evelyn Graddy McCullough, Remainderman
Cain Chemicals, Inc.
v478/p548
A 30' wide right of way for (1) 10" pipeline with 36" of cover.
26-MA-010
Matagorda County, TX
Clara Louise Green, William Franklin Green, III
Cain Chemicals, Inc.
v282/p928
A 5' wide right of way for (1) 10" pipeline with 36" of cover.  $500 to owners for each assignment.  Also refers to MA-12 on map
26-MA-011
Matagorda County, TX
Texas Department of Transportation
  
None
FM 2431
26-MA-011A
Matagorda County, TX
Clara Louise Green, William Franklin Green, III
Cain Chemicals, Inc.
282-928
On alignment sheets, MA-011A is for a railroad, but railroad conveyed property to Clara Louise Green in v222/p732 dated 8/29/88
26-MA-012
Matagorda County, TX
Clara Louise Green, William Franklin Green, III
Cain Chemicals, Inc.
v282/928
A 5' wide right of way for (1) 10" pipeline with 36" of cover.  $500.00 per assignment.
26-MA-013
Matagorda County, TX
Matagorda County Hospital District
Cain Chemicals, Inc.
v478/p582
A 30' wide right of way for (1) 10" pipeline with 36" of cover.
26-MA-014X
Matagorda County, TX
Matagorda County
None
None
Private Rd.  No permit required.
26-MA-015
Matagorda County, TX
Lower Colorado River Authority
Continental Oil Company
None
A right of way for (1) 10" pipeline to cross El Maton Canal in the Bowman & Chase Reese League, A-8.
26-MA-016
Matagorda County, TX
Matagorda County Hospital District
Cain Chemicals, Inc.
v478/p582
A 30' wide right of way for (1) 10" pipeline.  (Same as MA-016)
26-MA-017X
Matagorda County, TX
Texas Department of Transportation
  
None
SH 35
26-MA-018
Matagorda County, TX
Matagorda County Hospital District
Cain Chemicals, Inc.
v478/p582
A 30' wide right of way for (1) 10" pipeline with 36" of cover.  (Same as MA-013)
26-MA-019
Matagorda County, TX
Lorena Dawdy
Cain Chemicals, Inc.
v478/p572
A 30' wide right of way for (1) 10" pipeline with 48" of cover.
26-MA-020X
Matagorda County, TX
Missouri Pacific Railroad (UPRR)
Cain Chemicals, Inc.
None
License for (1) 10" ethylene pipeline crossing at MP 272.38 near Bay City, TX.  Audit No. 148001.  Folder No. 1335-52.
26-MA-021X
Matagorda County, TX
Matagorda County
None
None
Private Rd. No permit required.
26-MA-022
Matagorda County, TX
James Hickl, Doris Hickl Wendel, Patricia Hickl Gavranovic
Cain Chemicals, Inc.
None
A right of way for (1) 10" pipeline with 48" of cover.
26-MA-023
Matagorda County, TX
Mary James Bruden, et al Trustees of Esker L. McDonald Estate Trust
Cain Chemicals, Inc.
v282/p907
A 10' wide right of way with 60" of cover.
26-MA-024
Matagorda County, TX
J. C. Lewis Family 1974 Trust, et al
Cain Chemicals, Inc.
v281/p923
A 1' wide right of way for (1) 10" pipeline with 48" of cover and (1) 20' by 30' surface right of way for a valve site.
26-MA-025
Matagorda County, TX
Lower Colorado River Authority
Continental Oil Company
None
A right of way for (1) 10" pipeline across Buckeye Canal in the Nicholas Clopper Survey, A-16.
26-MA-026
Matagorda County, TX
J. C. Lewis Family 1974 Trust, et al
Cain Chemicals, Inc.
v281/p923
A 1' wide right of way for (1) 10" pipeline and (1) 20' by 30' valve site with 48" of cover.
26-MA-027X
Matagorda County, TX
SouthTexas Railroad  (UPRR)
  
None
South Texas Nuclear Spur
26-MA-028X
Matagorda County, TX
Texas Department of Transportation
None
None
FM 1468.  TXDOT cannot locate copy of permit.
26-MA-029
Matagorda County, TX
J. C. Lewis Family 1974 Trust, et al
Cain Chemicals, Inc.
v281/p923
A 1' wide right of way for (1) 10" pipeline and (1) 20' by 30' valve site with 48" of cover.
26-MA-030
Matagorda County, TX
James Daniel Wendt
Cain Chemicals, Inc.
v478/p566
A 30' wide right of way for (1) 10" pipeline with 48" of cover.
26-MA-031
Matagorda County, TX
Lorena Dawdy
Cain Chemicals, Inc.
v478/p572
A 30' wide right of way for (1) 10" pipeline with 48" of cover.
26-MA-032X
Matagorda County, TX
State of Texas General Land Office
Equistar Chemicals, LP
31918
ME 890107 for (1) 10" ethylene pipeline across the Colorado River.
26-MA-032XX
Matagorda County, TX
Corps of Engineers
South Texas Pipeline Company
None
Permit No. 14114/110 across the Colorado River.
26-MA-033
Matagorda County, TX
Walter W. Fondren III, Trustee, et al
Cain Chemicals, Inc.
v282/p943
A 6' wide right of way with 48" of cover.  No above ground anchors.
26-MA-033X
Matagorda County, TX
Atchison, Topeka and Santa Fe Railroad (BNSF)
Cain Chemicals, Inc.
None
A license for (1) 10" Ethylene pipeline.  CT 10644; AT 179957.  MP 4 + 4488 near South Bay City, TX.
26-MA-034
Matagorda County, TX
Celanese Chemical Company, Inc.
Conoco, Inc.
v714/p147
See file 26-MA-102 for original documents.  A 10' wide right of way with 36" of cover.  Included is a letter of consent by grantor for assignment to Cain Chemical.
27-BR-001
Brazoria County, TX
Monsanto Chemical Corporation
Conoco, Inc.
v1601/p26
Lease of facilities in Chocolate Bayou
27-BR-002
Brazoria County, TX
Monsanto Chemical Company
Continental Oil Company
v1424/p352
A right of way for (1) 6"  and (1) 8" pipeline, 4' below natural ground line.
27-BR-002X
Brazoria County, TX
Brazos River Authority
Continental Oil Company
None
Letter permit for a 10' wide right of way with (1) 6" and (1) 8" pipeline, and 5' of cover at the lowest point.
27-BR-002XX
Brazoria County, TX
Texas Department of Transportation
Continental Oil Company
None
Permit No. 78-1713 crossing FM 2917.
27-BR-002XXX
Brazoria County, TX
Missouri Pacific Railroad Company (UPRR)
Continental Oil Company
None
License for (1) 6" and (1) 8" pipelines at MP 336.1.  Folder No. 126484, Audit No. CA77946 near Chocolate Bayou, TX.
27-BR-003
Brazoria County, TX
General Crude Oil Company
Continental Oil Company
None
(Not recorded)  An 8' wide right of way for (2) pipelines with 4' of cover at the lowest point and 5' of cover at railroad crossings.  Filing this agreement terminates the easement.  NOTE: Attempt to assign without prior written consent will terminate thi
27-BR-003
Brazoria County, TX
General Crude Oil Company
Continental Oil Company
v1414/p380
An 8' wide right of way for (2) pipelines.  New ownership: Terrance Hlvinka Cattle Co., P. O. Box 1188, East Bernard, TX 77453-1188.
27-BR-003X.1
Brazoria County, TX
Brazos River Authority
Continental Oil Company
None
Letter permit for a 10' wide right of way with (1) 6" and (1) 8" pipeline, and 5' of cover at the lowest point.
27-BR-003X.2
Brazoria County, TX
Brazoria County Conservation and Reclamation District No. 3
Continental Oil Company
None
  
27-BR-003X.3
Brazoria County, TX
Brazoria County Commissioners Court
Continental Oil Company
None
Permit to cross  CR 169.
27-BR-003X.4
Brazoria County, TX
Missouri Pacific Railroad Company (UPRR)
Continental Oil Company
None
A license for (2) pipelines with 3' of cover on ditches, 5.5' under railroad tracks, and 4.5' on secondary tracks, crossing mile post 4.5 in Chocolate Bayou, TX.  Folder No. 126483, Audit No. CA77945.
27-BR-003X.5
Brazoria County, TX
Brazoria County Conservation and Reclamation District
Continental Oil Company
None
Permit for (1) 6" and (1) 8" pipeline.  PICK UP DRAWING 1-1.4-147.
27-BR-003.5
Brazoria County, TX
Brazoria County Commissioners Court
Cain Chemicals, Inc.
None
Permit to cross dedicated road.
27-BR-004
Brazoria County, TX
William W. Allen, et al
Continental Oil Company
v1405/p656
A 30' wide right of way for (2) pipelines not exceeding 8" with 30" of cover.
27-BR-004X
Brazoria County, TX
Brazoria County Conservation and Reclamation District No. 3
Continental Oil Company
None
  
27-BR-004XX
Brazoria County, TX
Brazoria County Commissioners Court
Cain Chemicals, Inc.
None
Permit crossing private drive.
27-BR-005
Brazoria County, TX
Alibel Pardue, et al
Continental Oil Company
v1416/p381
A 30' wide right of way for (2) pipelines not exceeding 8" with 48" of cover.  Description of location of pipeline lists the incorrect survey name, but correct abstract number.  NOTE: 07/25/03- Survey listed on easement incorrect.
27-BR-006
Brazoria County, TX
Karolen Wilkinson Dittmar and Martin M. Dittmar, Jr.
Continental Oil Company
v1405/p638
A 30' wide right of way for (2) pipelines not exceeding 8" under cultivation depth.
27-BR-007
Brazoria County, TX
Alibel Pardue, et al
Continental Oil Company
v1416/p381
A 30' wide right of way for (2) pipelines not exceeding 8" with 48" of cover.  Description of location of pipeline lists the incorrect survey name, but correct abstract number.
27-BR-008
Brazoria County, TX
Clyde Herring and Sons, Inc.
Continental Oil Company
v1402/p894
A 30' wide right of way for (2) pipelines not exceeding 8" under cultivation depth.  (Block valve)
27-BR-008X
Brazoria County, TX
Brazoria County Commissioners Court
Continental Oil Company
None
Permit to cross CR 160.
27-BR-008X
Brazoria County, TX
Brazoria County Commissioners Court
Cain Chemicals, Inc.
None
Permit to cross CR 160.  Order transferring rights.
27-BR-008XX
Brazoria County, TX
Brazoria County Conservation and Reclamation District No. 3
Continental Oil Company
None
  
27-BR-008XXX
Brazoria County, TX
Brazos River Authority
Continental Oil Company
None
Letter permit for a 10' wide right of way with (1) 6" and (1) 8" pipeline, and 5' of cover at the lowest point.
27-BR-009
Brazoria County, TX
Thomas J. Howell
Continental Oil Company
None
A 20' wide right of way for (2) pipelines, 20' from the railroad.
27-BR-009X
Brazoria County, TX
Brazoria County Commissioners Court
Continental Oil Company
None
Order granting permit for (2) pipelines under and across CR 168.
27-BR-010
Brazoria County, TX
Robert R. Armstrong and Judy Armstrong
Continental Oil Company
v1397/p487
A 30' wide right of way for (2) pipelines not exceeding 8" and buried at cultivation depth.
27-BR-011
Brazoria County, TX
Lawrence Edwin Schuenemann
Continental Oil Company
v1399/p841
A 30' wide right of way for (2) pipelines not exceeding 8" and buried at cultivation depth.
27-BR-012
Brazoria County, TX
E. G. Schuenemann and Hilda Schuenemann
Continental Oil Company
v1388/p41
A 30' wide right of way for (2) pipelines not exceeding 8" and buried at cultivation depth.
27-BR-013
Brazoria County, TX
Charles R. Schuenemann, Sr. and Shirley Schuenemann
Continental Oil Company
v1399/p839
A 30' wide right of way for (2) pipelines not exceeding 8" and buried at cultivation depth.
27-BR-013X
Brazoria County, TX
Corps of Engineers
Continental Oil Company
None
Permit No. 12781 across Mustang Bayou with (1) 6" and (1) 8" pipelines.
27-BR-013XX
Brazoria County, TX
State of Texas General Land Office
Continental Oil Company
v1406/p460
ME 3913 for (1) 6" and (1) 8" pipelines with 5' of cover under Mustang Bayou and 4' elsewhere.  NO longer state regulated land.
27-BR-013XXX
Brazoria County, TX
Brazoria County Conservation and Reclamation District No. 3
Continental Oil Company
None
  
27-BR-014
Brazoria County, TX
Larry W. Schuenemann and Ophelia Schuenemann
Continental Oil Company
v1393/p662
A 30' wide right of way for (2) pipelines not to exceed 8" below cultivation depth.
27-BR-015
Brazoria County, TX
Frances E. Van Winkle, executrix of Rudolf F. Van Winkle Estate
Continental Oil Company
v1389/p286
A 30' wide right of way for (2) pipelines not to exceed 8" buried below cultivation depth.
27-BR-016
Brazoria County, TX
Harold Cook
Continental Oil Company
v1392/p650
A 30' wide right of way for (2) pipelines not to exceed 8" with 36" of cover.
27-BR-016X
Brazoria County, TX
Brazoria County Commissioners Court
Cain Chemicals, Inc.
None
Easement dated 03/30/78 of Harold Cook covers crossing of pipelines on private road.
27-BR-017
Brazoria County, TX
Marvin Angus Finger, Sr.
Continental Oil Company
v1392/p658
A 30' wide right of way for (2) pipelines not to exceed 8" with  36" of cover.
27-BR-018
Brazoria County, TX
H. C. Finger and Nellie E. Finger
Continental Oil Company
v1392/p663
A 30' wide right of way for (2) pipelines not to exceed 8" with 36" of cover.
27-BR-018XX
Brazoria County, TX
Brazoria County Commissioners Court
Continental Oil Company
None
Order granting permit for (2) pipelines under and across CR 166.
27-BR-019
Brazoria County, TX
W. G. Middlebrooks, Jr. and Claire Latham Middlebrooks
Continental Oil Company
v1399/p843
A 30' wide right of way.
27-BR-019X
Brazoria County, TX
Houston Lighting and Power Company
Continental Oil Company
v1740/p809
A right of way for (2) pipelines with 4' of depth longitudinal and 9' of depth for perpendicular crossings.  Consent of all on line.  Easement located between BR-19 and BR-20 on map
27-BR-020
Brazoria County, TX
John Lee Shaw and Dorothy Triplett Shaw
Dow Chemical Company
v1172/p313
A 30' wide right of way for (2) pipelines with 36" of cover.  No above ground appurtenances.
27-BR-021
Brazoria County, TX
Charles Alvin Quinn and Barbara Sue Quinn
Dow Chemical Company
v1174/p680
A 30' wide right of way for (2) pipelines with 36" of cover.
27-BR-021X
Brazoria County, TX
Brazoria County Commissioners Court
Continental Oil Company
None
Order granting permit for (2) pipelines under and across CR 370.
27-BR-021XX
Brazoria County, TX
Houston Lighting and Power Company
Continental Oil Company
v1740/p809
Easement for the operation of (1) 6" and (1) 8' pipeline.
27-BR-022
Brazoria County, TX
David E. and Mary Frances LeCompte
Dow Chemical Company
v1174/p684
A 30' wide right of way for (2) pipelines with 48" of cover.
27-BR-022X
Brazoria County, TX
Brazoria County Commissioners Court
Continental Oil Company
None
Order granting permit for (2) pipelines under and across CR 163.
27-BR-023
Brazoria County, TX
H. C. Finger and Nellie E. Finger
Dow Chemical Company
v1172/p309
A 30' wide right of way for (2) pipelines with 42" of cover.
27-BR-023X
Brazoria County, TX
Brazoria County Conservation and Reclamation District No. 3
Continental Oil Company
None
  
27-BR-024
Brazoria County, TX
H. C. Finger and Nellie E. Finger
Dow Chemical Company
v1172/p305
A 30' wide right of way for (2) pipelines with 42" of cover.
27-BR-024X
Brazoria County, TX
Brazoria County Commissioners Court
Continental Oil Company
None
Order granting permit for (2) pipelines under and across CR 266.
27-BR-024XX
Brazoria County, TX
Brazoria County Commissioners Court
Continental Oil Company
None
Order granting permit for (2) pipelines under and across CR 267.
27-BR-025
Brazoria County, TX
Michael C. Deanovich
Dow Chemical Company
v1162/p70
A 30' wide right of way buried under cultivation depth.  (Property in the name of Garvin C. Reue and Nancy M. Reue by way of chain of title statement.) Multiple line rights for additional consideration.
27-BR-026
Brazoria County, TX
J. G. Odom and Eunice Alene Odom
Dow Chemical Company
v1154/p586
A 30' wide right of way for (2) pipelines under cultivation depth.  (In the name of Jack L.  Miller and Shirley Ann Miller, dated 04/06/76, by way of chain of title statement.)  Multiple line rights for additional consideration.
27-BR-027
Brazoria County, TX
Michael C. Deanovich
Dow Chemical Company
v1162/p70
A 30' wide right of way buried under cultivation depth.  (Property in the name of Garvin C. Reue and Nancy M. Reue by way of chain of title statement.)
27-BR-027A
Brazoria County, TX
Garvin  C. Reue
Oxy Petrochemicals, Inc.
90746 475
A 5.680 acre tract out of a called 10.633 acre tract in the L. C. Dunbaugh Survey, Abstract 585.  NTCE
27-BR-027X
Brazoria County, TX
Brazoria County Commissioners Court
Continental Oil Company
None
Order granting permit for (2) pipelines under and across CR 160.
27-BR-028
Brazoria County, TX
T. G. Le Compte
Dow Chemical Company
v1166/p797
A 30' wide right of way for (2) pipelines buried under cultivation depth.
27-BR-028X
Brazoria County, TX
Houston Lighting and Power Company
Continental Oil Company
v1740/p809
Easement for the operation of (1) 6" and (1) 8' pipeline.
27-BR-029
Brazoria County, TX
J. W. Moore
Dow Chemical Company
v1166/p792
A 30' wide right of way for (2) pipelines under cultivation depth.  All interest as of 04/08/76; not acquired; 2/10 interest missing.  See file for more details.
27-BR-029X
Brazoria County, TX
Houston Lighting and Power Company
Continental Oil Company
v1740/p809
Easement for the operation of (1) 6" and (1) 8' pipeline.
27-BR-030
Brazoria County, TX
Katherine Vedder Pauls, Indepedant Executrix
Dow Chemical Company
v1151/p879
A 40' wide right of way for (1) pipeline under cultivation depth.  Charles Key and Clarence Key have undivided 1/2 interest.
27-BR-030X
Brazoria County, TX
Houston Lighting and Power Company
Continental Oil Company
v1740/p809
Easement for the operation of (1) 6" and (1) 8' pipeline.
27-BR-031
Brazoria County, TX
Josie Marx Blum Trust
Dow Chemical Company
v1158/p799
A 30' wide right of way for (2) pipelines under cultivation depth.  (New owners are George F. and Delores Tacguard, by way of chain of title statement.)  Multiple line rights for additional consideration.
27-BR-031X
Brazoria County, TX
Brazoria County Conservation and Reclamation District No. 3
Continental Oil Company
None
  
27-BR-032
Brazoria County, TX
Howard Purnell, Jr. as Executor of the Estate of Aimee R. Purnell
Oxy Petrochemicals, Inc.
None
A 100' wide right of way.
27-BR-032
Brazoria County, TX
Fay E. Oldenburg, et al
Oxy Petrochemicals, Inc.
None
A 100' wide right of way.  Requires additional payment for construction of any pipeline.
27-BR-032
Brazoria County, TX
Lewis H. Follett, et al
Dow Chemical Company
v1161/p425
A 30' wide right of way for (1) pipeline.
27-BR-032XX
Brazoria County, TX
Brazoria County Commissioners Court
Continental Oil Company
None
Order granting permit for (2) pipelines under and across CR 155.
27-BR-033
Brazoria County, TX
Louise Hayman Benson
Dow Chemical Company
v1153/p209
A 30' wide right of way for (2) pipelines under cultivation depth.  Beverly Benson Hager, trustee, as of 04/07/76.  Multiple line rights for additional consideration.
27-BR-034
Brazoria County, TX
Edward O. MacInerney, agent for Catherine Dana Malloy
Dow Chemical Company
v1171/p503
A 30' wide right of way for (2) pipelines.
27-BR-035
Brazoria County, TX
Frank J. Phillips
Dow Chemical Company
v1178/p95
A 30' wide right of way for (2) pipelines with 36" of cover.
27-BR-035X
Brazoria County, TX
Brazoria County Conservation and Reclamation District No. 3
Continental Oil Company
None
  
27-BR-035XX
Brazoria County, TX
Atchison, Topeka and Santa Fe Railroad Company (BNSF)
Continental Oil Company
None
For (1) 6" pipeline.  Audit No. CT24798; Folder No. AT155607 crossing near Algoa, TX.  MP 26 + 497.7.  Amended product limitations 8/23/85 to show ethane and natural gas.
27-BR-035XX
Brazoria County, TX
Atchison, Topeka, and Santa Fe Railroad Company (BNSF)
Continental Oil Company
None
Folder No. AT155608; A railroad license for (1) 8" pipeline crossing near Algoa, TX.  MP 26 + 497.7
27-BR-036
Brazoria County, TX
Thomas Hockin
Dow Chemical Company
v1172/p321
A 20' wide right of way for (2) pipelines with 42" of cover.
27-BR-036X
Brazoria County, TX
Houston Lighting and Power Company
Continental Oil Company
v1740/p809
Easement for the operation of (1) 6" and (1) 8' pipeline.
27-BR-036XX
Brazoria County, TX
Texas Department of Transportation
Continental Oil Company
None
Permit No. 78-1697.  Permit for (2) pipelines across State Highway 6
27-BR-037
Brazoria County, TX
James Harold Blackwell and Margaret Blackwell Tupi
Dow Chemical Company
v1171/p187
A 30' wide right of way for (2) pipelines with 36" of cover.
27-BR-037X
Brazoria County, TX
Houston Lighting and Power Company
Continental Oil Company
v1740/p809
Easement for the operation of (1) 6" and (1) 8' pipeline.
27-BR-038
Brazoria County, TX
Fern B. Washington
Dow Chemical Company
v1178/p385
A 20' wide right of way for (2) pipelines.  Notify grantors on assignment.
27-BR-038X
Brazoria County, TX
Brazoria County Conservation and Reclamation District No. 3
Continental Oil Company
None
  
27-BR-038XX
Brazoria County, TX
Houston Lighting and Power Company
Continental Oil Company
v1740/p809
Easement for the operation of (1) 6" and (1) 8" pipeline.
27-BR-039
Brazoria County, TX
J. M. Frost, III
Dow Chemical Company
v1189/p57
A 30' wide right of way for (2) pipelines not to exceed 12" with 36" of cover.  Covers tracks 39 and 46.
27-BR-039.1
Brazoria County, TX
James H. Blackwell, et al
Oxy Petrochemicals, Inc.
None
A 130' wide right of way for multiple pipelines with 36" of cover.  Grantee must pay for each additional pipeline constructed after first two.  Copy of assignment to grantors.  (INACTIVE)  Option was never exercised and no proof of payment made.
27-BR-040
Brazoria County, TX
James A. Gibson and Maudie Gibson Fischer
Dow Chemical Company
v1179/p392
A 30' wide right of way for (2) pipelines with 36" of cover.
27-BR-041
Brazoria County, TX
Rex L. Gibson
Dow Chemical Company
v1182/p137
A 30' wide right of way for (2) pipelines with 36" of cover.
27-BR-042
Brazoria County, TX
James A. Gibson and Maudie Gibson Fischer
Dow Chemical Company
v1182/p132
A 30' wide right of way for (2) pipelines with 36" of cover.
27-BR-042X
Brazoria County, TX
Texas Department of Transportation
Continental Oil Company
None
Permit No. 78-1698 crossing FM 517.
27-BR-043
Brazoria County, TX
Rex L. Gibson and Ruth Gibson Moore
Dow Chemical Company
v1182/p127
A 30' wide right of way for (2) pipelines with 36" of cover.
27-BR-043X
Brazoria County, TX
Brazoria County Commissioners Court
Continental Oil Company
None
Order granting permit for (2) pipelines under and across CR 906.
27-BR-043XX
Brazoria County, TX
Brazoria County Conservation and Reclamation District No. 3
Continental Oil Company
None
  
27-BR-044
Brazoria County, TX
Floyd Dixon and Billie June Dixon
Dow Chemical Company
v1184/p606
A 20' wide right of way for (2) pipelines with 36" of cover.
27-BR-045
Brazoria County, TX
E. A. McCauley
Dow Chemical Company
v1183/p155
A 20' wide right of way for (2) pipelines below cultivation depth.
27-BR-045.1
Brazoria County, TX
A. C. Ware and Eva Jane Ware
Dow Chemical Company
v1170/p435
A 20' wide right of way for (2) pipelines with 36" of cover.
27-BR-045X
Brazoria County, TX
Brazoria County Commissioners Court
Continental Oil Company
None
Order granting permit for (2) pipelines under and across CR 351.
27-BR-045.2
Brazoria County, TX
Community Public Service Company
Continental Oil Company
v1429/p367
A 30' wide right of way for (2) pipelines not to exceed 8".
27-BR-046.1
Brazoria County, TX
Houston Lighting and Power Company
Continental Oil Company
v1740/p809
Easement for the operation of (1) 6" and (1) 8' pipeline.
27-BR-046
Brazoria County, TX
Bertie Justin McCauley, Jr. and William Ethel McCauley
Dow Chemical Company
v1174/p692
A 20' wide right of way for (2) pipelines with 36" of cover.
27-BR-046
Brazoria County, TX
Bertie Justin McCauley, Jr.
Dow Chemical Company
v1170/p430
A 20' wide right of way for (2) pipelines with 36" of cover.
27-BR-046X
Brazoria County, TX
Brazoria County Conservation and Reclamation District No. 3
Continental Oil Company
None
  
27-BR-047
Brazoria County, TX
United States National Bank of Galveston, guardian of Emma Lee, et al
Dow Chemical Company
v1184/p689
A 20' wide right of way for (2) pipelines with 36" of cover.
27-BR-048
Brazoria County, TX
H. W. Blackstock, et al
Continental Oil Company
v1365/p426
A 10' wide right of way for (2) pipelines with 36" of cover.
27-BR-048X
Brazoria County, TX
Brazoria County Commissioners Court
Continental Oil Company
None
Order granting permit for (2) pipelines under and across CR 367.
27-BR-048XX
Brazoria County, TX
Brazoria County Commissioners Court
Continental Oil Company
None
Order granting permit for (2) pipelines under and across CR 947.
27-BR-049
Brazoria County, TX
T. T. Mills and Annie Ruth Mills
Dow Chemical Company
v1186/p155
A 30' wide right of way for (2) pipelines with 36" of cover.
27-BR-050
Brazoria County, TX
Thomas  V. Helfin, et al
Dow Chemical Company
v1189/p415
A 30' wide right of way for (2) pipelines with 36" of cover.
27-BR-051
Brazoria County, TX
A. E. Montgomery, et al
Dow Chemical Company
v1180/p441
A 40' wide right of way for (2) pipelines with 36" of cover.
27-BR-051X
Brazoria County, TX
A. E. Montgomery, et al
Dow Chemical Company
v1180/p441
A private lateral on private land for (2) pipelines.  Assigned to Conoco on 11/29/77 in v1379/p963
27-BR-051XX
Brazoria County, TX
Houston Lighting and Power Company
Continental Oil Company
v1740/p809
Easement for the operation of (1) 6" and (1) 8' pipeline.
27-BR-052
Brazoria and Galveston
Laurence E. Dignan, et al
Dow Chemical Company
v1179/p898; v2409/p561
A 40' wide right of way for (2) pipelines with 36" of cover.
27-GA-052X
Galveston County, TX
Private Canal
None
None
Private canal
27-GA-053
Galveston County, TX
Dennis J. M. Corbett
Dow Chemical Company
v2427/p159
A 30' wide right of way buried at cultivation depth.
27-GA-054
Galveston County, TX
Cesare J. Galli and Margaret Galli
Dow Chemical Company
v2387/p82
A right of way for (1) pipeline with 36" of cover.  Right of way is 15' west of Lavaca's centerline and 10' East of Phillips pipeline.
27-GA-054X
Galveston County, TX
Galveston County Drainage District
None
None
Private canal
27-GA-054XX
Galveston County, TX
Private Drainage Ditch
None
None
Private ditch.  No permit required.
27-GA-055
Galveston County, TX
J. A. Segelquist Ranch, Inc. and J. A. Segelquist, president
Dow Chemical Company
v2399/p491
A 20' wide right of way for (1) pipelines with 30" of cover.
27-GA-055X.1
Galveston County, TX
Houston Lighting and Power Company
Continental Oil Company
###-##-####
A right of way for (2) pipelines with 4' of depth for longitudinal crossings and 9' of cover for perpendicular crossings.  Refer to GA-55 on map
27-GA-055X.2
Galveston County, TX
Corps of Engineers
Continental Oil Company
None
Permit No. 12781 across Dickinson Bayou with (1) 6" and (1) 8" pipelines.
27-GA-055X.3
Galveston County, TX
State of Texas General Land Office
Oxy Petrochemicals, Inc.
GAC 9818178
ME 880059 crossing Dickinson's Bayou.  This was originally for (1) 6" and (1) 8" but renewal is for (1) 8" only.  NOTE: GLO is amending to add the 6" to easement.
27-GA-055X.4
Galveston County, TX
Brazos River Authority
Continental Oil Company
None
Letter permit for a 10' wide right of way with (1) 6" and (1) 8" pipeline, and 5' of cover at the lowest point.
27-GA-056
Galveston County, TX
Pearland Sportsman Club Service Corporation
Dow Chemical Company
v2451/p119
A 25' wide right of way for (2) pipelines with 36" of cover.
27-GA-057
Galveston County, TX
Reginald C. Peterson
Dow Chemical Company
v2439/p237
A 25' wide right of way for (2) pipelines with 36" of cover.
27-GA-057X
Galveston County, TX
Brazos River Authority
None
None
American Canal and County Rd..  Now under the jurisdiction of the Gulf Coast Water Authority for Ditches and Canals.  David Sauer stated that all the BRA permits remain unfiled and there is no way of locating it.
27-GA-058
Galveston County, TX
Christian Communications Corporation, William Strubel, president
Dow Chemical Company
v2417/p400
A 25' wide right of way for (2) pipelines with 36" of cover.  No fences.
27-GA-059
Galveston County, TX
W. R. Lunday and Dora B. Lunday
Dow Chemical Company
v2399/p486
A 25' wide right of way for no specified amount of pipelines with 36" of cover.
27-GA-059X
Galveston County, TX
City of Friendswood
None
None
07/24/03: Conversation with Wendy Kingery, Building Dept., said that permits were never officially issued.  They request only  an application and as-builts after construction.
27-GA-060
Galveston County, TX
L. W. Lunday, Sr., et al
Dow Chemical Company
v2449/p545
A 25' wide right of way for no specified amount of pipelines with 36" of cover.
27-GA-061
Galveston County, TX
W. R. Lunday and Dora B. Lunday
Dow Chemical Company
v2399/p486
A 25' wide right of way for no specified amount of pipelines with 36" of cover.
27-GA-062
Galveston County, TX
E. L. Angelo and George A. Bofysil
Dow Chemical Company
v2433/p25
A 20' wide right of way for (2) pipelines not to exceed 12" with 48" of cover.
27-GA-063
Galveston County, TX
Community Public Service Company (Nellie B. Roberts)
Continental Oil Company
v3061/p228
Community Public Service Co. agrees to installation of pipeline on their right of way given by F. H. Roberts, et ux.  A 30' wide right of way for (2) 8" pipelines.
27-GA-063
Galveston County, TX
Frank H. Roberts and Nellie B. Roberts
Dow Chemical Company
v2365/p148
A 30' wide right of way for (1) pipeline buried to cultivation depth.
27-GA-063X
Galveston County, TX
Rice Lateral
None
None
Private.  No permit/easement required.
27-GA-064
Galveston County, TX
George A. Bofysil
Dow Chemical Company
v2433/p30
A 20' wide right of way for (2) pipelines not to exceed 12" with 48" of cover.
27-GA-065
Galveston County, TX
Stanley Weinstein, Trustee
Dow Chemical Company
v2433/p35
A 20' wide right of way for (2) pipelines with 48" of cover.
27-GA-065X
Galveston County, TX
Texas Department of Transportation
Continental Oil Company
None
Permit No. 78-1743.  For (2) pipelines across FM 528.
27-GA-066
Galveston County, TX
James B. Kerr
Dow Chemical Company
v2409/p81
A right of way for (2) pipelines with 36" of cover.
27-GA-067
Galveston County, TX
Billy Leon Rainey and Victoria Toulson Rainey
Dow Chemical Company
v2409/p557
A 25' wide right of way for (2) pipelines with 36" of cover.
27-GA-068
Galveston County, TX
Thomas J. Blake and  P. Joan Blake
Dow Chemical Company
v2409/p85
A 20' wide right of way for (2) pipelines with 36" of cover.
27-GA-069
Galveston County, TX
Joseph J. Unger, Jr. and Veda Annette Unger
Dow Chemical Company
v2409/p99
A 20' wide right of way for (2) pipelines with 36" of cover.
27-GA-069X
Galveston County, TX
Private Ditch
None
None
This ditch appears to be private.
27-GA-070
Galveston County, TX
W. Frank Lenair
Dow Chemical Company
v2399/p146
A 20' wide right of way for (2) pipelines with 36" of cover.
27-GA-071
Galveston County, TX
Robert A. Bludworth
Dow Chemical Company
v2475/p625
A 20' wide right of way for (2) pipelines with 36" of cover.
27-GA-071X
Galveston County, TX
Friendswood Drainage District
Continental Oil Company
None
Letter grants variance to lower pipelines that cross Coward and Chigger Creeks with (2) pipelines.
27-GA-072
Galveston County, TX
William B. Wood and Judith G. Wood
Dow Chemical Company
v2463/p598
A 20' wide right of way for (2) pipelines with 36" of cover.
27-GA-072X
Galveston County, TX
City of Friendswood
None
None
07/24/03: Conversation with Wendy Kingery, Building Dept., said that permits were never officially issued.  They request only  an application and as-builts after construction.
27-GA-073
Galveston County, TX
W. Frank Lenair
Dow Chemical Company
v2399/p146
A 20' wide right of way for (2) pipelines with 36" of cover.
27-GA-073X
Galveston County, TX
City of Friendswood
None
None
07/24/03: Conversation with Wendy Kingery, Building Dept., said that permits were never officially issued.  They request only an application and as-builts after construction.
27-GA-074
Galveston County, TX
Carroll L. Boone
Dow Chemical Company
v2439/p486
A 20' wide right of way for (2) pipelines.
27-GA-075
Galveston County, TX
Herbert L. Brannan
Dow Chemical Company
v2439/p154
A 20' wide right of way for (2) pipelines with 36" of cover.
27-GA-076
Galveston County, TX
James F. Fairleigh
Continental Oil Company
v2992/p655
(This agreement has signature of James F. Fairleigh only.) 24' by 30' Block valve site.
27-GA-076
Galveston County, TX
Novelli and Dr. James F. Fairleigh
Dow Chemical Company
v2409/p94
A 20' wide right of way for (2) pipelines with 36" of cover.
27-GA-076X
Galveston County, TX
City of Friendswood
None
None
07/24/03: Conversation with Wendy Kingery, Building Dept., said that permits were never officially issued.  They request only  an application and as-builts after construction.
27-GA-077
Galveston County, TX
James O. Nye and Mary E. Nye
Continental Oil Company
v2903/p430
A 100' wide right of way with 36" of cover.
27-GA-077X
Galveston County, TX
Friendswood Drainage District
Continental Oil Company
None
Letter grants variance to lower pipelines that cross Coward and Chigger Creeks with (2) pipelines.
27-GA-078
Galveston County, TX
Timberline Corporation, Timerline Building Company, Inc., Samuel H. Vester, Jr.,  president
Continental Oil Company
v1555/p392
A 10' wide right of way with 5' of cover.
27-GA-078X
Galveston County, TX
Texas Department of Transportation
Continental Oil Company
None
Permit No. 78-1739 for the crossing of FM 2351.
27-BR-079
Brazoria and Galveston
Robert B. Blaylock and Laverne G. Blaylock
Continental Oil Company
v1406/p454; v3019/p627
A 20' wide right of way for (2) pipelines with 36" of cover.
27-BR-080
Brazoria County, TX
V & F Builders, Inc.
Continental Oil Company
v1405/p641
A 10' wide right of way for (2) pipelines.
27-BR-081
Brazoria County, TX
Child Guidance Centers, Inc.
Continental Oil Company
v1406/p457
A 20' wide right of way for (2) pipelines with 36" of cover.
27-BR-082
Brazoria County, TX
Gerald R. Wood and Donna C. Wood
Continental Oil Company
v1405/p632
A 20' wide right of way for (2) pipelines with 48" of cover.
27-BR-083
Brazoria County, TX
Wade T. Wood and Anna Lou Wood
Continental Oil Company
v1405/p635
A 20' wide right of way for (2) pipelines.
27-BR-083X
Brazoria County, TX
Brazoria County
Continental Oil Company
None
Rd.way between CR 130 and Penny Wayne.  This road is presently not under County's jurisdiction, but may soon become CR and our pipeline is constructed in accordance with their regulations.  See file for more info.
27-BR-084
Brazoria County, TX
United Valve Supply, Inc.
Continental Oil Company
v1405/p653
A 20' wide right of way for (2) pipelines with 36" of cover.  Lien subordination in agreement.
27-BR-084X
Brazoria County, TX
Brazoria County
Continental Oil Company
None
Rd.way between CR 130 and Penny Wayne.  This road is presently not under County's jurisdiction, but may soon become CR and our pipeline is constructed in accordance with their regulations.  See file for more info.
27-BR-084XX
Brazoria County, TX
Brazoria County
Continental Oil Company
None
Rd.way between CR 130 and Penny Wayne.  This road is presently not under County's jurisdiction, but may soon become CR and our pipeline is constructed in accordance with their regulations.  See file for more info.
27-BR-085
Brazoria County, TX
James T. Iley;  Anna C. Iley; Chester T. Iley
Continental Oil Company
v1405/p647
A 20' wide right of way for (2) pipelines with 36" of cover.
27-BR-086
Brazoria County, TX
Diane A. Branch Cass
Continental Oil Company
v1405/p650
A 20' wide right of way for (2) pipelines.
27-BR-086X
Brazoria County, TX
Brazoria County Commissioners Court
Continental Oil Company
None
Order granting permit to cross CR  131.  (Rustic Lane)
27-BR-087
Brazoria County, TX
Henry Winston and Betty Winston
Continental Oil Company
v1405/p644
A 10' wide right of way for (2) pipelines with 48" of cover.
27-BR-088
Brazoria County, TX
Cain Corporation, Linn C. Eignus, president
Continental Oil Company
v1425/p462
A 20' wide right of way for (2) pipelines with 48" of cover.
27-BR-088X
Brazoria County, TX
Brazoria County Drainage District No. 4
Continental Oil Company
None
Mary's Creek Lateral and Mary's Creek.
27-BR-089
Brazoria County, TX
South Corridor Two, LTD
Continental Oil Company
v1433/p671
A 20' wide right of way for (2) pipelines with cathodic protection, and 4' of cover on ditches and cultivation depth everywhere else.  Property sold to Houston Pine Hollow Association LTD, 01/13/95.
27-BR-089X
Brazoria County, TX
Brazoria County Commissioners Court
Cain Chemicals, Inc.
None
Original permit was to Continental Oil.  Commissioner agrees to assignment of permit and gives new permit to Cain and allows relocation of CR 169 crossing.  (1) 6" and (1) 8" pipeline.
27-BR-089XX
Brazoria County, TX
Texas Department of Transportation
Continental Oil Company
None
Permit No. 78-1699 to cross FM 518
27-BR-090
Brazoria County, TX
George E. Young, individually and as Trustee and B-2 Towing Company, C. C. Brooks, president
Continental Oil Company
v1427/p617
A 10' wide right of way for (2) pipelines with 6' of cover.
27-BR-090X
Brazoria County, TX
Brazoria County Drainage District No. 4
Continental Oil Company
None
Mary's Creek Lateral and Mary's Creek.
27-BR-091
Brazoria County, TX
South Corridor One, LTD
Continental Oil Company
v1433/p323
A right of way for (2) pipelines.
27-BR-091X
Brazoria County, TX
City of Pearland
Conoco, Inc.
None
Minutes from meeting of Pearland council on crossing Dixie Farm Rd. and McDonald Rd..
27-BR-092
Brazoria County, TX
David Mayfield and Veronica H. Mayfield
Continental Oil Company
v1434/p581
A 4' wide right of way.
27-BR-092X
Brazoria County, TX
City of Pearland
Conoco, Inc.
None
Minutes from meeting of Pearland council on crossing Dixie Farm Rd. and McDonald Rd.
27-BR-093
Harris and Brazoria
Clear Creek Property, LTD, J. R. McDonald and J. H. Walthall
Continental Oil Company
v1475/p453; ###-##-####
A 20' wide right of way for (2) pipelines with 36" of cover.
27-BR-093X
Brazoria County, TX
Corps of Engineers
Continental Oil Company
None
Permit No. 12781 across Clear Creek with (1) 6" and (1) 8" pipelines.
27-BR-093XX
Brazoria and Galveston
State of Texas General Land Office
Continental Oil Company
v3023/p473
ME 3914 crossing Clear Creek with (1) 6" and (1) 8" pipeline.  No longer state owned.
27-HA-094
Harris County, TX
James A. Wood and Doris Wood
Continental Oil Company
###-##-####
A 10' wide right of way for (2) pipelines buried at cultivation depth.
27-HA-094X
Harris County, TX
Harris County Commissioners Court
Continental Oil Company
None
Permit No. 3987.  Crossing Choate Rd. and Tri-City Beach Rd. with (2) pipelines with 4' of minimum cover.
27-HA-095
Harris County, TX
Republic National Bank of Dallas, Trustee
Continental Oil Company
###-##-####
A 20' wide right of way for (2) pipelines with 31' of cover.
27-HA-096
Harris County, TX
Ralph L. Lowe
Continental Oil Company
###-##-####
A 20' wide right of way for (2) pipelines 8" or smaller buried to cultivation depth.
27-HA-096X
Harris County, TX
Corps of Engineers
None
None
No permit was issued or required for this crossing.  "Letter to File" is all that is file.
27-HA-097
Harris County, TX
Republic National Bank of Dallas, Trustee
Continental Oil Company
###-##-####
A 20' wide right of way for (2) pipelines with 31" of cover.
27-HA-098
Harris County, TX
Ethel C. Jones
Continental Oil Company
###-##-####
A 20' wide right of way for (2) pipelines with 36" of cover.
27-HA-099
Harris County, TX
Nancy Elizabeth Peyraud
Continental Oil Company
###-##-####
A 20' wide right of way for (2) pipelines with 36" of cover.
27-HA-099X
Harris County, TX
Lease Rd. Crossing
None
None
No permit was issued or required for this crossing.  "Letter to File" is all that is in file.
27-HA-100
Harris County, TX
Republic National Bank of Dallas, co-Trustee and Erin B. Jones, co-Trustee
Dow Chemical Company
###-##-####
A 20' wide right of way for (2) pipelines with 42" of cover.
27-HA-101
Harris County, TX
Georgia Warm Springs Foundation
Dow Chemical Company
###-##-####
A 20' wide right of way for (2) pipelines with 36" of cover.
27-HA-101X
Harris County, TX
Harris County Commissioners Court
Conoco, Inc.
None
Permit to cross Choate Rd. with (1) 6" and (1) 8" pipelines.
27-HA-102
Harris County, TX
Scott Beamer, individually and as Trustee under the will of Louise Scott Beamer
Continental Oil Company
###-##-####
A 20' wide right of way for (2) pipelines not exceeding 10"  with 36" of cover.
27-HA-103
Harris County, TX
Kathryn Scott Bray
Continental Oil Company
###-##-####
A 20' wide right of way for (2) pipelines with 36" of cover.
27-HA-104
Harris County, TX
Exxon Corporation
Dow Chemical Company
###-##-####
Tracts 1-5, for a 4" pipeline.
27-HA-104
Harris County, TX
Board of Trustees of Hermann Hospital Estate
Continental Oil Company
###-##-####
A right of way for (2) 8" pipelines with 4' of cover.
27-HA-104X
Harris County, TX
Harris County Flood Control District
Continental Oil Company
None
Permit for (1) 6" and (1) 8" pipeline crossing Flood Control drainage districts.
27-HA-105
Harris County, TX
Kathryn Scott Bray
Continental Oil Company
031-00-1001
A 20' wide right of way for (2) pipelines with 36" of cover.
27-HA-106
Harris County, TX
Exxon Corporation
Dow Chemical Company
###-##-####
Easement for tracts 1-5 for (1) 4" pipeline.
27-HA-107
Harris County, TX
Roy A. Kielsling, Sr., et al
Dow Chemical Company
###-##-####
A 15' wide right of way for (2) pipelines with 42" of cover.
27-HA-107
Harris County, TX
Emma K. Dixon Trust and T. K. Dixon Trust
Dow Chemical Company
###-##-####
A 15' wide right of way for (2) pipelines with 42" of cover.
27-HA-108
Harris County, TX
Exxon Company USA
Cain Chemicals, Inc.
None
Refers to ###-##-####.  Assignment of Continental Oil Co. a pipeline ROW being sold to Cain Chemical.
27-HA-109
Harris County, TX
Exxon Corporation
Dow Chemical Company
###-##-####
Tracts 1-5, for a 4" pipeline.
27-HA-109X
Harris County, TX
Texas Department of Transportation
Continental Oil Company
None
Permit No. 78-1700.  Permit to cross I-45 with (1) 6" and (1) 8" pipeline.
27-HA-110
Harris County, TX
Exxon Corporation
Cain Chemicals, Inc.
None
Refers to ###-##-####.  Assignment of Continental Oil Co. a pipeline ROW being sold to Cain Chemical.
27-HA-110X
Harris County, TX
Houston Lighting and Power Company
Continental Oil Company
###-##-####
A right of way for (1) 6" and (1) 8" pipeline with 4' of cover for longitudinal and 9' of cover for perpendicular crossings.  Also, a no objection letter for a 20' by 45' valve site.
27-HA-110XX
Harris County, TX
Texas Department of Transportation
Continental Oil Company
None
Permit No. 78-1711 for (1) 6" and (1)  8" pipeline across SH 3.
27-HA-110XXX
Harris County, TX
Galveston, Houston and Henderson Railroad Company (UPRR)
Conoco, Inc.
None
License for (1) 6" and (1) 8" pipeline.  MP 17.685 near Ellington Field, TX.  Secretary No. 2420.  Product limitations amended to say Ethylene, ethane and natural gas.
27-HA-111
Harris County, TX
Exxon Corporation and Red Bluff Development
Dow Chemical Company
###-##-####
Easement for (1) 4" pipeline.
27-HA-111X.1
Harris County, TX
Harris County Flood Control District
Continental Oil Company
None
Permit for (1) 6" and (1) 8" pipeline crossing Flood Control drainage.
27-HA-111X.2A
Harris County, TX
Corps of Engineers
Continental Oil Company
None
Permit No. 12781 across Middle (Armand) Bayou with (1) 6" and (1) 8" pipeline.  Amended to include various products and assignment to Cain Chemical.
27-HA-111X.2B
Harris County, TX
State of Texas General Land Office
Equistar Chemicals, LP
  
ME 20030141 for (1) 6" and (1) 8" pipelines crossing Armand Bayou..
27-HA-111X.3
Harris County, TX
Houston Lighting and Power Company
Continental Oil Company
###-##-####
A right of way for (1) 6" and (1) 8" pipeline with 4' of cover for longitudinal and 9' of cover for perpendicular crossings.  Also, a no objection letter for a 20' by 45' valve site.
27-HA-111X.4
Harris County, TX
Harris County Commissioners Court
Continental Oil Company
None
Permit for (1) 6" and (1) 8" pipeline crossing Red Bluff Rd.  Product limitations has changed to oil, gas products and byproducts, ethylene, ethane and natural gas in amendment dated 8/8/85.
27-HA-111X.5
Harris County, TX
Harris County Flood Control District
Continental Oil Company
None
Permit for (1) 6" and (1) 8" pipeline crossing Flood Control drainage.
27-HA-112X.1
Harris County, TX
Harris County Commissioners Court
Continental Oil Company
None
Permit to cross Proposed Underwood Rd.
27-HA-112X.2
Harris County, TX
Harris County Flood Control District
Continental Oil Company
None
Permit for (1) 6" and (1) 8" pipeline.
27-HA-112X.3
Harris County, TX
Harris County Commissioners Court
Continental Oil Company
None
Permit for (1) 6" and (1) 8" pipeline crossing Bay Park Rd.  Product limitations has changed to oil, gas products and byproducts, ethylene, ethane and natural gas in amendment dated 8/8/85.
27-HA-112X.4
Harris County, TX
Houston Lighting and Power Company
Continental Oil Company
###-##-####
A right of way for (1) 6" and (1) 8" pipeline with 4' of cover for longitudinal and 9' of cover for perpendicular crossings.  Also, a no objection letter for a 20' by 45' valve site.
27-HA-112X.5
Harris County, TX
Harris County Commissioners Court
Continental Oil Company
None
Permit for (1) 6" and (1) 8' pipeline crossing Fairmont Parkway.  Product limitations has changed to oil, gas products and byproducts, ethylene, ethane and natural gas in amendment dated 8/8/85.
27-HA-112X.6
Harris County, TX
City of La Porte
Continental Oil Company
None
Ordinance No. 915-K to cross the City of La Porte.  Amended Ordinance No. 915-K (A) on 8/26/85 to include oil, gas, byproducts, ethylene, ethane and natural gas.  Amended 915-K (B) on 10/26/87 to assign to Cain Chemical.
27-HA-113
Harris County, TX
Exxon Pipeline Company
Continental Oil Company
###-##-####
F595275 - Film Code: 194-19-0956.  Corridor agreement with a five year rate review.  (1) 6" and (1) 8" pipeline.  Grantor has first right of refusal to purchase of grantee desires to sell.  Grantee may sell to or assign this agreement to wholly-owned subs
27-HA-113X.1
Harris County, TX
Harris County Commissioners Court
Continental Oil Company
None
Permit for (1) 6" and (1) 8" pipeline crossing West Main (Spencer Highway).  Product limitations has changed to oil, gas products and byproducts, ethylene, ethane and natural gas in amendment dated 8/8/85.
27-HA-113X.2
Harris County, TX
Harris County Flood Control District
Continental Oil Company
None
Permit for (1) 6" and (1) 8" pipeline crossing Flood Control drainage.
27-HA-113X.3
Harris County, TX
City of LaPorte
Continental Oil Company
None
Ordinance No. 915-K.  Amended Ordinance No. 915-K (A) on 8/26/85 to include oil, gas, byproducts, ethylene, ethane and natural gas.  Amended 915-K (B) on 10/26/87 to assign to Cain Chemical.
27-HA-113X.4
Harris County, TX
City of Lomax
Continental Oil Company
None
Ordinance 111 for North L., North P., and North H. street crossings.
27-HA-113X.5
Harris County, TX
City of Lomax
Continental Oil Company
None
Ordinance 111 for North L., North P., and North H. street crossings.
27-HA-113X.6
Harris County, TX
Harris County Flood Control District
Continental Oil Company
None
Permit for (1) 6" and (1) 8" pipeline crossing Flood Control drainage.
27-HA-113X.7
Harris County, TX
Harris County Flood Control District
Continental Oil Company
None
Permit for (1) 6" and (1) 8" pipeline crossing Flood Control drainage.
27-HA-113X.8
Harris County, TX
City of Lomax
Continental Oil Company
None
Ordinance 111 for North L., North P., and North H. street crossings.
27-HA-113X.9
Harris County, TX
Harris County Flood Control District
Continental Oil Company
None
Ditch F-100-00-00
27-HA-113X.10
Harris County, TX
Union Pacific Railroad Company
Equistar Chemicals, LP
None
License for (1) 6" PGP/ethane and (1) 8" Hydrocarbons pipelines crossing near Strang Subdivision, Deer Park, TX.  Audit No. 222565 (formerly 185494).  MP 20.58.  Folder No. 2001-49
27-HA-113X.11
Harris County, TX
Texas Department of Transportation
Continental Oil Company
None
Permit No. 78-1790 for (1) 6" and (1) 8" pipeline crossing SH 225.
27-HA-114
Harris County, TX
E. I. Du Pont De Nemours and Company
Continental Oil Company
###-##-####
Cathodic protection on units on portions of Du Pont's La Porte, TX plant property.
27-HA-114
Harris County, TX
E. I. Du Pont De Nemours and Company
Continental Oil Company
###-##-####; ###-##-####
A right of way for (1) 6" and (1) 8" pipeline.
27-HA-114.1
Harris County, TX
E. I. Du Pont De Nemours and Company
Equistar Chemicals, LP
###-##-####
Lease of 0.3328 acres in the Enoch Brinson Survey, A-5.  This is for a valve site and pig traps.  This is the same tract as 25-H-202.2X, 27-H-001 and 27-H-001X.
27-HA-114.1
Harris County, TX
E. I. Du Pont De Nemours and Company
Equistar Chemicals, LP
###-##-####
Easement for (2) 6" and (4) 8" pipelines in Enoch Brinson Survey, A-5.  This is the same tract as 25-H-202.2X, 27-H-001 and 27-H-001X.
27-HA-114.1
Harris County, TX
E. I. Du Pont De Nemours and Company
Equistar Chemicals, LP
None
Easement to install and replace (1) 6" and (1) 8" pipelines as well as removing pipe from abandoned 6" and 8" easement-New easement granted on the condition that it obtains a Right of Entry from Reliant Energy (obtained).  Easement is located in the Enoch
27-HA-114X.1
Harris County, TX
Houston Lighting and Power Company
Continental Oil Company
###-##-####
A right of way for (1) 6" and (1) 8" pipeline with 4' of cover for longitudinal and 9' of cover for perpendicular crossings.  Also, a no objection letter for a 20' by 45' valve site.
27-HA-114X.2
Harris County, TX
Harris County Commissioners Court
Conoco, Inc.
None
Permit to cross Sens Rd. with (1) 6" and (1) 8" pipeline.
27-HA-114X.3
Harris County, TX
Coastal Industrial Water Authority
Continental Oil Company
None
Permit in letter for (1) 6" and (1) 8" pipeline.  Permit No. CP-78-41.
27-HA-114X.4
Harris County, TX
Southern Pacific Transportation Company (UPRR)
Continental Oil Company
None
License for (1) 6" ethane and (1) 8" ethylene pipelines.  Audit No. 185493.  Crossing Lead tracts 300 & 302.  MP 0.44.  Crossing near Strang, TX.  Amended 9/25/85 to Ethane, Ethylene and natural gas as product limitations.
27-HA-114X.5
Harris County, TX
Harris County Commissioners Court
Conoco, Inc.
None
Permit to cross Strang Rd. with (1) 6" and (1) 8" pipeline.
27-HA-114X.6
Harris County, TX
Texas Department of Transportation
Continental Oil Company
None
Permit for (1) 6" and (1) 8" pipeline crossing SH 146.  Same as HA-114X.  Refer to H-7 on map
27-HA-114X.7
Harris County, TX
Houston Lighting and Power Company
Continental Oil Company
###-##-####
A right of way for (1) 6" and (1) 8" pipeline with 4' of cover for longitudinal and 9' of cover for perpendicular crossings.  Also, a no objection letter for a 20' by 45' valve site.
27-HA-114X.8A
Harris County, TX
Corps of Engineers
Continental Oil Company
None
Permit No. 12780 across Lower San Jacinto Bay with (1) 6" and (1) 8" pipelines.
27-HA-114X.8A
Harris County, TX
Corps of Engineers
Continental Oil Company
None
Permit No. 12780 for (1) 6" and (1) 8" pipeline across Tabbs Bay.
27-HA-114X.8B
Harris County, TX
State of Texas General Land Office
Continental Oil Company
###-##-####
ME 3904 for (1) 6" and (1) 8" pipeline crossing the Lower San Jacinto Bay.  This is now under the jurisdiction of the Harris County Navigation District.
27-HA-115
Harris County, TX
Port of Houston Authority
Equistar Chemicals, LP
None
License No. 99-0055 (formerly 88-0296) for (1) 6" and (1) 8" pipeline.  Under and across the Lower San Jacinto Bay.
27-HA-116
Harris County, TX
Alyce Kilpatrick Van Wagner and Eugenia K. Bray
Continental Oil Company
###-##-####
A 10' wide right of way for (2) pipelines.  A 1/2 undivided interest.
27-HA-117
Harris County, TX
Port of Houston Authority
Equistar Chemicals, LP
None
License No. 99-0055 (formerly 88-0296) for crossing in Port Authority jurisdiction under and across Spillman Island.  (1) 6" and (1) 8" pipeline.
27-HA-117X
Harris County, TX
Corps of Engineers
Continental Oil Company
None
Permit No. 12780 across the Houston Ship Channel with (1) 6" and (1) 8" pipelines.
27-HA-117XX
Harris County, TX
State of Texas General Land Office
Continental Oil Company
None
ME 3915 for (1) 6" and (1) 8" pipeline crossing the Houston Ship Channel.  This easement is now under the authority of the Harris County Ship and Navigation District.  No easement or renewal is required for the GLO.
27-HA-118
Harris County, TX
Port of Houston Authority
Equistar Chemicals, LP
None
License No. 99-0055 (formerly 88-0296) for crossing in Port Authority jurisdiction.  Under and across Hog Island.
27-HA-118X
Harris County, TX
Corps of Engineers
Continental Oil Company
None
Permit No. 12780 across Tabbs Bay with (1) 6" and (1) 8" pipelines.
27-HA-118XX
Harris County, TX
State of Texas General Land Office
Continental Oil Company
###-##-####
ME 3957 across Tabbs Bay.  This is now under the authority of the Harris County Ship Navigation District.  Not under GLO jurisdiction.
27-HA-118XXX
Harris County, TX
Port of Houston Authority
Equistar Chemicals, LP
None
License No. 99-0055 (formerly 88-0296) for crossing in Port Authority jurisdiction under and across Tabbs Bay.  (1) 6" and (1) 8" pipeline.
27-HA-119
Harris County, TX
Texaco, Inc.
Continental Oil Company
###-##-####
Surface of 10 acres.  Subject to any and all easements, leases and other rights.
27-HA-119X
Harris County, TX
Harris County Commissioners Court
Continental Oil Company
None
Permit No. 3987 crossing Choate Rd. and Tri City Beach Rd. with (2) pipelines with 4' of cover.
27-HA-119XX
Harris County, TX
Corps of Engineers
Continental Oil Company
None
Permit No. 12780 across Cedar Bayou with (1) 6" and (1) 8" pipelines.
27-HA-119XXX
Chambers County, TX
State of Texas General Land Office
Equistar Chemicals, LP
99-398-126
ME 880084 across Cedar Bayou.
27-HA-119XXXX
Chambers County, TX
Port of Houston Authority
Equistar Chemicals, LP
None
License No. 99-0055 (formerly 88-0296) for crossing in Port Authority jurisdiction.  Under and across Cedar Bayou.  (1) 6" and (1) 8" pipelines.
27-CH-119X
Harris and Chambers
Port of Houston Authority
Equistar Chemicals, LP
None
License No. 99-0055 (formerly 88-0296) for crossing the Port Authority Jurisdiction.  Under and across Cedar Bayou.
27-CH-120
Chambers County, TX
United States Steel Corporation
Continental Oil Company
v432/p328
A 10' wide right of way for (1) to a maximum of (3) pipelines with 42" of cover.  Easement allows for underground cathodic protection and other corrosion control equipment and appurtenant valves and other apparatus above or below ground.
27-CH-120X
Chambers County, TX
Texas Department of Transportation
Continental Oil Company
None
Permit No 20-469-78 for (1) 6" and (1) 8" pipeline crossing FM 1405.
27-CH-120X.2
Chambers County, TX
Missouri Pacific Railroad Company (UPRR)
None
None
This MPRR spur is under the jurisdiction of U. S. Steel.  See memo in file dated 7/17/78.
27-CH-120X.3
Chambers County, TX
Texas Department of Transportation
Continental Oil Company
None
Permit No. 20-549-78 for (1) 6" and (1) 8" pipeline crossing Cedar Bayou and proposed FM 1405.
27-CH-120X.4
Chambers County, TX
Texas Department of Transportation
Continental Oil Company
None
Permit No. 20-553-78 for (1) 6" and (1) 8" pipeline across FM 1405.
27-CH-121
Chambers County, TX
Houston Lighting and Power Company
Continental Oil Company
v538/p274
A right of way for (1) 6" and (1) 8" pipeline with 4' of cover longitudinally and for 9' perpendicular crossings.
27-CH-121X.1
Chambers County, TX
Houston Lighting and Power Company
Continental Oil Company
None
A right of way for (1) 6" and (1) 8" pipeline with 4' of cover longitudinally and for 9' perpendicular crossings.
27-CH-121X.2
Chambers County, TX
Corps of Engineers
Continental Oil Company
None
Permit No. 13044 crossing under HL&P Canal with (1) 6" and (1) 8" pipelines.
27-CH-122
Chambers County, TX
Mobay Chemical Company
Continental Oil Company
v426/p144
A 15' wide right of way.
27-CH-123
Chambers County, TX
Houston Lighting and Power Company
Continental Oil Company
None
A right of way for (1) 6" and (1) 8" pipeline with 4' of cover longitudinally and for 9' perpendicular crossings.
27-CH-124
Chambers County, TX
Katherine Clark Newbold, et al
Continental Oil Company
v412/p251
A 30' wide right of way for (2) pipeline not exceeding 10" and (2) pipelines not exceeding 24" with 4' of cover.
27-CH-124X
Chambers County, TX
Texas Department of Transportation
Continental Oil Company
None
Permit No. 20-550-78 for (1) 6" and (1) 8" pipeline crossing FM 1405.
27-CH-124XX
Chambers County, TX
Southern Pacific Transportation Company (UPRR)
Continental Oil Company
None
Audit No. 185380.  License for (1) 6" ethane and (1) 8" ethylene pipelines crossing beneath Cedar Bayou Industrial Spur at MP 4.12.  Amended 9/25/85 to Ethane, Ethylene and natural gas as product limitations.  Crossing near Eldor, TX.
27-CH-125
Chambers County, TX
S/C Management Company No. 56, LTD.
Continental Oil Company
v425/p15
A 30' wide right of way for no more than (3) pipelines with 5' of cover.  Assignable in whole, not in part.
27-CH-125
Chambers County, TX
S. C. Management Corporation No. 56
Continental Oil Company
v425/p28
Agreement to install, maintain, inspect, alter, repair, operate, change and remove such overhead valves, gate valves and boxes, apparatus and equipment including fences and structures to enclose same.
27-CH-125X
Chambers County, TX
Texas Department of Transportation
Continental Oil Company
None
Permit No. 20-551-78  for (1) 6" and (1) 8" pipeline crossing FM 565.
27-CH-125X
Chambers County, TX
Texas Department of Transportation
Continental Oil Company
None
Permit No. 20-170-79 to construct across driveway on highway right of way on FM 565.
27-CH-126
Chambers County, TX
Elva McKay, et al
Continental Oil Company
v416/p496
A 25' wide right of way for (3) pipelines with 4' of cover.
27-CH-127
Chambers County, TX
Kilgore Heirs, a limited parternship
Continental Oil Company
v429/p628
A 30' wide right of way with 4' of cover.  Each additional pipeline above (4) can be laid for additional consideration.
27-CH-128
Chambers County, TX
Diamond -Koch, LP
Equistar Chemicals, LP
None
A right of way for (3) 8" pipelines with 4' of cover.  A 20' by 20' surface site.  Assignable with prior written consent.          (NON-USE TERM: 180 consecutive days unless by act of God, explosion or extended maintenance or reason beyond control of gran
27-CH-128
Chambers County, TX
Texaco, Inc.
Continental Oil Company
v425/p22
A right of way for (3) pipelines with 4' of cover.
27-CH-129
Chambers County, TX
J. H. Strickland, et al
Continental Oil Company
v419/p513
A 30' wide right of way for (2) pipeline not exceeding 10" and (1) pipeline not exceeding 24" .  No above ground appurtenances.
27-CH-130
Chambers County, TX
Texaco, Inc.
  
v425/p22
  
27-CH-130X
Chambers County, TX
Chambers County Commissioners Court
Continental Oil Company
None
Permit No. 78-4 crossing Needlepoint Rd., Eagle Park Rd., Sun Oil Rd., Winfree Rd. with (1) 6" and (1) 8" pipeline.
27-CH-131
Chambers County, TX
Diamond Shamrock Corporation
Continental Oil Company
v429/p636
A right of way for (1) 6" and (1) 8" pipeline, (2) pipelines not to exceed 24".  Width of right of way limited to width of pipe.  Ownership: Speers Property and Enterprise, No address available.
27-CH-131X.1
Chambers County, TX
Texas Department of Transportation
Continental Oil Company
None
Permit No. 20-489-78 to cross IH-10 with (1) 6" and (1) 8" pipeline with 36" of cover.
27-CH-131X.2
Chambers County, TX
Chambers County Commissioners Court
Continental Oil Company
None
Permit No. 78-4 crossing Needlepoint Rd., Eagle Park Rd., Sun Oil Rd., Winfree Rd. with (1) 6" and (1) 8" pipeline.
27-CH-131X.3
Chambers County, TX
Smith Gully Crossing
None
None
As far as can be determined, no permit was issued or required for this crossing.  Purpose of letter is to strictly point out the existence of this crossing and its location.
27-CH-131X.4
Chambers County, TX
Chambers County Commissioners Court
Continental Oil Company
None
Permit No. 78-4 crossing Needlepoint Rd., Eagle Park Rd., Sun Oil Rd., Winfree Rd. with (1) 6" and (1) 8" pipeline.
27-CH-131X.5
Chambers County, TX
Smith Gully Crossing
None
None
As far as can be determined, no permit was issued or required for this crossing.  Purpose of this letter is strictly to point out the existence of this crossing and its location.
27-CH-132
Chambers County, TX
Atlantic Richfield Company
Continental Oil Company
v433/p558
A right of way for (1) 6" and (1) 8" pipeline.  A-5.
27-CH-133
Chambers County, TX
J. R. Oliver, individually and as Trustee
Continental Oil Company
v435/p209
A 15' wide right of way not exceeding (3) pipelines with 36" of cover.  Ingress and egress limited to the 7.638 acre tract of land known as tract No. 1.
27-CH-133X
Chambers County, TX
Texas Department of Transportation
Continental Oil Company
None
Permit No. 20-552-78 to cross FM 565 with (1) 6" and (1) 8" pipeline with a minimum depth of 24".
27-CH-134
Chambers County, TX
Gulf Oil Corporation, Acting by and through Warren Petroleum Company, a division of Gulf Oil Corp
Continental Oil Company
v425/p627
A 10' wide right of way for (1) 6" and (1) 8" pipeline, and (2) 24" pipelines with 3' of cover.  Ownership: Dynegy, C/O Warren Leatherman, 1000 Louisiana St. Suite 5800, Houston, TX 77002-5021.
27-CH-135
Chambers County, TX
Robert Ben Smith and Jo Ann Smith
Continental Oil Company
v423/p212
A 10' wide right of way for (3) pipelines buried at cultivation depth.
27-CH-136
Chambers County, TX
Gulf Oil Corporation, acting by and through Warren Petroleum Company, a division of Gulf Oil Corp
Continental Oil Company
v425/p635
A 10' wide right of way for (1) 6" and (1) 8" pipeline, and (2) 24" pipelines with 3' of cover.  Ownership: Dynegy, C/O Warren Leatherman, 1000 Louisiana St. Suite 5800, Houston, TX 77002-5021.
27-CH-136X
Chambers County, TX
Chambers County Commissioners Court
Continental Oil Company
None
Permit No. 78-4 crossing Needlepoint Rd., Eagle Park Rd., Sun Oil Rd., Winfree Rd. with (1) 6" and (1) 8" pipeline.
27-CH-137
Chambers County, TX
Tenneco Natural Gas Liquids Corporation
Oxy Petrochemicals, Inc.
None
Pipeline equipment license for valves and related equipment.  Access to work space not to exceed 10' adjacent to and on each side.  Assignment with prior written consent.  (2) originals in file.  .0052 acre Scrapper Trap site.
27-CH-137
Chambers County, TX
Tenneco Oil Company
Continental Oil Company
v428/p228
A 10' wide right of way for (1) 6", (1) 8" and (1) 24" pipelines, 18" apart from each other, with 5' of cover.
27-CH-137X
Chambers County, TX
Texas Department of Transportation
Continental Oil Company
None
Permit No. 20-471-78  for (1) 6" and (1) 8" pipeline crossing SH 146.
27-CH-138
Chambers County, TX
Atlantic Richfield Company
Continental Oil Company
v433/p558
A right of way for (1) 6" and (1) 8' pipeline in A-12.
27-CH-138X
Chambers County, TX
Texas Department of Transportation
Continental Oil Company
None
Permit No. 20-470-78 for (1) 6" and (1) 8" pipeline crossing SH 146.
27-CH-139
Chambers County, TX
Gulf Oil Corporation
Continental Oil Company
v425/p631
A 10' wide right of way  for (1) 6", (1) 8" and (2) 24" pipelines with 3' of cover.  Grantor may lay pipe over grantee's line.  Assignable with prior written consent.  Ownership: Dynegy, C/O Warren Leatherman, 1000 Louisiana St. Suite 5800, Houston, TX 77
27-CH-140
Chambers County, TX
Conoco, Inc.
Cain Chemicals, Inc.
87-16-408
6" pipeline with Block valve site, natural gas metering skid, CDR injection skid, CDR storage tank and related appurtenances. Amended on 06/07/87 in 87-17-25.
27-CH-140
Chambers County, TX
Conoco, Inc.
Cain Chemicals, Inc.
87-16-412
A 30' wide right of way for (1) 6" and (1) 8" pipeline, related valve site and appurtenances.  Ownership: ConocoPhillips, P. O. Box 870849, Mesquite, TX 75187.
27-BR-L1-001
Brazoria County, TX
Clyde Herring and Sons, Inc.
Conoco, Inc.
v1583/p715
A 30' wide right of way for (1) 6" pipeline below cultivation depth.
27-BR-L1-001X
Brazoria County, TX
Brazoria County Commissioners Court
Conoco, Inc.
None
Permit to cross CR  160 with (1) 6" pipeline. 12/03/03: Per Gene Roberson, this line which tied into the 8" is no longer in service.  It was flanged approximately 10 years ago and is no longer in use.
27-BR-L1-002
Brazoria County, TX
L. A. Van Sant, et al
Conoco, Inc.
v1584/p26
Valve site agreement. NOTE: 07/25/03-Description of right of way on easement is incorrect.   12/03/03: Per Gene Roberson, this line which tied into the 8" is no longer in service.  It was flanged approximately 10 years ago and is no longer in use.
27-BR-L1-002
Brazoria County, TX
Charlotte Steele Daniel, et al
Conoco, Inc.
v1584/p47
A 30' wide right of way for (1) 6" pipeline. 12/03/03: Per Gene Roberson, this line which tied into the 8" is no longer in service.  It was flanged approximately 10 years ago and is no longer in use.
27-BR-L1-003
Brazoria County, TX
Seadrift Pipeline Corporation
Conoco, Inc.
None
For pipeline operations to install overhead valves, gate valves and boxes, apparatus and metering equipment.  12/03/03: Per Gene Roberson, this line which tied into the 8" is no longer in service.  It was flanged approximately 10 years ago and is no longe
27-HA-L2-001
Harris County, TX
Compot Investments, LTD K. George Crockett, General Partner
Continental Oil Company
###-##-####
No specifics in easements.
27-HA-L3-001
Harris County, TX
E. I. Du Pont De Nemours and Company
Conoco, Inc.
###-##-####
(1) 4" pipeline and a 40' by 70' valve area.
27-HA-L3-001X
Harris County, TX
Houston Lighting and Power Company
Conoco, Inc.
None
Permission to Conoco, Inc. for (1) 6" pipeline (should be a 4") and a 10' by 10' valve site.
27-HA-L3-001XX
Harris County, TX
Southern Pacific Land Company (UPRR)
Conoco, Inc.
None
Southern Pacific offers no objection to (2) separate tract crossings located 78.9' West of Mile Post 220, Strang, Texas.
27-HA-L3-001XXX
Harris County, TX
Coastal Industrial Water Authority
  
None
(1) 4" pipeline in Enoch Brinson, A-5.
27-CH-L4-001
Chambers County, TX
Diamond Shamrock Corporation
Continental Oil Company
v512/p156
A right of way for (1) 6" and (1) 8" pipeline  and (1) 4" valve site discharge line, (1) 1.5" drain line and appurtenances.  Also a .0551 acre valve site.
27-H-001
Harris County, TX
E. I. Du Pont De Nemours and Company
Equistar Chemicals, LP
###-##-####
A right of way for (1) 8" and (2) 6" pipelines with 48" of cover.
27-H-001X
Harris County, TX
E. I. Du Pont De Nemours and Company
Equistar Chemicals, LP
###-##-####
Lease for a .3328 valve site.
27-H-002
Harris County, TX
Exxon Pipeline Company
Oxy Petrochemicals, Inc.
###-##-####
(1) 8" pipeline for natural gas liquids.
27-H-002X
Harris County, TX
Coastal Water Authority
Equistar Chemicals, LP
None
A right of way for (1) 8" pipeline.
27-H-002-CR
Harris County, TX
Harris County Commissioners Court
Oxy Petrochemicals, Inc.
None
Permit to cross Strang Rd..
27-H-003
Harris County, TX
Reliant Energy
Equistar Chemicals, LP
None
An 8" wide right of way for (1) 8" pipeline in lengths of 60' and  94'.
27-H-003X
Harris County, TX
Union Pacific Railroad Company (UPRR)
Oxy Petrochemicals, LP
None
A license agreement for (1) 8" pipeline carrying only condensate.  Folder No. 1657-56.  Crossing near La Porte, TX.  Audit No. 205367.  MP 21.24.
27-H-004
Harris County, TX
Port of Houston Authority
Oxy Petrochemicals, Inc.
None
License for (1) 8" pipeline with 4' of cover.  Permit NO. 98-0081 across/under Port Authority's Peggy Lake Disposal area access road.
27-H-005
Harris County, TX
Occidental Chemical Corporation
Equistar Chemicals, LP
###-##-####
Easement across a 186.56 acre tract, a 220.28 acre tract and a 66.04726 acre tract.  All in A-46.
27-H-006
Harris County, TX
Occidental Chemical Corporation
Equistar Chemicals, LP
###-##-####
Easement across a 186.56 acre tract, a 220.28 acre tract and a 66.04726 acre tract.  All in A-46.  See H-005 for documents.
27-H-007
Harris County, TX
Occidental Chemical Corporation
Equistar Chemicals, LP
###-##-####
Easement across a 186.56 acre tract, a 220.28 acre tract and a 66.04726 acre tract.  All in A-46.
27-H-007-SH
Harris County, TX
Texas Department of Transportation
Oxy Petrochemicals, Inc.
None
Permit No. 98-0229 crossing SH 134 with (1) 8" pipeline with a minimum of 5' of cover.
27-H-008
Harris County, TX
Mit Sui (USA) Company - Union Equity
  
None
No documents in file
28-PLS-2
Harris County, TX
Houston Ship Channel
      
28-PLS-3
Harris County, TX
City of Baytown
      
28-PLS-4
Harris County, TX
Don W. Queen
      
28-PLS-5,6,7,8,9,10
Harris County, TX
Edwin Rice Brown
      
28-PLS-12
Harris County, TX
R.T. Kerr
      
28-PLS-13
Harris County, TX
Robert A. Dixon
      
28-PLS-13A
Harris County, TX
Michael Ferrell  UT UX
      
28-PLS-14
Harris County, TX
George H. Dixon
      
28-PLS-15
Harris County, TX
Jessie Wade Smith
      
28-PLS-15A
Harris County, TX
Nidia Cunningham
      
28-PLS-15B
Harris County, TX
Johnnie Wooster
      
28-PLS-16,17,19
Harris County, TX
Dorothy Virdine Trustee
      
28-PLS-18
Harris County, TX
Gulf Refining Company
      
28-PLS-20
Harris County, TX
Verna Joyce Hill
      
28-PLS-21
Harris County, TX
E. P. Crow, et ux
      
28-PLS-22
Harris County, TX
Edna M. Gray
      
28-PLS-23,25
Harris County, TX
St. James Place
      
28-PLS-24
Harris County, TX
Cecil R. Rawlinson
      
28-PLS-26,28
Harris County, TX
Texas Olefins Company
      
28-PLS-27
Harris County, TX
San Jacinto River Authority
      
28-PLS-28A
Harris County, TX
David C. Swalm
      
28-PLS-30
Harris County, TX
One Decker Drive
      
28-PLS-33
Harris County, TX
David M. Kadjar
      
28-PLS-34
Harris County, TX
Ronald D. Haddox
      
28-PLS-37
Harris County, TX
Leighton Davis
      
28-PLS-38
Harris County, TX
Amanita C. Holman
      
28-PLS-38A
Harris County, TX
Highland Farms Corporation
      
28-PLS-39
Harris County, TX
James Alton Humphrey
      
28-PLS-40
Harris County, TX
Mark Ellis East
      
28-PLS-41
Harris County, TX
Wilheim vB. Miller & Clara Mae Miller
      
28-PLS-43
Harris County, TX
Herman H. Enderli
      
28-PLS-43.1
Harris County, TX
John M. Huckaby
      
28-PLS-43A
Harris County, TX
A.M. Thomas Jr
      
28-PLS-46
Harris County, TX
George F. Lerch (S.M.D.#3)
      
28-PLS-476A
Harris County, TX
O.B. Adcox
      
28-PLS-46A, 46B
Harris County, TX
Holland, et al
      
28-PLS-47
Harris County, TX
Northwest Trails
      
28-PLS-48A
Harris County, TX
J.D. Graves, el  al
      
28-PLS-49
Harris County, TX
Phil R. Kensinger
      
28-PLS-50
Harris County, TX
Texas Weslayan College
      
28-PLS-51
Harris County, TX
Texas Foundation of Voluntary Supported Colleges
      
28-PLS-52
Harris County, TX
George F. Lerch
      
28-PLS-53
Harris County, TX
H L & P
      
28-PLS-54
Harris County, TX
Steel M. McDonald
      
28-PLS-54A
Harris County, TX
E. L. Hargie, et ux
      
28-PLS-56
Harris County, TX
John Santavvy & L.R. Koudelka
      
28-PLS-57
Harris County, TX
Garth Archer (Grube)
      
28-PLS-58
Harris County, TX
Charles A. Jurek
      
28-PLS-59
Harris County, TX
E. J. Gray, et al
      
28-PLS-60
Harris County, TX
A.K. Miks
      
28-PLS-61
Harris County, TX
Sidonia Kouldelka
      
28-PLS-62
Harris County, TX
D.A. Clanton
      
28-PLS-63
Harris County, TX
A.W. Hunt Jr.
      
28-PLS-64
Harris County, TX
Exxon
      
28-PLS-65
Harris County, TX
I-Ten LTD
      
28-PLS-65B
Harris County, TX
E. J. Schaeffer
      
28-PLS-65D
Harris County, TX
William D. Kelley & Martha (wife)
      
28-PLS-65E
Harris County, TX
Lena F. Johnson
      
28-PLS-65K
Harris County, TX
Katie Ingre Williams, et al
      
28-PLS-65G
Harris County, TX
Gulf Oil Corp
      
28-PLS-65G1
Harris County, TX
James C. Savell, et ux
      
28-PLS-65K1
Harris County, TX
Warren Petroleum Corporation., et al
      
28-PLS-65K3
Harris County, TX
South Pacific
      
28-PLS-K5
Harris County, TX
Paul T. Williams
      
28-PLS-65K-7
Harris County, TX
Lee I. Swint, et al
      
28-PLS-65K-9
Harris County, TX
Viva Wiliams
      
28-PLS-65K-10
Harris County, TX
Iris Wilma Nickle, et al
      
28-PLS-65K-11
Harris County, TX
Katie Ingre Williams
      
28-PLS-65L
Harris County, TX
Mills Bennett Estate
      
28-PLS-65L-1
Harris County, TX
Paul T. Williams
      
28-PLS-65L-2
Harris County, TX
Exxon Pipeline Co.
      
28-PLS-65L-3
Harris County, TX
Houston Oil & Minerals
      
28-PLS-65N
Harris County, TX
Sun Oil, et al
      
28-PLS-65H
Harris County, TX
L.W. Massey
      
28-PLS-65 O,Q, X
Harris County, TX
Warren Petroleum Corporation
      
28-PLS-69
Harris County, TX
Ten Sjolander Brine Line
      
28-PLS-69A
Harris County, TX
Gulf Oil Corp Brine Line R-41A
      
28-PLS-79
Harris County, TX
Coastal Land Co.
      
28-PLS-80
Harris County, TX
John D. Fitzgerald
      
28-PLS-81
Harris County, TX
G.A. laughlin, et al
      
28-PLS-82A
Harris County, TX
Collier, et al
      
28-PLS-82B
Harris County, TX
Trichel, et al
      
28-PLS-82C
Harris County, TX
Collier, et al
      
28-PLS-83
Harris County, TX
G.W. Speer, Trustee
      
30-151-1
Calcasieu Parish, LA
Cities Service Refining Corporation
Defense Plant Corporation
v376/p43
A 100' wide right of way for a railroad.
30-151-2
Calcasieu Parish, LA
Cit-Con Oil Corporation joined by Magnolia Petroleum Company
Petroleum Chemicals, Inc.
v646/p547
A 30' wide right of way for (1) 6" pipeline with the depth below plow level.
30-151-3
Calcasieu Parish, LA
Louisiana Department of Highways
Petroleum Chemicals, Inc.
None
Permit for (1) 6" pipeline for (4) crossings.
30-151-4
Calcasieu Parish, LA
Louisiana Department of Highways
Petroleum Chemicals, Inc.
None
Permit for (1) 6" pipeline.
30-151-5
Calcasieu Parish, LA
Cities Service Refining Corporation
Kansas City Southern Railroad Company of Texas and New Orleans RR Company
None
A 80' wide right of way for railroad.
30-151-6
Calcasieu Parish, LA
Cities Service Refining Corporation
Petroleum Chemicals, Inc.
v643/p329
A right of way for (1) 6" pipeline below plow depth.
30-151-7
Calcasieu Parish, LA
Calcasieu Parish Police Jury
Petroleum Chemicals, Inc.
None
Permit for (1) 6" pipeline with 18" of cover for 10 road crossings.
30-151-8
Calcasieu Parish, LA
S. J. Bertrand, et al
Petroleum Chemicals, Inc.
v633/p634
A right of way with depth below plow level.
30-151-9
Calcasieu Parish, LA
Noah J. Portie
Petroleum Chemicals, Inc.
v633/p393
A right of way for (1) pipeline.
30-151-10
Calcasieu Parish, LA
Mrs. A. E. Dailey, et al
Petroleum Chemicals, Inc.
v633/p636
A right of way for (1) pipeline.
30-151-11
Calcasieu Parish, LA
Mrs. Louise Vincent, et al
Petroleum Chemicals, Inc.
v638/p32
A right of way with to be laid a maximum of 2' from existing line with 36" of cover.
30-151-12
Calcasieu Parish, LA
Carl Jacob Drost
Petroleum Chemicals, Inc.
v633/p403
A right of way the width of the pipe for (1) 6" pipeline and laid 5' south of and parallel to grantors north property line.
30-151-13
Calcasieu Parish, LA
Louisiana Department of Highways
Petroleum Chemicals, Inc.
None
Permit for (1) 6" pipeline.
30-151-14
Calcasieu Parish, LA
Hollis Eubanks
Petroleum Chemicals, Inc.
v638/p31
A right of way for (1) 6" pipeline buried in ground and parallel to and 5' west of grantors East property line.
30-151-15
Calcasieu Parish, LA
Calcasieu Parish Police Jury
Oxy Petrochemicals, Inc.
None
Letter regarding multi-road crossings.
30-151-16
Calcasieu Parish, LA
Mack H. Fariburn
Petroleum Chemicals, Inc.
v638/p34
A right of way for a  pipeline to be buried no further than 5' from property's East line.
30-151-17
Calcasieu Parish, LA
George L. Burleson, et al
Petroleum Chemicals, Inc.
v638/p30
A right of way the width of the pipe with the depth being below plow depth.
30-151-18
Calcasieu Parish, LA
Calcasieu Parish Police Jury
Oxy Petrochemicals, Inc.
None
See right of way no. 7 (3) for original license covering several crossings.
30-151-19
Calcasieu Parish, LA
Ricky Joseph Guidry and Phyllis Ann Guidry
Occidental Chemical Corporation
None
Damages
30-151-72
Calcasieu Parish, LA
Missouri Pacific Railroad Company (UPRR)
Petroleum Chemicals, Inc.
None
License for (1) 6" pipeline with 4.5' of cover below rail bottom.
30-151-20T
Calcasieu Parish, LA
American Sulfer and Oil Company
Cities Service Company
v1412/p380
A 50' wide right of way for (1) pipeline with 6' of cover from the bottom of the ditches.  One year term with right to renew for 99 years.
30-151-21
Calcasieu Parish, LA
Krauss and Managin
Petroleum Chemicals, Inc.
None
A right of way for (1) pipeline crossing canal.
30-151-22
Calcasieu Parish, LA
George T. Locke, et al
Petroleum Chemicals, Inc.
v647/p163
A right of way for (1) 6" pipeline.
30-151-23T
Calcasieu Parish, LA
Matilda Gray Stream, et al
Cities Service Company
v1696/p656
Amends and renews term of original easement dated 05/27/57 and recorded in v644/p58 for additional 30 years for a (1) pipeline right of way the width of the pipe with 3' of cover.
30-151-82
Orange County, TX
Corps of Engineers
Petroleum Chemicals, Inc.
None
Permit for (1) 6" pipeline.
30-151-25A
Calcasieu Parish, LA
Manford Kelly and Susan Gail Kelly
Cities Service Company
None
File No. 1718791
30-151-26
Calcasieu Parish, LA
Calcasieu Parish Police Jury
Petroleum Chemicals, Inc.
None
See right of way no. 7 (4) for original permit for road crossings.
30-151-27
Calcasieu Parish, LA
Johnnie J. Blanchard married to Petty John Blanchard
Petroleum Chemicals, Inc.
v632/p561
A right of way for (1) pipeline.
30-151-28
Calcasieu Parish, LA
Dave Dugas
Petroleum Chemicals, Inc.
v636/p5
A right of way for (1) pipeline buried below cultivation depth.
30-151-29
Calcasieu Parish, LA
Calcasieu Parish Police Jury
Oxy Petrochemicals, Inc., successor to Petroleum Chemicals, Inc.
None
See right of way no. 7 (5) for original right of way permit.
30-151-30
Calcasieu Parish, LA
William T. Burton Industries, Inc.
Petroleum Chemicals, Inc.
v640/p464
A 30' wide right of way for (1) pipeline.
30-151-31
Calcasieu Parish, LA
Mary A. Benglis
Petroleum Chemicals, Inc.
v633/p633
A right of way for (1) pipeline.
30-151-32
Calcasieu Parish, LA
Andres Vincent
Petroleum Chemicals, Inc.
v633/p630
A right of way for (1) 6" ethylene pipeline.
30-151-33
Calcasieu Parish, LA
Melba Lee Hale
Cities Service Company
None
No documents in file.  See right of way no. 19, tract 2 for original instrument.
30-151-34
Calcasieu Parish, LA
Dewey LeDoux
Petroleum Chemicals, Inc.
v636/p6
A right of way for (1) pipeline.
30-151-35
Calcasieu Parish, LA
Calcasieu Parish Police Jury
Oxy Petrochemicals, Inc., formerly Petroleum Chemicals, Inc.
None
See right of way No. 7 (6) for original permit.
30-151-36
Calcasieu Parish, LA
Mrs. Addie Dugas Portie, wife of J. D. Portie
Petroleum Chemicals, Inc.
v636/p8
A right of way for (1) 6" pipeline.
30-151-37
Calcasieu Parish, LA
Mrs. Bertha Lee Stone, wife of S. V.Stone
Petroleum Chemicals, Inc.
v632/p560
A right of way for (1) pipeline.
30-151-38
Calcasieu Parish, LA
Calcasieu Parish Police Jury
Oxy Petrochemicals, Inc.
None
See right of way no. 7 (7) for original permits for road crossings.
30-151-39
Calcasieu Parish, LA
Willie Grace Dugas Richardson, wife of M. B. Richardson
Petroleum Chemicals, Inc.
v681/p496
A right of way for (1) pipeline.
30-151-40
Calcasieu Parish, LA
Arthur Goodrich
Petroleum Chemicals, Inc.
v633/p400
A right of way for (1) pipeline.
30-151-41
Calcasieu Parish, LA
Erwin Heirs, Inc., et al
Petroleum Chemicals, Inc.
v638/p102
A right of way for (1) pipeline.
30-151-42
Calcasieu Parish, LA
William T. Burton Industries
  
None
See right of way no. 30 paragraph (2) of description for original easement.
30-151-43
Calcasieu Parish, LA
R. Ray Orrill
Petroleum Chemicals, Inc.
v633/p638
A 50' wide right of way for (1) 6" pipeline.  Grantees must pay all taxes for right of way.
30-151-44
Calcasieu Parish, LA
Leslie E. Weber
Petroleum Chemicals, Inc.
v633/p635
A right of way for (1) pipeline.
30-151-45
Calcasieu Parish, LA
Cecil R. Lyons
Petroleum Chemicals, Inc.
v633/p632
A right of way for (1) 6" pipeline.
30-151-46
Calcasieu Parish, LA
Calcasieu Parish Police Jury
Oxy Petrochemicals, Inc., formerly Petroleum Chemicals, Inc.
None
See right of way no. 7 (8) for original Parish Rd. crossing permits.
30-151-47
Calcasieu Parish, LA
I. S. Ecker
Petroleum Chemicals, Inc.
v638/p502
A 30' wide right of way for (1) pipeline.
30-151-48
Calcasieu Parish, LA
Mrs. Evelyn Burton Lawton, et al
Petroleum Chemicals, Inc.
v640/p467
A 30' wide right of way for (1) pipeline.
30-151-49
Calcasieu Parish, LA
Reverand Louis Hoffpauin, et ux
Petroleum Chemicals, Inc.
v640/p112
A 30' wide right of way for (1) 6" pipeline with 36" of cover.
30-151-50
Calcasieu Parish, LA
Canal Properties, Inc., and West LA Corp
Petroleum Chemicals, Inc.
v641/p622
A right of way for (1) pipeline with 3' of cover below canals.
30-151-51
Calcasieu Parish, LA
Louisiana Department of Highways
Oxy Petrochemicals, Inc., formerly Petroleum Chemicals, Inc.
None
Permit for (1) 6" pipeline.
30-151-52
Calcasieu Parish, LA
Mrs. Lillie Green Noble
Petroleum Chemicals, Inc.
v639/p182
A right of way for (1) pipeline with 24" of cover.
30-151-53
Calcasieu Parish, LA
Charles O. Moss, et al
Petroleum Chemicals, Inc.
v640/p602
A right of way for (1) pipeline with 24" of cover.
30-151-54
Calcasieu Parish, LA
Canal Properties and West LA Corp
  
None
See right of way no. 50 (6) for original canal crossing information.
30-151-55
Calcasieu Parish, LA
Francis F. Moss
Petroleum Chemicals, Inc.
v640/p601
A right of way the width of the pipe with 24" of cover.
30-151-56
Calcasieu Parish, LA
Canal Properties and West LA Corp
  
None
See right of way no. 50 (7) for original canal crossing information.
30-151-57
Calcasieu Parish, LA
Calcasieu Parish Police Jury
Oxy Petrochemicals, Inc.
None
See right of way no. 7 (9) for original Parish Rd. crossings.
30-151-58
Calcasieu Parish, LA
Matilda Gray Stream, et al
  
None
See right of way no. 23 © for original right of way instrument.
30-151-59
Calcasieu Parish, LA
Evelyn Burton Lawton
  
None
See right of way no. 48 paragraph 2 for original right of way agreement.
30-151-60
Calcasieu Parish, LA
Calcasieu Parish Police Jury
Oxy Petrochemicals, Inc., formerly Petroleum Chemicals, Inc.
None
See right of way no. 7 (10) for original road crossing.
30-151-61
Calcasieu Parish, LA
Mrs. Edith Burton Plauche, et al
Petroleum Chemicals, Inc.
v640/p466
A 30' wide right of way for (1) 6" pipeline.
30-151-62A
Calcasieu Parish, LA
John W. Mecom, et al
Petroleum Chemicals, Inc.
v654/p177
A 30' wide  right of way for (1) pipeline with 3' of cover for surface and 6' below bottom of canal.
30-151-63
Calcasieu Parish, LA
Calcasieu Parish Police Jury
Oxy Petrochemicals, Inc., formerly Petroleum Chemicals, Inc.
None
A right of way for (1) 6" pipeline.
30-151-65T
Calcasieu Parish, LA
Matilda Gray Stream, et al
  
None
See right of way no. 23 (4) for original right of way easement.
30-151-66T, 66AT
Calcasieu Parish, LA
Babette Moore Odom
Cities Service Company
1447782
A right of way for (1) pipeline with 30" of cover.
30-151-67T, 67AT
Calcasieu Parish, LA & Or
Cities Service Company
Occidental Chemical Corporation
2363474
Term extended 20 years to 05/03/97 for (1) 6" pipeline.  Reference Nos.: 2363474, 2363473, 2363475, 2355049, 2355048, 2355047, 2355046.
30-151-68
Calcasieu Parish, LA & Or
Conway Bayou
  
None
Right of way file missing
30-151-69
Calcasieu Parish, LA & Or
State of Louisiana
Petroleum Chemicals, Inc.
696359
A 100' wide right of way for (1) 6" pipeline.
30-151-70
Orange County, TX
State of Texas General Land Office
Cities Service Company
v519/p207
A right of way for (1) 6" pipeline.
30-151-70A
Orange County, TX
Cities Service Oil and Gas Corporation
Occidental Chemical Corporation
None
Assignment of (1) 6" pipeline.  This assignment assigns easement No. 79 to 181 (790181).
30-151-71
Orange County, TX
Lutcher and Moore Lumber Company
Petroleum Chemicals, Inc.
v206/p434
A 30' wide right of way for (1) pipeline.
30-151-73
Orange County, TX
Orange County Navigation and Port District
Petroleum Chemicals, Inc.
v207/p613
A 30' wide right of way for (1) pipeline.
30-151-75
Orange County, TX
Orange County Engineering Department
Oxy Petrochemicals, Inc.
None
A right of way for (1) 6" pipeline with 3' of cover below road.
30-151-76
Orange County, TX
Babette Moore Odom
Cities Service Company
v478/p707
A 30' wide right of way for (1) 6" pipeline.
30-151-77
Orange County, TX
Randy R. Plant
Occidental Chemical Corporation
v1038/p64
A 30' wide right of way for (1) 6" pipeline.  Extends easement dated 05/03/77 and recorded in v486/p791.  References 7.1433%.
30-151-78
Orange County, TX
Charles W. Dobbertine, et al
Petroleum Chemicals, Inc.
v207/p329
A 30' wide right of way for (1) pipeline.
30-151-79
Orange County, TX
Mrs. Barbara J. Hymers, et al
Petroleum Chemicals, Inc.
v206/p429
A 30' wide right of way for (1) 6" pipeline.
30-151-80
Orange County, TX
E. W. Brown, III, et al
Cities Service Company
v468/p791
A 30' wide right of way for (1) 6" pipeline.
30-151-81
Orange County, TX
H. J. L. Stark
Petroleum Chemicals, Inc.
v206/p423
A 30' wide right of way for (1) pipeline.
30-151-83
Orange County, TX
W. J. Skeeler and wife Lucy Skeeler
Petroleum Chemicals, Inc.
v212/p70
A right of way for (1) 6" pipeline.
30-151-84
Orange County, TX
Gulf States Utilities Company
Petroleum Chemicals, Inc.
v213/p338
A 30' wide right of way for (1) 6" pipeline.
30-151-85
Orange County, TX
W. J. Skeeler and wife Lucy Skeeler
Petroleum Chemicals, Inc.
v212/p68
A right of way for (1) 6" pipeline.
30-151-86
Orange County, TX
Texas Department of Transportation
Petroleum Chemicals, Inc.
None
Permit No. 20-711-57 for (1) 6" pipeline with 3' of cover below grade line.****Check rental payments information.
30-151-87
Orange County, TX
United Gas Pipeline Company
Petroleum Chemicals, Inc.
v213/p330
A right of way for (1) 6" pipeline.
30-151-89
Orange County, TX
H. J. L. Stark
Petroleum Chemicals, Inc.
v225/p561
A right of way for (1) 6" pipeline.
30-151-91
Orange County, TX
Spencer Chemical Company
Petroleum Chemicals, Inc.
v441/p535
A right of way for (1) 6" pipeline.
30-151-88
Orange County, TX
Texas and New Orleans Railroad Company and Missouri Pacific Railroad Company (UPRR)
Petroleum Chemicals, Inc.
48936
A right of way for (1) 6" pipeline.
30-151-90
Orange County, TX
Texas Department of Transportation
Petroleum Chemicals, Inc.
None
Permit No. 20-710-57, for (1) 6" pipeline with 3' of cover below grade line.
30-151-92
Orange County, TX
Union Pacific Railroad Company (UPRR)
Equistar Chemicals, LP
None
Folder No. 1738-61.  This is presently the only owned portion of the system owned by Equistar pipeline.  The remainder of the system is owned by Oxy Petrochemicals.
30-151-93
Orange County, TX
E. I. Du Pont De Nemours and Company
Cain Chemicals, Inc.
None
A real Estate lease providing for a leasehold interest with option to purchase the Orange Plant Site.
39172
Harris County, TX
The Texas Pipeline Company
ARCO Pipeline Company
###-##-####
Easement for (3) 6" and (1) 16" pipelines across 20.593 Ezekiel Thomas Survey, A-73, and a 4.669 acre tract out of C. Martinez Survey, A-545.  Ownership: Equilon Pipeline Co., LLC., P. O. Box 4369, Houston, TX 77251.
11414
Harris County, TX
ARCO Pipeline Company
Lyondell Petrochemical Company
###-##-####
A right of way for (2) 6" pipelines for a 1.94 acre tract in the Ezekul Thomas Survey, Abstract 73.
39233
Harris County, TX
Houston Lighting and Power Company
ARCO Pipeline Company
###-##-####; v374/p595
For various pipelines in Harris and Chambers County.
11475
Harris County, TX
ARCO Pipeline Company
Lyondell Petrochemical Company
###-##-####
Line rights for (1) 16" pipeline in 1.94 acre tract in Ezekiel Thomas Survey, A-73.
39294
Harris County, TX
Port of Houston Authority
Lyondell Petrochemical Company
None
Renewal for various port authority crossings.
39325
Harris County, TX
ARCO Pipeline Company
Lyondell Petrochemical Company
###-##-####
Line rights for (2) 6" pipelines and (1) 16" pipeline on .40 acre tract in Ezekiel Thomas Survey, A-73.
11567
Harris County, TX
Harris County Commissioners Court
ARCO Pipeline Company
None
Permit to cross Clinton Drive
39386
Harris County, TX
ARCO Pipeline Company
Lyondell Petrochemical Company
###-##-####
Line rights for (1) 16" and (2) 6" pipelines on .46 acre tract in the Ezekiel Thomas Survey, A-73.
31-010A
Harris County, TX
Harris County Flood Control District
ARCO Pipeline Company
None
Crossing Panther Creek.
11628
Harris County, TX
Houston Lighting and Power Company
ARCO Pipeline Company
###-##-####; v374/p595
Same as file 31-005
39447
Harris County, TX
The Texas Pipeline Company
ARCO Pipeline Company
###-##-####
Easement for (3) 6" and (1) 16" pipelines across 20.593 acres and 4.669 acres.    Ownership: Equilon Pipeline Co., LLC., P. O. Box 4369, Houston, TX 77251.
31-013
Harris County, TX
Houston Lighting and Power Company
ARCO Pipeline Company
###-##-####; v374/p595
Same as file 31-005
31-014
Harris County, TX
ARCO Pipeline Company
Lyondell Petrochemical Company
###-##-####
Line rights for (1) 16" and (2) 6" pipelines over a 2.91 acre tract in the Ezekiel Thomas Survey, A-73.
31-014
Harris County, TX
ARCO Pipeline Company
Lyondell Petrochemical Company
###-##-####
Line rights for (1) 6" pipelines over a 2.91 acre tract in the Ezekiel Thomas Survey, A-73.
31-015
Harris County, TX
The Texas Pipeline Company
ARCO Pipeline Company
###-##-####
Same as file 31-003.    Ownership: Equilon Pipeline Co., LLC., P. O. Box 4369, Houston, TX 77251.
31-016
Harris County, TX
ARCO Pipeline Company
Lyondell Petrochemical Company
###-##-####
A right of way for (1) 16" and (3) 6" pipelines in a 2.94 acre tract in the Ezekiel Thomas Survey, A-73.
31-017
Harris County, TX
Port of Houston Authority
Lyondell Petrochemical Company
None
Renewal for various port authority crossings. License No. 95-0018 across the Port's Northside Main Line RR ROW East of Holland Avenue, the Port Authority's Texaco tract, under and across Hunting Bayou and Greens Bayou.  (3) 6" and (1) 16" pipelines.  Texa
31-018
Harris County, TX
Houston Lighting and Power Company
ARCO Pipeline Company
###-##-####; v374/p595
Same as file 31-005
31-019
Harris County, TX
Port of Houston Authority
Lyondell Petrochemical Company
None
License 95-0018 across Port Authority's Texaco Tract for (3) 6" and (1) 16" pipelines.
31-019
Harris County, TX
Texaco Pipe Line Company
ARCO Pipe Line Company
###-##-####
Lease for a 0.0046AC tract for an above ground block valve located in the Ezekiel Thomas Svy, A73.
31-019A
Harris County, TX
Harris County Flood Control District
ARCO Pipeline Company
None
Turkey Run Gully.  See file 31-20 for documents.
31-020
Harris County, TX
Houston Lighting and Power Company
ARCO Pipeline Company
###-##-####; v374/p595
Same as file 31-005.
31-020.1
Harris County, TX
Exxon Pipeline Company
  
None
(1) 6" gas products pipeline only according to alignment sheet, covers about half a mile.
31-020X
Harris County, TX
City of San Jacinto
ARCO Pipeline Company
None
Permit crossing San Jacinto's streets
31-022
Harris County, TX
ARCO Pipeline Company
Lyondell Petrochemical Company
None
Witnessed by Missouri Pacific Railroad who accepts assignment to Lyondell, crossing their right of way.  Audit No. CA-73353, 73915, 74444.
31-023
Harris County, TX
City of San Jacinto
ARCO Pipeline Company
None
Permit to cross Market Street.
31-024
Harris County, TX
Industrial Gas Supply Corporation
Lyondell Petrochemical Company
###-##-####
A right of way for (3) 6" and (1) 16" pipelines.  02/16/04: Lease is expired.  Centerpoint is drafting up new lease agreement.
31-024A
Harris County, TX
ARCO Pipeline Company
Lyondell Petrochemical Company
None
An assignment of a previous right of way from Ensearch Gas Transmission Company dated 07/16/85 for a 5' wide easement.  (Easement may have expired.)  Alignment maps do not indicate this location.
31-025
Harris County, TX
Texas Department of Transportation
ARCO Pipeline Company
None
Permit No. 75-8443 for crossing I-10 with (1) 16" and (3) 6" pipelines.
31-025A
Harris County, TX
Houston Lighting and Power Company
ARCO Pipeline Company
###-##-####/v374/p595
Same as file 31-005.
31-025B
Harris County, TX
The Texas Pipeline Company
ARCO Pipeline Company
###-##-####
Easement for (3) 6" and (1) 16" pipelines across 20.593 acres and 4.669 acres.
31-026
Harris County, TX
ARCO Pipeline Company
Lyondell Petrochemical Company
###-##-####
A right of way for (1) 16" and (3) 6" pipelines on a .994 acre, .15, .450, and a .857 acre tract in C. Martinez Survey, A-545.
31-027
Harris County, TX
ARCO Pipeline Company
Lyondell Petrochemical Company
###-##-####
A right of way for (1) 16" and (2) 6" pipelines.  See 31-026 for documents.
31-027A
Harris County, TX
Harris County Flood Control District
ARCO Pipeline Company
None
Hunting Bayou
31-027X.2
Harris County, TX
Port of Houston Authority
Lyondell Petrochemical Company
None
Permit No. 95-0018 crossing Hunting Bayou, Greens Bayou, PHA Texaco Tract and the Northside Main Line Railroad ROW with (1) 16" and (3) 6" pipelines.
31-028
Harris County, TX
ARCO Pipeline Company
Lyondell Petrochemical Company
###-##-####
A right of way for (1) 16" and (3) 6" pipelines on a .994, .15, .450 and a .857 acre tract in C. Martinez Survey, A-545.
31-028A
Harris County, TX
Harris County Flood Control District
ARCO Pipeline Company
None
Hunting Bayou.
31-029
Harris County, TX
United Texas Transmission Company
ARCO Pipeline Company
###-##-####
A right of way for (1) 16" and (3) 6" pipelines on a 12.448 acre tract in C. Martinez Survey.
31-030
Harris County, TX
ARCO Pipeline Company
Lyondell Petrochemical Company
###-##-####
A right of way for (1) 16" and (3) 6" pipelines on a .77441 and a 2.4216 acre tract in the C. Martinez Survey, A-545.
31-030B
Harris County, TX
Harris County Flood Control District
ARCO Pipeline Company
None
Ditch
31-031
Harris County, TX
ARCO Pipeline Company
Lyondell Petrochemical Company
###-##-####
A right of way for (1) 16" and (3) 6" pipelines on a 2.63 acre tract in the Reels and Trobough Survey, A-59.
31-031A
Harris County, TX
ARCO Pipeline Company
Lyondell Petrochemical Company
###-##-####
A right of way for (1) 16" and (3) 6" pipelines.
31-032
Harris County, TX
Houston Lighting and Power Company
ARCO Pipeline Company
###-##-####; v374/p595
For various pipelines in Harris and Chambers County.  Same as 31-005.
31-033
Harris County, TX
Harris County Commissioners Court
ARCO Pipeline Company
None
Permit to cross Wallisville Rd..
31-034
Harris County, TX
Caperton B. Smith and Ellen M. Beardsley
Sinclair Pipeline Company
v6160/p101; ###-##-####
A right of way for (4) pipelines.
31-035
Harris County, TX
Houston Lighting and Power Company
ARCO Pipeline Company
###-##-####; v374/p595
For various pipelines in Harris and Chambers County.
31-036
Harris County, TX
Letha A. James, a widow and executrix
Sinclair Pipeline Company
###-##-####; v6236/p73
A right of way for (4) pipelines.
31-036A
Harris County, TX
ARCO Pipeline Company
Lyondell Petrochemical Company
###-##-####
A right of way for (1) 16" and (3) 6" pipelines over a .684 acre and a 100 acre tract in the Reels and Trobough Survey, A-59.
31-037
Harris County, TX
Houston Lighting and Power Company
ARCO Pipeline Company
###-##-####; v374/p595
For various pipelines in Harris and Chambers County.  (1) 16 and (3) 6" pipelines on a 13.205 acre tract in the Reels and Trobough Survey, A-59.
31-037.1
Harris County, TX
Houston Lighting and Power Company
ARCO Pipeline Company
###-##-####; v374/p595
For various pipelines in Harris and Chambers County.  (1) 16 and (3) 6" pipelines on a 8.046 acre tract in the Reels and Trobough Survey, A-59.
31-038
Harris County, TX
Southwest Mortgage and Realty Investors
ARCO Pipeline Company
###-##-####
A 50' wide right of way for (7) pipelines on a 24.256 and a 33.2681 tract in the Reels and Trobough Survey, A-59.
31-039
Harris County, TX
Southwest Mortgage and Realty Investors
ARCO Pipeline Company
###-##-####
A 50' wide right of way for (7) pipelines on a 24.256 and a 33.2681 tract in the Reels and Trobough Survey, A-59.
31-040
Harris County, TX
Carter and Doris Welsey, husband and wife
Sinclair Pipeline Company
v6252/p555; ###-##-####
A 50' wide right of way for (4) pipelines over a 30.3 acre tract in the Reels and Trobough Survey, A-59.  Amended in ###-##-#### and dated 4/7/85.
31-040X
Harris County, TX
Harris County Flood Control District
Sinclair Pipeline Company
v6298/p461
A 50' wide right of way for (3) pipelines.  Drainage No. P111-00-00.
31-041
Harris County, TX
Houck Realty Company
Sinclair Pipeline Company
v6298/p461; ###-##-####
A 50' wide right of way for (3) pipelines over a 50.663 acre tract in the J. Gordon Survey, A-291.  Amended on 9/11/74 in ###-##-####, adding (4) lines for a total of (7).
31-042X
Harris County, TX
Texas Department of Transportation
ARCO Pipeline Company
None
Permit No. 75-8325 for crossing FM 526 (Maxey Rd.) with (1) 16" and (3) 6" pipelines in the Shipman Survey, A-68.
31-043
Harris County, TX
Houck Realty Company
Sinclair Pipeline Company
###-##-####; v6298/p461
A 50' wide right of way for (3) pipelines in a 50.663 acre tract in the J. Gordon Survey, A-29.  Amended on 9/11/74 in ###-##-#### to add (4) pipelines for a total of (7).
31-044X
Harris County, TX
Corps of Engineers
ARCO Pipeline Company
None
Permit No. 10541 crossing Greens Bayou.  Amended 06/03/75 to include (3) 6" and (1) 16" pipelines.
31-044X.2
Harris County, TX
State of Texas General Land Office
ARCO Pipeline Company
E420299
ME 2982 for (1) 16" and (3) 6" pipeline across Greens Bayou.  Subject to the Small Bill.  The GLO no longer has jurisdiction over this body of water.
31-044X.3
Harris County, TX
Harris County Flood Control District
ARCO Pipeline Company
None
Permit crossing Greens Bayou.
31-044X.4
Harris County, TX
Port of Houston Authority
Lyondell Petrochemical Company
None
License for crossing Greens Bayou.  Permit No. 95-0018.  Texas Water Quality Board certification approved 02/19/75.
31-045
Harris County, TX
Texaco, Inc.
Sinclair Pipeline Company
v6313/p333; ###-##-####
A right of way for (3) pipelines on a 107 acre tract in the E. Shipman League, A-68.  Amended on 1/15/75 in ###-##-#### for additional lines totaling (7).
31-045X
Harris County, TX
Harris County Flood Control District
ARCO Pipeline Company
None
Sulfer Gully, Drain P, No. 109-00-00.
31-046
Harris County, TX
Lillian H. Callahan
Sinclair Pipeline Company
###-##-####; v6421/p102
A right of way for (3) pipelines on a 409.5 acre tract in the J. Erwin Survey, A-257.  Amended on 5/16/75 in ###-##-#### to add (4) pipelines for a total of (7).
31-047X
Harris County, TX
Harris County Flood Control District
ARCO Pipeline Company
None
Drainage ditch crossing.  Drain No. P107-00-00.
31-048
Harris County, TX
Fred J. Berkley
Sinclair Pipeline Company
###-##-####; v6376/p407
A 50' wide right of way for (3) pipelines on a 244.895 acre tract in the Thomas O. Meux Survey, A-596.  Amended on 8/5/74 in ###-##-#### adding pipelines totaling (7).
31-049X
Harris County, TX
Harris County Commissioners Court
ARCO Pipeline Company
None
Uvalde Rd. crossing.
31-050
Harris County, TX
Fred J. Berkley
Sinclair Pipeline Company
###-##-####; v6376/p407
A 50' wide right of way for (3) pipelines on a 244.895 acre tract in the Thomas O. Meux Survey, A-596.  Amended on 8/5/74 in 109-012537 to add pipelines totaling (7).
31-051
Harris County, TX
City of Houston
ARCO Pipeline Company
None
Ordinance No. 75-1538 for (1) 16" and (3) 6" pipelines crossing West Canal in T. O. Meux Survey, A-596.   01/28/04: Ordinance paid for and pending.   02/06/04: Jim Boxley said that Jaime Medina needed to submit  insurance certificate and endorsement to Ci
31-052
Harris County, TX
United Texas Transmission Company
ARCO Chemical Company
None
A right of way for a 20' wide road way and for a 6' by 5' high concrete box culvert intake line.
31-052
Harris County, TX
United Texas Transmission Company
ARCO Pipeline Company
###-##-####
Line rights for (1) 16" and (3) 6" pipelines on a 5.95 acre tract in the Thomas O. Meux Survey, A-596.
31-053
Harris County, TX
ARCO Pipeline Company
Lyondell Petrochemical Company
###-##-####
A right of way for (1) 16" and (3) 6" pipelines on a 5.1192 acre tract in the T. O. Meux Survey, A-596.
31-054
Harris County, TX
Chambco, Inc.
Sinclair Pipeline Company
v6278/p345; ###-##-####
A right of way for (4) pipelines, not to exceed 8" on two tracts out of a 223.9 acre tract in the Spyars Singleton Survey, A-704.  Amended 07/08/74 in ###-##-#### changing pipelines diameter, not to exceed 16".  Amended 08/23/74 in ###-##-#### adding addi
31-054X
Harris County, TX
Harris County Commissioners Court
ARCO Pipeline Company
None
Permit to cross East Belt Drive No. 8.
31-055
Harris County, TX
Harris County Flood Control District
ARCO Pipeline Company
None
Crossing Carpenter's Bayou
31-056
Harris County, TX
ARCO Pipeline Company
Lyondell Petrochemical Company
###-##-####
A right of way for (1) 16" and (3) 6" pipelines crossing a tract of land in Spyar Singleton Survey, A-704.
31-056A
Harris County, TX
Harris County Commissioners Court
ARCO Pipeline Company
None
Permit to cross Proposed Miller Rd. No. 1
31-057
Harris County, TX
Houston Lighting and Power Company
ARCO Pipeline Company
###-##-####; v374/p595
For (1) 16" and (3) 6" pipelines on a 16.860 acre tract in the Spyar Singleton Survey, A-704.
31-057
Harris County, TX
Houston Lighting and Power Company
ARCO Pipe Line Company
###-##-####
A 9' by 25' surface site for a valve located within the Spyars Singleton Svy, A704 out of a 16.860 acre tract.
31-058
Harris County, TX
ARCO Pipeline Company
Lyondell Petrochemical Company
###-##-####
A right of way for (1) 16" and (3) 6" pipelines on a 5.04 acre tract in the Spyar Singleton Survey, A-704.
31-059
Harris County, TX
Harris County Commissioners Court
ARCO Pipeline Company
None
Permit to cross Miller Rd. No. 2 crossing.
31-060
Harris County, TX
ARCO Pipeline Company
Lyondell Petrochemical Company
###-##-####
A right of way for (1) 16" and (3) 6" pipelines being Lots 5 and 6, Block 1 of Twinland Estates in the Spyars Singleton Survey, A-704.
31-061
Harris County, TX
ARCO Pipeline Company
Lyondell Petrochemical Company
###-##-####
A right of way for (1) 16" and (3) 6" pipelines being Lots 5 and 6, Block 1 of Twinland Estates in the Spyars Singleton Survey, A-704.
31-062
Harris County, TX
Harris County Commissioners Court
ARCO Pipeline Company
None
Permit to cross  Lemoine Lane
31-063
Harris County, TX
ARCO Pipeline Company
Lyondell Petrochemical Company
###-##-####
A right of way for (1) 16" and (3) 6" pipelines on Lot 6, Block 2 of Twinland Estates and a 1.74 acre tract in the Spyars Singleton Survey, A-704 and the Blunt Sessums Survey, A-733.
31-064
Harris County, TX
ARCO
Lyondell Petrochemical Company
###-##-####
See file No. 31-063.
31-065
Harris County, TX
Houston Lighting and Power Company
ARCO Pipeline Company
###-##-####; v374/p595
A right of way for (1) 16" and (3) 6" pipelines across a 24.258 acre tract in the B. M. Sessums Survey, A-733.
31-066
Harris County, TX
ARCO Pipeline Company
Lyondell Petrochemical Company
###-##-####
A right of way for (1) 16" and (3) 6" pipelines on a 3.83 acre tract in the Michael Stroin Survey, A-1559.
31-067
Harris County, TX
Port of Houston Authority
Equistar Chemicals, LP
None
PHA 2001-0023, formerly 91-0146.  License for (1) 12" pipelines.  This also includes a valve site located in 31-L-001.
31-070X
Harris County, TX
Harris County Commissioners Court
ARCO Pipeline Company
None
Permit to cross Sheldon Rd..
31-L-001
Harris County, TX
Port of Houston Authority
Equistar Chemicals, LP
None
PHA 2001-0023, formerly 91-0146.  This is part of the LCR lateral.  License for  (1) 12" pipelines with the Port Authority's Northside Main Line Railroad Right of Way in Ezekial Thomas Survey, A-73.  Assignable to corporate affiliates, subsidiaries or suc
31-L-002
Harris County, TX
Houston Lighting and Power Company
ARCO Pipe Line Company
###-##-####
A right of way 8.625" wide for (1) 8.625" pipeline and a right of way 12.750" wide for (1) 12.750" pipeline.  Ezekial Thomas Survey, A-73.
32-105
Harris County, TX
Missouri Pacific Railroad Company (UPRR)
Texas Butadiene and Chemical Corporation
None
A 63" right of way for (2) 4", (1) 6" and (1) 8" pipeline in the MPRR right of way.  MP 18.00 to Hayden Rd.  Crossing near Houston/Baytown.  Audit No. CA-45583.  Folder No. 212494.  02/13/04: Letter from Joan Preble stating that this was assigned to Stron
32-105
Harris County, TX
Missouri Pacific Railroad Company (UPRR)
Sinclair Petrochemicals, Inc.
None
A right of way for (1) 6" pipeline in Hayden Rd. ROW.  Audit No. 56684
32-105.1
Harris County, TX
Harris County Flood Control District
  
None
Wallisville Gully.  HCFCD No. G-103-08-00.
32-105.2
Harris County, TX
Harris County Commissioners Court
Texas Butadiene and Chemical Corporation
None
Permit for laying pipeline under various roads alongside Missouri Pacific Railroad. Harris County Commissioners Court v37/p69 for (1) 6" and (2) 4" pipelines crossing Wallisville Rd.
32-106.2
Harris County, TX
Harris County Flood Control District
Sinclair Pipeline Company
None
No. G-103-01-00
32-107.1
Harris County, TX
Harris County Flood Control District
Sinclair Pipeline Company
None
Refer to 32-106.2 for documents.  Ditch No. G-103-02-03
32-108.1
Harris County, TX
Harris County Commissioners Court
Texas Butadiene and Chemical Corporation
v37/p69
Permit for crossing  Wood Drive.  Harris County Commissioners Court Records v37/p69.
32-108.2
Harris County, TX
Harris County Flood Control District
Sinclair Pipeline Company
None
Refer to 32-106.2 for documents.  Ditch No. G103-01-00
32-108.3
Harris County, TX
Harris County Commissioners Court
Chemicals, Inc.
None
Permit for crossing Bear Bayou Rd..  Harris County Commissioners Court Records v37/p69 and amended in v55/296.
32-108.3
Harris County, TX
Harris County Commissioners Court
Texas Butadiene and Chemical Corporation
None
Permit for crossing Bear Bayou Drive.  Harris County Commissioners Court Records v37/p69 and amended in v55/296.
32-110.1
Harris County, TX
Harris County
Sinclair Petroleum Company
None
Same as file 32-116.2  For Ridlon Avenue.  Harris County Commissioners Court Records v37/p69 and amended in v55/296.
32-110.1
Harris County, TX
Harris County Commissioners Court
Texas Butadiene and Chemical Company
None
Permit for crossing Ridlon Avenue.  Harris County Commissioners Court Records v37/p69 and amended in v55/296.
32-110.2
Harris County, TX
Harris County Flood Control District
Sinclair Pipeline Company
None
Refer to 32-106.2 for documents.   Ditch No. G103-01-02
32-111.1
Harris County, TX
Harris County Commissioners Court
Texas Butadiene and Chemical Corporation
None
Sheldon Rd..  Harris County Commissioners Court Records v37/p69 and amended in v55/296.
32-111.1
Harris County, TX
Harris County Commissioners Court
Sinclair Petrochemicals, Inc.
None
Permit to cross Sheldon-Deer Park Rd..  Harris County Commissioners Court Records v37/p69 and amended in v55/296.
32-112.1
Harris County, TX
Harris County
Texas Butadiene and Chemical Corporation
None
Crossing East Brentwood Drive.  Harris County Commissioners Court Records in v37/p69 and amended 03/12/64 in v55/p296.
32-112.1
Harris County, TX
Harris County Commissioners Court
Chemicals, Inc.
None
Permit to cross East Brentwood Drive
32-112.2
Harris County, TX
Harris County Flood Control District
Sinclair Pipeline Company
None
Refer to 32-106.2 for documents.   Ditch No. N-104-00-00
32-113.1
Harris County, TX
Harris County Commissioners Court
Texas Butadiene and Chemical Corporation
None
Crossing at Delldale Street.  Harris County Commissioners Court Records in v37/p69 and amended 03/12/64 in v55/p296.
32-113.1
Harris County, TX
Harris County Commissioners Court
Chemicals, Inc.
None
For Delldale Street.
32-114.1
Harris County, TX
Harris County Commissioners Court
Texas Butadiene and Chemical Corporation
None
Crossing West Brentwood Drive.    Harris County Commissioners Court Records in v37/p69 and amended 03/12/64 in v55/p296.
32-114.1
Harris County, TX
Harris County Commissioners Court
Chemicals, Inc.
None
West Brentwood Drive
32-114.2
Harris County, TX
Harris County Flood Control District
Sinclair Pipeline Company
None
Refer to 32-106.2 for documents.   Creek No. N-106-00-000
32-115.1
Harris County, TX
Harris County Commissioners Court
Sinclair Petrochemicals, Inc.
None
Same as file 32-116.2.  Crossing East Belt Drive.    Harris County Commissioners Court Records in v37/p69 and amended 03/12/64 in v55/p296.
32-115.2
Harris County, TX
Harris County Flood Control District
Sinclair Pipeline Company
None
Refer to 32-106.2 for documents.  Carpenter's Bayou Crossing.  Ditch No. N100-00-000
32-116.1
Harris County, TX
Harris County Flood Control District
Sinclair Pipeline Company
None
Refer to 32-106.2 for documents.   Ditch No. N107-00-000 is between Carpenter's Bayou and I-10.
32-116.2
Harris County, TX
Texas Department of Transportation
Texas Butadiene and Chemical Corporation
None
Crossing SH 73 (now I-10).  Permit No. 99.
32-116.3
Harris County, TX
Harris County Commissioners Court
Sinclair Petrochemicals, Inc.
None
Crossing Patch Street.
32-117.1
Harris County, TX
Harris County Flood Control District
Sinclair Pipeline Company
None
Refer to 32-106.2 for documents.   Ditch P104-00-000.
32-118.1
Harris County, TX
Harris County Commissioners Court
Sinclair Petrochemicals, Inc.
None
For Hadden Rd..  Harris County Commissioners Court Records in v37/p69 and amended 03/12/64 in v55/p296.
32-118.1
Harris County, TX
Harris County Commissioners Court
Texas Butadiene and Chemical Corporation
None
Permit for crossing Hadden Rd..  Harris County Commissioners Court Records in v37/p69 and amended 03/12/64 in v55/p296.
32-118.2
Harris County, TX
Diamond Alkali Company (Now Reichold)
Texas Butadiene and Chemical Corporation
v4865/p15; ###-##-####
A 10' wide right of way for (3) pipelines.  Amended 06/16/64 in HCC File No. C 121792, film code ###-##-#### in v5992/p100.
32-118.2
Harris County, TX
Reichold Chemicals Company, Inc.
Sinclair Petrochemicals, Inc.
v5992/p100; ###-##-####
A right of way for (1) pipeline.
32-119
Harris County, TX
Port of Houston Authority
Equistar Chemicals, LP
None
PHA 2003-0070 (Formerly MO-P-85-B). For (1) 4" and (2) 6" pipelines.
32-119.1
Harris County, TX
Corps of Engineers
Texas Butadiene and Chemical Corpsoration
None
Permit No. 3371 across Greens Bayou with (3) pipelines.
32-119.1A
Harris County, TX
Harris County Houston Ship Channel Navigation District (PHA)
Texas Butadiene and Chemical Corporation
None
Approval of crossing of pipelines at Greens Bayou.  Permit No. W-N-243-41, Permit 3371 for (3) pipelines.
32-119.1B
Harris County, TX
Harris County Flood Control District
Sinclair Pipeline Company
None
Refer to 32-106.2 for documents.  Greens Bayou Crossing.  P-100-00-00
32-120.1
Harris County, TX
Harris County Flood Control District
Sinclair Pipeline Company
None
Refer to 32-106.2 for documents.   Ditch No. P101-00-00 between Greens Bayou and Sheffield Street.
32-120.2
Harris County, TX
Harris County Commissioners Court
Texas Butadiene and Chemical Corporation
None
Same as file 32-108.1.  Refers to crossing of Miles Street.  Harris County Commissioners Court Records in v37/p69 and amended 03/12/64 in v55/p296.
32-120.3
Harris County, TX
Harris County Commissioners Court
Texas Butadiene and Chemical Corporation
None
Same as file 32-108.2.  Refers to crossing White Oak Drive (now Sheffield Street).  Harris County Commissioners Court Records in v37/p69 and amended 03/12/64 in v55/p296.
32-121.1
Harris County, TX
Harris County Commissioners Court
Texas Butadiene and Chemical Corporation
None
Crossing  Industrial Rd..  Harris County Commissioners Court Records in v37/p69 and amended 03/12/64 in v55/p296.
32-121.1
Harris County, TX
Harris County Commissioners Court
Chemicals, Inc.
None
Permit to cross  Industrial Rd..
32-122.1
Harris County, TX
Hess Oil and Chemical Corporation
Chemicals, Inc.
v5586/p14; ###-##-####
A right of way for (1) 6" pipeline.
32-122.1
Harris County, TX
Amarada Hess Corporation
Equistar Chemicals, LP
None
Amendment to easement dated 04/01/63 to include meter sites being  .0103 AC and a .0025AC being out of a 180.00AC tract in the Harris and Wilson Svy, A31.
32-122.1
Harris County, TX
Hess Oil and Chemical Corporation
Sinclair Petrochemicals, Inc.
v5096/p348
Right of way for (2) 6" and (1) 4" pipeline and its appurtenances.
32-123.1
Harris County, TX
Warren Petroleum Corporation
Sinclair Petrochemicals, Inc.
669434-B
A right of way for (1) 4" and (2) 6" pipelines.  Assignable with written consent.  New ownership: Magellan Midstream Partners, LP, C/O Bill Smoot, P. O. Box 52, Galena Park, TX 77547; Dynegy Midstream Services, LP, C/O Warren Leatherman, 1000 Louisiana St
32-123.2
Harris County, TX
Harris County Commissioners Court
Sinclair Petrochemicals, Inc.
None
Permit to cross Federal Rd..
32-123.2A
Harris County, TX
City of Galena Park
Sinclair Pipeline Company
None
  
32-123.3
Harris County, TX
Southern Pacific Company (UPRR)
Sinclair Petrochemicals, Inc.
None
Audit No. S144599.  A right of way for (1) 6" petrochemical pipeline at Galena Park.  Mile post 0, in Galena Park, TX.  1429.3' across freight tract west of Federal Rd.
32-124.1
Harris County, TX
City of Houston
ARCO Pipeline Company
None
Ordinance No. 83-278 for pipelines.  (Amendment) Ordinance No. 84-1049 for (2) 6" and (1) 4" pipeline under the West Canal. Corrected number of pipelines in first ordinance.
32-124.2
Harris County, TX
William Marsh Rice University and  Champion Papers, Inc.
Sinclair Petrochemicals, Inc.
v5644/p516; ###-##-####
A right of way for (1) 6" pipeline.
32-124.2A
Harris County, TX
Port of Houston Authority
Equistar Chemicals, LP
None
License No. 2003-0070 (formerly MO-P-85-B) for (1) 4" and (2) 6" pipelines.
32-124.3
Harris County, TX
Texaco, Inc.
Sinclair Petrochemicals, Inc.
v5078/p225; ###-##-####
A right of way for (1) 4" and (2) 6" pipelines.
32-125.1
Harris County, TX
Harris County Flood Control District
Sinclair Pipeline Company
None
Letter stating no objection to proposed crossing of Hunting Bayou  with (1) 4" and (2) 6" pipeline.  Reference No. H100-00-00.
32-125.2
Harris County, TX
General American Transportation Corporation
Sinclair Petrochemicals, Inc.
v5078/219; ###-##-####
A right of way for (1) 4" and (2) 6" pipelines.
32-127.1
Harris County, TX
Houston Lighting and Power Company
Sinclair Petrochemicals, Inc.
###-##-####
A right of way for (1) 4" and (2) 6" pipelines.
32-127.2
Harris County, TX
The Texas Pipeline Company
Sinclair Petrochemicals, Inc.
v5078/p211; ###-##-####
A right of way for (1) 4" and (2) 6" pipelines.
32-128.1
Harris County, TX
Harris County Commissioners Court
Sinclair Petrochemicals, Inc.
None
Permit to cross Clinton Drive  (Galena Park).
32-128.1
Harris County, TX
Harris County Commissioners Court
Sinclair Petrochemicals, Inc.
None
Permit for Galena Park Drive (Formerly Clinton Drive).
32-128.2
Harris County, TX
General American Transportation Corporation
Sinclair Petrochemicals, Inc.
v5078/p219; ###-##-####
A right of way for (1) 4" and (2) 6" pipelines.
32-128.3
Harris County, TX
Southern Pacific Company (UPRR)
Sinclair Petroleum Company
None
License for (3) 6" and (1) 8" petroleum products pipeline, at or near Galena Park.  MP 8.48.  Crossing near Galena Park, TX.  Audit No. 144468.
32-128.4
Harris County, TX
General American Transportation Corporation
Sinclair Petrochemicals, Inc.
v5078/p219; ###-##-####
A right of way for (1) 4" and (2) 6" pipelines.
32-128.5
Harris County, TX
Harris County Flood Control District
Sinclair Petrochemicals, Inc.
None
Letter stating no objection to proposed crossing of Panther Creek (now Bonner Branch) with (1) 4" and (2) 6" pipelines.  Reference No. G112-00-00.
32-129.1
Harris County, TX
ARCO Pipeline Company
  
None
Fee property.  Ship Channel Tunnel
32-130.1
Harris County, TX
Sinclair Refining Company
Sinclair Petrochemicals, Inc.
B814643
A right of way for (1) 4" pipeline.
32-130.2
Harris County, TX
Port of Houston Authority
Lyondell Petrochemical Company
None
License renewal of (1) 6" pipeline.  PHA No. 2001-0411 (formerly 81-0299)
32-131.3
Harris County, TX
Sinclair Refining Company
Sinclair Petrochemicals, Inc.
B814643
A right of way for (1) 4" pipeline.
32-132.1
Harris County, TX
City of Houston
Sinclair Refining Company
None
Ordinance No. 58-960 crossing La Porte Rd. (now Lawndale Street) for a pipeline tunnel.
32-132.2
Harris County, TX
Southern Pacific Company (UPRR)
Sinclair Petrochemicals, Inc.
None
A 36" right of way for (1) 8" pipeline at MP 10.82
32-132.3
Harris County, TX
Sinclair Refining Company
Sinclair Petrochemicals, Inc.
B814643
Right of way for (1) 4" pipeline.
32-132.3
Harris County, TX
Lyondell-Citgo Refining Company LTD
Lyondell Petrochemical Company
None
(9) easements and valve sites on plant site.
32-132.3
Harris County, TX
Lyondell-Citgo Refining, LP
Equistar Chemicals, LP
None
Easement for a non-exclusive easement for a 15' by 20' surface site, an easement for a 6" pipeline and an easement for a 25' by 40' surface site, for the purpose of transporting and metering of Butane/Butylene Mix in No. 3 pipeline and Normal Butane in No
32-134.1
Harris County, TX
City of Houston
Sinclair Refining Company
None
Ordinance No. 58-961 crossing Allen-Genoa Rd. for a pipeline tunnel.
32-134.2
Harris County, TX
Sinclair Refining Company
Sinclair Petrochemicals, Inc.
B814643
Right of way for (1) 4" pipeline.
32-134.3
Harris County, TX
Houston Lighting and Power Company
Sinclair Petrochemicals, Inc.
v5306/p442; ###-##-####
A right of way for (1) 4" pipeline.
32-134.4
Harris County, TX
Texas Department of Transportation
Sinclair Petrochemicals, Inc.
None
No documents in file.  Refers to crossing Highway 225.  Permit No. 63-1724.  Memo: TXDOT unable to locate original permit.
32-134.5
Harris County, TX
Sinclair-Koppers Chemical Company
Sinclair Petrochemicals, Inc.
v5112/p215
An easement for (1) 4" pipeline.
32-134.6
Harris County, TX
Southern Pacific Company (UPRR)
  
None
Memo to file stating that T&NO acquired ROW for RR prior to 1964 construction of 4" lateral.  Per ROW meeting 02/02/04, license will not be aquired.
32-134.7
Harris County, TX
Good Year Tire and Rubber Company
Equistar Chemicals, LP
###-##-####
A 5' wide right of way for (1) 4" pipeline and valve site.
32-121.1A
Harris County, TX
City of Houston
  
None
Old Industrial Rd. is in the Houston City limits.
32-132.3X
Harris County, TX
Southern Pacific Company (UPRR)
Sinclair Petrochemicals, Inc.
None
A 36" right of way for (1) 8" pipeline at MP 10.25.
33-H-L-001
Harris County, TX
Atlantic Richfield Company
Lyondell Petrochemical Company
###-##-####
A conveyance of 13 tracts for refining units.  NTCE.
33-H-L-001
Harris County, TX
Houston Lighting and Power Company
None
None
No documents in file.  For (1) 12" natural gas pipeline.
33-H-L-001
Harris County, TX
Atlantic Richfield Company
ARCO Chemical Company
###-##-####
Easement for (1) 12" pipeline for the transportation of natural gas with 3' of cover.  This is now covered by Lyondell Fee Tract.
33-H-L-001
Harris County, TX
Harris County Commissioners Court
ARCO Pipeline Company
v104/p34 Commish. Court
A permit to cross Wallisville Rd.
33-H-L2-001
Harris County, TX
Houston Lighting and Power Company
ARCO Chemical Company
None
No documents in file
33-H-L2-001
Harris County, TX
Atlantic Richfield Company
ARCO Chemical Company
###-##-####
(1) 4" pipeline with 3' of cover.
33-H-L2-001
Harris County, TX
Atlantic Richfield Company
ARCO Chemical Company
###-##-####
Easement for (1) 12" pipeline for the transportation of natural gas with 3' of cover.
33-H-L2-001
Harris County, TX
Atlantic Richfield Company
ARCO Chemical Company
###-##-####
An easement for (1) 4" propane pipeline with 3' of cover.
33-H-L2-001
Harris County, TX
Atlantic Richfield Company
ARCO Chemical Company
###-##-####
(2) pipelines with 3' of cover.
33-H-L3-001
Harris County, TX
Exxon Corporation
ARCO Chemical Company
###-##-####
A right of way for (1) 3" hydrogen and (1) 36" water pipeline with 42" of cover
33-H-L3-001
Harris County, TX
Houston Lighting and Power Company
  
None
No documents in file.
33-H-L3-001
Harris County, TX
Harris County Commissioners Court
None
None
Wallisville Rd. crossing for (1) 3" pipeline.
33-H-L4-001
Harris County, TX
Houston Lighting and Power Company
  
None
No documents in file
33-H-L4-001
Harris County, TX
Atlantic Richfield Company
ARCO Chemical Company
193-310705
A right of way for (1) 8" and (1) 10" MTBE pipeline.
34-P-001
Harris County, TX
Corps of Engineers
Seagull Petrochemical Corporation
None
Permit No. 15800 (01)/119 across an unnamed slough.
34-P-002
Harris County, TX
Port of Houston Authority
Seagull Petrochemical Corporation
None
PHA No. 91-0076 for a right of way for (3) 8" and (1) 10" pipeline within the Exxon Bayport-Baytown Pipeline Corridor being a 150' easement in Arthur McCormick Survey, A-40.
34-P-003
Harris County, TX
Port of Houston Authority
Equistar Chemicals, LP
None
License No. 91-0075 for (3) 8" pipelines and (1) 10" pipeline under and across Scott Bay, the Houston Ship Channel and Upper San Jacinto Bay in the William Scott Survey, A-66; Nathaniel Lynch Survey, A-44 and the A. M. McCormick Survey, A-46.
34-P-003.1
Harris County, TX
Corps of Engineers
Seagull Petrochemical Corporation
None
Permit No. 18914 across the Houston Ship Channel, Scott Bay and Upper San Jacinto Bay with (3) 9" and (1) 11" pipelines.
34-P-004
Harris County, TX
City of Baytown
Seagull Petrochemical Corporation
None
Permission to cross Bayway Drive
34-P-005
Harris County, TX
City of Baytown
Seagull Petrochemical Corporation
None
Permission to cross Park Street
34-P-005.1
Harris County, TX
Harris County
Seagull Petroleum Corporation
None
Permission to occupy road for laying of (4) pipelines at Park Street, 730' East of Bayway.  Recorded in v146 of County Minutes.  Notification No. 14336.
34-HA-001E,2E
Harris County, TX
Exxon Corporation
Seagull Petrochemical Corporation
###-##-####
A right of way for (3) 8" pipelines and (1) 10" pipeline.  See document for exact location.  Consent is required but only if not assigning to Quantum Chemical Corporation.
34-P-006
Harris County, TX
Missouri Pacific Railroad Company (UPRR)
Seagull Petrochemical Company
None
Agreement No. 150934 covering a four pipeline crossing at mile posted 27.94 to Baytown Branch.
34-P-007
Harris County, TX
San Jacinto River Authority
Seagull Petrochemical Corporation
###-##-####
A right of way for (3) 8" and (1) 10" pipeline crossing at the Main Canal, parcel E-77 in the Harvey Whiting Survey, A-840.
34-HA-003E
Harris County, TX
Eola Cox
Seagull Petrochemical Corporation
###-##-####
A right of way for a cathodic protection system
34-P-008
Harris County, TX
City of Baytown
Seagull Petrochemical Corporation
None
Permission to cross Decker Drive.
34-P-008.1
Harris County, TX
Texas Department of Transportation
Seagull Petrochemical Company
None
Permit No. 89-5650.  A right of way for (4) pipelines crossing Spur 330 (Decker Drive).
34-HA-001N
Harris County, TX
Ameriway Savings Association
Seagull Petroleum Corporation
###-##-####
A warranty deed granting real property.  See Exhibit A for description.  NTCE.
34-HA-001N (FEE)
Harris County, TX
Seagull Petrochemical Corporation
Quantum Chemical Corporation
-207792
Warranty deed conveying real property as described in original deed dated 12/27/89 with Ameriway Savings Association and subject to same terms and conditions.  NTCE
34-P-009
Harris County, TX
Harris County Flood Control District
Seagull Petrochemical Corporation
None
Notice approving pipeline crossing Unit 0 107-00-00 ditch.
34-P-010
Harris County, TX
Harris County Flood Control District
Seagull Petrochemical Corporation
None
Notice approving pipeline crossing (0 100-00-00) Goose Creek.
34-P-011
Harris County, TX
City of Baytown
Seagull Petrochemical Corporation
None
Permission to cross 100' fee strip adjacent to Goose Creek Stream.
34-P-011
Harris County, TX
City of Baytown
Seagull Petrochemical Corporation
None
Permission to cross 100' fee strip adjacent to Goose Creek Stream.
34-HA-005N
Harris County, TX
Exxon Pipeline Corporation
Quantum Chemical Corporation
None
A right of way for (4) pipelines consisting of (1) 8" ethane, (1) 8" butane, (1) 8' ethylene and (1) 10" propane.  See exhibit A for the description of corridor.  Grantor has right of first refusal if pipelines sold.
34-HA-006N
Chambers and Harris
Houston Lighting and Power Company
Quantum Chemical Corporation
###-##-####; 91-133-448
A right of way for (3) 8" pipelines and  (1) 10" pipeline.
34-HA-006N.1
Harris County, TX
Goose Creek Country Club
Seagull Petrochemical Company
None
Letter agreement gaining the Club's consent to lay pipeline adjacent to its golf course.
34-P-011A
Harris County, TX
Harris County
Seagull Petrochemical Corporation
None
Permission to occupy road for laying (4) pipelines at proposed connecting boulevard.  Recorded in v146 of County Minutes.  Notification No. 14299.
34-P-011A.1
Harris County, TX
City of Baytown
Seagull Petrochemical Corporation
None
Permission to cross proposed connecting boulevard.
34-P-011A.2
Harris County, TX
Harris County Flood Control District
Seagull Petrochemical Corporation
None
Notice approving pipeline crossing (0 129-00-00), a proposed ditch.
34-HA-007N
Harris County, TX
Exxon Gas System, Inc.
Seagull Petrochemical Corporation
###-##-####
A right of way for (4) pipelines.  New ownership: Kinder Morgan Texas Pipeline L.P., 500 Dallas St., Suite 1000, Houston, TX 77002.
34-HA-008N
Harris County, TX
M.T. Amad
Seagull Petrochemical Corporation
###-##-####
A right of way for (4) pipelines.  See exhibit for description.
34-HA-009N
Chambers and Harris
Houston Lighting and Power Company
Quantum Chemical Corporation
###-##-####; 91-133-448
A right of way for (3) 8" pipelines and (1) 10" pipeline.  See file 34-HA-6N for documents.
34-P-012
Harris County, TX
City of Baytown
Seagull Petrochemical Corporation
None
Permission to cross Baker Rd..
34-P-012.1
Harris County, TX
Harris County Commissioners Court
Seagull Petrochemical Corporation
None
Permission to occupy road for laying of (4) pipelines at Baker Rd..  See file P-11A for original documents.  Recorded in v146 of County Minutes.  Notification No. 14299.
34-P-013
Harris County, TX
Harris County Flood Control District
Seagull Petrochemical Corporation
None
Notice approving pipeline crossing 0 109-00-00, across Baker Street and Storm Sewer.
34-P-014
Harris County, TX
City of Baytown
Seagull Petrochemical Corporation
None
Permission to cross Riceland Rd..
34-P-015
Harris County, TX
Harris County Commissioners Court
Seagull Petrochemical Corporation
None
Permission to occupy road for laying of (4) pipelines at Lynchburg-Cedar Bayou Rd..  See file P-11A for original documents.  Recorded in v146 of County Minutes.  Notification No. 14299.
34-P-016
Harris County, TX
Harris County Commissioners Court
Seagull Petrochemical Corporation
None
Permission to occupy road for laying of (4) pipeline at Archer Rd..  See file P-11A for documents.  Recorded in v146 of County Minutes.  Notification No. 14299.
34-P-017
Harris County, TX
Harris County Flood Control District
Seagull Petrochemical Corporation
None
Notice approving pipeline crossing  0 128-00-00, Archer Rd. and HCFCD ditch.
34-HA-010N
Harris County, TX
Sidonia Santavy LaPoint Koudelka et al
Seagull Petrochemical Corporation
###-##-####
A 10' wide right of way for (4) pipelines.
34-HA-011,12,14N
Harris County, TX
George Gilman, Trustee
Seagull Petrochemical Corporation
###-##-####
A 10' wide right of way for (4) pipelines, each not exceeding 11" in diameter.
34-P-018
Harris County, TX
Harris County Flood Control District
Seagull Petrochemical Corporation
None
Notice approving pipeline crossing 0 113-00-00, drainage ditch.
34-P-019
Harris County, TX
Texas Department of Transportation
Seagull Petrochemical Corporation
None
Permit No. 89-5642.  A right of way for 4 pipelines crossing IH-10.
34-HA-017N
Harris County, TX
John Burley Corporation
Seagull Petrochemical Corporation
157 70 2416
A 30' wide right of way for (4) pipelines.
34-P-020
Harris County, TX
Harris County Commissioners Court
Seagull Petrochemical Corporation
None
Permission for laying (4) pipelines across Harris County easement.  Recorded in v146 of County Minutes.  Notification No. 14299.  See file P-11A for documents.
34-HA-018N
Harris County, TX
R and S Land Company and A.N. Rusche Distributing  Company
Seagull Petrochemical Corporation
###-##-####
A 30' wide right of way for (4) pipelines
34-P-021
Harris County, TX
Harris County Flood Control District
Seagull Petrochemical Corporation
None
Notice approving pipeline crossing 0 126-00-00 ditch.
34-P-022
Harris County, TX
Harris County Commissioners Court
Seagull Petrochemical Corporation
None
Permission to occupy road for laying (4) pipelines at Jones Rd..  Recorded in v146 of County Minutes.  Notification No. 14299.  See file P-11A for documents.
34-P-023
Harris County, TX
Harris County Commissioners Court
Seagull Petrochemical Corporation
None
Permission to occupy road for laying (4) pipelines at Wallisville Rd..   Recorded in v146 of County Minutes.  Notification No. 14299. See file P-11A for documents.
34-HA-021N
Harris County, TX
Garth - Wallisville, Ltd.
Seagull Petrochemical Corporation
160 66 0561
A 10' wide right of way for (4) pipelines.
34-P-024
Harris County, TX
Harris County Commissioners Court
Seagull Petrochemical Corporation
None
Permission to occupy road for laying (4) pipelines at Garth Rd..  Recorded in v146 of County Minutes.  Notification No. 14299.  See file P-11A for documents.
34-HA-023N
Harris County, TX
Royal D. Burnside, Jr. et al
Seagull Petrochemical Corporation
182 71 0752
For a cathodic protection groundbed.
34-HA-023N
Harris County, TX
Royal D. Burnside, Jr. et al
Seagull Petrochemical Corporation
156 61 0653
A 10' wide right of way for (4) pipelines.
34-P-025
Harris County, TX
San Jacinto River Authority
Seagull Petroleum Corporation
###-##-####
A right of way for (3) 8" pipelines and (1) 10" pipeline crossing the East Canal.
34-P-026
Harris County, TX
Harris County Flood Control District
Seagull Petrochemical Corporation
None
Notice approving pipeline crossing Q 118-03-00, North Main Rd. and ditch.
34-P-027
Harris County, TX
Harris County Commissioners Court
Seagull Petrochemical Corporation
None
Permission to occupy road for laying (4) pipelines at North Main Street.  Recorded in v146 of County Minutes.  Notification No. 14299.  See file P-11A for documents.
34-HA-026N
Harris County, TX
Nadyne W. Tye
Seagull Petrochemical Corporation
157 67 2356
A 15' wide right of way for (4) pipelines.
34-HA-027N
Harris County, TX
Nadyne W. Tye, Earl W. Wilbum Jr., and Joanne W. Gill
Seagull Petrochemical Corporation
157 67 2349
A right of way for (4) pipelines.  See exhibit for details.
34-HA-028N
Harris County, TX
Marvin R. Clark and Brenda A. Clark
Seagull Petrochemical Corporation
158 75 0521
A right of way for (4) pipelines.  See exhibit for details.
34-HA-029N
Harris County, TX
Marvin R. Clark and Brenda A. Clark
Seagull Petrochemical Corporation
158 75 0516
A right of way for (4) pipelines.  See exhibit for details.
34-P-028
Harris County, TX
Harris County Flood Control District
Seagull Petrochemical Corporation
None
Notice approving pipeline crossing Q 118-00-00, Ellis Branch Canal
34-HA-030N
Harris County, TX
Charles R. Sherron, M.D.
Seagull Petrochemical Corporation
159 62 2472
A right of way for (4) pipelines.  See exhibit for description of location.
34-P-029
Harris County, TX
Harris County Commissioners Court
Seagull Petrochemical Corporation
None
Permission to occupy road for laying (4) pipelines at Hadden Rd..  Recorded in v146 of County Minutes.  Notification No. 14299.  See file P-11A for documents.
34-HA-031N
Harris County, TX
Texas and Northern Industries, Inc.
Seagull Petrochemical Corporation
###-##-####
Coveys all real properties as described in exhibit A and B, yet reserves a perpetual non-exclusive easement.  NTCE
34-P-030
Chambers and Harris
Corps of Engineers
Seagull Petrochemical Corporation
None
Permit No. 14114 (01)/114 crossing Cedar Bayou Canal.
34-P-030.1
Harris County, TX
Harris County Flood Control District
Seagull Petrochemical Corporation
None
Notice approving pipeline crossing Unit Q 100-00-00, Cedar Bayou Canal.
34-CH-001N
Chambers County, TX
William F. Busch, Trustee and the heirs of Annie F. Busch Estate
Seagull Petrochemical Corporation
90 104 119
A 30' wide right of way for (4) pipelines.  Executed in several counterparts.
34-CH-002N
Chambers County, TX
Edwin Lammond et al
Seagull Petrochemical Corporation
v109/p308
A right of way with 48" of cover.  Cannot transport salt water or extremely hazardous substances.  See file for additional terms and conditions.  (Assignable if entity has assets of $100 million or more based on 1990 dollars.)
34-P-031
Chambers and Harris
Houston Lighting and Power Company
Quantum Chemical Corporation
###-##-####; 91-133-448
A right of way for (3) 8" and (1) 10" pipelines.  See file HA-6N for documents.
34-P-032
Chambers County, TX
Coastal Water Authority
Seagull Petrochemical Corporation
None
Letter approves crossing of Coastal Water Authority canal as described in drawing (SEG 613A-8023) near Cedar Point Lateral.
34-CH-001C
Chambers County, TX
Enron Gas Liquids, Inc., previously known as UPG, Inc.
Seagull Petrochemical Corporation
90 121 612
A 10' wide right of way for (3) pipelines .
34-CH-001D
Chambers County, TX
XRAL Storage and Terminaling Company
Seagull Petrochemical Corporation
90-131-273
A duration of use easement for (6) pipelines and appurtenances.
34-CH-001E
Chambers County, TX
Conoco, Inc.
Seagull Petrochemical Corporation
90 124 217
A right of way for (1) 8" ethane and (1) 8" propane/but one pipeline.
34-CH-001E
Chambers County, TX
Conoco, Inc.
Equistar Chemicals, LP
None
A right of way for (4) 8" pipelines with 48" of cover.   No structures.  Assignable with written consent.  Ownership: ConocoPhillips, P. O. Box 2197, Houston, TX 77252-2197.
34-CH-001F
Chambers County, TX
Nancy Rhea Welwood, David Glenn Barber, Cheryl Jeanne Orchin
Seagull Petrochemical Corporation
90 114 339
A 5' wide right of way for (2) pipelines.
34-CH-001F
Chambers County, TX
Harold A. Barber and N. Lynn Barber
Seagull Petrochemical Corporation
90 114 332
A 5' wide right of way for (2) pipelines.
34-P-033
Harris County, TX
Texas Department of Transportation
Seagull Petrochemical Company
None
Permit No. 20-473-89.  A right of way for a 10" propane, 8" ethane, 8" butane and a 8" ethylene for FM 1942.
34-CH-001B
Harris County, TX
Southern Pacific Transportation Company
Seagull Petrochemical Company
None
Audit No. 211124 for  (5) 8" and (1) 10" pipelines.  Mile post 12.8 in Mont Belvieu, TX.  Letter dated 11/17/97 from Seagull to UPRC on behalf of Equistar asking for consent to assign into Equistar.  Letter is not signed.  Letter dated 5/10/90 from Seagul
34-CH-004X
Chambers County, TX
City of Mont Belvieu
Seagull Petrochemical Corporation
None
Permits No. 212, 213, 214, 215, 216, 217 for (6) pipelines crossing the city of Mount Belvieu.
34-CH-005
Chambers County, TX
Harry J. Traverso, Jr. et al
Seagull Petrochemical Corporation
90 102 33
A 30' wide right of way for (2) pipelines.
34-CH-005B
Chambers County, TX
T.E. Products Pipeline Company
Seagull Petrochemical Corporation
90 114 311
A 5' wide right of way for (2) 8" pipelines.  Ownership: T. W. Products Pipeline Co., LP, C/O Deb Smith, P. O. Box 2521, Houston, TX 77252-2521
34-P-034
Chambers County, TX
Coastal Water Authority
Seagull Petrochemical Corporation
None
Letter approves crossing of Coastal Water Authority Canal as described in drawing SEG-697A-8002 near Cedar Point Lateral.
34-P-035
Chambers County, TX
Chambers County
Seagull Petrochemical Corporation
None
Permit No. 90-08.  A right of way for (4) pipelines West of Southern Pacific Railroad, 320' N of Winfree Rd. which is located within 34-CH-1D..  Permit No. 90-09 for (2) pipelines West of Southern Pacific Railroad and approximately 2120' South of West end
34-P-036
Chambers County, TX
Southern Pacific Transportation Company (UPRR)
Seagull Petrochemical Corporation
None
Audit  No. 211124,  (5) 8"  and (1) 10" pipelines at mile post 12.8 in Mont Belvieu, TX.  CS-3400.  Audit No. 17945.  This covers the following crossings:  MP 14.07 for Ethane, Propane and Butane pipelines; MP-14.06 for an 8" ethylene pipeline; MP 13.62 f
34-L5H-001
Harris County, TX
Equistar Chemicals, LP
  
None
At time of construction of the 4" lateral, the right of way is held by Equistar Chemical, LP, therefore no additional right of way required.
34-L5H-002
Harris County, TX
H.  V. Properties, Inc.
Equistar Chemicals, LP
###-##-####
A right of way for a 4" nominal diameter pipeline with 3' of cover.
34-L5H-003
Harris County, TX
DGAJA, Ltd.
Equistar Chemicals, LP
###-##-####
A right of way for a 4" nominal diameter pipeline with 3' of cover.
34-L5H-003
Harris County, TX
Dayton State Bank (lender) and DGAJA, Ltd (owner)
Equistar Chemicals, LP
###-##-####
A right of way for a 4" nominal diameter pipeline with 3' of cover.  Agreement effective since 10/11/99.
34-L5H-004
Harris County, TX
Tommy Kimmey, et ux
Equistar Chemicals, LP
###-##-####
A right of way for a 4" nominal diameter pipeline with 3' of cover.
34-L5H-005
Harris County, TX
BMH Eagleton, Inc.
Equistar Chemicals, LP
###-##-####
A right of way for a 4" nominal diameter pipeline with 3' of cover.
34-L5H-006
Harris County, TX
Chevron, Inc.
Quantum Chemical Corporation
v133/p448
A right of way for (2) pipelines and a 15' by 15' valve site.
35-101.1
Chambers County, TX
Texas Butadiene and Chemical Corporation
Sinclair Petrochemicals, Inc.
v238/p378
Mt. Belvieu Terminal, including Lot 7.  Being 41.200 acres, Henry Griffith League, A-12, Chambers County, TX.  NTCE
35-101.2
Chambers County, TX
Gulf Oil Corporation
Texas Butadiene and Chemical Corporation
v240/p282
A right of way for (2) 6" pipelines across Lots 9 and 8.
35-101.3
Chambers County, TX
A. W. Foerster, Trustee
Texas Butadiene and Chemical Corporation
v181/p47
A right of way for (2) pipelines.
35-101.4
Chambers County, TX
Elsie Gilbert
Texas Butadiene and Chemical Corporation
v181/p45
A right of way for (2) pipelines in one ditch.
35-101.5
Chambers County, TX
Thelma Barber
Texas Butadiene and Chemical Corporation
v181/p45
A right of way for (2) pipelines in one ditch.
35-101.6
Chambers County, TX
J. R. Barber
Texas Butadiene and Chemical Corporation
v181/p43
A right of way for (2) pipelines.
35-101.7
Chambers County, TX
Texas Department of Transportation
Texas Butadiene and Chemical Corporation
None
Permit No. 80-645-56 for (2) 6" pipelines.
35-101.8
Chambers County, TX
Texas and New Orleans Railroad Company (UPRR)
Texas Butadiene and Chemical Corporation
None
Lease No. 128926 for (2) 6" pipelines.  1400' North of Hwy 1942 on Dayton to Baytown Branch.  02/13/04: Letter from Joan Preble stating that this was assigned to Strong Capital One.  Ownership: Railroad Management Company, C/O Cary Newman, 4514 Cole Avenu
35-101.10
Chambers County, TX
Chambers County
Texas Butadiene and Chemical Company
None
Hatcherville Rd.
35-101.11
Chambers County, TX
Alfred F. Ulrich
Texas Butadiene and Chemical Corporation
v181/p42
A right of way for (2) pipelines.
35-101.12
Chambers County, TX
Coastal Water Authority
None
None
After visiting with John Olden, with Kellog-Brown and Root, the engineers for the Coastal Water Authority, it is determined that the Coastal Water Authority issued no permits prior to 1977.
35-101.13
Chambers County, TX
Ben R. Reynolds, et al
Texas Butadiene and Chemical Corporation
v181/p39
A right of way for (2) pipelines.
35-102.1
Harris County, TX
Harris County Flood Control District
Texas Butadiene and Chemical Corporation, ARCO Pipeline (1977)
None
Permit to cross ditch No. Q 100-00-00.
35-102.1A
Harris County, TX
Harris County Flood Control District
Texas Butadiene and Chemical Corporation, ARCO Pipeline (1977)
None
Permit to cross ditch No. Q 122-01-00.
35-102.2
Harris County, TX
Emma Smith
Texas Butadiene and Chemical Corporation
v3183/p358
A right of way for (2) pipelines.
35-102.2B
Harris County, TX
Harris County Flood Control District
Texas Butadiene and Chemical Corporation, ARCO Pipeline (1977)
None
Permit to cross ditch No. Q 122-01-02.
35-102.3
Harris County, TX
Buck Turner
Texas Butadiene and Chemical Corporation
v3183/p357
A right of way for (2) pipelines.
35-102.4
Harris County, TX
Harris County Commissioners Court
Texas Butadiene and Chemical Corporation
None
Permit to cross Crosby Cedar Bayou Rd.  Permit also covers 102.4, 103.17, and 103.6.
35-102.5
Harris County, TX
Rosa Clawson
Texas Butadiene and Chemical Corporation
v3183/p356
A right of way for (2) pipelines.
35-102.6
Harris County, TX
Wilbur Scott, et al
Texas Butadiene and Chemical Corporation
v3183/p354
A right of way for (2) pipelines.
35-103.1
Harris County, TX
Theo A. Ramsey
Texas Butadiene and Chemical Corporation
v3183/p353
A right of way for (2) pipelines.
35-103.2
Harris County, TX
Charles D. Moore
Texas Butadiene and Chemical Corporation
v3183/p351
A right of way for (2) pipelines.
35-103.3
Harris County, TX
Houston Lighting and Power Company
  
None
No documents in file
35-103.4
Harris County, TX
Eddie Faust
Texas Butadiene and Chemical Corporation
v3183/p350
A right of way for (2) pipelines.
35-103.5
Harris County, TX
Julius Patrick Davis, et ux
Texas Butadiene and Chemical Corporation
v3183/p348
A right of way for (2) pipelines.
35-103.6
Harris County, TX
Harris County Commissioners Court
Texas Butadiene and Chemical Corporation
None
Permit for pipeline crossing Saralla Rd..  See 35-102.4 for documents.
35-103.7
Harris County, TX
Houston Lighting and Power Company
  
None
No documents in file
35-103.8
Harris County, TX
Jessie Newton, et ux
Texas Butadiene and Chemical Corporation
v3183/p346
A right of way for (2) pipelines.
35-103.9
Harris County, TX
Emil L. Doskocil and Mary K. Doskocil
Texas Butadiene and Chemical Corporation
v3183/p345
A right of way for (2) pipelines.
35-103.9A
Harris County, TX
Harris County Flood Control District
Texas Butadiene and Chemical Corporation, ARCO Pipeline (1977)
None
G 103-08-00
35-103.10
Harris County, TX
Howard A. Miller and Susie Miller, James Frank Wiggins and Lois Wiggins
Texas Butadiene and Chemical Corporation
v3183/p343
A right of way for (2) pipelines.
35-103.11
Harris County, TX
San Jacinto River Authority
Texas Butadiene and Chemical Corporation
None
A right of way for (2) pipelines.
35-103.12
Harris County, TX
James Frank Wiggins and Lois Ruth Wiggins
Texas Butadiene and Chemical Corporation
v3183/p342
A right of way for (2) pipelines.
35-103.13
Harris County, TX
Louis Doskocil and Doris Doskocil
Texas Butadiene and Chemical Corporation
v3183/p340
A right of way for (2) pipelines.
35-103.14
Harris County, TX
Edward P.Kosta , et al
Texas Butadiene and Chemical Corporation
v3183/p338
A right of way for (2) pipelines.
35-103.15
Harris County, TX
Lillian Hyer
Texas Butadiene and Chemical Corporation
v3183/p336
A right of way for (2) pipelines.
35-103.16
Harris County, TX
Leon Lloyd and Clara Lloyd
Texas Butadiene and Chemical Corporation
v3181/p335
A right of way for (2) pipelines.
35-103.17
Harris County, TX
Harris County Commissioners Court
Texas Butadiene and Chemical Corporation
None
Permit to cross Crosby-Lynchburg Rd.  See 102.4 for documents.
35-104.1
Harris County, TX
Kate Meyer
Texas Butadiene and Chemical Corporation
v3183/p333
A right of way for (2) pipelines.
35-104.2
Harris County, TX
Delbert R. Lang and Grace A. Lange
Texas Butadiene and Chemical Corporation
v3183/p332
A right of way for (2) pipelines.
35-104.3
Harris County, TX
J. L. Holec and Alvena Holec
Texas Butadiene and Chemical Corporation
v3183/p330
A right of way for (2) pipelines.
35-104.4
Harris County, TX
W. C. Arnold and Gladys Arnold
Texas Butadiene and Chemical Corporation
v3183/p329
A right of way for (2) pipelines.
35-104.5
Harris County, TX
Houston Lighting and Power Company
  
None
No documents in file
35-104.7
Harris County, TX
Harris County Flood Control District
Texas Butadiene and Chemical Corporation, ARCO Pipeline (1977)
None
Ditch
35-104.9
Harris County, TX
Harris County
None
None
Highland Shores.  We have preexisting rights.  This road was built after our line was constructed.
35-104.13
Harris County, TX
Corps of Engineers
Texas Butadiene and Chemical Corpsoration
None
Permit No. 3539 across the San Jacinto River with (2) 6" pipelines.
35-104.13A
Harris County, TX
Harris County Houston Ship Channel Navigation District
Texas Butadiene and Chemical Corporation
None
Permit No. MO-K-48-A for (2) 6" pipelines crossing the San Jacinto River.  8/11/03-MM: Original permit not in file, but letter of permission to assign to Sinclair Petrochemicals is.
36-H32
Harris County, TX
Lyondell Petrochemical Company
EPC Partners IV, Inc.
###-##-####
A right of way for a valve site and pipelines.
36-LPC-2P
Harris County, TX
Missouri Pacific Railroad Company
  
None
No documents in file.
36-H32.2P
Harris County, TX
Corps of Engineers
EPC Partners IV, Inc.
None
San Jacinto River.  Permit No. 14114(02)/300 across the San Jacinto River with (1) 10" and (2) 8" pipelines.
36-H32.2P(PA)
Harris County, TX
Port of Houston Authority
EPC Partners IV, Inc.
None
PHA No. 95-0213 (formerly 94-0158).  License to cross the San Jacinto River with (2) 8" pipelines and (1) 10" pipeline.  Assignment assigns (1) 8" pipeline.  **New agreement in 2005-License No. 2004-0339, formerly 95-0213.
36-H32.3P(HCFCD)
Harris County, TX
Harris County Flood Control District
EPC Partners IV, Inc.
None
Refers to San Jacinto River crossing.  No documents in file.  Permit Nos.  01-19-22 (10"), 01-19-23 (8"), 01-19-24 (8") and San Jacinto River No. G100-00-00.
36-H32A
Harris County, TX
EPC Partners III, Inc.
Lyondell Petrochemical Company
###-##-####
An assignment of right of entry issued by Houston Lighting and Power to EPC Partners III, Inc. for pipeline installation is given to Lyondell Petrochemical Company.
36-H33
Harris County, TX
John W. Schumacher III/Agent and  Attorney in fact for Maude Hazel Helms
EPC Partners IV, Inc.
###-##-####
A 30' wide right of way for (1) 10" and (2) 8" pipelines.
36-H34
Harris County, TX
Letwalt Corporation
EPC Partners IV, Inc.
###-##-####
A 30' wide right of way for (1) 10" and (2) 8" pipelines.
36-H35
Harris County, TX
ARCO Pipeline Company
EPC Partners IV, Inc.
###-##-####
A right of way for (1) 10" and (2) 8" pipelines.  ARCO Pipeline Company approves the assignment of easement to Lyondell Petrochemical Company as it pertains to (1) 8" pipeline.  Ownership: ARCO Pipeline Company, C/O BP America, Inc., P. O. Box 3092, Houst
36-H35A
Harris County, TX
Waitkus Trading Company
EPC Partners IV, Inc.
###-##-####
A 30' wide right of way for (1) 10" and (2) 8" pipelines.
36-H35AP
Harris County, TX
Harris County Commissioners Court
EPC Partners IV, Inc.
None
Permit to cross Highland Shores crossing.  Notice No 16637.  This was assigned to Lyondell.
36-H36
Harris County, TX
Enerfin Resources II-92, LTD Partnership
EPC Partners IV, Inc.
###-##-####
A 30' wide right of way for (1) 10" and (2) 8" pipelines.
36-H36A
Harris County, TX
John David Craddock et al
EPC Partners IV, Inc.
###-##-####
A 30' wide right of way for (1) 10" and (2) 8" pipelines.
36-H37
Harris County, TX
Kenneth Fielder and Bessie Fielder
EPC Partners IV, Inc.
###-##-####
A 30' wide right of way for (1) 10" and (2) 8" pipelines.
36-H42
Harris County, TX
Sadeane C. Lang, et al
EPC Partners III, Inc.
###-##-####
A 20' wide right of way for (1) 10" and (2) 8" pipelines.
36-H42C
Harris County, TX
Realinvest Corporation
EPC Partners IV, Inc.
###-##-####
A 20' wide right of way for (1) 10" and (2) 8" pipelines.
36-H42E
Harris County, TX
Ealter G. Clardy
EPC Partners IV, Inc.
###-##-####
A 20' wide right of way for (1) 10" and (2) 8" pipelines parallel and adjacent to the existing 20' wide easement granted 09/30/91.
36-H42.1P
Harris County, TX
Harris County Commissioners Court
EPC Partners IV, Inc.
None
Permit to cross Grace Lane Crossing.  Notice No. 16637.  This was assigned to Lyondell.
36-H42.2P
Harris County, TX
Harris County Flood Control District
EPC Partners IV, Inc.
None
Permit Nos. 01-19-25 (10"), 01-19-26 (8"), 01-19-27 (8") and Canal No. G103-05-01.
36-H42.3P
Harris County, TX
Harris County Commissioners Court
EPC Partners IV, Inc.
None
Permit to cross  FM 2100 (Crosby-Lynchburg).  Notice No. 16637.
36-H40
Harris County, TX
Carrol. Messer
EPC Partners IV, Inc.
###-##-####
A 30' wide right of way for (1) 10" and (2) 8" pipelines.
36-H41
Harris County, TX
Houston Pipeline Company
EPC Partners IV, Inc.
###-##-####
A 30' wide right of way for (1) 10" and (2) 8" pipelines.
36-H42.4P
Harris County, TX
San Jacinto River Authority
EPC Partners IV, Inc.
None
No documents in file.
36-H42R
Harris County, TX
John F. Newell and Alice Joyce Newell
EPC Partners IV, Inc.
###-##-####
A 20' wide right of way for (1) 10" and (2) 8" pipelines.
36-H43R
Harris County, TX
Lois Ruth Wiggins
EPC Partners IV, Inc.
###-##-####
A 20' wide right of way for (1) 10" and (2) 8" pipelines.
36-H44R.1P
Harris County, TX
Harris County
EPC Partners IV, Inc.
None
Refers to Barbers Hill Rd..  Notice No. 16637.  This was assigned to Lyondell.
36-H44R
Harris County, TX
San Jacinto River Authority
EPC Partners IV, Inc.
###-##-####
A 30' wide right of way for (1) 10" and (2) 8" pipelines.
36-H44R.2P
Harris County, TX
Harris County Commissioners Court
EPC Partners IV, Inc.
None
Permit to cross Barbers Hill Rd..  Assigned to Lyondell.
36-H45R
Harris County, TX
EPC Partners IV, Inc.
EPC Partners III, Inc.
###-##-####
A 30' wide right of way for (1) 10" and (2) 8" pipelines.
36-H45RP
Harris County, TX
Harris County
EPC Partners IV, Inc.
None
Refers to Danek Rd. Crossing.  No documents in file.  Notice No. 16637.
36-H47R
Harris County, TX
Huey Pierce Cheek and Cajuane Faye Cheek
EPC Partners IV, Inc.
###-##-####
A 20' wide right of way for (1) 10" and (2) 8" pipelines.
36-H47RP
Harris County, TX
Harris County Commissioners Court
EPC Partners IV, Inc
None
Permit to cross Danek Rd..  Notice No. 16637.
36-H48
Harris County, TX
Roger A. Ramsey, et al
EPC Partners IV, Inc.
###-##-####
A 20' wide right of way for (1) 10" and (2) 8" pipelines.
36-H48R
Harris County, TX
Roger A. Ramsey
EPC Partners IV, Inc.
###-##-####
A 20' wide right of way for (1) 10" and (2) 8" pipelines.
36-H49
Harris County, TX
Robin Montgomery
EPC Partners IV, Inc.
###-##-####
A 20' wide right of way for (1) 10" and (2) 8" pipelines.
36-H49P
Harris County, TX
Harris County Commissioners Court
EPC Partners IV, Inc.
None
Permit to cross David Lane Crossing.  Notice No. 16637.
36-H49A
Harris County, TX
Vernon Hagan, et al
EPC Partners IV, Inc.
###-##-####
A 20' wide right of way for (1) 10" and (2) 8" pipelines.
36-H50
Harris County, TX
Eugene Lester Johnson
EPC Partners IV, Inc.
###-##-####
A 20' wide right of way for (1) 10" and (2) 8" pipelines.
36-H51
Harris County, TX
Allen Holt and Katie M. Holt, as agents and attorneys in fact for Allen Holt, Jr.
EPC Partners IV, Inc.
###-##-####
A correction 20' wide right of way for (1) 10" and (2) 8" pipelines.
36-H52
Harris County, TX
Houston Lighting and Power Company
EPC Partners IV, Inc.
None
No documents in file.  PNO ###-##-####.
36-H52A
Harris County, TX
Gary Glenn Sawyer, executor of Milton James Sawyer Estate
EPC Partners IV, Inc.
###-##-####
A 30' wide right of way for (1) 10" and (2) 8" pipelines.
36-H53
Harris County, TX
Paul H. Krebs, Trustee
EPC Partners IV, Inc.
###-##-####
A 30' wide right of way for (1) 10" and (2) 8" pipelines.
36-H53.1
Harris County, TX
Laris J. Nolan, Jr. and Romeal G. Nolan
EPC Partners IV, Inc.
###-##-####
A 10' wide right of way for (1) 10" and (2) 8" pipelines.
36-H53.2
Harris County, TX
Tammy Rincon and Kerri Pettit
EPC Partners IV, Inc.
###-##-####
A 10' wide right of way for (1) 10" and (2) 8" pipelines.
36-H53.3
Harris County, TX
Kathryn S. Washington
EPC Partners IV, Inc.
###-##-####
A 10' wide right of way for (1) 10" and (2) 8" pipelines.
36-H53.4
Harris County, TX
Joe R. DuBose and Tracy L.  DuBose
EPC Partners IV, Inc.
###-##-####
A 10' wide right of way for (1) 10" and (2) 8" pipelines.
36-H53.5
Harris County, TX
James W. Lundy and Patsy J. Lundy
EPC Partners IV, Inc.
###-##-####
A 10' wide right of way for (1) 10" and (2) 8" pipelines.
36-H54
Harris County, TX
Paul H. Krebs, Trustee
EPC Partners IV, Inc.
###-##-####
A 30' wide right of way for (1) 10" and (2) 8" pipelines.
36-H54P
Harris County, TX
Texas Department of Transportation
EPC Partners IV, Inc.
None
Permit to cross FM 1942.  Permit No. 94-0187.
36-H55
Harris County, TX
Dallas Ted Weems, et al
EPC Partners IV, Inc.
###-##-####
A 30' wide right of way for (1) 10" and (2) 8" pipelines.
36-H56
Harris County, TX
Jess Newton Rayzor
EPC Partners IV, Inc.
###-##-####
A 30' wide right of way for (1) 10" and (2) 8" pipelines.  Notification required when assigned.  Ownership: Rayzor J. Newton Estate, C/O J. H. Fant & Philip Baker-Individual Co-Executors, 1204 W. University Dr. No. 400, Denton, TX 76201-1794.
36-H56AP
Harris County, TX
Coastal Water Authority
EPC Partners IV, Inc
None
No documents in file.  Profile No. 67-651-0095.
36-H57
Harris County, TX
Willie Lee Haluska and Alice Mae Haluska
EPC Partners IV, Inc.
###-##-####
A 30' wide right of way for (1) 10" and (2) 8" pipelines.
36-H58
Harris County, TX
Lillie Mae Gates
EPC Partners IV, Inc.
###-##-####
A 30' wide right of way for (1) 10" and (2) 8" pipelines.
36-H59
Harris County, TX
Jerome Jerry Ulrich and Shirley Ulrich
EPC Partners IV, Inc.
###-##-####
A 30' wide right of way for (1) 10" and (2) 8" pipelines.
36-H60
Harris County, TX
Joe Carroll Ulrich
EPC Partners IV, Inc.
###-##-####
A 30' wide right of way for (1) 10" and (2) 8" pipelines.  Consent given to assign to Lyondell Petrochemical.  Ownership: Estate of Camille Ulrich, C/O Joe C. Ulrich, 6011 FM 1942 Rd., Baytown, TX 77521-8721.
36-H61
Harris County, TX
Gary S. Janacek and Sandra Janacek
EPC Partners IV, Inc.
###-##-####
A 30' wide right of way for (1) 10" and (2) 8" pipelines.
36-H62
Harris County, TX
Ruby Novak Sanders
EPC Partners IV, Inc.
###-##-####
A 30' wide right of way for (1) 10" and (2) 8" pipelines.
36-H62A
Harris County, TX
Carolyn Jo Novak Brakensiek
EPC Partners IV, Inc.
###-##-####
A 30' wide right of way for (1) 10" and (2) 8" pipelines.
36-H62B
Harris County, TX
Frances Ann Novak Bauer
EPC Partners IV, Inc.
###-##-####
A 30' wide right of way for (1) 10" and (2) 8" pipelines.
36-H62C
Harris County, TX
Dorothy Novack Bogoard
EPC Partners IV, Inc.
###-##-####
A 30' wide right of way for (1) 10" and (2) 8" pipelines.
36-H63
Harris County, TX
Patti Kate Kroll
EPC Partners IV, Inc.
###-##-####
A 30' wide right of way for (1) 10" and (2) 8" pipelines.  Consent given to assign to Lyondell Petrochemical.
36-H64
Harris County, TX
Patti Kate Kroll
EPC Partners IV, Inc.
###-##-####
A 30' wide right of way for (1) 10" and (2) 8" pipelines.  Consent given to assign to Lyondell Petrochemical.
36-H64X
Harris County, TX
Port of Houston Authority
EPC Partners IV, Inc.
None
PHA License No. 95-0214 (formerly 94-0152) for (1) 8" pipeline crossing Cedar Bayou. **New agreement in 2005-License No. 2004-0340, formerly 95-0214
36-H66R
Harris County, TX
Louis F. Rothermel II, Trustee
EPC Partners IV, Inc.
###-##-####
A 20' wide right of way for (1) 10" and (2) 8" pipelines.
36-H67R
Harris County, TX
William J. Davis and Elizabeth Davis
EPC Partners IV, Inc.
###-##-####
A 20' wide right of way for (1) 10" and (2) 8" pipelines.
36-H68R
Harris County, TX
Charles D. Mattingly and Annie Lois Mattingly
EPC Partners IV, Inc.
###-##-####
A 20' wide right of way for (1) 10" and (2) 8" pipelines.
36-C69R
Chambers County, TX
Peter C. Ulrich
EPC Partners IV, Inc.
None
A 20' wide right of way for (1) 10" and (2) 8" pipelines.
36-H64.1PP
Harris County, TX
Corps of Engineers
EPC Partners IV, Inc.
None
Permit No. 14114(02)/299 across Cedar Bayou with (1) 10" and (2) 8" pipelines.
36-C70
Chambers County, TX
Belvieu Environmental Fuels
EPC Partners IV, Inc.
95-263-361
A right of way for (1) 8" pipeline.
36-C70A
Chambers County, TX
Enterprise Products Belvieu Environmental Fuels
EPC Partners IV, Inc.
95-263-332
A right of way for (1) 8" pipeline.
36-C70B
Chambers County, TX
Belvieu Environmental Fuels
EPC Partners IV, Inc.
95-263-361
Same as file 36-C70
36-C71
Chambers County, TX
Enterprise Products Company
EPC Partners IV, Inc.
95-263-393
A right of way for (1) 8" pipeline.
36-C73.1P
Chambers County, TX
Chambers County
EPC Partners IV, Inc.
None
Application No. 94-46.  No documents in file
36-C72
Chambers County, TX
Enterprise Products Company
EPC Partners IV, Inc.
95-263-394
A right of way for (1) 8" pipeline.
36-C73B
Chambers County, TX
Houston Lighting and Power Company
EPC Partners IV, Inc.
None
No documents in file.  PNO ###-##-####
36-C73.2P
Chambers County, TX
Coastal Water Authority
EPC Partners IV, Inc.
None
Permit/Profile No. 67-651-0096.
36-C73.3P
Chambers County
Southern Pacific Transportation Company
Enterprise Products Company
None
Audit No. 708991.  $1500 flat rate is substituted for annual fee in original agreement.
36-C73.4P
Chambers County, TX
City of Mont Belvieu
EPC Partners IV, Inc.
None
Minutes of City of Mont Belvieu Council Meeting, October 24, 1994.  Permit No. 250.
36-C74
Chambers County, TX
Glenda Del Brown
EPC Partners IV, Inc.
95-258-342
A 10' wide right of way for (1) 8" pipeline.
36-C74.1P
Chambers County, TX
Texas Department of Transportation
EPC Partners IV, Inc.
None
Refers to FM 1942 crossing.  Permit No. 20-325-1994
36-C75
Chambers County, TX
TE Products Pipeline Company
EPC Partners IV, Inc.
94-254-356
A right of way for (1) 8" pipeline.
36-C75.1P
Chambers County, TX
Chambers County, TX
EPC Partners IV, Inc.
None
Refers to Barbers Hill Rd. crossing.  No documents in file.  Application No. 94-48, Order No. 94-9-304.
36-C76.1P
Chambers County, TX
Chambers County, TX
EPC Partners IV, Inc
None
Refers to Fitzgerald Rd. Crossing.  No documents in file.  Application No. 94-48, Order No. 94-9-327.
36-C77
Chambers County, TX
Chevron USA, Inc.
EPC Partners IV, Inc.
95-258-354
A right of way for (1) 8" pipeline.  Written consent required on assignment.  Ownership: Dynegy, C/O Warren Leatherman, 1000 Louisiana St. Suite 5800, Houston, TX 77002-5021.
37-H-001
Harris County, TX
Exxon Pipeline Company
Oxy Petrochemicals, Inc
None
Bayport Corridor 510, 30, 520, 60, 530, 540 and 550.
37-H-001.1
Harris County, TX
Harris County Flood Control District
Oxy Petrochemicals, Inc.
None
Big Island Slough crossing approved for (1) 8" pipeline.
37-H-001.2
Harris County, TX
Harris County Commissioners Court
Oxy Petrochemicals, Inc.
None
Permit to cross Baypark Rd.
37-H-001.1A
Harris County, TX
Coastal Water Authority
Oxy Petrochemicals, Inc
None
Permission given to construct a pipeline across CWA Pipeline.
37-H-001.1B
Harris County, TX
Corps of Engineers
Oxy Petrochemicals, Inc.
None
General permits No. 14114 (03)/506 and 14114 (03)/507 across Taylor Bayou and Big Island Slough.
37-H-002
Harris County, TX
Houston Lighting and Power Company
  
None
No documents in file
37-H-002.1
Harris County, TX
Harris County Flood Control District
Oxy Petrochemicals, Inc.
None
Permit to cross ditch No. B 104-03-00.  Permit not required.
37-H-002.2
Harris County, TX
Gulf Coast Water Disposal Authority
None
None
No permit required.
37-H-002A
Harris County, TX
Coastal Water Authority
Oxy Petrochemicals, Inc.
None
Same as 37H-1.1A.  Gives permission to construct pipeline across CWA pipelines.
37-H-003
Harris County, TX
Exxon Pipeline Company
Oxy Petrochemicals, Inc.
None
See 37-H-001 for documents.  Bayport Corridor 510, 30, 520, 60, 530, 540 and 550.
37-H-003.1
Harris County, TX
Harris County Commissioners Court
Oxy Petrochemicals, Inc.
None
Permit to cross Choate Rd.
37-H-003A
Harris County, TX
State of Texas General Land Office
Oxy Petrochemicals, Inc.
###-##-####
A 30' wide right of way for (1) 8" pipeline crossing Taylor Bayou. Miscellaneous easement No. ME 980013.
37-H-003.2
Harris County, TX
Harris County Commissioners Court
Oxy Petrochemicals, Inc.
None
Permit to cross Bay Area Boulevard
37-H-004
Harris County, TX
Houston Lighting and Power Company
  
None
No documents in file
37-H-005
Harris County, TX
Exxon Pipeline Company
Oxy Petrochemicals, Inc.
None
See 37-H-1 for details.  Bayport Corridor 510, 30, 520, 60, 530, 540 and 550.
37-H-005.1
Harris County, TX
Southern Pacific Transportation Company (UPRR)
Oxy Petrochemicals, Inc.
None
License agreement for audit No. 202733 for a (1) 8" MEG pipeline.  Folder No. 1624-10.  MP 1.94.  Crossing near Bayport, TX.
37-H-005.2
Harris County, TX
Texas Department of Transportation
Oxy Petrochemicals, Inc.
None
Permit No. 97-1110 crossing State Highway 146 .
37-H-006
Harris County, TX
Exxon Pipeline Company
Oxy Petrochemicals, Inc.
None
Bayport Corridors 510, 30, 520, 60, 530, 540 and 550.
38-HA-046
Harris County, TX
Fox and Jacobs, Inc.
ARCO Pipeline Company
###-##-####
Amendment of easement dated 06/24/66 and recorded in v6421/p102.  Amended in 05/16/75 and recorded in film code ###-##-####.  Adds (1) additional pipeline.  4' of cover.
38-HA-047
Harris County, TX
Harris County Flood Control District
ARCO Pipeline Company
None
Permit for crossing the following ditches: P 107-00-00; G 103-08-00; N 100-00-00.
38-HA-047.1
Harris County, TX
Harris County Commissioners Court
ARCO Pipeline Company
None
Permit for crossing Nachita Dr., Purple Sage Rd., and Trailview Street.  A-257, J. Erwin Survey.
38-HA-048
Harris County, TX
San Jacinto Junior College District
ARCO Pipeline Company
###-##-####
Modification of easement dated 05/18/66 and recorded in v6376/p407.  Modification of easement dated 08/05/74 and recorded under film code ###-##-####.
38-HA-049
Harris County, TX
Harris County Commissioners Court
ARCO Pipeline Company
None
Permit to cross Uvalde Rd.
38-HA-050
Harris County, TX
San Jacinto Junior College District
ARCO Pipeline Company
###-##-####
Modification of easement dated 05/18/66 and recorded in v6376/p407.  Modification of easement dated 08/05/74 and recorded under film code ###-##-####.
38-HA-051
Harris County, TX
City of Houston
ARCO Pipeline Company
None
Permit No. 81-1809 for (1) 16" pipeline.  Additional permit, Council Motion 81-3273.  Both permitted to cross City's West Canal.
38-HA-052
Harris County, TX
United Texas Transmission Company
ARCO Pipeline Company
###-##-####
Easement for (1) 16" pipeline with 30" of cover.
38-HA-053
Harris County, TX
ARCO Pipeline Company
Atlantic Richfield Company
J742648
Easement for (1) 16" pipeline across (7) tracts of land.  Ownership: ARCO Pipeline Company, C/O BP America, Inc., P. O. Box 3092, Houston, TX 77562.
38-HA-054
Harris County, TX
James P. Grizzard
ARCO Pipeline Company
###-##-####
A 10' wide right of way for (1) 16" pipeline across (2) tracts of land with 4' of cover.
38-HA-054A
Harris County, TX
Harris County Commissioners Court
ARCO Pipeline Company
None
Permit for Uvalde Rd., Sheldon Rd., proposed East Belt Drive, Miller Rd. No. 2.
38-HA-055
Harris County, TX
Harris County Flood Control District
ARCO Pipeline Company
None
Permit for crossing the following ditches: P 107-00-00; G 103-08-00; N 100-00-00.
38-HA-056
Harris County, TX
ARCO Pipeline Company
Atlantic Richfield Company
J742648
Easement for (1) 16" pipeline across (7) tracts of land.  Ownership: ARCO Pipeline Company, C/O BP America, Inc., P. O. Box 3092, Houston, TX 77562.
38-HA-057
Harris County, TX
Houston Lighting and Power Company
ARCO Pipeline Company
###-##-####
A right of way for (1) 16" pipeline at (3) locations with 4' of cover for longitudinal and 9' of cover for perpendicular crossings.
38-HA-058
Harris County, TX
ARCO Pipeline Company
Atlantic Richfield Company
J742648
Easement for (1) 16" pipeline across (7) tracts of land.  Ownership: ARCO Pipeline Company, C/O BP America, Inc., P. O. Box 3092, Houston, TX 77562.
38-HA-059
Harris County, TX
Harris County Commissioners Court
ARCO Pipeline Company
None
Permit for Uvalde Rd., Sheldon Rd., proposed East Belt Drive, Miller Rd. No. 2.
38-HA-060
Harris County, TX
ARCO Pipeline Company
Atlantic Richfield Company
J742648
Easement for (1) 16" pipeline across (7) tracts of land.  Ownership: ARCO Pipeline Company, C/O BP America, Inc., P. O. Box 3092, Houston, TX 77562.
38-HA-061
Harris County, TX
ARCO Pipeline Company
None
v6032/p357; v6333/p511
A-704. 1.40 acres.  See HA-060 for documents.  Ownership: ARCO Pipeline Company, C/O BP America, Inc., P. O. Box 3092, Houston, TX 77562.
38-HA-062
Harris County, TX
Harris County Commissioners Court
ARCO Pipeline Company
None
Lemoine Rd.   Volume/file: 111.  Page/Film Code: 59 HCCCR
38-HA-063
Harris County, TX
ARCO Pipeline Company
Atlantic Richfield Company
J742648
Easement for (1) 16" pipeline across (7) tracts of land.  Ownership: ARCO Pipeline Company, C/O BP America, Inc., P. O. Box 3092, Houston, TX 77562.
38-HA-064
Harris County, TX
ARCO Pipeline Company
Atlantic Richfield Company
J742648
Easement for (1) 16" pipeline across (7) tracts of land.  Ownership: ARCO Pipeline Company, C/O BP America, Inc., P. O. Box 3092, Houston, TX 77562.
38-HA-065
Harris County, TX
Houston Lighting and Power Company
ARCO Pipeline Company
###-##-####
A right of way for (1) 16" pipeline at (3) locations with 4' of cover for longitudinal and 9' of cover for perpendicular crossings.
38-HA-066
Harris County, TX
ARCO Pipeline Company
Atlantic Richfield Company
J742648
Easement for (1) 16" pipeline across (7) tracts of land.  Ownership: ARCO Pipeline Company, C/O BP America, Inc., P. O. Box 3092, Houston, TX 77562.
38-HA-066A
Harris County, TX
Fee
Atlantic Richfield Company
E742648
A-1559, Michael Stroin Survey.  Fee property
38-HA-070
Harris County, TX
Harris County Flood Control District
ARCO Pipeline Company
None
Permit for crossing the following ditches: P 107-00-00; G 103-08-00; N 100-00-00.
38-HA-070
Harris County, TX
Harris County Commissioners Court
ARCO Pipeline Company
None
Permit for Uvalde Rd., Sheldon Rd., proposed East Belt Drive, Miller Rd. No. 2.
38-HA-070A
Harris County, TX
Houston Lighting and Power Company
ARCO Pipeline Company
###-##-####
A right of way for (1) 16" pipeline at (3) locations with 4' of cover for longitudinal and 9' of cover for perpendicular crossings.
38-HA-071
Harris County, TX
Atlantic Richfield Company
None
None
Fee property
39-CH-001
Chambers County, TX
Lyondell Petrochemical Company
Equistar Chemicals, LP
v365/p1
Warranty Deed for (5) tracts of land located in the: Henry Griffith Leage, A-12; William Hodge League, A-13; William Bloodgood Aug, A-5; William D. Smith Survey, A-24
39-CH-002
Chambers County, TX
Coastal Water Authority
ARCO Chemical Company
v374/p486
A 25' wide right of way for (1) 14" pipeline.
39-CH-003
Chambers County, TX
Atha Winfree, et al
Atlantic Richfield Company
v368/p280
Right of way for (1) saltwater pipeline.  Written consent required when assigning.
39-CH-004
Chambers County, TX
Continental Oil Company
Atlantic Richfield Company
v372/p354
A right of way for (1) 14" pipeline.
39-CH-004
Chambers County, TX
Conoco, Inc.
Atlantic Richfield Company
v571/p413
A 3' wide right of way for (1) 14" Brine pipeline across 91.317 acres in A-12.
39-CH-005
Chambers County, TX
Southern Pacific Transportation Company (UPRR)
ARCO Chemical Company
None
Audit No. 179528 at MP 13.31 on Baytown Branch for (1) 14" Brine pipeline at or near Mont Belvieu.
39-CH-006
Chambers County, TX
Lyondell Petrochemical Company
Equistar Chemicals, LP
v365/p1
Warranty Deed for (5) tracts of land located in the: Henry Griffith Leage, A-12; William Hodge League, A-13; William Bloodgood Aug, A-5; William D. Smith Survey, A-24.
39-CH-007
Chambers County, TX
Gulf Oil Corporation
Atlantic Richfield Company and Conoco, Inc.
v513/p586
A 10' wide right of way for (1) 14" pipeline.  Written consent required when assigning.  Ownership: Dynegy, C/O Warren Leatherman, 1000 Louisiana St. Suite 5800, Houston, TX 77002-5021.
39-CH-008
Chambers County, TX
Chambers County
  
None
No documents in file
39-CH-009
Chambers County, TX
Enterprise Products Company
  
None
No documents in file
39-CH-010
Chambers County, TX
Texas Department of Transportation
ARCO Chemical Company
None
Permit No. 20-248-82 for (1) 14" Brine line across FM 1942.
39-CH-011
Chambers County, TX
City of Mont Belvieu
ARCO Chemical Company
None
Permit No. 124 for (1) 14" Brine pipeline.
39-CH-012
Chambers County, TX
Tenneco, Enterprise, Conoco and LPC
Tenneco, Enterprise, Conoco and LPC
None
Brine sharing agreement
40-H-001
Harris County, TX
ARCO Chemical Company
ARCO Pipeline Company
###-##-####
Easement includes a valve site agreement.
40-H-002
Harris County, TX
Harris County Flood Control District
ARCO Pipeline Company
None
Permit to cross ditch No. G 103-02-03.
40-H-003
Harris County, TX
Harris County Flood Control District
ARCO Pipeline Company
None
Permit to cross ditch No. G 103-01-00.
40-H-004
Harris County, TX
Alex Moore
ARCO Pipeline Company
###-##-####
A 10' wide right of way for pipelines.
40-H-005
Harris County, TX
Alex Moore
ARCO Pipeline Company
###-##-####
A 25' wide right of way for pipelines.
40-H-006
Harris County, TX
Misssouri Pacific Railroad Company (UPRR)
ARCO Pipeline Company
None
Audit No. 152831 for a  longitudinal occupation for (5) pipelines..  MP 16.04 to MP 18.2 and MP 0.00 to MP 1.68 ARCO Ind. Lead near North Shore ICI.  Crossing near Baytown, TX.
40-H-007
Harris County, TX
Alex Moore
ARCO Pipeline Company
###-##-####
A 10' wide right of way for pipelines.
40-H-008
Harris County, TX
Harris County Commissioners Court
ARCO Pipeline Company
None
Permit to cross Wood Rd.
40-H-009
Harris County, TX
Harris County Commissioners Court
ARCO Pipeline Company
None
Permit to cross Bear Bayou Dr.
40-H-010
Harris County, TX
Harris County Commissioners Court
ARCO Pipeline Company
None
Permit to cross Ridlon Rd.
40-H-011
Harris County, TX
Herbert Herbert
ARCO Pipeline Company
###-##-####
A 10' wide right of way for pipelines.
40-H-012
Harris County, TX
Harris County Flood Control District
ARCO Pipeline Company
None
Permit to cross ditch No. G 103-01-02.
40-H-013
Harris County, TX
Harris County Commissioners Court
ARCO Pipeline Company
None
Permit to cross Sheldon Rd.
40-H-014
Harris County, TX
Harris County Commissioners Court
ARCO Pipeline Company
None
Permit to cross East Bentwood Rd.
40-H-015
Harris County, TX
Harris County Flood Control District
ARCO Pipeline Company
None
Permit to cross ditch No. N 104-00-00.
40-H-016
Harris County, TX
Harris County Commissioners Court
ARCO Pipeline Company
None
Permit to cross Dell Dale Rd.
40-H-017
Harris County, TX
Harris County Commissioners Court
ARCO Pipeline Company
None
Permit to cross North Bentwood Dr.
40-H-018
Harris County, TX
Harris County Flood Control District
ARCO Pipeline Company
None
Permit to cross ditch No. 106-00-00.
40-H-019
Harris County, TX
Irma Rowlett
ARCO Pipeline Company
###-##-####
A right of way for pipelines.
40-H-020
Harris County, TX
ITEL Rail Corp
ARCO Pipeline Company
###-##-####
A right of way for pipelines.
40-H-021
Harris County, TX
ARCO Fee Land
None
None
ARCO Fee Land
40-H-022
Harris County, TX
Houston Lighting and Power Company
ARCO Pipeline Company
###-##-####
A right of way for (1) 6" and (1) 8" pipeline with (2) 10' by 40' valve sites.
40-H-023
Harris County, TX
Harris County Flood Control District
ARCO Pipeline Company
None
Permit to cross ditch N 106-00-00.
40-H-024
Harris County, TX
Harris County Commissioners Court
ARCO Pipeline Company
None
Permit to cross Dell Dale  Ave.
40-H-025
Harris County, TX
Harris County Commissioners Court
ARCO Pipeline Company
None
Permit to cross Grand Ave.
40-H-026
Harris County, TX
Texas Department of Transportation
ARCO Pipeline Company
None
Permit No. 90-6208 to cross I-10.
40-H-027
Harris County, TX
United Texas Transmission Company
ARCO Pipeline Company
###-##-####
A right of way for pipelines.  Ownership: Kinder Morgan Texas Pipeline, L.P., C/O David Petty, 500 Dallas St. Suite 1000, Houston, TX 77002-4708.
40-H-028
Harris County, TX
Vibration Control Engineering Company
ARCO Pipeline Company
###-##-####
A right of way for pipelines.
40-H-029
Harris County, TX
Harris County Flood Control District
ARCO Pipeline Company
None
Permit to cross ditch N 104-00-00.
40-H-030
Harris County, TX
Harris County Commissioners Court
ARCO Pipeline Company
None
Permit to cross Carlang Dr.
40-H-031
Harris County, TX
Harris County Commissioners Court
ARCO Pipeline Company
None
Permit to cross Sheldon Rd.
40-H-032
Harris County, TX
Harris County Flood Control District
ARCO Pipeline Company
None
Permit to cross ditch N 104-01-00
40-H-033
Harris County, TX
Harris County Commissioners Court
ARCO Pipeline Company
None
Permit to cross Market St.
40-H-034
Harris County, TX
Channelview Discount Lumberyard, James D. Green, Individually
ARCO Pipeline Company
###-##-####
A right of way for pipelines.
40-H-035
Harris County, TX
Carl and Michelle Green
ARCO Pipeline Company
###-##-####
HL & P longitudinal easement.
40-H-036
Harris County, TX
Harris County Commissioners Court
ARCO Pipeline Company
None
Permit to cross Pemberton St.
40-H-037
Harris County, TX
Cecil Bedgood
ARCO Pipeline Company
###-##-####
HL & P longitudinal easement.
40-H-038
Harris County, TX
Carl and Michelle Green
ARCO Pipeline Company
###-##-####
HL & P longitudinal easement.
40-H-039
Harris County, TX
Harris County Flood Control District
ARCO Pipeline Company
None
Permit to cross ditch N 101-00-00
40-H-040
Harris County, TX
Harris County Commissioners Court
ARCO Pipeline Company
None
Permit to cross Elsbeth Rd.
40-H-041
Harris County, TX
Harris County Commissioners Court
ARCO Pipeline Company
None
Permit to cross North Shore Dr.
40-H-042
Harris County, TX
Harris County Commissioners Court
ARCO Pipeline Company
None
Permit to cross Woodrow Street
40-H-043
Harris County, TX
Harris County Commissioners Court
ARCO Pipeline Company
None
Permit to cross Lake Court St.
40-H-044
Harris County, TX
Harris County Commissioners Court
ARCO Pipeline Company
None
Permit to cross De Lavala Rd.
40-H-045
Harris County, TX
Solar Turbines Inc.
ARCO Pipeline Company
###-##-####
HL& P easement.
40-H-046
Harris County, TX
Pennsylvania Texas, Inc.
ARCO Pipeline Company
###-##-####
A right of way pipelines.  New ownership: Kirby Inland Marine, C/O Steve Valerius or Barb Gerasi, P. O. Box 1537, Houston, TX 77251-1537.
40-H-047
Harris County, TX
National Marine Service (ARCO Fee)
ARCO Pipeline Company
None
(ARCO Fee)
40-H-048
Harris County, TX
National Marine Service (ARCO Fee)
ARCO Pipeline Company
None
(ARCO Fee)
40-H-049
Harris County, TX
Corps of Engineers
ARCO Pipeline Company
None
Permit No. 14114 (01)/150 across Carpenters Bayou with (2) 8" and (1) 6" pipelines.  Lyondell request dated 3/31/04 asking the Corps to transfer pipelines C, D, and E out of a bundle of five pipelines, the remainder of which is ARCO Midcon, LLC's-General
40-H-050
Harris County, TX
Johann Haltermann Ltd.
ARCO Pipeline Company
None
A right of way for pipelines.  Ownership: Dow Pipeline Company, C/O L. A. Semper, P. O. Box 4286 Bin 2C3, Houston, TX 77210-4286.
40-H-051
Harris County, TX
Corps of Engineers
ARCO Pipeline Company
None
Permit No. 14114 (01)/149 across the Houston Ship Channel with (2) 8" and (1) 6" pipelines.  Lyondell request dated 3/31/04 asking the Corps to transfer pipelines C, D, and E out of a bundle of five pipelines, the remainder of which is ARCO Midcon, LLC's-
40-H-051A
Harris County, TX
Port of Houston Authority
ARCO Pipeline Company
None
PHA No. 90-0129 for 8 pipelines crossing the Houston Ship Channel and Carpenters Bayou: (3) assigned to Lyondell including (2) 8" and (1) 6" pipelines.  NOTE: New license was paid for, but no license in file.
40-H-052
Harris County, TX
Coastal Water Authority
ARCO Pipeline Company
###-##-####
  
40-H-053
Harris County, TX
Paktank Corp.
ARCO Pipeline Company
###-##-####
A right of way for (3) 6" pipelines and an  80' by 110' valve site agreement.  Ownership: Paktank Gulf Coast, Inc., C/O Michael Swenson, 2000 West Loop South, Suite 2200, Houston, TX 77027-3511.
41-CH-002
Chambers County, TX
Bessie Brown
Texas Butadiene & Chemical Corporation and Tennessee Gas Transmission Company
v224/p284
An easement for a 35' by 25' site for a pumping station and facilities.
41-CH-002
Chambers County, TX
Bessie Brown
Southern Canal Company
None
A 15' wide right of way for (1) water pipeline on a 16.1 acre tract in the Henry Griffith Survey.
41-CH-003
Chambers County, TX
Elsie Gilbert
Southern Cancal Company
None
A 15' wide right of way for (1) water pipeline on a 30 acre tract of land in the Henry Griffith Survey.
41-CH-004
Chambers County, TX
Q.K. Barber
Southern Canal Company
None
A 15' wide right of way for (1) water pipeline across a 30 acre tract in the Henry Griffith Survey.
41-CH-006
Chambers County, TX
Gulf Oil Corporation
Southern Canal Company
None
A 15' wide right of way for (1) 12" water pipeline across Lot 15, a five-acre tract in the Winfree & Allen Subdivision in the Henry Griffith Survey.
41-CH-008
Chambers County, TX
Gulf Oil Corporation
Southern Canal Company
None
A 15' wide right of way for (1) 8" water pipeline across Lot 11, a five-acre tract in the Winfree & Allen Subdivision in the Henry Griffith Survey.
41-CH-009
Chambers County, TX
State of Texas Highway Department
ARCO Chemical Company
None
Permit No. 20-388-80 for (1) 8" fresh-water pipeline across SH Loop 207.
41-CH-011
Chambers County, TX
State of Texas Highway Department
Southern Canal Company
None
Permit for (1) 8" steel pipeline across SH 146.
41-CH-011
Chambers County, TX
State of Texas Highway Department
ARCO Chemical Company
None
Permit No. 20-387-80 for (1) 8" freshwater pipeline acros SH 146.
41-CH-014
Chambers County, TX
Texas Butadiene and Chemical Corporation
Tennessee Gas Transmission Company
None
Letter agreement between the two companies agreeing on the management, maintenance and operation of the water line.
26A-BR-001
Brazoria County, TX
Monsanto
Conoco, Inc.
v1707/p138
A right of way 5' below surface.  Multiple pipelines, various sings and products, barge loading line and other facilities and land area.  This easement covers the Monsanto tract at the beginning of Map 26A.  It is not labeled with a file ID number, but is
26A-BR-002
Brazoria County, TX
Dow Chemical Company and Carrie S. Brock, et al
Oxy Petrochemicals, Inc.
92-29784
Partial assignment of (6) pipelines.  Brock lease including meter stations and surface site.  No less than 48" of cover.  Dow reserves right to grant use to third parties.  Grants only the assignments listed in documents.
26A-P-64X
Brazoria County, TX
State of Texas General Land Office
Equistar Chemicals, LP
1574987
ME 810122 for (2) 4" and (2) 6" pipelines across Chocolate Bayou.
26A-P-64XX
Brazoria County, TX
Corps of Engineers
Monsanto Chemical Company
None
Permit No. 5213 across Chocolate Bayou with  (2) 4" and (3) 6" pipelines.
26A-BR-025
Brazoria County, TX
Katie W. and the Estate of Wirt Davis
Monsanto Chemical Company
v802/p468
A 30' wide right of way.  Assignment can be made to any affiliate or subsidiary of Monsanto.
26A-BR-025X
Brazoria County, TX
Brazoria County Drainage District No. 8
Monsanto Chemical Company
None
For drainage ditches and canals.
26A-BR-026
Brazoria County, TX
Texaco, Inc.
Monsanto Chemical Company
v802/p473
A 50' wide right of way for (3) pipelines not exceeding 6" with 36" of cover.
26A-BR-026X
Brazoria County, TX
Brazoria County Drainage District No. 8
Monsanto Chemical Company
None
For Drainage ditches and canals.
26A-P-68
Brazoria County, TX
Brazoria County Commissioners Court
Monsanto Chemical Company
None
Order granting permit across County roads: 203, 227, 226, 729, 288, 400, 310, 309, 310, 308, 310.
26A-P-87
Brazoria County, TX
Brazoria County Commissioners Court
Monsanto Chemical Company
None
Order granting permit to cross County roads.  Refer to P-68 for documents.
26A-P-94X
Brazoria County, TX
State of Texas General Land Office
Equistar Chemicals, LP
1573526
ME 810135 for (2) 4" and (1) 6" pipelines crossing Bastrop Bayou.
26A-P-94XX
Brazoria County, TX
Corps of Engineers
Monsanto Chemical Company
None
Permit No. 5214 across Bastop Bayou with (1) 6" and (2) 4" pipelines.
26A-BR-038
Brazoria County, TX
W. N. Foster
Monsanto Chemical Company
v796/p178
A 50' wide right of way for pipelines.
26A-BR-039
Brazoria County, TX
Midhurst Oil Corporation
Monsanto Chemical Company
v800/p359
A 50' wide right of way.  1/2 interest holder in property.
26A-BR-039.1
Brazoria County, TX
Amerada Petroleum Corporation
Monsanto Chemical Company
v800/p358
A 50' wide right of way.  1/2 interest holder in property.
26A-BR-040
Brazoria County, TX
H. Olin Shanks, T. J. Shanks and Mannie Mae Shanks
Monsanto Chemical Corporation
v796/p180
A 50' wide right of way.
26A-BR-041
Brazoria County, TX
Lucille B. McMillan, et al
Monsanto Chemical Company
v803/p341
A 25' wide right of way with 3' of cover.  Must put (3) pipelines in the same ditch.  No above ground appurtenances.  Assignability limited to subsidiary or successors.  Multiple line rights for additional consideration.
26A-P-96X
Brazoria County, TX
State of Texas General Land Office
Equistar Chemicals, LP
-249034
ME 810132 for (2) 4" and (1) 6" pipelines across Big Slough.
26A-P-96XX
Brazoria County, TX
Corps of Engineers
Monsanto Chemical Company
None
Permit No. 5215 across Big Slough with (2) 4" and (1) 6" pipelines.
26A-BR-043
Brazoria County, TX
Mary Lee Seaburn Hudgins
Monsanto Chemical Corporation
v792/p182
A 50' wide right of way.
26A-P-103
Brazoria County, TX
Texas Department of Transportation
Monsanto Chemical Company
None
Permit No. 61/1373 for (4) product lines crossing FM 523.
26A-BR-045
Brazoria County, TX
Dow Chemical Company
Oxy Petrochemicals, Inc.
None
(1) 4" pipeline and valve site surface easement.  Pipeline(s) conveyed within surface lease.
26A-BR-045
Brazoria County, TX
Carrie S. Brock, et al
Dow Chemical Company
v775/p594
Lease for the production, operation, etc. of salt and it's byproducts and appurtenances for it.  Across land in Brazoria County, TX consisting of approximately 1510 acres.
26B-BR-048
Brazoria County, TX
Guy Webb Adriance and Lois Brock Adriance
Monsanto Chemical Company
v804/p696
A 50' wide right of way for (1) pipeline.  Addition line rights for additional consideration.
26B-P-182
Brazoria County, TX
Brazoria County Commissioners Court
Monsanto Chemical Company
None
Permit to cross Brazoria CR 226
26B-BR-049
Brazoria County, TX
Dan H. Madeley and Martha Foster Madeley
Monsanto Chemical Company
v804/p698
A 50' wide right of way
26B-P-181
Brazoria County, TX
Texas Department of Transportation
Monsanto Chemical Company
None
Permit No. 62-1434 across SH 288 with (1) 4" pipeline.
26B-BR-050A
Brazoria County, TX
Margaret Ward Clark
Monsanto Chemical Company
v803/p331
A 50' wide right of way with 36" of cover.  Multiple line rights for additional $28.50 per rod.
26B-P-180
Brazoria County, TX
Brazoria County Commissioners Court
Monsanto Chemical Company
None
Permit to cross CR 729.
26B-BR-051A
Brazoria County, TX
Nannie M. Stringfellow, widow
Monsanto Chemical Company
v803/p334
A 25' wide right of way with 36" of cover.
26B-P-179
Brazoria County, TX
State of Texas General Land Office
Equistar Chemicals, LP
03-017955
Easement for (1) 4.5" pipeline on the west bank of Bastrop Bayou.  ME 810138.
26B-BR-052
Brazoria County, TX
F. W. Stevens, Trustee
Monsanto Chemical Company
v804/p685
A 50' wide right of way for (1) pipeline with 3' of cover.  Multiple line rights for additional $20 per rod.
26B-P-178
Brazoria County, TX
Missouri Pacific Railroad Company (UPRR)
Monsanto Chemical Company
None
Assignment dated 08/21/81: Monsanto to Conoco, Inc; Assignment dated 06/15/87: Conoco, Inc. to Cain Chemical; Folder No. 1196-87; Audit No. CA-54248.  Crossing near Ross, TX.  (1) 4" petroleum pipeline.  MP 10.3
26B-P-177
Brazoria County, TX
Brazoria County Commissioners Court
Monsanto Chemical Company
None
Permit to cross CR  288.
26B-BR-053
Brazoria County, TX
W. T. Galloway
Monsanto Chemical Company
v804/p690
A 50' wide right of way.
26B-P-176
Brazoria County, TX
State of Texas General Land Office
Equistar Chemicals, LP
03-017957
ME 810137 for (1) 4.5" pipeline across Bastrop Bayou.
26B-BR-054A
Brazoria County, TX
J. M. Chafin
Monsanto Chemical Company
v803/p320
A 25' wide right of way with 3' of cover.
26B-BR-055A
Brazoria County, TX
J. R. Marmion
Monsanto Chemical Company
v804/687
A 25' wide right of way for (1) 4.5" pipeline and (1) 6.5" pipeline.  Assignor in each assignment of right-of-way and easement shall notify grantor immediately of the identity and address of its assignee.
26B-BR-056A
Brazoria County, TX
Leslie Bice
Monsanto Chemical Company
v803/p353
A 25' wide right of way.
26B-BR-057
Brazoria County, TX
Sharon Realty Company
Monsanto Chemical Company
v805/p695
A 25' wide right of way for a 4.5" and an additional 6.5" pipeline with cover at a minimum of plow depth.
26B-BR-058
Brazoria County, TX
D. W. Schuech
Monsanto Chemical Company
v803/p350
A 25' wide right of way with 3' of cover.
26B-BR-059
Brazoria County, TX
Texas Board of Corrections
Monsanto Chemical Company
v801/p662
A 50' wide right of way for (2)  pipelines not exceeding 6".  New ownership: Retrieve-Dept. of Corrections, C/O Mike Corley, Land Manager, Agriculture Headquarters, 2405 Ave I, Suite E.,Huntsville, TX 77340.
26B-P-175
Brazoria County, TX
State of Texas General Land Office
Monsanto Chemical Company
v1598/p724
ME 81-115 for a 4.5" pipeline on the west bank of Oyster Creek.  ME 810115.
26B-P-175.1
Brazoria County, TX
Corps of Engineers
Monsanto Chemical Company
None
Permit No. 5298 across Oyster Creek with (1) 4" pipeline.
26B-BR-060
Brazoria County, TX
John H. Craig, et al
Monsanto Chemical Company
v803/p322
A 50' wide right of way for (1) 4" pipeline with 30" of cover.
26B-BR-061
Brazoria County, TX
W. S. Riggs and Alice F. Riggs
Monsanto Chemical Company
v804/p237
A 50' wide right of way for (1) pipeline.
26B-P-170
Brazoria County, TX
Texas Department of Transportation
Monsanto Chemical Company
None
Permit No. 61/1386 for (1) 4" pipeline across SH 332.
26B-BR-062
Brazoria County, TX
Lee S. Krause and Lauretta Krause
Monsanto Chemical Company
v800/p350
A 50' wide right of way
26B-P-169
Brazoria County, TX
State of Texas General Land Office
Equistar Chemicals, LP
1574256
ME 810120 for a 30' wide right of way crossing the Brazos River with (2) 4.5" pipelines.
26B-P-169.1
Brazoria County, TX
Corps of Engineers
Monsanto Chemical Company
None
Permit No. 5299 across the Brazos River with (1) 4" pipeline.
26B-BR-063.1
Brazoria County, TX
Leston R. Childs
Monsanto Chemical Company
v812/p269
A 50' wide right of way.
26B-P-168
Brazoria County, TX
Brazoria County Commissioners Court
Monsanto Chemical Company
None
Permit to cross CR 400.
26B-BR-064
Brazoria County, TX
Texas Board of Corrections
Monsanto Chemical Company
v806/p667
A 50' wide right of way for (2) 6" pipelines.
26B-P-167
Brazoria County, TX
Texas Department of Transportation
Monsanto Chemical Company
None
Permit No. 61/1385
26B-P-164
Brazoria County, TX
Brazoria County Commissioners Court
Monsanto Chemical Company
None
Permit to cross CR 310.
26B-P-164.1
Brazoria County, TX
Brazoria County Commissioners Court
Monsanto Chemical Company
None
Permit to cross CR 310.
26B-BR-065
Brazoria County, TX
J. S. Rush
Monsanto Chemical Company
v800/p356
A 50' wide right of way
26B-BR-066
Brazoria County, TX
Alfred Proebstle and Mary M. Proebstle
Monsanto Chemical Company
v803/p332
A 50' wide right of way
26B-P-163
Brazoria County, TX
State of Texas General Land Office
Equistar Chemicals, LP
1573891
ME 81030 for (1) 4" pipeline crossing the San Bernard River.
26B-P-163.1
Brazoria County, TX
Corps of Engineers
Monsanto Chemical Company
None
Permit No. 5323 across the San Bernard River with  (1) 4" pipeline.
26B-BR-067A
Brazoria County, TX
Ada L. Johns and George E. Johns
Monsanto Chemical Company
v806/p1
A 50' wide right of way for pipelines.
26B-BR-068
Brazoria County, TX
J.  V. Hinkle, Jr.
Monsanto Chemical Company
v800/p360
A 50' wide right of way
26B-P-162
Brazoria County, TX
Brazoria County Commissioners Court
Monsanto Chemical Company
None
Permit to cross CR 309.
26B-BR-069A
Brazoria County, TX
Lewis H. Follet
Monsanto Chemical Company
v805/p692
A 50' wide right of way for (1) 4" pipeline.
26B-BR-069B
Brazoria County, TX
Edna A. Hubbard, Uriah J. Hubbard
Monsanto Chemical Company
v806/p342
A 50' wide right of way.
26B-BR-071A
Brazoria County, TX
Willie Fletcher
Monsanto Chemical Company
v814/p472
A 50' wide right of way
26B-BR-073A
Brazoria County, TX
Rachel Beith, et al
Monsanto Chemical Company
v804/p700
A 50' wide right of way
26B-BR-070
Brazoria County, TX
Dorothy Lumley Melrose, et al
Monsanto Chemical Company
v807/p459
A 50' wide right of way
26B-BR-072
Brazoria County, TX
J. T. Hinkle and Sophie K. Hinkle
Monsanto Chemical Company
v805/p699
A 50' wide right of way.
26B-BR-074
Brazoria County, TX
Dr. J. L. Ducroz, individually and as executor of the Estate of Ella Ducroz, et al
Monsanto Chemical Company
v804/p680
A 20' wide right of way for a 6" pipeline with 36" of cover.
26B-BR-075
Brazoria County, TX
John H. Craig
Monsanto Chemical Company
v803/p322
A 50' wide right of way for (1) 4" pipeline with 30" of cover.
26B-P-156
Brazoria County, TX
Brazoria County Commissioners Court
Monsanto Chemical Company
None
Permit to cross CR 310.
26B-BR-076
Brazoria County, TX
J. O. Glick and Mrs. J. O. Glick
Monsanto Chemical Company
v803/p339
A 50' wide right of way for (1) 6" pipeline with 36" of cover.
26B-BR-077
Brazoria County, TX
Henrietta S. Glick
Monsanto Chemical Company
v801/p301
A 50' wide right of way with 36" of cover.
26B-BR-078
Brazoria County, TX
Helen S. Lawther, et al
Monsanto Chemical Company
v807/p461
A 50' wide right of  way.
26B-BR-079
Brazoria County, TX
Martha Ward, et al
Monsanto Chemical Company
v817/p418
A 25' wide right of way for (1) pipelines.
26B-BR-080
Brazoria County, TX
Sylvester Crecy
Monsanto Chemical Company
v809/p550
A 50' wide right of way.
26B-P-155
Brazoria County, TX
Brazoria County Commissioners Court
Monsanto Chemical Company
None
CR 318 for (1) pipeline.
26B-BR-081
Brazoria County, TX
Lorraine Johnson, et al
Monsanto Chemical Company
v819/p27
A 25' wide right of way for (1) pipeline.
26B-P-154
Matagorda County, TX
State of Texas General Land Office
Equistar Chemicals, LP
03-017956
Easement for Cedar Lake Creek for (1) 4.5" pipeline.  ME 810131
26B-MA-082
Matagorda County, TX
John R. Parkinson and Elise  P. Miles
Monsanto Chemical Company
v374/p88
A 50' wide right of way
26B-MA-083
Matagorda County, TX
A. H. Wadsworth
Monsanto Chemical Company
v375/p639
A 50' wide right of way.  No telephone or telegraph lines.
26B-MA-084
Matagorda County, TX
Mae Vineyard Neal, T. M. Neal
Monsanto Chemical Company
v376/p514
A 30' wide right of way with 36" of cover.
26B-P-153
Matagorda County, TX
Texas Department of Transportation
Monsanto Chemical Company
None
Permit No. 61/1384 for (1) 4.5" pipeline crossing SH 457.
26B-MA-085
Matagorda County, TX
Ben Lynn Vineyard
Monsanto Chemical Company
v376/p497
A 30' wide right of way with 36" of cover.  No telephone, telegraph or above ground appurtenances.
26B-MA-085.1
Matagorda County, TX
Billy J. Bullard and wife Molly Bell Bullard
Monsanto Chemical Company
v706/p338
Easement's purpose is for building a radio tower and relay station, the right to run electric lines.  $50 per year.
26B-MA-085.1
Matagorda County, TX
Billy J. Bullard and Molly Bell Bullard
Monsanto Chemical Company
v706/p338
Easement for radio tower.
26B-MA-086
Matagorda County, TX
R. M. Eubank and Mary Alice Eubank
Monsanto Chemical Company
v374/p93
A 5' wide right of way for (1) 6" pipeline.
26B-MA-086A
Matagorda County, TX
Iras Stone, H. A. Stone
Monsanto Chemical Company
v375/p641
A 50' wide right of way.
26B-MA-087
Matagorda County, TX
H. G. Fall
Monsanto Chemical Company
v374/p91
A 50' wide right of way for (4) pipelines with a maximum diameter of 6" with 36" of cover.
26B-MA-088
Matagorda County, TX
Ira Clements
Monsanto Chemical Company
v375/p471
A 50' wide right of way for (4) pipelines with a maximum diameter of 6"  with 36" of cover.
26B-MA-089
Matagorda County, TX
John M. Stevens, Willie Lou Stevens, Rita Freeman
Monsanto Chemical Company
v375/p643
A 50' wide right of way for (1) pipeline with a maximum diameter of 6"  with 36" of cover.
26B-MA-090
Matagorda County, TX
C. T. Clements and Ruby M. Clements
Monsanto Chemical Company
v376/p521
A 50' wide right of way for (4) pipelines with a maximum diameter of 6"  with 36" of cover.
26B-P-145
Matagorda County, TX
Matagorda County Commissioners Court
Monsanto Chemical Company
None
Permit to cross Matagorda County Rd.s.
26B-MA-091
Matagorda County, TX
Raleigh Sanborn
Monsanto Chemical Company
v374/p210
A 50' wide right of way for (4) pipelines with a maximum diameter of 6"  with 36" of cover.
26B-P-144
Matagorda County, TX
Texas Department of Transportation
Monsanto Chemical Company
None
Permit No. 61/1382 for FM 521.  Letter dated 09/11/81 from TXDOT to Conoco offering no objection from assignment from Monsanto to Conoco for numerous permit numbers.
26B-MA-092
Matagorda County, TX
Frank Harris and Alice Green Harris
Monsanto Chemical Company
v374/p206
A 50' wide right of way
26B-MA-093
Matagorda County, TX
Hesikiah Powell, et al
Monsanto Chemical Company
v376/p496
A 50' wide right of way for pipelines.
26B-P-143
Matagorda County, TX
Matagorda County Commssioners Court
Monsanto Chemical Company
None
Permit to cross Matagorda County Rd.s.
26B-P-139
Matagorda County, TX
Matagorda County Commissioners Court
Monsanto Chemical Company
None
Permit to cross Matagorda County Rd.s.
26B-MA-094
Matagorda County, TX
C. R. Bell
Monsanto Chemical Company
v377/p366
A 30' wide right of way for a 4.5" pipeline with 36" of cover.  No above ground appurtenances.  $25 given to grantors for each and every assignment.  Notice and monies given for Cain Chemical agreement.
26B-MA-095
Matagorda County, TX
Burton B. LeTulle, et al
Monsanto Chemical Company
v379/p439
A 30' wide right of way for (1) pipeline.  Rental payment required annually equal to $1 per rod of pipeline.
26B-MA-096
Matagorda County, TX
Harry G. Burkhart, III
Monsanto Chemical Company
v374/p208
A 50' wide right of way for (4) 6" pipelines.
26B-MA-097
Matagorda County, TX
Marion Bouldin Way, Nathanial Way
Monsanto Chemical Company
v382/p333
A 50' wide right of way
26B-MA-098
Matagorda County, TX
Arthur Wyche, et al
Monsanto Chemical Company
v377/p55
A 50' wide right of way for pipelines.
26B-MA-099
Matagorda County, TX
Verlan Grant and Willa Mae Grant
Monsanto Chemical Company
v381/p113
A 50' wide right of way for (2) pipelines with 30" of cover.
26B-P-136
Matagorda County, TX
Matagorda County Commissioners Court
Monsanto Chemical Company
None
Permit to cross Matagorda County Rd.s.
26B-MA-100, 101
Matagorda County, TX
W. B. Ferguson, et al
Monsanto Chemical Company
v377/p374
A 50' wide right of way for (4) pipelines with 36" of cover.
26B-P-135
Matagorda County, TX
Matagorda County Commissioners Court
Monsanto Chemical Company
None
Permit to cross Matagorda County roads.
26B-P-130
Matagorda County, TX
Lower Colorado River Authority
Monsanto Chemical Company
v376/p528
Permit for (5) crossings.
26B-MA-102
Matagorda County, TX
Estate of W. D. Cornelius, et al
Monsanto Chemical Company
v376/p504
A 50' wide right of way for (2) 6" pipelines whose maximum diameter is 6" with 36" of cover.  No telephone or electric facilities.  $25 per assignment.
26B-MA-103
Matagorda County, TX
Francis Savage and Frances Savage
Monsanto Chemical Company
v377/p368
A 50' wide right of way for (1) 4.5" pipeline with 36" of cover.  $25.00 per assignment.  Letter in file informs grantor that the easement has been assigned to Cain Chemical and they were paid $25 for the assignment.
26B-MA-104
Matagorda County, TX
E.  P. Layton
Monsanto Chemical Company
v375/p469
A 50' wide right of way for (4) 6" pipelines.
26B-P-113
Matagorda County, TX
Gulf Colorado and Santa Fe Railroad Company (BNSF)
Monsanto Chemical Company
None
Secretary Contract No. 36419 for (1) 4" pipeline near Wadsworth, TX.  MP 76 + 2473.4
26B-P-112
Matagorda County, TX
Lower Colorado River Authority
Monsanto Chemical Company
v376/p528
Permit for (5) crossings.
26B-P-111
Matagorda County, TX
Texas Department of Transportation
Monsanto Chemical Company
None
Permit No. 61/1383 to cross SH 60.  Letter dated 09/11/81 from TXDOT to Conoco offering no objection from assignment from Monsanto to Conoco for numerous permit numbers.
26B-MA-105
Matagorda County, TX
Hamilton Savage and Eva Savage
Monsanto Chemical Company
v379/p443
A 30' wide right of way for a 4.5" pipeline with 36" of cover.  No above ground appurtenances.  $25 per assignment.  Letter in file notifies grantors of assignment to Cain Chemical.
26B-P-110
Matagorda County, TX
Lower Colorado River Authority
Monsanto Chemical Company
v376/p528
Permit for (5) crossings.
26B-P-109
Matagorda County, TX
Lower Colorado River Authority
Monsanto Chemical Company
v376/p528
Permit for (5) crossings.
26B-P-108
Matagorda County, TX
Lower Colorado River Authority
Monsanto Chemical Company
v376/p528
Permit to for (5) crossings.
26B-P-151
Matagorda County, TX
Lower Colorado River Authority
Monsanto Chemical Company
v376/p528
Permit for (5) crossings.
26B-P-149
Matagorda County, TX
Matagorda County Commissioners Court
Monsanto Chemical Company
None
Permit to cross Matagorda County Rd.s.
26B-MA-109
Matagorda County, TX
Walter W. Fondren, Jr.
Monsanto Chemical Company
v376/p525
A 7' wide right of way for (1) pipeline.
26B-P-148
Matagorda County, TX
Lower Colorado River Authority
Monsanto Chemical Company
v376/p528
Permit for (5) crossings.
26B-MA-110
Matagorda County, TX
Celanese Corporation of America
Monsanto Chemical Company
v389/p529
A right of way for a 4" pipeline
26B-P-125
Matagorda County, TX
Matagorda County Commissioners Court
Monsanto Chemical Company
None
Permit to cross Matagorda County Rd.s.
26B-P-159
Brazoria County, TX
Brazoria County Commissioners Court
Monsanto Chemical Company
None
Permit to cross CR 308


 
 
 
 
 


SCHEDULE 1.01G

CERTAIN SECURITY INTERESTS AND GUARANTEES

Grant Of Security Interest In United States Patents And Patent Applications

Grant Of Security Interest In United States Trademarks And Trademark Applications

The Security Agreements listed on Schedule 1.01J.

The Intercreditor Agreement, dated on or about December 20, 2007, between Citibank, N.A., as Security Agent and ABL Agent, LyondellBasell Receivables I, LLC, Lyondell Chemical Company and the other parties thereto.
 
That certain Intercreditor Agreement, dated as of December 20, 2007, entered into between, among others, Citibank, N.A., as Senior Agent and Security Agent, Merrill Lynch Capital Corporation, as Interim Facility Agent, Citibank, N.A., as ABL Agent, The Bank of New York, as High Yield Notes Trustee, Borrower and the Company. 

German law IP Rights Assignment Agreement, dated as of 20 December 2007, between Basell Polyolefine GmbH and Citibank, N.A. as Collateral Agent.

German law IP Rights Assignment Agreement, dated as of  20 December 2007, between Basell Bayreuth Chemie GmbH and Citibank, N.A. as Collateral Agent.




 
 
 

SCHEDULE 1.01H

GUARANTORS1

1. 
Basell Asia Pacific Limited
2. 
Basell Bayreuth Chemie GmbH
3. 
Basell Canada Inc.
4. 
Basell Europe Holdings B.V.
5. 
Basell Finance & Trading Company B.V.
6. 
Basell Finance Company B.V.
7. 
Basell Finance USA Inc.*
8. 
Basell Funding S.á.r.l.
9. 
Basell Germany Holdings GmbH
10. 
Basell Holdings B.V.
11. 
Basell International Holdings B.V.
12. 
Basell North America Inc.*
13. 
Basell Polyolefine GmbH
14. 
Basell Polyolefins UK Limited
15. 
Basell Sales & Marketing Company B.V.
16. 
Basell UK Holdings Limited
17. 
Basell USA Inc.*
18. 
Equistar Chemicals, LP
19. 
Houston Refining LP
20. 
LBI Acquisition LLC*
21. 
LBIH LLC*
22. 
Lyondell Chemical Company (formerly BIL Acquisition Holdings Limited)*
23. 
Lyondell Chemical Nederland, Ltd.*
24. 
Lyondell Chemical Products Europe LLC*
25. 
Lyondell Chemical Technology 1 Inc.*
26. 
Lyondell Chemical Technology Management, Inc.*
27. 
Lyondell Chemical Technology, L.P.*
28. 
Lyondell Chimie France LLC*
29. 
Lyondell Equistar Holdings Partners*
30. 
Lyondell Europe Holdings Inc.*
31. 
Lyondell Houston Refinery Inc.*
32. 
Lyondell LP3 GP, LLC*
33. 
Lyondell LP3 Partners, LP*
34. 
Lyondell LP4 Inc.*
35. 
Lyondell (Pelican) Petrochemical L.P.1, Inc.*
36. 
Lyondell Petrochemical L.P. Inc.*
37. 
Lyondell Refining Company LLC*
38. 
Lyondell Refining I, LLC*
39. 
LyondellBasell Finance Company*
40. 
LyondellBasell Industries AF S.C.A.*
41. 
LyondellBasell Netherlands Holdings B.V.*
42. 
Millennium America Holdings Inc.*
43. 
Millennium America Inc.*
44. 
Millennium Chemicals Inc. *
45. 
Millennium Petrochemicals GP LLC*
46. 
Millennium Petrochemicals Inc.*
47. 
Millennium Petrochemicals Partners, LP*
48. 
Millennium Specialty Chemicals Inc.*
49. 
Millennium US Op Co LLC*
50. 
Millennium Worldwide Holdings I Inc.*
51. 
Nell Acquisition (US) LLC*

 
 
1 Entities marked with an asterisk  are U.S. entities.
 

 
 
 


EXHIBIT C-1
 
LENDER:  [●]
PRINCIPAL AMOUNT:  $[●]
 
[FORM OF] DUTCH TRANCHE A DOLLAR TERM NOTE
 
New York, New York
[Date]
 
FOR VALUE RECEIVED, BASELL HOLDINGS B.V., a Dutch corporation limited by shares (“Basell Holdings”), BASELL FINANCE COMPANY B.V., a Dutch corporation limited by shares (“Basell Finance” and, together with Basell Holdings, the “Dutch Borrowers”), hereby promises to pay to the Lender set forth above (the “Lender”) or its registered assigns, in lawful money of the United States of America in immediately available funds at the Administrative Agent’s Office (such term, and each other capitalized term used but not defined herein, having the meaning assigned to it in the Credit Agreement dated as of December 20, 2007 (as the same may be amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among BASELL AF S.C.A. (to be renamed LYONDELL BASELL INDUSTRIES AF S.C.A.), a company existing under the laws of the Grand Duchy of Luxembourg (together with its successors and assigns, the “Company”), BIL ACQUISITION HOLDINGS LIMITED, a Delaware corporation and Wholly Owned Subsidiary of the Company (to be merged with and into LYONDELL CHEMICAL COMPANY substantially concurrently with the initial Credit Extensions) (“Lyondell” or the “U.S. Borrower”), Dutch Borrowers and BASELL GERMANY HOLDINGS GmbH, a corporation organized under the laws of Germany (the “German Borrower” and, together with the Dutch Borrowers, the “Non-U.S. Borrowers” and, together with the Dutch Borrowers and the U.S. Borrower, the “Borrowers”), the other Non-U.S. Borrowers party thereto from time to time, the Subsidiary Guarantors party thereto from time to time, CITIBANK, N.A., as Administrative Agent, U.S. Swing Line Lender and Collateral Agent, CITIBANK, N.A., LONDON BRANCH, as European Swing Line Lender, ABN AMRO Bank N.V. as  L/C Issuer (the “L/C Issuer”) and each lender party thereto from time to time (collectively, the “Lenders” and individually, a “Lender”)) (i) on the dates set forth in the Credit Agreement, the principal amounts set forth in the Credit Agreement with respect to Dutch Tranche A Dollar Term Loans made by the Lender to the Dutch Borrowers pursuant to the Credit Agreement and (ii) on each Interest Payment Date, interest at the rate or rates per annum as provided in the Credit Agreement on the unpaid principal amount of all Dutch Tranche A Dollar Term Loans made by the Lender to the Dutch Borrowers pursuant to the Credit Agreement.
 
The Dutch Borrowers hereby waive diligence, presentment, demand, protest and notice of any kind whatsoever.  The nonexercise by the holder hereof of any of its rights hereunder in any particular instance shall not constitute a waiver thereof in that or any subsequent instance.
 
All borrowings evidenced by this note and all payments and prepayments of the principal hereof and interest hereon and the respective dates thereof shall be endorsed by the holder hereof on the schedule attached hereto and made a part hereof or on a continuation thereof which shall be attached hereto and made a part hereof, or otherwise recorded by such holder in its internal records; provided, however, that the failure of the holder hereof to make such a notation or any error in such notation shall not affect the obligations of Dutch Borrower under this note.
 
This note is one of the Dutch Tranche A Dollar Term Notes referred to in the Credit Agreement that, among other things, contains provisions for the acceleration of the maturity hereof upon the happening of certain events, for optional and mandatory prepayment of the principal hereof prior to the maturity hereof and for the amendment or waiver of certain provisions of the Credit Agreement, all upon the terms and conditions therein specified.
 
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
 
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]


 
C-1-
 
 
 

BASELL HOLDINGS B.V., as Dutch Borrower
 
 
By:         
 
 
Name:
 
 
Title:
 
BASELL FINANCE COMPANY B.V., as Dutch Borrower
 
 
By:         
 
 
Name:
 
 
Title:
 


 
C-1-
 
 
 

LOANS AND PAYMENTS
 
Date
Amount of Loan
Maturity Date
Payments of Principal/Interest
Principal Balance of Note
Name of Person Making the Notation
           
           
           
           
           
           
           
           
           
           
           
           
           
           
           



 
C-1-
 
 
 

EXHIBIT C-2
 
LENDER:  [●]
PRINCIPAL AMOUNT:  $[●]
 
[FORM OF] U.S. TRANCHE A DOLLAR TERM NOTE
 
New York, New York
[Date]
 
FOR VALUE RECEIVED, BIL ACQUISITION HOLDINGS LIMITED (to be merged with and into LYONDELL CHEMICAL COMPANY substantially concurrently with the initial Credit Extensions) (“Lyondell” or the “U.S. Borrower”) hereby promises to pay to the Lender set forth above (the “Lender”) or its registered assigns, in lawful money of the United States of America in immediately available funds at the Administrative Agent’s Office (such term, and each other capitalized term used but not defined herein, having the meaning assigned to it in the Credit Agreement dated as of December 20, 2007 (as the same may be amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among BASELL AF S.C.A. (to be renamed LYONDELL BASELL INDUSTRIES AF S.C.A.), a company existing under the laws of the Grand Duchy of Luxembourg (together with its successors and assigns, the “Company”), the U.S. Borrower, BASELL HOLDINGS B.V., a Dutch corporation limited by shares (“Basell Holdings”), BASELL FINANCE COMPANY B.V., a Dutch corporation limited by shares (“Basell Finance” and, together with Basell Holdings, the “Dutch Borrowers”) and  BASELL GERMANY HOLDINGS GmbH, a corporation organized under the laws of Germany (the “German Borrower”  and, together with the Dutch Borrowers, the “Non-U.S. Borrowers” and, together with the Dutch Borrowers and the U.S. Borrower, the “Borrowers”), the other Non-U.S. Borrowers party thereto from time to time, the Subsidiary Guarantors party thereto from time to time, CITIBANK, N.A., as Administrative Agent, U.S. Swing Line Lender and Collateral Agent, CITIBANK, N.A., LONDON BRANCH, as European Swing Line Lender, ABN AMRO Bank N.V. as  L/C Issuer (the “L/C Issuer”) and each lender party thereto from time to time (collectively, the “Lenders” and individually, a “Lender”)) (i) on the dates set forth in the Credit Agreement, the principal amounts set forth in the Credit Agreement with respect to U.S. Tranche A Dollar Term Loans made by the Lender to the U.S. Borrower pursuant to the Credit Agreement and (ii) on each Interest Payment Date, interest at the rate or rates per annum as provided in the Credit Agreement on the unpaid principal amount of all U.S. Tranche A Dollar Term Loans made by the Lender to the U.S. Borrower pursuant to the Credit Agreement.
 
The U.S. Borrower hereby waives diligence, presentment, demand, protest and notice of any kind whatsoever.  The nonexercise by the holder hereof of any of its rights hereunder in any particular instance shall not constitute a waiver thereof in that or any subsequent instance.
 
All borrowings evidenced by this note and all payments and prepayments of the principal hereof and interest hereon and the respective dates thereof shall be endorsed by the holder hereof on the schedule attached hereto and made a part hereof or on a continuation thereof which shall be attached hereto and made a part hereof, or otherwise recorded by such holder in its internal records; provided, however, that the failure of the holder hereof to make such a notation or any error in such notation shall not affect the obligations of U.S. Borrower under this note.
 
This note is one of the U.S. Tranche A Dollar Term Notes referred to in the Credit Agreement that, among other things, contains provisions for the acceleration of the maturity hereof upon the happening of certain events, for optional and mandatory prepayment of the principal hereof prior to the maturity hereof and for the amendment or waiver of certain provisions of the Credit Agreement, all upon the terms and conditions therein specified.
 
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
 
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]


 
C-2-
 
 
 

BIL ACQUISITION HOLDINGS LIMITED, as the U.S. Borrower
 
 
By:         
 
 
Name:
 
 
Title:
 


 
C-2-
 
 
 

LOANS AND PAYMENTS
 
Date
Amount of Loan
Maturity Date
Payments of Principal/Interest
Principal Balance of Note
Name of Person Making the Notation
           
           
           
           
           
           
           
           
           
           
           
           
           
           
           



 
C-2-
 
 
 

EXHIBIT C-3
 
LENDER:  [●]
PRINCIPAL AMOUNT:  $[●]
 
[FORM OF] U.S. TRANCHE B DOLLAR TERM NOTE
 
New York, New York
[Date]
 
FOR VALUE RECEIVED, BIL ACQUISITION HOLDINGS LIMITED (to be merged with and into LYONDELL CHEMICAL COMPANY substantially concurrently with the initial Credit Extensions) (“Lyondell” or the “U.S. Borrower”) hereby promises to pay to the Lender set forth above (the “Lender”) or its registered assigns, in lawful money of the United States of America in immediately available funds at the Administrative Agent’s Office (such term, and each other capitalized term used but not defined herein, having the meaning assigned to it in the Credit Agreement dated as of December 20, 2007 (as the same may be amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), a among BASELL AF S.C.A. (to be renamed LYONDELL BASELL INDUSTRIES AF S.C.A.), a company existing under the laws of the Grand Duchy of Luxembourg (together with its successors and assigns, the “Company”), the U.S. Borrower, BASELL HOLDINGS B.V., a Dutch corporation limited by shares (“Basell Holdings”), BASELL FINANCE COMPANY B.V., a Dutch corporation limited by shares (“Basell Finance” and, together with Basell Holdings, the “Dutch Borrowers”) and BASELL GERMANY HOLDINGS GmbH, a corporation organized under the laws of Germany (the “German Borrower” and, together with the Dutch Borrowers, the “Non-U.S. Borrowers” and, together with the Dutch Borrowers and the U.S. Borrower, the “Borrowers”), the other Non-U.S. Borrowers party thereto from time to time, the Subsidiary Guarantors party thereto from time to time, CITIBANK, N.A., as Administrative Agent, U.S. Swing Line Lender and Collateral Agent, CITIBANK, N.A., LONDON BRANCH, as European Swing Line Lender, ABN AMRO Bank N.V. as  L/C Issuer (the “L/C Issuer”) and each lender party thereto from time to time (collectively, the “Lenders” and individually, a “Lender”)) (i) on the dates set forth in the Credit Agreement, the principal amounts set forth in the Credit Agreement with respect to U.S. Tranche B Dollar Term Loans made by the Lender to the U.S. Borrower pursuant to the Credit Agreement and (ii) on each Interest Payment Date, interest at the rate or rates per annum as provided in the Credit Agreement on the unpaid principal amount of all U.S. Tranche B Dollar Term Loans made by the Lender to the U.S. Borrower pursuant to the Credit Agreement.
 
The U.S. Borrower hereby waives diligence, presentment, demand, protest and notice of any kind whatsoever.  The nonexercise by the holder hereof of any of its rights hereunder in any particular instance shall not constitute a waiver thereof in that or any subsequent instance.
 
All borrowings evidenced by this note and all payments and prepayments of the principal hereof and interest hereon and the respective dates thereof shall be endorsed by the holder hereof on the schedule attached hereto and made a part hereof or on a continuation thereof which shall be attached hereto and made a part hereof, or otherwise recorded by such holder in its internal records; provided, however, that the failure of the holder hereof to make such a notation or any error in such notation shall not affect the obligations of U.S. Borrower under this note.
 
This note is one of the U.S. Tranche B Dollar Term Notes referred to in the Credit Agreement that, among other things, contains provisions for the acceleration of the maturity hereof upon the happening of certain events, for optional and mandatory prepayment of the principal hereof prior to the maturity hereof and for the amendment or waiver of certain provisions of the Credit Agreement, all upon the terms and conditions therein specified.
 
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
 
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]


 
C-3-
 
 
 

BIL ACQUISITION HOLDINGS LIMITED, as the U.S. Borrower
 
 
By:         
 
 
Name:
 
 
Title:
 


 
C-3-
 
 
 

LOANS AND PAYMENTS
 
Date
Amount of Loan
Maturity Date
Payments of Principal/Interest
Principal Balance of Note
Name of Person Making the Notation
           
           
           
           
           
           
           
           
           
           
           
           
           
           
           



 
C-3-
 
 
 

EXHIBIT C-4
 
LENDER:  [●]
PRINCIPAL AMOUNT:  $[●]
 
[FORM OF] GERMAN TRANCHE B EURO TERM NOTE
 
New York, New York
[Date]
 
FOR VALUE RECEIVED, BASELL GERMANY HOLDINGS GmbH, a corporation organized under the laws of Germany, (the “German Borrower”) hereby promises to pay to the Lender set forth above (the “Lender”) or its registered assigns, in the single currency of the European Union in immediately available funds at the Administrative Agent’s Office (such term, and each other capitalized term used but not defined herein, having the meaning assigned to it in the Credit Agreement dated as of December 20, 2007 (as the same may be amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among BASELL AF S.C.A. (to be renamed LYONDELL BASELL INDUSTRIES AF S.C.A.), a company existing under the laws of the Grand Duchy of Luxembourg (together with its successors and assigns, the “Company”), BIL ACQUISITION HOLDINGS LIMITED, a Delaware corporation and Wholly Owned Subsidiary of the Company (to be merged with and into LYONDELL CHEMICAL COMPANY substantially concurrently with the initial Credit Extensions) (“Lyondell” or the “U.S. Borrower”), German Borrower, BASELL HOLDINGS B.V., a Dutch corporation limited by shares (“Basell Holdings”), BASELL FINANCE COMPANY B.V., a Dutch corporation limited by shares (“Basell Finance” and, together with Basell Holdings, the “Dutch Borrowers” and, together with the German Borrowers, the “Non-U.S. Borrowers” and, together with the Dutch Borrowers and the U.S. Borrower, the “Borrowers”), the other Non-U.S. Borrowers party thereto from time to time, the Subsidiary Guarantors party thereto from time to time, CITIBANK, N.A., as Administrative Agent, U.S. Swing Line Lender and Collateral Agent, CITIBANK, N.A., LONDON BRANCH, as European Swing Line Lender, ABN AMRO Bank N.V. as  L/C Issuer (the “L/C Issuer”) and each lender party thereto from time to time (collectively, the “Lenders” and individually, a “Lender”)) (i) on the dates set forth in the Credit Agreement, the principal amounts set forth in the Credit Agreement with respect to German Tranche B Euro Term Loans made by the Lender to the German Borrower pursuant to the Credit Agreement and (ii) on each Interest Payment Date, interest at the rate or rates per annum as provided in the Credit Agreement on the unpaid principal amount of all German Tranche B Euro Term Loans made by the Lender to the German Borrower pursuant to the Credit Agreement.
 
The German Borrower hereby waives diligence, presentment, demand, protest and notice of any kind whatsoever.  The nonexercise by the holder hereof of any of its rights hereunder in any particular instance shall not constitute a waiver thereof in that or any subsequent instance.
 
All borrowings evidenced by this note and all payments and prepayments of the principal hereof and interest hereon and the respective dates thereof shall be endorsed by the holder hereof on the schedule attached hereto and made a part hereof or on a continuation thereof which shall be attached hereto and made a part hereof, or otherwise recorded by such holder in its internal records; provided, however, that the failure of the holder hereof to make such a notation or any error in such notation shall not affect the obligations of German Borrower under this note.
 
This note is one of the German Tranche B Euro Term Notes referred to in the Credit Agreement that, among other things, contains provisions for the acceleration of the maturity hereof upon the happening of certain events, for optional and mandatory prepayment of the principal hereof prior to the maturity hereof and for the amendment or waiver of certain provisions of the Credit Agreement, all upon the terms and conditions therein specified.
 
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
 
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]


 
C-4-
 
 
 

BASELL GERMANY HOLDINGS GmbH, as the German Borrower
 
 
By:         
 
 
Name:
 
 
Title:
 


 
C-4-
 
 
 

LOANS AND PAYMENTS
 
Date
Amount of Loan
Maturity Date
Payments of Principal/Interest
Principal Balance of Note
Name of Person Making the Notation
           
           
           
           
           
           
           
           
           
           
           
           
           
           
           


 
C-4-
 
 
 

EXHIBIT C-5
 
LENDER:  [●]
PRINCIPAL AMOUNT:  $[●]
 
[FORM OF] [  ] TRANCHE REVOLVING CREDIT NOTE
 
New York, New York
[Date]
 
FOR VALUE RECEIVED, BIL ACQUISITION HOLDINGS LIMITED (to be merged with and into LYONDELL CHEMICAL COMPANY substantially concurrently with the initial Credit Extensions) (“Lyondell” or the “U.S. Borrower”), BASELL HOLDINGS B.V., a Dutch corporation limited by shares (“Basell Holdings”), BASELL FINANCE COMPANY B.V., a Dutch corporation limited by shares (“Basell Finance” and, together with Basell Holdings, the “Dutch Borrowers”) and BASELL GERMANY HOLDINGS GmbH, a corporation organized under the laws of Germany, (the “German Borrower” and, together with the Dutch Borrowers, the “Non-U.S. Borrowers” and, together with the Dutch Borrowers and the U.S. Borrower, the “Borrowers”)1, hereby severally promises to pay to the Lender set forth above (the “Lender”) or its registered assigns, in immediately available funds at the relevant Administrative Agent’s Office (such term, and each other capitalized term used but not defined herein, having the meaning assigned to it in the Credit Agreement dated as of December 20, 2007 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among BASELL AF S.C.A. (to be renamed LYONDELL BASELL INDUSTRIES AF S.C.A.), a company existing under the laws of the Grand Duchy of Luxembourg (together with its successors and assigns, the “Company”), U.S. Borrower, the Dutch Borrowers and German Borrower, the Guarantors party thereto from time to time, the lenders and other parties thereto from time to time and Citibank, N.A., as Administrative Agent, U.S. Swing Line Lender and Collateral Agent, CITIBANK, N.A., LONDON BRANCH, as European Swing Line Lender, ABN AMRO Bank N.V. as L/C Issuer (the “L/C Issuer”) and each lender party thereto from time to time (collectively, the “Lenders” and individually, a “Lender”)) (A) on the dates set forth in the Credit Agreement, the lesser of (i) the principal amount set forth above and (ii) the aggregate unpaid principal amount, in such currencies as they are made, of all Revolving Credit Loans made by the Lender to such Borrower pursuant to the Credit Agreement, and (B) interest from the date hereof on the principal amount from time to time outstanding on each such Revolving Credit Loan at the rate or rates per annum and payable on such dates and in such currencies, as provided in the Credit Agreement, in each case in the currency of the applicable Revolving Credit Loan.

Each Borrower hereby waives diligence, presentment, demand, protest and notice of any kind whatsoever.  The nonexercise by the holder hereof of any of its rights hereunder in any particular instance shall not constitute a waiver thereof in that or any subsequent instance.
 
All borrowings evidenced by this note and all payments and prepayments of the principal hereof and interest hereon and the respective dates thereof shall be endorsed by the holder hereof on the schedule attached hereto and made a part hereof or on a continuation thereof which shall be attached hereto and made a part hereof, or otherwise recorded by such holder in its internal records; provided, however, that the failure of the holder hereof to make such a notation or any error in such notation shall not affect the obligations of the Borrowers under this note.
 
This note is one of the Revolving Credit Notes referred to in the Credit Agreement that, among other things, contains provisions for the acceleration of the maturity hereof upon the happening of certain events, for optional and mandatory prepayment of the principal hereof prior to the maturity hereof and for the amendment or waiver of certain provisions of the Credit Agreement, all upon the terms and conditions therein specified.
 
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
 
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

 
1
Conform Revolving Credit Note to list Borrower which made the request in the Committed Loan Notice.
 


 
C-5-
 
 
 

BIL ACQUISITION HOLDINGS LIMITED2
 
 
By:         
 
 
Name:
 
 
Title:
 
 
BASELL HOLDINGS B.V.
 
 
By:         
 
 
Name:
 
 
Title:
 
 
BASELL FINANCE COMPANY B.V.
 
 
By:         
 
 
Name:
 
 
Title:
 
 
BASELL GERMANY HOLDINGS GmbH
 
 
By:         
 
 
Name:
 
 
Title:
 

 
2
To be Lyondell Chemical Company after the Closing Date.
 


 
C-5-
 
 
 

LOANS AND PAYMENTS
 
Date
Amount of Loan
Maturity Date
Payments of Principal/Interest
Principal Balance of Note
Name of Person Making the Notation
           
           
           
           
           
           
           
           
           
           
           
           
           
           
           



 
C-5-
 
 
 

EXHIBIT C-6
 
LENDER:  [●]
PRINCIPAL AMOUNT:  $[●]
 
[FORM OF] U.S. SWING LINE NOTE
 
New York, New York
[Date]
 
FOR VALUE RECEIVED, the undersigned, BIL ACQUISITION HOLDINGS LIMITED, a Delaware corporation and Wholly Owned Subsidiary of the Company (to be merged with and into LYONDELL CHEMICAL COMPANY substantially concurrently with the initial Credit Extensions) (“Lyondell” or the “U.S. Borrower”), hereby promises to pay to the Lender set forth above (the “Lender”) or its registered assigns, in immediately available funds at the relevant Administrative Agent’s Office (such term, and each other capitalized term used but not defined herein, having the meaning assigned to it in the Credit Agreement dated as of December 20, 2007 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among BASELL AF S.C.A. (to be renamed LYONDELL BASELL INDUSTRIES AF S.C.A.), a company existing under the laws of the Grand Duchy of Luxembourg (together with its successors and assigns, the “Company”), BASELL HOLDINGS B.V., a Dutch corporation limited by shares (“Basell Holdings”), BASELL FINANCE COMPANY B.V., a Dutch corporation limited by shares (“Basell Finance” and, together with Basell Holdings, the “Dutch Borrowers”), and BASELL GERMANY HOLDINGS GmbH, a corporation organized under the laws of Germany (the “German Borrower” and, together with the Dutch Borrowers, the “Non-U.S. Borrowers” and, together with the Dutch Borrowers and the U.S. Borrower, the “Borrowers”), the Guarantors party thereto from time to time, the lenders and other parties thereto from time to time and Citibank, N.A., as Administrative Agent, U.S. Swing Line Lender and Collateral Agent, CITIBANK, N.A., LONDON BRANCH, as European Swing Line Lender, ABN AMRO Bank N.V. as L/C Issuer (the “L/C Issuer”) and each lender party thereto from time to time (collectively, the “Lenders” and individually, a “Lender”)) (A) on the dates set forth in the Credit Agreement, the lesser of (i) the principal amount set forth above and (ii) the aggregate unpaid principal amount, in such currencies as they are made, of all Swing Line Loans made by the Lender to such Borrower pursuant to the Credit Agreement, and (B) interest from the date hereof on the principal amount from time to time outstanding on each such Swing Line Loan at the rate or rates per annum and payable on such dates and in such currencies as provided in the Credit Agreement.
 
Each Borrower promises to pay interest, on demand, on any overdue principal and, to the extent permitted by law, overdue interest from their due dates at a rate or rates provided in (and to the extent required by) the Credit Agreement.
 
Each Borrower hereby waives diligence, presentment, demand, protest and notice of any kind whatsoever.  The nonexercise by the holder hereof of any of its rights hereunder in any particular instance shall not constitute a waiver thereof in that or any subsequent instance.
 
All borrowings evidenced by this note and all payments and prepayments of the principal hereof and interest hereon and the respective dates thereof shall be endorsed by the holder hereof on the schedule attached hereto and made a part hereof or on a continuation thereof which shall be attached hereto and made a part hereof, or otherwise recorded by such holder in its internal records; provided, however, that the failure of the holder hereof to make such a notation or any error in such notation shall not affect the obligations of the Borrowers under this note.
 
This note is one of the Swing Line Notes referred to in the Credit Agreement that, among other things, contains provisions for the acceleration of the maturity hereof upon the happening of certain events, for optional and mandatory prepayment of the principal hereof prior to the maturity hereof and for the amendment or waiver of certain provisions of the Credit Agreement, all upon the terms and conditions therein specified.
 
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
 
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]


 
C-6-
 
 
 

BIL ACQUISITION HOLDINGS LIMITED3
 
 
By:         
 
 
Name:
 
 
Title:
 

 
3
To be Lyondell Chemical Company after the Closing Date.
 


 
C-6-
 
 
 

LOANS AND PAYMENTS
 
Date
Amount of Loan
Maturity Date
Payments of Principal/Interest
Principal Balance of Note
Name of Person Making the Notation
           
           
           
           
           
           
           
           
           
           
           
           
           
           
           



 
C-6-
 
 
 

EXHIBIT C-7
 
LENDER:  [●]
PRINCIPAL AMOUNT:  $[●]
 
[FORM OF] EUROPEAN SWING LINE NOTE
 
New York, New York
[Date]
 
FOR VALUE RECEIVED, each of the undersigned, BASELL HOLDINGS B.V., a Dutch corporation limited by shares (“Basell Holdings”), BASELL FINANCE COMPANY B.V., a Dutch corporation limited by shares (“Basell Finance” and, together with Basell Holdings, the “Dutch Borrowers”), and BASELL GERMANY HOLDINGS GmbH, a corporation organized under the laws of Germany (the “German Borrower” and, together with the Dutch Borrowers, the “Non-U.S. Borrowers” and, together with the Dutch Borrowers and the U.S. Borrower, the “Borrowers”), hereby severally promises to pay to the Lender set forth above (the “Lender”) or its registered assigns, in immediately available funds at the relevant Administrative Agent’s Office (such term, and each other capitalized term used but not defined herein, having the meaning assigned to it in the Credit Agreement dated as of December 20, 2007 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among BASELL AF S.C.A. (to be renamed LYONDELL BASELL INDUSTRIES AF S.C.A.), a company existing under the laws of the Grand Duchy of Luxembourg (together with its successors and assigns, the “Company”), BIL ACQUISITION HOLDINGS LIMITED, a Delaware Corporation and Wholly Owned Subsidiary of the Company (to be merged with and into LYONDELL CHEMICAL COMPANY substantially concurrently with the initial Credit Extensions) (“Lyondell” or the “U.S. Borrower”), the Dutch Borrowers and German Borrower, the Guarantors party thereto from time to time, the lenders and other parties thereto from time to time and Citibank, N.A., as Administrative Agent, U.S. Swing Line Lender and Collateral Agent, CITIBANK, N.A., LONDON BRANCH, as European Swing Line Lender, ABN AMRO Bank N.V. as L/C Issuer (the “L/C Issuer”) and each lender party thereto from time to time (collectively, the “Lenders” and individually, a “Lender”)) (A) on the dates set forth in the Credit Agreement, the lesser of (i) the principal amount set forth above and (ii) the aggregate unpaid principal amount, in such currencies as they are made, of all Swing Line Loans made by the Lender to such Borrower pursuant to the Credit Agreement, and (B) interest from the date hereof on the principal amount from time to time outstanding on each such Swing Line Loan at the rate or rates per annum and payable on such dates and in such currencies as provided in the Credit Agreement.
 
Each Borrower hereby waives diligence, presentment, demand, protest and notice of any kind whatsoever.  The nonexercise by the holder hereof of any of its rights hereunder in any particular instance shall not constitute a waiver thereof in that or any subsequent instance.
 
All borrowings evidenced by this note and all payments and prepayments of the principal hereof and interest hereon and the respective dates thereof shall be endorsed by the holder hereof on the schedule attached hereto and made a part hereof or on a continuation thereof which shall be attached hereto and made a part hereof, or otherwise recorded by such holder in its internal records; provided, however, that the failure of the holder hereof to make such a notation or any error in such notation shall not affect the obligations of the Borrowers under this note.
 
This note is one of the Swing Line Notes referred to in the Credit Agreement that, among other things, contains provisions for the acceleration of the maturity hereof upon the happening of certain events, for optional and mandatory prepayment of the principal hereof prior to the maturity hereof and for the amendment or waiver of certain provisions of the Credit Agreement, all upon the terms and conditions therein specified.
 
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
 
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]


 
C-7-
 
 
 

 
BASELL HOLDINGS B.V.
 
 
By:         
 
 
Name:
 
 
Title:
 
 
BASELL FINANCE COMPANY B.V.
 
 
By:         
 
 
Name:
 
 
Title:
 
 
BASELL GERMANY HOLDINGS GmbH
 
 
By:         
 
 
Name:
 
 
Title:
 


 
C-7-
 
 
 

LOANS AND PAYMENTS
 
Date
Amount of Loan
Maturity Date
Payments of Principal/Interest
Principal Balance of Note
Name of Person Making the Notation
           
           
           
           
           
           
           
           
           
           
           
           
           
           
           



 
C-7-
 
 
 


EXHIBIT F-1
 
[FORM OF] U.S. SECURITY AGREEMENT

 
 
U.S. SECURITY AGREEMENT
 
dated as of
 
December 20, 2007
 
among
 
GRANTORS IDENTIFIED HEREIN,

 
and
 
CITIBANK, N.A.,
 
as Collateral Agent
 




 
 
 

TABLE OF CONTENTS
 
Definitions 
1
 
 
SECTION 1.01.Credit Agreement1
 
 
SECTION 1.02.Other Defined Terms1
 
ARTICLE II
Pledge of Securities 
3
 
 
SECTION 2.01.Pledge3
 
 
SECTION 2.02.Delivery of the Pledged Collateral4
 
 
SECTION 2.03.Representations, Warranties and Covenants5
 
 
SECTION 2.04.Certification of Limited Liability Company and Limited Partnership Interests6
 
 
SECTION 2.05.Registration in Nominee Name; Denominations6
 
 
SECTION 2.06.Voting Rights; Dividends and Interest7
 
 
ARTICLE IIISecurity Interests in Personal Property9
 
 
SECTION 3.01.Security Interest9
 
 
SECTION 3.02.Representations and Warranties10
 
 
SECTION 3.03.Covenants12
 
 
SECTION 3.04.Other Actions12
 
 
ARTICLE IVRemedies14
 
 
SECTION 4.01.Remedies Upon Default14
 
 
SECTION 4.02.Application of Proceeds16
 
 
ARTICLE VIndemnity, Subrogation and Subordination17
 
 
SECTION 5.01.Indemnity17
 
 
SECTION 5.02.Contribution and Subrogation17
 
 
SECTION 5.03.Subordination17
 
 
ARTICLE VIMiscellaneous18
 
 
SECTION 6.01.Notices18
 
 
SECTION 6.02.Waivers; Amendment18
 
 
SECTION 6.03.Collateral Agent’s Fees and Expenses; Indemnification18
 
 
SECTION 6.04.Successors and Assigns19
 
 
SECTION 6.05.Survival of Agreement19
 
 
SECTION 6.06.Counterparts; Effectiveness; Several Agreement19
 
 
SECTION 6.07.Severability20
 
 
SECTION 6.08.Right of Set-Off20
 
 
SECTION 6.09.Governing Law; Jurisdiction; Consent to Service of Process20
 
 
SECTION 6.10.WAIVER OF JURY TRIAL21
 
 
SECTION 6.11.Headings21
 
 
SECTION 6.12.Security Interest Absolute21
 
 
SECTION 6.13.Termination or Release22
 
 
SECTION 6.14.Additional Restricted Subsidiaries22
 
 
SECTION 6.15.Collateral Agent Appointed Attorney-in-Fact23
 
 
SECTION 6.16.General Authority of the Collateral Agent24
 
 
SECTION 6.17.Miscellaneous24
 


 
 
 

Schedules
 
Schedule I                                Pledged Equity; Pledged Debt
 
Exhibits
 
Exhibit I                      Form of Security Agreement Supplement

 
 
 

U.S. SECURITY AGREEMENT dated as of December 20, 2007 among, the Grantors identified herein and who become a party hereto from time to time and CITIBANK, N.A., as Collateral Agent for the Secured Parties (as defined below) (the “Collateral Agent”).
 
Reference is made to the Credit Agreement dated as of the date hereof (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among LyondellBasell Industries AF S.C.A. (the “Company”), a company existing under the laws of the Grand Duchy of Luxembourg, BIL Acquistion Holdings Limited, a Delaware corporation (to be merged with and into Lyondell Chemical Company) (the “U.S. Borrower”), Basell Holdings B.V., a Dutch corporation limited by shares, Basell Finance Company B.V., and Basell Germany Holdings GmbH, a corporation organized under the laws of Germany, the Subsidiary Guarantors party thereto from time to time, the lenders party thereto from time to time, Citibank, N.A., as Administrative Agent and Collateral Agent and the other Agents party thereto.  The Lenders have agreed to extend credit to the Borrowers subject to the terms and conditions set forth in the Credit Agreement.  The obligations of the Lenders to extend such credit are conditioned upon, among other things, the execution and delivery of this Agreement.  The Guarantors are affiliates of the Borrowers, will derive substantial benefits from the extension of credit to the Borrowers pursuant to the Credit Agreement and are willing to execute and deliver this Agreement in order to induce the Lenders to extend such credit.  Accordingly, the parties hereto agree as follows:
 
ARTICLE I                                
 

 
Definitions
 
SECTION 1.01. Credit Agreement.
 
(a) Capitalized terms used in this Agreement and not otherwise defined herein have the meanings specified in the Credit Agreement.  All terms defined in the New York UCC (as defined herein) and not defined in this Agreement have the meanings specified therein; the term “instrument” shall have the meaning specified in Article 9 of the New York UCC.
 
(b) The rules of construction specified in Article I of the Credit Agreement also apply to this Agreement.
 
 
“ABL Agent” means Citibank, N.A., in its capacity as collateral agent under the Asset Backed Credit Facilities.
 
“ABL Borrowers” means, collectively, the U.S. Borrower, Basell USA Inc., Equistar Chemicals, LP, Houston Refining LP and the other subsidiaries of the Company party to the ABL Credit Agreement, as borrowers.
 
“ABL Credit Agreement” means the Credit Agreement, dated as of the date hereof, among the ABL Borrowers, the ABL Agent and the lenders party thereto (as the same may be amended, supplemented, modified or restated from time to time).
 
“ABL Guarantors” means the Guarantors party to the Subsidiary Guaranty (each as defined in the ABL Credit Agreement).
 
“ABL Intercreditor Agreement” means the Intercreditor Agreement, dated as of the date hereof, among the Collateral Agent, the ABL Agent, the U.S. Borrower, the Company and the other parties thereto form time to time, as amended, amended and restated, supplemented or otherwise modified from time to time
 
“ABL Security Agreement” means the Security Agreement, dated as of the date hereof, among the U.S. Borrower, Equistar Receivables, LP, Houston Refining LP, Basell U.S.A. Inc., any other Borrowers party thereto and the ABL Agent.
 
“Account Debtor” means any Person who is or who may become obligated to any Grantor under, with respect to or on account of an Account.
 
“Agreement” means this Security Agreement.
 
“Article 9 Collateral” has the meaning assigned to such term in Section 3.01(a).
 
“Claiming Party” has the meaning assigned to such term in Section 5.02.
 
“Capital Lease” shall mean, as applied to any Person, any lease of any property by that Person as lessee which is accounted for as a capital lease on the balance sheet of that Person.”
 
“Capitalized Lease Obligations” of any Person shall mean all obligations under Capital Leases of such Person.”
 
“Collateral” means the Article 9 Collateral and the Pledged Collateral.
 
“Collateral Agent” has the meaning assigned to such term in the preliminary statement to this Agreement.
 
“Company” has the meaning assigned to such term in the preliminary statement to this Agreement.
 
“Contributing Party” has the meaning assigned to such term in Section 5.02.
 
“Credit Agreement” has the meaning assigned to such term in the preliminary statement of this Agreement.
 
“Domestic Subsidiary” means a Subsidiary of the Company incorporated under the laws of the United States or any state thereof or the District of Columbia.
 
“Equistar Notes” means $150,000,000 7.55% Senior Notes due 2026 issued by the Lyondell Petrochemical Company (as predecessor to Equistar Chemicals, LP) pursuant to the Equistar Notes Indenture together with any other series of notes created under the Equistar Notes Indenture.
 
 “Equistar Notes Indenture” means the indenture governing the Equistar Notes dated as of January 29, 1996 as supplemented by Supplemental Indentures dated February 15, 1996, December 1, 1997, November 3, 2000 and November 17, 2000.
 
“General Intangibles” has the meaning specified in Article 9 of the New York UCC.
 
“Grantor” means each Guarantor that is a party hereto, and each Guarantor that is a Domestic Subsidiary that becomes a party to this Agreement after the Closing Date; provided that neither Lyondell POTechLP Inc. nor the U.S. Borrower shall be a Grantor hereunder.
 
“New York UCC” means the Uniform Commercial Code as from time to time in effect in the State of New York.
 
“Pledged Collateral” has the meaning assigned to such term in Section 2.01.
 
“Pledged Debt” has the meaning assigned to such term in Section 2.01.
 
“Pledged Equity” has the meaning assigned to such term in Section 2.01.
 
 “Pledged Securities” means any promissory notes, stock certificates or other securities now or hereafter included in the Pledged Collateral, including all certificates, instruments or other documents representing or evidencing any Pledged Collateral.
 
“Receivables” has the meaning assigned to such term in the ABL Security Agreement as in effect on the date hereof.
 
 “Secured Obligations” means the “Obligations” as defined in the Credit Agreement.
 
“Secured Parties” means, collectively, the Administrative Agent, the Collateral Agent, the Lenders, the Hedge Banks, the Supplemental Agents and each co-agent or sub-agent appointed by the Administrative Agent or the Collateral Agent from time to time pursuant to Section 9.02 of the Credit Agreement.
 
 “Security Agreement Supplement” means an instrument in the form of Exhibit I hereto.
 
“Security Interest” has the meaning assigned to such term in Section 3.01(a).
 
 “Transferred Receivables” has the meaning defined in the ABL Security Agreement.
 
“U.S. Borrower” has the meaning assigned to such term in the preliminary statement of this Agreement.
 
ARTICLE II                                
 

 
Pledge of Securities
 
SECTION 2.01. Pledge.
 
(a) As security for the payment and performance in full of the Secured Obligations, including the Guaranties, each Grantor hereby assigns and pledges to the Collateral Agent, its successors and assigns, for the benefit of the Secured Parties, and hereby grants to the Collateral Agent, its successors and assigns, for the benefit of the Secured Parties, a security interest in, all of such Grantor’s right, title and interest in, to and under (i) (1) all Equity Interests held by it and listed on Schedule I, whether now owned or hereafter acquired, (2) any other Equity Interests directly owned by such Grantor of any Wholly Owned Domestic Subsidiary of the Company, whether now owned or hereafter acquired, (3) 100% of the outstanding Equity Interests directly owned by such Grantor of any Wholly Owned Foreign Subsidiary of the Company, whether now owned or hereafter acquired; provided that, with respect to any Secured Obligation of the U.S. Borrower, the foregoing pledge of any stock of a Wholly Owned Foreign Subsidiary of the Company that is a “controlled foreign corporation” (within the meaning of Section 957(a) of the Code) shall be limited to 65% of the outstanding voting stock and 100% of the outstanding non-voting stock of such controlled foreign corporation and (4) the certificates representing all such Equity Interests (all such Equity Interests and certificates collectively referred to as  the “Pledged Equity”); provided that the Pledged Equity, shall not include (A) any Equity Interests to the extent that, and for so long as, such a pledge of such Equity Interests would violate law applicable thereto, and (B) any Equity Interests in (1) LyondellBasell Receivables I, L.L.C. or Equistar Receivables II, LLC, (2) Basell Capital Corporation, (3) any Equity Interest in any other Securitization Entity; (ii)(A) the debt securities owned by it and listed opposite the name of such Grantor on Schedule I, (B) any debt securities obtained in the future by such Grantor and (C) the promissory notes and any other instruments evidencing such debt securities (collectively, the “Pledged Debt”); provided that the Pledged Debt shall not include any indebtedness or other obligations owed by (1) LyondellBasell Receivables I, L.L.C., Equistar Receivables II, LLC and Basell Capital Corporation to the ABL Borrowers or the ABL Guarantors and (2) any Pledged Debt owing from any Securitization Entity to any Grantor; (iii)  subject to Section 2.06, all payments of principal or interest, dividends, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of, in exchange for or upon the conversion of, and all other Proceeds received in respect of, the securities referred to in clauses (i) and (ii) above; (iv) subject to Section 2.06, all rights and privileges of such Grantor with respect to the securities and other property referred to in clauses (i), (ii), and (iii) above; and (v) all Proceeds of any of the foregoing (the items referred to in clauses (i) through (iv) above being collectively referred to as the “Pledged Collateral”).

(b) The Collateral Agent shall release, (such release to be effected pursuant to the terms of Section 6.13 hereof) any security interest granted to it in the following property (other than to the extent any such property constitutes property described in the proviso contained in Section 2.01(a) above): (i) the Equity Interests of any Subsidiary acquired pursuant to a Permitted Acquisition and subject to Liens permitted by Section 7.01(w) of the Credit Agreement if and so long as the terms of such Liens prohibit the creation of a Lien in favor of the Collateral Agent for the benefit of the Secured Parties on such Equity Interests, (ii) any Equity Interest in any other Securitization Entity and (iii) any Pledged Debt owing from any Securitization Entity to any Grantor.
TO HAVE AND TO HOLD the Pledged Collateral, together with all right, title, interest, powers, privileges and preferences pertaining or incidental thereto, unto the Collateral Agent, its successors and assigns, for the benefit of the Secured Parties, forever; subject, however, to the terms, covenants and conditions hereinafter set forth.
 
SECTION 2.02. Delivery of the Pledged Collateral.
 
(a) Each Grantor agrees promptly to deliver or cause to be delivered to the Collateral Agent, for the benefit of the Secured Parties, any and all Pledged Securities (other than (i) any uncertificated securities, but only for so long as such securities remain uncertificated, and (ii) any Equity Interests in any direct Wholly Owned Subsidiary that is dormant or inactive (so long as such Subsidiary remains dormant or inactive)) to the extent such Pledged Securities, in the case of promissory notes or other instruments evidencing Indebtedness, are required to be delivered pursuant to paragraph (b) of this Section 2.02.
 
(b) Each Grantor will cause any Indebtedness (other than intercompany Indebtedness) for borrowed money having an aggregate principal amount in excess of $10,000,000 owed to such Grantor by any Person to be evidenced by a duly executed promissory note that is pledged and delivered to the Collateral Agent, for the benefit of the applicable Secured Parties, pursuant to the terms hereof.
 
(c) Upon delivery to the Collateral Agent, (i) any Pledged Securities shall be accompanied by stock powers duly executed in blank or other instruments of transfer reasonably satisfactory to the Collateral Agent and (ii) all other property comprising part of the Pledged Collateral shall be accompanied by proper instruments of assignment duly executed by the applicable Grantor and such other instruments or documents as the Collateral Agent may reasonably request. Each Grantor hereby authorizes the Collateral Agent to Supplement Schedule I hereto by adding any additional Pledged Securities delivered to the Collateral Agent pursuant hereto.
 
(d) In accordance with the terms of the Cash Flow Intercreditor Agreement, all Pledged Collateral delivered to the Collateral Agent shall also be held by the Collateral Agent as gratuitous bailee for the Interim Facility Finance Parties, the Second Lien Notes Finance Parties and the Second Lien Noteholders (as each such term is defined in the Cash Flow Intercreditor Agreement), solely for the purpose of perfecting the security interest therein granted under the Interim Facility Security Documents and Second Lien Notes Security Documents (as each such term is defined in the Cash Flow Intercreditor Agreement).
 
SECTION 2.03. Representations, Warranties and Covenants.  Each Grantor represents and warrants, as to itself and the Grantors, to and with the Collateral Agent, for the benefit of the Secured Parties, that:
 
(a) Schedule I correctly sets forth the percentage of the issued and outstanding units of each class of the Equity Interests of the issuer thereof represented by the Pledged Equity and includes all Equity Interests (other than Equity Interests of any direct Wholly Owned Domestic Subsidiary that is dormant or inactive and Equity Interests of any direct Wholly Owned Foreign Subsidiary that is dormant, inactive or otherwise immaterial), debt securities in excess of $10,000,000 and promissory notes in excess of $10,000,000, in each case required to be pledged hereunder pursuant to the Credit Agreement;
 
(b) [Reserved];
 
(c) [Reserved];
 
(d) except for restrictions and limitations imposed by the Loan Documents or securities laws generally, the Pledged Collateral is and will continue to be freely transferable and assignable, and none of the Pledged Collateral is or will be subject to any option, right of first refusal, shareholders agreement, charter or by-law provisions or contractual restriction of any nature that might prohibit, materially impair, materially delay or otherwise affect in any manner material and adverse to the Secured Parties the pledge of such Pledged Collateral hereunder, the sale or disposition thereof pursuant hereto;
 
(e) [Reserved];
 
(f) [Reserved];
 
(g) [Reserved];
 
(h) [Reserved]; and
 
(i) each Grantor that is an issuer of Pledged Equity, pledged hereunder agrees that after the occurrence and during the continuance of an Event of Default it shall comply with all instructions from the Collateral Agent with respect to such Pledged Equity without further consent of the Grantor pledging such Pledged Equity.
 
SECTION 2.04. Certification of Limited Liability Company and Limited Partnership Interests.
 
(a) Each interest in any limited liability company or limited partnership controlled by any Grantor, pledged under Section 2.01 and represented by a certificate, shall be a “security” within the meaning of Article 8 of the New York UCC or any other applicable Uniform Commercial Code and shall be governed by Article 8 of the New York UCC or any other applicable Uniform Commercial Code, and each such interest shall at all times hereafter be represented by a certificate.
 
(b) Each interest in any limited liability company or limited partnership controlled by any Grantor, pledged under Section 2.01 and not represented by a certificate shall not be a “security” within the meaning of Article 8 of the New York UCC or any other applicable Uniform Commercial Code and shall not be governed by Article 8 of the New York UCC or any other applicable Uniform Commercial Code, and the Grantors shall at no time elect to treat any such interest as a “security” within the meaning of Article 8 of the New York UCC or any other applicable Uniform Commercial Code or issue any certificate representing such interest, unless the applicable Grantor provides prior written notification to the Administrative Agent of such election and promptly (and in any event within 30 days after such election) delivers any such certificate to the Administrative Agent pursuant to the terms hereof.
 
SECTION 2.05. Registration in Nominee Name; Denominations.  If an Event of Default shall occur and be continuing and the Collateral Agent shall give the U.S. Borrower notice of its intent to exercise such rights, (a) the Collateral Agent, on behalf of the Secured Parties, shall have the right (in its sole and absolute discretion) to hold the Pledged Securities in its own name as pledgee, the name of its nominee (as pledgee or as sub-agent) or the name of the applicable Grantor, endorsed or assigned in blank or in favor of the Collateral Agent and each Grantor will promptly give to the Collateral Agent copies of any notices or other communications received by it with respect to Pledged Securities registered in the name of such Grantor and (b) the Collateral Agent shall have the right to exchange the certificates representing Pledged Securities for certificates of smaller or larger denominations for any purpose consistent with this Agreement.
 
SECTION 2.06. Voting Rights; Dividends and Interest.
 
(a) Unless and until (1) an Event of Default shall have occurred and be continuing and (2) the Collateral Agent shall have notified the U.S. Borrower that the rights of the Grantors under this Section 2.06 are being suspended:
 
(i) Each Grantor shall be entitled to exercise any and all voting and/or other consensual rights and powers inuring to an owner of Pledged Securities or any part thereof for any purpose consistent with the terms of this Agreement, the Credit Agreement and the other Loan Documents.
 
(ii) The Collateral Agent shall promptly execute and deliver to each Grantor, or cause to be executed and delivered to such Grantor, all such proxies, powers of attorney and other instruments as such Grantor may reasonably request for the purpose of enabling such Grantor to exercise the voting and/or consensual rights and powers it is entitled to exercise pursuant to subparagraph (i) above.
 
(iii) Each Grantor shall be entitled to receive and retain any and all dividends, interest, principal and other distributions paid on or distributed in respect of the Pledged Securities to the extent and only to the extent that such dividends, interest, principal and other distributions are permitted by, and otherwise paid or distributed in accordance with, the terms and conditions of the Credit Agreement, the other Loan Documents and applicable Laws; provided that any noncash dividends, interest, principal or other distributions that would constitute Pledged Equity or Pledged Debt, whether resulting from a subdivision, combination or reclassification of the outstanding Equity Interests of the issuer of any Pledged Securities or received in exchange for Pledged Securities or any part thereof, or in redemption thereof, or as a result of any merger, consolidation, acquisition or other exchange of assets to which such issuer may be a party or otherwise, shall be and become part of the Pledged Collateral, and shall if certificated be held in trust for the benefit of the Collateral Agent and the Secured Parties and shall be forthwith delivered to the Collateral Agent in the same form as so received (with any necessary endorsement reasonably requested by the Collateral Agent).
 
(b) If (A) an Event of Default has occurred and is continuing and (B) the Collateral Agent shall have notified the U.S. Borrower of the suspension of the rights of the Grantors under paragraph (a)(iii) of this Section 2.06, then all rights of any Grantor to dividends, interest, principal or other distributions that such Grantor is authorized to receive with respect to such Pledged Collateral pursuant to paragraph (a)(iii) of this Section 2.06 shall cease, and all such rights shall thereupon become vested in the Collateral Agent, which shall have the sole and exclusive right and authority to receive and retain such dividends, interest, principal or other distributions, subject to the terms of the Credit Agreement and Intercreditor Agreement.  All dividends, interest, principal or other distributions received by any Grantor contrary to the provisions of this Section 2.06 shall be held in trust for the benefit of the Collateral Agent, shall be segregated from other property or funds of such Grantor and shall be forthwith delivered to the Collateral Agent upon demand in the same form as so received (with any necessary endorsement reasonably requested by the Collateral Agent).  Any and all money and other property paid over to or received by the Collateral Agent pursuant to the provisions of this paragraph (b) shall be retained by the Collateral Agent in an account to be established by the Collateral Agent upon receipt of such money or other property and shall be applied in accordance with the provisions of Section 4.02.  After all Events of Default have been cured or waived, the Collateral Agent shall promptly repay to each Grantor (without interest) all dividends, interest, principal or other distributions that such Grantor would otherwise be permitted to retain pursuant to the terms of paragraph (a)(iii) of this Section 2.06 and that remain in such account.
 
(c) If (A) an Event of Default has occurred and is continuing and (B) the Collateral Agent shall have notified the U.S. Borrower of the suspension of the rights of the Grantors under paragraph (a)(iii) of this Section 2.06, then all rights of any Grantor to exercise the voting and consensual rights and powers it is entitled to exercise with respect to such Pledged Collateral pursuant to paragraph (a)(i) of this Section 2.06, and the obligations of the Collateral Agent under paragraph (a)(ii) of this Section 2.06, shall cease, and all such rights shall thereupon become vested in the Collateral Agent, which shall have the sole and exclusive right and authority to exercise such voting and consensual rights and powers, subject to the terms of the Credit Agreement and the Intercreditor Agreement; provided that, unless otherwise directed by the Required Lenders, the Collateral Agent shall have the right from time to time following and during the continuance of an Event of Default to permit the Grantors to exercise such rights.  After all Events of Default have been cured or waived, each Grantor shall have the exclusive right to exercise the voting and/or consensual rights and powers that such Grantor would otherwise be entitled to exercise pursuant to the terms of paragraph (a)(i) above.
 
(d) Any notice given by the Collateral Agent to the U.S. Borrower suspending the rights of the Grantors under paragraph (a) of this Section 2.06 (i) shall be given in writing, (ii) may be given with respect to one or more of the Grantors at the same or different times and (iii) may suspend the rights of the Grantors under paragraph (a)(i) or paragraph (a)(iii) in part without suspending all such rights (as specified by the Collateral Agent in its sole and absolute discretion) and without waiving or otherwise affecting the Collateral Agent’s rights to give additional notices from time to time suspending other rights so long as an Event of Default has occurred and is continuing.
 
ARTICLE III                                
 

 
Security Interests in Personal Property
 
SECTION 3.01. Security Interest.
 
(a) As security for the payment and performance in full of the Secured Obligations, including the Guaranties, each Grantor hereby assigns and pledges to the Collateral Agent, its successors and assigns, for the benefit of the Secured Parties, and hereby grants to the Collateral Agent, its successors and assigns, for the benefit of the Secured Parties, a security interest (the “Security Interest”) in, all right, title and interest in or to any and all of the following assets and properties now owned or at any time hereafter acquired by such Grantor or in which such Grantor now has or at any time in the future may acquire any right, title or interest (collectively, the “Article 9 Collateral”):
 
(i) all Accounts;
 
(ii) all Chattel Paper;
 
(iii) all Documents;
 
(iv) all Letters of Credit (as such term is defined in the New York UCC) and Letter-of-Credit Rights;
 
(v) all Equipment;
 
(vi) all Pledged Collateral;
 
(vii) all General Intangibles;
 
(viii) all Instruments;
 
(ix) all Inventory, Goods and Fixtures;
 
(x) all Investment Property;
 
(xi) all books and records;
 
(xii) all Money and Deposit Accounts; and
 
(xiii) all Proceeds and products of any and all of the foregoing and all Supporting Obligations, collateral security and guarantees given by any Person with respect to any of the foregoing;
 
provided, that notwithstanding anything to the contrary in this Agreement, this Agreement shall not constitute a grant of a security interest in (and the term “Collateral” shall not include) (A) any vehicle covered by a certificate of title or ownership, (B) any property effectively conveyed, sold, contributed or otherwise transferred under (i) the 2005 Securitization Facility (as defined in the ABL Credit Agreement as in effect on the date hereof) or (ii) the 2007 Securitization Facility (as defined in the ABL Credit Agreement as in effect on the date hereof), (C) any property in which an effective grant of security interest has been conveyed under the ABL Security Agreement as in effect on the date hereof so long as the ABL Credit Agreement has not been terminated, (D) any Equipment owned by any Grantor that is subject to a purchase money security interest (within the meaning of Section 9-103 of the UCC) or a or a Capitalized Lease Obligation permitted by the Credit Agreement so long as the contract or other agreement in which such security interests is granted (or the documentation providing for such Capitalized Lease Obligations) prohibits the creation of any other security interest on such, (E) any Equity Interest that is not Pledged Equity, (F) any Restricted Property (as such term is defined in the Equistar Notes Indenture), and (G) any contract, lease, license or other document so long as (and only to the extent that) the grant of a security interest therein would (x) violate a restriction in such contract, lease, license or documents or under any law, regulation, permit, order or decree of any Governmental Authority, unless and until all required consents shall have been obtained (for the avoidance of doubt, the restrictions described herein shall not include negative pledges or similar undertakings in favor of a lender or other financial counterparty) or (y) expressly give any other party in respect of any such contract, lease, instrument, license or other document, the right to terminate its obligations thereunder, provided however, that the limitations set forth in clause (G) above shall not affect, limit, restrict or impair the grant by a Grantor of a security interest pursuant to this Agreement in any such Collateral to the extent that an otherwise applicable prohibition or restriction on such grant is rendered ineffective by any applicable law, including the UCC. The delivery of control agreements with respect to any “deposit account” or “securities account” as such terms are defined in the UCC shall not be required, except with respect to the Working Capital Reserve Account.
 
(b) The Collateral Agent shall release (such release to be effected pursuant to the terms of Section 6.13 hereof) any security interest granted to it in the following property (other than to the extent any such property constitutes property described in the proviso contained in Section 3.01(a) above): (A) Accounts and related assets (including deposit accounts) evidencing such Accounts or proceeds thereof purported to be transferred pursuant to any Receivables Financing or any Securitization Transaction not prohibited by the Credit Agreement, (B) Inventory, Accounts and related assets evidencing such Accounts and Inventory or proceeds thereof securing any Asset Backed Credit Facility or Receivables Financing not prohibited by the Credit Agreement and (C) all Transferred Receivables, Related Transferred Rights (as defined in the ABL Security Agreement as in effect on the date hereof) and all goods (including returned goods), if any, the sale of which gave rise to any Transferred Receivables.
 
(c) Each Grantor hereby irrevocably authorizes the Collateral Agent for the benefit of the Secured Parties at any time and from time to time to file in any relevant jurisdiction any financing statements (including fixture filings) with respect to the Article 9 Collateral or any part thereof and amendments thereto that (i) indicate the Collateral as all assets of such Grantor or words of similar effect as being of an equal or lesser scope or with greater detail, and (ii) contain the information required by Article 9 of the Uniform Commercial Code or the analogous legislation of each applicable jurisdiction for the filing of any financing statement or amendment, including (A) whether such Grantor is an organization, the type of organization and any organizational identification number issued to such Grantor and (B) in the case of a financing statement filed as a fixture filing, a sufficient description of the real property to which such Article 9 Collateral relates.  Each Grantor agrees to provide such information to the Collateral Agent promptly upon request.
 
(d) The Security Interest is granted as security only and shall not subject the Collateral Agent or any other Secured Party to, or in any way alter or modify, any obligation or liability of any Grantor with respect to or arising out of the Article 9 Collateral.
 
SECTION 3.02. Representations and Warranties.  Each Grantor represents and warrants to the Collateral Agent and the Secured Parties that:
 
(a) Each Grantor has good and valid rights in and title to the Article 9 Collateral with respect to which it grants a Security Interest hereunder.
 
(b) The Perfection Certificate has been duly prepared, completed and executed and the information set forth therein, is correct and complete in all material respects as of the Closing Date.  The Uniform Commercial Code financing statements (including fixture filings, as applicable) or other appropriate filings, recordings or registrations (including without limitation Copyright filings) prepared by the Collateral Agent based upon the information provided to the Collateral Agent in the Perfection Certificate for filing in each governmental, municipal or other office specified in the Perfection Certificate, are all the filings, recordings and registrations that are necessary to establish a legal, valid and perfected security interest in favor of the Collateral Agent (for the benefit of the Secured Parties) in respect of all Article 9 Collateral in which the Security Interest may be perfected by filing, recording or registration in the United States (or any political subdivision thereof) and its territories and possessions, and no further or subsequent filing, refiling, recording, rerecording, registration or reregistration is necessary in any such jurisdiction, except as provided under applicable law with respect to the filing of continuation statements.
 
SECTION 3.03. Covenants.
 
(a) Each Grantor shall, at its own expense, take any and all commercially reasonable actions necessary to defend title to the Article 9 Collateral against all Persons and to defend the Security Interest of the Collateral Agent in the Article 9 Collateral and the priority thereof against any Lien not expressly permitted pursuant to Section 7.01 of the Credit Agreement (it being understood that the Grantor shall have the right to Dispose of Collateral to the extent permitted by Section 7.05 of the Credit Agreement).
 
(b) [Reserved].
 
(c) At its option, upon the occurrence and during the continuance of an Event of Default, the Collateral Agent may discharge past due taxes, assessments, charges, fees, Liens, security interests or other encumbrances at any time levied or placed on the Article 9 Collateral and not permitted pursuant to Section 7.01 of the Credit Agreement, and may pay for the maintenance and preservation of the Article 9 Collateral to the extent any Grantor fails to do so as required by the Credit Agreement or this Agreement and within a reasonable period of time after the Collateral Agent has requested that it do so, and each Grantor severally agrees to reimburse the Collateral Agent promptly after demand for any payment made or any reasonable expense incurred by the Collateral Agent pursuant to the foregoing authorization.  Nothing in this paragraph shall be interpreted as excusing any Grantor from the performance of, or imposing any obligation on the Collateral Agent or any Secured Party to cure or perform, any covenants or other promises of any Grantor with respect to taxes, assessments, charges, fees, Liens, security interests or other encumbrances and maintenance as set forth herein or in the other Loan Documents.
 
(d) Each Grantor (rather than the Collateral Agent or any Secured Party) shall remain liable (as between itself and any relevant counterparty) to observe and perform all the conditions and obligations to be observed and performed by it under each contract, agreement or instrument relating to the Article 9 Collateral, all in accordance with the terms and conditions thereof, and each Grantor jointly and severally agrees to indemnify and hold harmless the Collateral Agent and the Secured Parties from and against any and all liability for such performance.
 
SECTION 3.04. Other Actions.  In order to further insure the attachment, perfection and priority of, and the ability of the Collateral Agent to enforce, the Security Interest, each Grantor agrees, in each case at such Grantor’s own expense, to take the following actions with respect to the following Article 9 Collateral:
 
Instruments.  If any Grantor shall at any time hold or acquire any Instrument constituting Collateral and evidencing an amount in excess of $10,000,000, such Grantor shall forthwith endorse, assign and deliver the same to the Collateral Agent for the benefit of the applicable Secured Parties, accompanied by such instruments of transfer or assignment duly executed in blank as the Collateral Agent may from time to time reasonably request.
 
ARTICLE IV                                
 

 
Remedies
 
SECTION 4.01. Remedies Upon Default.  Upon the occurrence and during the continuance of an Event of Default, it is agreed that the Collateral Agent shall have the right to exercise any and all rights afforded to a secured party with respect to the Secured Obligations under the Uniform Commercial Code or other applicable law and also may (i) require each Grantor to, and each Grantor agrees that it will at its expense and upon request of the Collateral Agent forthwith, assemble all or part of the Collateral as directed by the Collateral Agent and make it available to the Collateral Agent at a place and time to be designated by the Collateral Agent that is reasonably convenient to both parties; (ii) occupy any premises owned or, to the extent lawful and permitted, leased by any of the Grantors where the Collateral or any part thereof is assembled or located for a reasonable period in order to effectuate its rights and remedies hereunder or under law, without obligation to such Grantor in respect of such occupation; provided that the Collateral Agent shall provide the applicable Grantor with notice thereof prior to or promptly after such occupancy; (iii) exercise any and all rights and remedies of any of the Grantors under or in connection with the Collateral, or otherwise in respect of the Collateral; provided that the Collateral Agent shall provide the applicable Grantor with notice thereof prior to or promptly after such exercise; and (iv) subject to the mandatory requirements of applicable law and the notice requirements described below, sell or otherwise dispose of all or any part of the Collateral securing the Secured Obligations at a public or private sale or at any broker’s board or on any securities exchange, for cash, upon credit or for future delivery as the Collateral Agent shall deem appropriate.  The Collateral Agent shall be authorized at any such sale of securities (if it deems it advisable to do so) to restrict the prospective bidders or purchasers to Persons who will represent and agree that they are purchasing the Collateral for their own account for investment and not with a view to the distribution or sale thereof, and upon consummation of any such sale the Collateral Agent shall have the right to assign, transfer and deliver to the purchaser or purchasers thereof the Collateral so sold.  Each such purchaser at any sale of Collateral shall hold the property sold absolutely, free from any claim or right on the part of any Grantor, and each Grantor hereby waives (to the extent permitted by law) all rights of redemption, stay and appraisal which such Grantor now has or may at any time in the future have under any rule of law or statute now existing or hereafter enacted.
 
The Collateral Agent shall give the applicable Grantors 10 days’ written notice (which each Grantor agrees is reasonable notice within the meaning of Section 9-611 of the New York UCC or its equivalent in other jurisdictions) of the Collateral Agent’s intention to make any sale of Collateral.  Such notice, in the case of a public sale, shall state the time and place for such sale and, in the case of a sale at a broker’s board or on a securities exchange, shall state the board or exchange at which such sale is to be made and the day on which the Collateral, or portion thereof, will first be offered for sale at such board or exchange.  Any such public sale shall be held at such time or times within ordinary business hours and at such place or places as the Collateral Agent may fix and state in the notice (if any) of such sale.  At any such sale, the Collateral, or portion thereof, to be sold may be sold in one lot as an entirety or in separate parcels, as the Collateral Agent may (in its sole and absolute discretion) determine.  The Collateral Agent shall not be obligated to make any sale of any Collateral if it shall determine not to do so, regardless of the fact that notice of sale of such Collateral shall have been given.  The Collateral Agent may, without notice or publication, adjourn any public or private sale or cause the same to be adjourned from time to time by announcement at the time and place fixed for sale, and such sale may, without further notice, be made at the time and place to which the same was so adjourned.  In case any sale of all or any part of the Collateral is made on credit or for future delivery, the Collateral so sold may be retained by the Collateral Agent until the sale price is paid by the purchaser or purchasers thereof, but the Collateral Agent shall not incur any liability in case any such purchaser or purchasers shall fail to take up and pay for the Collateral so sold and, in case of any such failure, such Collateral may be sold again upon like notice.  At any public (or, to the extent permitted by law, private) sale made pursuant to this Agreement, any Secured Party may bid for or purchase, free (to the extent permitted by law) from any right of redemption, stay, valuation or appraisal on the part of any Grantor (all said rights being also hereby waived and released to the extent permitted by law), the Collateral or any part thereof offered for sale and may make payment on account thereof by using any claim then due and payable to such Secured Party from any Grantor as a credit against the purchase price, and such Secured Party may, upon compliance with the terms of sale, hold, retain and dispose of such property without further accountability to any Grantor therefor.  For purposes hereof, a written agreement to purchase the Collateral or any portion thereof shall be treated as a sale thereof; the Collateral Agent shall be free to carry out such sale pursuant to such agreement and no Grantor shall be entitled to the return of the Collateral or any portion thereof subject thereto, notwithstanding the fact that after the Collateral Agent shall have entered into such an agreement all Events of Default shall have been remedied and the Secured Obligations paid in full.  As an alternative to exercising the power of sale herein conferred upon it, the Collateral Agent may proceed by a suit or suits at law or in equity to foreclose this Agreement and to sell the Collateral or any portion thereof pursuant to a judgment or decree of a court or courts having competent jurisdiction or pursuant to a proceeding by a court-appointed receiver.  Any sale pursuant to the provisions of this Section 4.01, to the fullest extent permitted by applicable law, shall be deemed to conform to the commercially reasonable standards as provided in Section 9-610(b) of the New York UCC or its equivalent in other jurisdictions.
 
Any remedies provided in this Section 4.01 shall be subject to each Intercreditor Agreement.
 
SECTION 4.02. Application of Proceeds.
 
(a) The Collateral Agent shall apply the proceeds of any collection or sale of Collateral, including any Collateral consisting of cash, in accordance with the applicable clause of Section 20 of the Cash Flow Intercreditor Agreement, and if the Cash Flow Intercreditor Agreement is no longer outstanding, in accordance with the Credit Agreement.
 
Subject to the terms of the Cash Flow Intercreditor Agreement, the Collateral Agent shall have absolute discretion as to the time of application of any such proceeds, moneys or balances in accordance with this Agreement.  Upon any sale of Collateral by the Collateral Agent (including pursuant to a power of sale granted by statute or under a judicial proceeding), the receipt of the Collateral Agent or of the officer making the sale shall be a sufficient discharge to the purchaser or purchasers of the Collateral so sold and such purchaser or purchasers shall not be obligated to see to the application of any part of the purchase money paid over to the Collateral Agent or such officer or be answerable in any way for the misapplication thereof.
 
(b) In making the determination and allocations required by this Section 4.02, the Collateral Agent may conclusively rely upon information supplied by the Administrative Agent as to the amounts of unpaid principal and interest and other amounts outstanding with respect to the Secured Obligations, and the Collateral Agent shall have no liability to any of the Secured Parties for actions taken in reliance on such information, provided that nothing in this sentence shall prevent any Grantor from contesting any amounts claimed by any Secured Party in any information so supplied.  All distributions made by the Collateral Agent pursuant to this Section 4.02 shall be (subject to any decree of any court of competent jurisdiction) final (absent manifest error), and the Collateral Agent shall have no duty to inquire as to the application by the Administrative Agent of any amounts distributed to it.
 
SECTION 4.03. Securities Act, Etc.  In view of the position of the Grantors in relation to the Pledged Collateral, or because of other current or future circumstances, a question may arise under the U.S. Securities Act of 1933, as now or hereafter in effect, or any similar statute hereafter enacted analogous in purpose or effect (such Act and any such similar statute as from time to time in effect being called the “Federal Securities Laws”) with respect to any disposition of the Pledged Collateral permitted hereunder.  Each Grantor understands that compliance with the Federal Securities Laws might very strictly limit the course of conduct of the Collateral Agent if the Collateral Agent were to attempt to dispose of all or any part of the Pledged Collateral, and might also limit the extent to which or the manner in which any subsequent transferee of any Pledged Collateral could dispose of the same.  Similarly, there may be other legal restrictions or limitations affecting the Collateral Agent in any attempt to dispose of all or part of the Pledged Collateral under applicable “blue sky” or other state securities laws or similar laws analogous in purpose or effect.  Each Grantor recognizes that in light of such restrictions and limitations the Collateral Agent may, with respect to any sale of the Pledged Collateral, limit the purchasers to those who will agree, among other things, to acquire such Pledged Collateral for their own account, for investment, and not with a view to the distribution or resale thereof.  Each Grantor acknowledges and agrees that in light of such restrictions and limitations, the Collateral Agent, in its sole and absolute discretion and to the extent permitted under applicable law, (a) may proceed to make such a sale whether or not a registration statement for the purpose of registering such Pledged Collateral or part thereof shall have been filed under the Federal Securities Laws and (b) may approach and negotiate with a limited number of potential purchasers (including a single potential purchaser) to effect such sale.  Each Grantor acknowledges and agrees that any such sale might result in prices and other terms less favorable to the seller than if such sale were a public sale without such restrictions. In the event of any such sale, the Collateral Agent shall, to the extent permitted under applicable law, incur no responsibility or liability for selling all or any part of the Pledged Collateral at a price that the Collateral Agent may in good faith deem reasonable under the circumstances, notwithstanding the possibility that a substantially higher price might have been realized if the sale were deferred until after registration as aforesaid or if more than a limited number of purchasers (or a single purchaser) were approached.  The provisions of this Section 4.03 will apply notwithstanding the existence of a public or private market upon which the quotations or sales prices may exceed substantially the price at which the Collateral Agent sells.
 
ARTICLE V                                
 

 
Indemnity, Subrogation and Subordination
 
SECTION 5.01. Indemnity.  In addition to all such rights of indemnity and subrogation as the Grantors may have under applicable law (but subject to Section 5.03), the U.S. Borrower agrees that, in the event any assets of any Grantor shall be sold pursuant to this Agreement or any other Collateral Document to satisfy in whole or in part an obligation owed to any Secured Party, the U.S. Borrower shall indemnify such Grantor in an amount equal to the greater of the book value or the fair market value of the assets so sold.
 
SECTION 5.02. Contribution and Subrogation.  Each Grantor other than the U.S. Borrower (a “Contributing Party”) agrees (subject to Section 5.03) that, in the event assets of any other Grantor other than the U.S. Borrower shall be sold pursuant to any Collateral Document to satisfy any Secured Obligation owed to any Secured Party and such other Grantor (the “Claiming Party”) shall not have been fully indemnified by the U.S. Borrower as provided in Section 5.01, the Contributing Party shall indemnify the Claiming Party in an amount equal to the greater of the book value or the fair market value of such assets, in each case multiplied by a fraction of which the numerator shall be the net worth of the Contributing Party on the date hereof and the denominator shall be the aggregate net worth of all the Contributing Parties together with the net worth of the Claiming Party on the date hereof (or, in the case of any Grantor becoming a party hereto pursuant to Section 6.14, the date of the Security Agreement Supplement hereto executed and delivered by such Grantor).  Any Contributing Party making any payment to a Claiming Party pursuant to this Section 5.02 shall be subrogated to the rights of such Claiming Party to the extent of such payment.
 
SECTION 5.03. Subordination.
 
(a) Notwithstanding any provision of this Agreement to the contrary, all rights of the Grantors under Sections 5.01 and 5.02 and all other rights of indemnity, contribution or subrogation under applicable law or otherwise shall be fully subordinated to the indefeasible payment in full in cash of the Secured Obligations.  No failure on the part of any Borrower or any Grantor to make the payments required by Sections 5.01 and 5.02 (or any other payments required under applicable law or otherwise) shall in any respect limit the obligations and liabilities of any Grantor with respect to its obligations hereunder, and each Grantor shall remain liable for the full amount of the obligations of such Grantor hereunder.
 
(b) Each Grantor hereby agrees that upon the occurrence and during the continuance of an Event of Default and after notice from the Collateral Agent all Indebtedness owed to it by any Subsidiary shall be fully subordinated to the indefeasible payment in full in cash of the Secured Obligations.
 
ARTICLE VI                                
 

 
Miscellaneous
 
SECTION 6.01. Notices.  All communications and notices hereunder shall (except as otherwise expressly permitted herein) be in writing and given as provided in Section 10.02 of the Credit Agreement.  All communications and notices hereunder to any Grantor other than the U.S. Borrower shall be given to it in care of the U.S. Borrower as provided in Section 10.02 of the Credit Agreement.
 
SECTION 6.02. Waivers; Amendment.
 
(a) No failure or delay by any Secured Party to exercise, and no delay by any such Person in exercising, any right, remedy, power or privilege hereunder or under any other Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.  The rights, remedies, powers and privileges herein provided, and provided under each other Loan Document, are cumulative and not exclusive of any rights, remedies, powers and privileges provided by applicable Law.  No waiver of any provision of this Agreement or consent to any departure by any Grantor therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section 6.02, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given.  Without limiting the generality of the foregoing, the making of a Loan or issuance of a Letter of Credit shall not be construed as a waiver of any Default, regardless of whether any Secured Party may have had notice or knowledge of such Default at the time.  No notice or demand on any Grantor in any case shall entitle any Grantor to any other or further notice or demand in similar or other circumstances.
 
(b) Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Collateral Agent and the Grantor or Grantors with respect to which such waiver, amendment or modification is to apply, subject to any consent required in accordance with Section 10.01 of the Credit Agreement.
 
SECTION 6.03. [Reserved].
 
SECTION 6.04. Successors and Assigns.  Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include the permitted successors and assigns of such party; and all covenants, promises and agreements by or on behalf of any Grantor or the Collateral Agent that are contained in this Agreement shall bind and inure to the benefit of their respective successors and assigns.
 
SECTION 6.05. Survival of Agreement.  Such representations and warranties have been or will be relied upon by each Secured Party, regardless of any investigation made by any Secured Party or on their behalf and notwithstanding that any Secured Party may have had notice or knowledge of any Default at the time of any Credit Extension, and shall continue in full force and effect as of the time made as long as any Loan or any other Obligation hereunder shall remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.
 
SECTION 6.06. Counterparts; Effectiveness; Several Agreement; Limitation on Assignment.  This Agreement may be executed in counterparts, each of which shall constitute an original but all of which when taken together shall constitute a single contract.  Delivery by telecopier of an executed counterpart of a signature page to this Agreement shall be as effective as delivery of an original executed counterpart of this Agreement.  This Agreement shall become effective as to any Grantor when a counterpart hereof executed on behalf of such Grantor shall have been delivered to the Collateral Agent and a counterpart hereof shall have been executed on behalf of the Collateral Agent, and thereafter shall be binding upon such Grantor and the Collateral Agent and their respective permitted successors and assigns, and shall inure to the benefit of such Grantor, the Collateral Agent and the other Secured Parties and their respective successors and assigns, except that no Grantor shall have the right to assign or transfer its rights or obligations hereunder or any interest herein or in the Collateral (and any such assignment or transfer shall be void) except as permitted by this Agreement or the Credit Agreement.  This Agreement shall be construed as a separate agreement with respect to each Grantor and may be amended, modified, supplemented, waived or released with respect to any Grantor without the approval of any other Grantor and without affecting the obligations of any other Grantor hereunder.
 
SECTION 6.07. Severability.  If any provision of this Agreement is held to be illegal, invalid or unenforceable, the legality, validity and enforceability of the remaining provisions of this Agreement shall not be affected or impaired thereby.  The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
 
SECTION 6.08. [Reserved].  
 
SECTION 6.09. Governing Law; Jurisdiction; Consent to Service of Process.
 
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
 
(a) ANY LEGAL ACTION OR PROCEEDING ARISING UNDER THIS AGREEMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO WHETHER NOW EXISTING OR HEREAFTER ARISING, MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK CITY OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH GRANTOR AND THE COLLATERAL AGENT CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS.  EACH GRANTOR AND THE COLLATERAL AGENT IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED THERETO.  EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS IN THE MANNER PROVIDED FOR NOTICES (OTHER THAN TELECOPIER) IN SECTION 10.02 OF THE CREDIT AGREEMENT.  NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.
 
SECTION 6.10. WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
 
SECTION 6.11. Headings.  Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and are not to affect the construction of, or to be taken into consideration in interpreting, this Agreement.
 
SECTION 6.12. Security Interest Absolute.  All rights of the Collateral Agent hereunder, the Security Interest, the grant of a security interest in the Pledged Collateral and all obligations of each Grantor hereunder shall be absolute and unconditional irrespective of (a) any lack of validity or enforceability of the Credit Agreement, any other Loan Document, any agreement with respect to any of the Secured Obligations or any other agreement or instrument relating to any of the foregoing, (b) any change in the time, manner or place of payment of, or in any other term of, all or any of the Secured Obligations, or any other amendment or waiver of or any consent to any departure from the Credit Agreement, any other Loan Document or any other agreement or instrument, (c) any exchange, release or non-perfection of any Lien on other collateral, or any release or amendment or waiver of or consent under or departure from any guarantee, securing or guaranteeing all or any of the Secured Obligations or (d) any other circumstance that might otherwise constitute a defense available to, or a discharge of, any Grantor in respect of the Secured Obligations or this Agreement.
 
SECTION 6.13. Termination or Release.
 
(a) This Agreement, the Security Interest and all other security interests granted hereby shall terminate with respect to all Secured Obligations when all the outstanding Secured Obligations (other than contingent indemnification obligations not then due) have been paid in full in cash, the Lenders have no further commitment to lend under the Credit Agreement, the L/C Obligations have been reduced to zero and the L/C Issuers have no further obligations to issue Letters of Credit under the Credit Agreement.
 
(b) A Grantor (other than the U.S. Borrower) shall automatically be released from its obligations hereunder and the Security Interest in the Collateral of such Grantor shall be automatically released upon the consummation of any transaction permitted by the Credit Agreement as a result of which such Grantor ceases to be a Subsidiary of the Company or is otherwise no longer required to be a Grantor hereunder; provided that the Required Lenders shall have consented to such transaction (to the extent required by the Credit Agreement) and the terms of such consent did not provide otherwise.
 
(c) Upon any sale or other transfer by any Grantor of any Collateral (other than any transfer of Collateral to another Grantor) that is permitted under the Credit Agreement, or upon the effectiveness of any written consent to the release of the security interest granted hereby in any Collateral pursuant to Section 10.01 of the Credit Agreement, the Security Interest in such Collateral shall be automatically released.
 
(d) With respect to any Receivables, the Security Interest shall terminate when such Receivables have become Transferred Receivables.  In each case, such termination shall not require the consent of any Secured Party, and the Collateral Agent and any third party shall be fully protected in relying on a certificate of the Borrowers’ Agent as to whether any Receivables qualify as Transferred Receivables (including without limitation whether the transfer thereof is permitted under the ABL Credit Agreement and this Agreement), as to whether the sale of any other Collateral is permitted by the Loan Documents or the loan documents pursuant to the ABL Credit Agreement and as to whether an Event of Default exists.
 
(e) In the case of any Receivables, the Security Interests with respect to the Related Transferred Rights (as defined in the ABL Security Agreement as in effect on the date hereof) shall terminate when such Receivables become Transferred Receivables.  Such termination shall not require the consent of any Secured Party.
 
(f) In the event that a Security Interest in any Collateral granted hereunder is in violation of the Credit Agreement, the Collateral Agent shall release the Security Interest in any such Collateral.
 
(g) Upon the occurrence of any event or circumstance set forth in Sections 2.01(b) or 3.01(b) hereunder, the Security Interest in such Collateral shall be automatically released.
 
(h) In connection with any termination or release pursuant to paragraph (a) through (g), the Collateral Agent shall execute and deliver to any Grantor, at such Grantor’s expense, all documents that such Grantor shall reasonably request to evidence such termination or release.  Any execution and delivery of documents pursuant to this Section 6.13 shall be without recourse to or warranty by the Collateral Agent.
 
SECTION 6.14. Additional Restricted Subsidiaries.  Pursuant to Section 6.11 of the Credit Agreement, certain Restricted Subsidiaries of the Grantors that were not in existence or not Restricted Subsidiaries on the date of the Credit Agreement may be required to enter into this Agreement as a Grantor upon becoming Restricted Subsidiaries.  Upon execution and delivery by the Collateral Agent and any such Restricted Subsidiary of a Security Agreement Supplement, such Restricted Subsidiary shall become a Grantor hereunder with the same force and effect as if originally named as a Grantor herein.  The execution and delivery of any such instrument shall not require the consent of any other Grantor hereunder.  The rights and obligations of each Grantor hereunder shall remain in full force and effect notwithstanding the addition of any new Grantor as a party to this Agreement.
 
SECTION 6.15. Collateral Agent Appointed Attorney-in-Fact.  Each Grantor hereby appoints the Collateral Agent the attorney-in-fact of such Grantor for the purpose of carrying out the provisions of this Agreement and taking any action and executing any instrument that the Collateral Agent may deem necessary or advisable to accomplish the purposes hereof at any time after and during the continuance of an Event of Default, which appointment is irrevocable and coupled with an interest.  Without limiting the generality of the foregoing, the Collateral Agent shall have the right, upon the occurrence and during the continuance of an Event of Default and notice by the Collateral Agent to the U.S. Borrower of its intent to exercise such rights, with full power of substitution either in the Collateral Agent’s name or in the name of such Grantor (a) to receive, endorse, assign and/or deliver any and all notes, acceptances, checks, drafts, money orders or other evidences of payment relating to the Collateral or any part thereof; (b) to demand, collect, receive payment of, give receipt for and give discharges and releases of all or any of the Collateral; (c) to sign the name of any Grantor on any invoice or bill of lading relating to any of the Collateral; (d) to send verifications of Accounts to any Account Debtor; (e) to commence and prosecute any and all suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect or otherwise realize on all or any of the Collateral or to enforce any rights in respect of any Collateral; (f) to settle, compromise, compound, adjust or defend any actions, suits or proceedings relating to all or any of the Collateral; (g) to notify, or to require any Grantor to notify, Account Debtors to make payment directly to the Collateral Agent; and (h) to use, sell, assign, transfer, pledge, make any agreement with respect to or otherwise deal with all or any of the Collateral, and to do all other acts and things necessary to carry out the purposes of this Agreement, as fully and completely as though the Collateral Agent were the absolute owner of the Collateral for all purposes; provided that nothing herein contained shall be construed as requiring or obligating the Collateral Agent to make any commitment or to make any inquiry as to the nature or sufficiency of any payment received by the Collateral Agent, or to present or file any claim or notice, or to take any action with respect to the Collateral or any part thereof or the moneys due or to become due in respect thereof or any property covered thereby.  The Collateral Agent and the other Secured Parties shall be accountable only for amounts actually received as a result of the exercise of the powers granted to them herein, and neither they nor their officers, directors, employees or agents shall be responsible to any Grantor for any act or failure to act hereunder, except for their own gross negligence, bad faith or willful misconduct or that of any of their Affiliates, directors, officers, employees, counsel, agents or attorneys-in-fact.
 
SECTION 6.16. General Authority of the Collateral Agent.  By acceptance of the benefits of this Agreement and any other Collateral Documents, each Secured Party (whether or not a signatory hereto) shall be deemed irrevocably (a) to consent to the appointment of the Collateral Agent as its agent hereunder and under such other Collateral Documents, (b) to confirm that the Collateral Agent shall have the authority to act as the exclusive agent of such Secured Party for the enforcement of any provisions of this Agreement and such other Collateral Documents against any Grantor, the exercise of remedies hereunder or thereunder and the giving or withholding of any consent or approval hereunder or thereunder relating to any Collateral or any Grantor’s obligations with respect thereto, (c) to agree that it shall not take any action to enforce any provisions of this Agreement or any other Collateral Document against any Grantor, to exercise any remedy hereunder or thereunder or to give any consents or approvals hereunder or thereunder except as expressly provided in this Agreement or any other Collateral Document and (d) to agree to be bound by the terms of this Agreement and any other Collateral Documents.  In furtherance of the foregoing provisions of this Section 6.16, each Secured Party, by its acceptance of the benefits hereof, agrees that it shall have no right individually to realize upon any of the Collateral hereunder, it being understood and agreed by such Secured Party that all rights and remedies hereunder may be exercised solely by the Collateral Agent for the benefit of the applicable Secured Parties in accordance with the terms of this Section 6.16.
 
SECTION 6.17. [Reserved].
 
SECTION 6.18. Intercreditor Agreement.  Notwithstanding anything herein to the contrary, the liens and security interests granted to the Collateral Agent pursuant to this Agreement and the exercise of any right or remedy by the Collateral Agent hereunder, in each case, with respect to the Collateral are subject to the limitations and provisions of each Intercreditor Agreement. In the event of any conflict between the terms of any Intercreditor Agreement and the terms of this Agreement with respect to the Collateral (other than with respect to Sections 2.01(a) and 3.01(a)), the terms of such Intercreditor Agreement shall govern and control.
 

 

 
(Remainder of page intentionally left blank)
 

 
 
 

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written.
 

[GRANTORS],
By
   
 
Name:
 
Title:



 

 
 
 

 



CITIBANK, N.A. as
Collateral Agent,
By
   
 
Name:
 
Title:




 


 
 
 
Schedule I to
the Security Agreement



EQUITY INTERESTS
 
Issuer
Number of
Certificate
Registered
Owner
Number and
Class of
Equity Interest
Percentage
of Equity Interests
         
         
         
         
         

DEBT SECURITIES
 
Issuer
Principal
Amount
Date of Note
Maturity Date
       
       
       
       
       

 
-
 
 
 
Exhibit I to the
Security Agreement



SUPPLEMENT NO. [   ] dated as of [●], (this “Supplement”) to the U.S. Security Agreement dated as of December 20, 2007 (the “Security Agreement”) between the Grantors identified therein and who become a party hereto from time to time and CITIBANK, N.A., as Collateral Agent for the Secured Parties (as defined below).
 
Reference is made to the Credit Agreement dated as of December 20, 2007 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among LyondellBasell Industries AF S.C.A. (the “Company”), a company existing under the laws of the Grand Duchy of Luxembourg, Lyondell Chemical Company, a Delaware corporation, Basell Holdings B.V., a Dutch corporation limited by shares, Basell Finance Company B.V., and Basell Germany Holdings GmbH, a corporation organized under the laws of Germany, the Subsidiary Guarantors party thereto from time to time, the lenders party thereto from time to time, Citibank, N.A., as Administrative Agent and Collateral Agent and the other Agents party thereto.
 
B.  Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement and the Security Agreement referred to therein.
 
C.  The Grantors have entered into the Security Agreement in order to induce the Lenders to make Loans.  Section 6.14 of the Security Agreement provides that additional Restricted Subsidiaries may become Grantors under the Security Agreement by execution and delivery of an instrument in the form of this Supplement.  The undersigned Restricted Subsidiary (the “New Subsidiary”) is executing this Supplement in accordance with the requirements of the Credit Agreement to become a Grantor under the Security Agreement in order to induce the Lenders to make additional Loans and as consideration for Loans previously made and Letters of Credit previously issued.
 
Accordingly, the Collateral Agent and the New Subsidiary agree as follows:
 
SECTION 1.  In accordance with Section 6.14 of the Security Agreement, the New Subsidiary by its signature below becomes a Grantor under the Security Agreement with the same force and effect as if originally named therein as a Grantor and the New Subsidiary hereby (a) agrees to all the terms and provisions of the Security Agreement applicable to it as a Grantor thereunder and (b) represents and warrants that the representations and warranties made by it as a Grantor thereunder are true and correct on and as of the date hereof, provided that, to the extent that such representations and warranties specifically refer to an earlier date, they shall be true and correct as of such earlier date.  In furtherance of the foregoing, the New Subsidiary, as security for the payment and performance in full of the Secured Obligations does hereby create and grant to the Collateral Agent, its successors and assigns, for the benefit of the Secured Parties, their successors and assigns, a security interest in and lien on all of the New Subsidiary’s right, title and interest in and to the Collateral (as defined in the Security Agreement) of the New Subsidiary.  Each reference to a “Grantor” in the Security Agreement shall be deemed to include the New Subsidiary.  The Security Agreement is hereby incorporated herein by reference.
 
SECTION 2.  The New Subsidiary represents and warrants to the Collateral Agent and the other Secured Parties that this Supplement has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms, except as such enforceability may be limited by (i) Debtor Relief Laws and by general principles of equity or other rules of Law or case law or court practice set forth in any opinion of legal counsel provided pursuant to this Agreement, (ii) the need for filings, registrations and stampings necessary to perfect the Liens on the Collateral granted by the Loan Parties in favor of the Secured Parties and (iii) the effect of foreign Laws, rules and regulations as they relate to pledges of Equity Interests in Foreign Subsidiaries (other than those pledges made under the Laws of the jurisdiction of formation of the applicable Foreign Subsidiary).
 
SECTION 3.  This Supplement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Supplement shall become effective when the Collateral Agent shall have received a counterpart of this Supplement that bears the signature of the New Subsidiary and the Collateral Agent has executed a counterpart hereof.  Delivery of an executed signature page to this Supplement by facsimile transmission shall be as effective as delivery of a manually signed counterpart of this Supplement.
 
SECTION 4.  The New Subsidiary hereby represents and warrants that (a) the information set forth in Schedule I attached hereto is true and correct and (b) set forth under its signature hereto is the true and correct legal name of the New Subsidiary, its jurisdiction of formation and the location of its chief executive office.
 
SECTION 5.  Except as expressly supplemented hereby, the Security Agreement shall remain in full force and effect.
 
SECTION 6.  THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
 
SECTION 6.19. SECTION 7.  If any provision of this Supplement is held to be illegal, invalid or unenforceable, the legality, validity and enforceability of the remaining provisions of this Supplement and the Security Agreement shall not be affected or impaired thereby.  The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
 
SECTION 8.  All communications and notices hereunder shall be in writing and given as provided in Section 6.01 of the Security Agreement.
 
SECTION 9.  The New Subsidiary agrees to reimburse the Collateral Agent for its reasonable out-of-pocket expenses in connection with this Supplement, including the reasonable fees, other charges and disbursements of counsel for the Collateral Agent.
 
SECTION 10.  Notwithstanding anything herein to the contrary, the lien and security interest granted to the Collateral Agent, for the benefit of the Secured Parties, pursuant to the Security Agreement and the exercise of any right or remedy by the Collateral Agent and the other Secured Parties thereunder are subject to the provisions of each Intercreditor Agreement.  In the event of any conflict or inconsistency between the provisions of any Intercreditor Agreement and the Security Agreement, the provisions of such Intercreditor Agreement shall control.
 
IN WITNESS WHEREOF, the New Subsidiary and the Collateral Agent have duly executed this Supplement to the Security Agreement as of the day and year first above written.
 
[NAME OF NEW SUBSIDIARY],
by
   
 
Name:
 
Title:
   
 
Legal Name:
 
Jurisdiction of Formation:
 
Location of Chief Executive office:


CITIBANK, N.A.,
as Collateral Agent
by
   
 
Name:
 
Title:

 
-
 
 
 
Schedule I
to the Supplement No __ to the
Security Agreement

LOCATION OF COLLATERAL
 
Description
Location
   
   
   
   
   

EQUITY INTERESTS
 
Issuer
Number of
Certificate
Registered
Owner
Number and
Class of
Equity Interests
Percentage
of Equity Interests
         
         
         
         
         

DEBT SECURITIES
 
Issuer
Principal
Amount
Date of Note
Maturity Date
       
       
       
       
       



CG&R DRAFT:  1/9/08 4:31 PM #897183 v15 (RC4V15_.DOC)

 
 
 

EXHIBIT F-2
 
[FORM OF] PLEDGE AGREEMENT NON-U.S. EXECUTORS
 
 
 
U.S. PLEDGE AGREEMENT
 
dated as of
 
December 20, 2007
 
among
 
THE GRANTORS IDENTIFIED HEREIN
 
and
 
CITIBANK, N.A.,
 
as Collateral Agent
 

 


 

 
 
 

TABLE OF CONTENTS
 
Page
 
 
 
 
Definitions
 
 
SECTION 1.01.Credit Agreement
 
SECTION 1.02.Other Defined Terms
 
ARTICLE II
 
 
Pledge of Securities
 
 
SECTION 2.01.Pledge
 
SECTION 2.02.Delivery of the Collateral
 
SECTION 2.03.Representations, Warranties and Covenants
 
SECTION 2.04.Certification of Limited Liability Company and Limited Partnership Interests
 
SECTION 2.05.Registration in Nominee Name; Denominations
 
SECTION 2.06.Voting Rights; Dividends and Interest
 
ARTICLE III
 
 
 
[Reserved]
 
 
ARTICLE IV
 
 
Remedies
 
 
SECTION 4.01.Remedies upon Default
 
SECTION 4.02.Application of Proceeds
 
SECTION 4.03.Securities Act, Etc
 
ARTICLE V
 
 
Subrogation and Subordination
 
 
SECTION 5.01.Subordination
 
ARTICLE VI
 
 
Miscellaneous
 
 
SECTION 6.01.Notices
 
SECTION 6.02.Waivers; Amendment
 
SECTION 6.03.[Reserved]
 
SECTION 6.04.Successors and Assigns
 
SECTION 6.05.Survival of Agreement
 
SECTION 6.06.Counterparts; Effectiveness; Several Agreement; Limitation on Assignment
 
SECTION 6.07.Severability
 
SECTION 6.08.[Reserved]
 
SECTION 6.09.Governing Law; Jurisdiction; Consent to Service of Process
 
SECTION 6.10.WAIVER OF JURY TRIAL
 
SECTION 6.11.Headings
 
SECTION 6.12.Security Interest Absolute
 
SECTION 6.13.Termination or Release
 
SECTION 6.14.Collateral Agent Appointed Attorney-in-Fact
 
SECTION 6.15.General Authority of the Collateral Agent
 
SECTION 6.16.[Reserved]
 
SECTION 6.17.Intercreditor Agreement


Schedules
 
Schedule I                                Pledged Equity; Pledged Debt
 


 
--
 
 
 
 

U.S. PLEDGE AGREEMENT dated as of December 20, 2007 among the Grantors identified herein and who become a party hereto from time to time, and CITIBANK, N.A., as Collateral Agent for the Secured Parties (as defined below) (the “Collateral Agent”).
 
Reference is made to the Credit Agreement dated as of the date hereof (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among LyondellBasell Industries AF S.C.A. (the “Company”), a company existing under the laws of the Grand Duchy of Luxembourg, BIL Acquisition Holdings Limited (to be merged with and into Lyondell Chemical Company) (the “U.S. Borrower”), Basell Holdings B.V., a Dutch private limited liability company existing under the laws of the Netherlands, Basell Finance Company B.V., a Dutch private limited liability company existing under the laws of the Netherlands, and Basell Germany Holdings GmbH, a corporation organized under the laws of Germany, the Subsidiary Guarantors party thereto from time to time, the lenders party thereto from time to time, Citibank, N.A., as Administrative Agent and Collateral Agent and the other Agents party thereto.  The Lenders have agreed to extend credit to the Borrowers subject to the terms and conditions set forth in the Credit Agreement.  The obligations of the Lenders to extend such credit are conditioned upon, among other things, the execution and delivery of this Agreement.  The Guarantors are affiliates of the Borrowers, will derive substantial benefits from the extension of credit to the Borrowers pursuant to the Credit Agreement and are willing to execute and deliver this Agreement in order to induce the Lenders to extend such credit.  Accordingly, the parties hereto agree as follows:
 
 
ARTICLE I
 
 

 
 
Definitions
 
SECTION 1.01. Credit Agreement
 
.
 
(a) Capitalized terms used in this Agreement and not otherwise defined herein have the meanings specified in the Credit Agreement.  All terms defined in the New York UCC (as defined herein) and not defined in this Agreement have the meanings specified therein; the term “instrument” shall have the meaning specified in Article 9 of the New York UCC.
 
(b) The rules of construction specified in Article I of the Credit Agreement also apply to this Agreement.
 
SECTION 1.02. Other Defined Terms
 
.  As used in this Agreement, the following terms have the meanings specified below:
 
“Agreement” means this Pledge Agreement.
 
“Collateral” has the meaning assigned to such term in Section 2.01.
 
 “Collateral Agent” has the meaning assigned to such term in the preliminary statement to this Agreement.
 
“Company” has the meaning assigned to such term in the preliminary statement to this Agreement.
 
“Credit Agreement” has the meaning assigned to such term in the preliminary statement of this Agreement.
 
“Grantor” means each grantor named on the signature pages hereto or which becomes a party hereto after the date hereof.                                   .
 
“New York UCC” means the Uniform Commercial Code as from time to time in effect in the State of New York.
 
“Pledged Debt” has the meaning assigned to such term in Section 2.01.
 
“Pledged Equity” has the meaning assigned to such term in Section 2.01.
 
“Secured Obligations” means the “Obligations” as defined in the Credit Agreement.
 
“Secured Parties” means, collectively, the Administrative Agent, the Collateral Agent, the Lenders, the Hedge Banks, the Supplemental Agents and each co-agent or sub-agent appointed by the Administrative Agent or the Collateral Agent from time to time pursuant to Section 9.02 of the Credit Agreement.
 
“U.S. Borrower” has the meaning assigned to such term in the preliminary statement of this Agreement.
 
 
ARTICLE II
 
 

 
 
Pledge of Securities
 
SECTION 2.01. Pledge
 
.
 
As security for the payment and performance in full of the Secured Obligations, including the Guaranties, each Grantor hereby assigns and pledges to the Collateral Agent, its successors and assigns, for the benefit of the Secured Parties, and hereby grants to the Collateral Agent, its successors and assigns, for the benefit of the Secured Parties, a security interest in, all of such Grantor’s right, title and interest in, to and under (i) (1) all Equity Interests held by it and listed on Schedule I, whether now owned or hereafter acquired, (2) any other Equity Interests of the issuers listed on Schedule I and (3) the certificates representing all such Equity Interests (all such Equity Interests and certificates collectively referred to as  the “Pledged Equity”) and (ii) (A) the debt securities owned by it and listed opposite the name of such Grantor on Schedule I and (B) the promissory notes and any other instruments evidencing such debt securities (collectively, the “Pledged Debt”); (iii) subject to Section 2.06, all payments of principal or interest, dividends, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of, in exchange for or upon the conversion of, and all other Proceeds received in respect of, the securities referred to in clauses (i) and (ii) above; (iv) subject to Section 2.06, all rights and privileges of such Grantor with respect to the securities and other property referred to in clauses (i), (ii), and (iii) above; and (v) all Proceeds of any of the foregoing (the items referred to in clauses (i) through (v) above being collectively referred to as the “Collateral”).
 
TO HAVE AND TO HOLD the Collateral, together with all right, title, interest, powers, privileges and preferences pertaining or incidental thereto, unto the Collateral Agent, its successors and assigns, for the benefit of the Secured Parties, forever; subject, however, to the terms, covenants and conditions hereinafter set forth.
 
SECTION 2.02. Delivery of the Collateral
 
.
 
(a) Each Grantor agrees promptly to deliver or cause to be delivered to the Collateral Agent, for the benefit of the Secured Parties, any and all Pledged Securities (other than any uncertificated securities, but only for so long as such securities remain uncertificated) to the extent such Pledged Securities, in the case of promissory notes or other instruments evidencing Indebtedness, have an aggregate principal amount in excess of $10,000,000.
 
(b) Upon delivery to the Collateral Agent, (i) any Pledged Securities shall be accompanied by stock powers duly executed in blank or other instruments of transfer reasonably satisfactory to the Collateral Agent and (ii) all other property comprising part of the Collateral shall be accompanied by proper instruments of assignment duly executed by the applicable Grantor and such other instruments or documents as the Collateral Agent may reasonably request. Each Grantor hereby authorizes the Collateral Agent to Supplement Schedule I hereto by any additional Pledged Securities delivered to the Collateral Agent pursuant hereto.
 
(c) In accordance with the terms of the Cash Flow Intercreditor Agreement, all Collateral delivered to the Collateral Agent shall also be held by the Collateral Agent as gratuitous bailee for the Interim Facility Finance Parties, (as such term is defined in the Cash Flow Intercreditor Agreement), solely for the purpose of perfecting the security interest therein granted under the Interim Facility Security Documents and (as such term is defined in the Cash Flow Intercreditor Agreement).
 
SECTION 2.03. Representations, Warranties and Covenants
 
.  Each Grantor represents and warrants, as to itself and the other Grantors, to and with the Collateral Agent, for the benefit of the Secured Parties, that:
 
(a) Schedule I correctly sets forth the percentage of the issued and outstanding units of each class of the Equity Interests of the issuer thereof represented by the Pledged Equity and includes all Equity Interests, debt securities in excess of $10,000,000 and promissory notes in excess of $10,000,000 required to be pledged by the Grantors hereunder;
 
(b) [Reserved];
 
(c) [Reserved];
 
(d) except for restrictions and limitations imposed by the Loan Documents or securities laws generally, the Collateral is and will continue to be freely transferable and assignable, and none of the Collateral is or will be subject to any option, right of first refusal, shareholders agreement, charter or by-law provisions or contractual restriction of any nature that might prohibit, materially impair, materially delay or otherwise affect in any manner material and adverse to the Secured Parties the pledge of such Collateral hereunder, the sale or disposition thereof pursuant hereto;
 
(e) [Reserved];
 
(f) [Reserved];
 
(g) [Reserved];
 
(h) [Reserved]; and
 
(i) each Grantor that is an issuer of Pledged Equity, pledged hereunder agrees that after the occurrence and during the continuance of an Event of Default it shall comply with all instructions from the Collateral Agent with respect to such Pledged Equity without further consent of the Grantor pledging such Pledged Equity.
 
SECTION 2.04. Certification of Limited Liability Company and Limited Partnership Interests
 
.
 
(a) Each interest in any Domestic Subsidiary that is a limited liability company or limited partnership controlled by any Grantor, pledged under Section 2.01 and represented by a certificate, shall be a “security” within the meaning of Article 8 of the New York UCC or any other applicable Uniform Commercial Code and shall be governed by Article 8 of the New York UCC or any other applicable Uniform Commercial Code, and each such interest shall at all times hereafter be represented by a certificate.
 
(b) Each interest in any Domestic Subsidiary that is a limited liability company or limited partnership controlled by any Grantor, pledged under Section 2.01 and not represented by a certificate shall not be a “security” within the meaning of Article 8 of the New York UCC or any other applicable Uniform Commercial Code and shall not be governed by Article 8 of the New York UCC or any other applicable Uniform Commercial Code, and the Grantors shall at no time elect to treat any such interest as a “security” within the meaning of Article 8 of the New York UCC or any other applicable Uniform Commercial Code or issue any certificate representing such interest, unless the applicable Grantor provides prior written notification to the Administrative Agent of such election and promptly (and in any event within 30 days after such election) delivers any such certificate to the Administrative Agent pursuant to the terms hereof.
 
SECTION 2.05. Registration in Nominee Name; Denominations
 
.  If an Event of Default shall occur and be continuing and the Collateral Agent shall give the U.S. Borrower notice of its intent to exercise such rights, (a) the Collateral Agent, on behalf of the Secured Parties, shall have the right (in its sole and absolute discretion) to hold the Pledged Securities in its own name as pledgee, the name of its nominee (as pledgee or as sub-agent) or the name of the applicable Grantor, endorsed or assigned in blank or in favor of the Collateral Agent and each Grantor will promptly give to the Collateral Agent copies of any notices or other communications received by it with respect to Pledged Securities registered in the name of such Grantor and (b) the Collateral Agent shall have the right to exchange the certificates representing Pledged Securities for certificates of smaller or larger denominations for any purpose consistent with this Agreement.
 
SECTION 2.06. Voting Rights; Dividends and Interest
 
.
 
(a) Unless and until (1) an Event of Default shall have occurred and be continuing and (2) the Collateral Agent shall have notified the U.S. Borrower that the rights of the Grantors under this Section 2.06 are being suspended:
 
(i) Each Grantor shall be entitled to exercise any and all voting and/or other consensual rights and powers inuring to an owner of Pledged Securities or any part thereof for any purpose consistent with the terms of this Agreement, the Credit Agreement and the other Loan Documents.
 
(ii) The Collateral Agent shall promptly execute and deliver to each Grantor, or cause to be executed and delivered to such Grantor, all such proxies, powers of attorney and other instruments as such Grantor may reasonably request for the purpose of enabling such Grantor to exercise the voting and/or consensual rights and powers it is entitled to exercise pursuant to subparagraph (i) above.
 
(iii) Each Grantor shall be entitled to receive and retain any and all dividends, interest, principal and other distributions paid on or distributed in respect of the Pledged Securities to the extent and only to the extent that such dividends, interest, principal and other distributions are permitted by, and otherwise paid or distributed in accordance with, the terms and conditions of the Credit Agreement, the other Loan Documents and applicable Laws; provided that any noncash dividends, interest, principal or other distributions that would constitute Pledged Equity or Pledged Debt, whether resulting from a subdivision, combination or reclassification of the outstanding Equity Interests of the issuer of any Pledged Securities or received in exchange for Pledged Securities or any part thereof, or in redemption thereof, or as a result of any merger, consolidation, acquisition or other exchange of assets to which such issuer may be a party or otherwise, shall be and become part of the Collateral, and shall if certificated be held in trust for the benefit of the Collateral Agent and the Secured Parties and shall be forthwith delivered to the Collateral Agent in the same form as so received (with any necessary endorsement reasonably requested by the Collateral Agent).
 
(b) If (A) an Event of Default has occurred and is continuing and (B) the Collateral Agent shall have notified the U.S. Borrower of the suspension of the rights of the Grantors under paragraph (a)(iii) of this Section 2.06, then all rights of any Grantor to dividends, interest, principal or other distributions that such Grantor is authorized to receive with respect to such Collateral pursuant to paragraph (a)(iii) of this Section 2.06 shall cease, and all such rights shall thereupon become vested in the Collateral Agent, which shall have the sole and exclusive right and authority to receive and retain such dividends, interest, principal or other distributions, subject to the terms of the Credit Agreement and Intercreditor Agreement.  All dividends, interest, principal or other distributions received by any Grantor contrary to the provisions of this Section 2.06 shall be held in trust for the benefit of the Collateral Agent, shall be segregated from other property or funds of such Grantor and shall be forthwith delivered to the Collateral Agent upon demand in the same form as so received (with any necessary endorsement reasonably requested by the Collateral Agent).  Any and all money and other property paid over to or received by the Collateral Agent pursuant to the provisions of this paragraph (b) shall be retained by the Collateral Agent in an account to be established by the Collateral Agent upon receipt of such money or other property and shall be applied in accordance with the provisions of Section 4.02.  After all Events of Default have been cured or waived, the Collateral Agent shall promptly repay to each Grantor (without interest) all dividends, interest, principal or other distributions that such Grantor would otherwise be permitted to retain pursuant to the terms of paragraph (a)(iii) of this Section 2.06 and that remain in such account.
 
(c) If (A) an Event of Default has occurred and is continuing and (B) the Collateral Agent shall have notified the U.S. Borrower of the suspension of the rights of the Grantors under paragraph (a)(iii) of this Section 2.06, then all rights of any Grantor to exercise the voting and consensual rights and powers it is entitled to exercise with respect to such Collateral pursuant to paragraph (a)(i) of this Section 2.06, and the obligations of the Collateral Agent under paragraph (a)(ii) of this Section 2.06, shall cease, and all such rights shall thereupon become vested in the Collateral Agent, which shall have the sole and exclusive right and authority to exercise such voting and consensual rights and powers, subject to the terms of the Credit Agreement and the Intercreditor Agreement; provided that, unless otherwise directed by the Required Lenders, the Collateral Agent shall have the right from time to time following and during the continuance of an Event of Default to permit the Grantors to exercise such rights.  After all Events of Default have been cured or waived, each Grantor shall have the exclusive right to exercise the voting and/or consensual rights and powers that such Grantor would otherwise be entitled to exercise pursuant to the terms of paragraph (a)(i) above.
 
(d) Any notice given by the Collateral Agent to the U.S. Borrower suspending the rights of the Grantors under paragraph (a) of this Section 2.06 (i) shall be given in writing, (ii) may be given with respect to one or more of the Grantors at the same or different times and (iii) may suspend the rights of the Grantors under paragraph (a)(i) or paragraph (a)(iii) in part without suspending all such rights (as specified by the Collateral Agent in its sole and absolute discretion) and without waiving or otherwise affecting the Collateral Agent’s rights to give additional notices from time to time suspending other rights so long as an Event of Default has occurred and is continuing.
 
 
ARTICLE III
 
 

 
 
[Reserved]
 
 
ARTICLE IV
 
 

 
 
Remedies
 
SECTION 4.01. Remedies upon Default
 
.  Upon the occurrence and during the continuance of an Event of Default, it is agreed that the Collateral Agent shall have the right to exercise any and all rights afforded to a secured party with respect to the Secured Obligations under the Uniform Commercial Code or other applicable law and also may (i)  exercise any and all rights and remedies of any of the Grantors under or in connection with the Collateral, or otherwise in respect of the Collateral, and (ii) subject to the mandatory requirements of applicable law and the notice requirements described below, sell or otherwise dispose of all or any part of the Collateral securing the Secured Obligations at a public or private sale or at any broker’s board or on any securities exchange, for cash, upon credit or for future delivery as the Collateral Agent shall deem appropriate.  The Collateral Agent shall be authorized at any such sale of securities (if it deems it advisable to do so) to restrict the prospective bidders or purchasers to Persons who will represent and agree that they are purchasing the Collateral for their own account for investment and not with a view to the distribution or sale thereof, and upon consummation of any such sale the Collateral Agent shall have the right to assign, transfer and deliver to the purchaser or purchasers thereof the Collateral so sold.  Each such purchaser at any sale of Collateral shall hold the property sold absolutely, free from any claim or right on the part of any Grantor, and each Grantor hereby waives (to the extent permitted by law) all rights of redemption, stay and appraisal which such Grantor now has or may at any time in the future have under any rule of law or statute now existing or hereafter enacted.
 
The Collateral Agent shall give the applicable Grantors 10 days’ written notice (which each Grantor agrees is reasonable notice within the meaning of Section 9-611 of the New York UCC or its equivalent in other jurisdictions) of the Collateral Agent’s intention to make any sale of Collateral.  Such notice, in the case of a public sale, shall state the time and place for such sale and, in the case of a sale at a broker’s board or on a securities exchange, shall state the board or exchange at which such sale is to be made and the day on which the Collateral, or portion thereof, will first be offered for sale at such board or exchange.  Any such public sale shall be held at such time or times within ordinary business hours and at such place or places as the Collateral Agent may fix and state in the notice (if any) of such sale.  At any such sale, the Collateral, or portion thereof, to be sold may be sold in one lot as an entirety or in separate parcels, as the Collateral Agent may (in its sole and absolute discretion) determine.  The Collateral Agent shall not be obligated to make any sale of any Collateral if it shall determine not to do so, regardless of the fact that notice of sale of such Collateral shall have been given.  The Collateral Agent may, without notice or publication, adjourn any public or private sale or cause the same to be adjourned from time to time by announcement at the time and place fixed for sale, and such sale may, without further notice, be made at the time and place to which the same was so adjourned.  In case any sale of all or any part of the Collateral is made on credit or for future delivery, the Collateral so sold may be retained by the Collateral Agent until the sale price is paid by the purchaser or purchasers thereof, but the Collateral Agent shall not incur any liability in case any such purchaser or purchasers shall fail to take up and pay for the Collateral so sold and, in case of any such failure, such Collateral may be sold again upon like notice.  At any public (or, to the extent permitted by law, private) sale made pursuant to this Agreement, any Secured Party may bid for or purchase, free (to the extent permitted by law) from any right of redemption, stay, valuation or appraisal on the part of any Grantor (all said rights being also hereby waived and released to the extent permitted by law), the Collateral or any part thereof offered for sale and may make payment on account thereof by using any claim then due and payable to such Secured Party from any Grantor as a credit against the purchase price, and such Secured Party may, upon compliance with the terms of sale, hold, retain and dispose of such property without further accountability to any Grantor therefor.  For purposes hereof, a written agreement to purchase the Collateral or any portion thereof shall be treated as a sale thereof; the Collateral Agent shall be free to carry out such sale pursuant to such agreement and no Grantor shall be entitled to the return of the Collateral or any portion thereof subject thereto, notwithstanding the fact that after the Collateral Agent shall have entered into such an agreement all Events of Default shall have been remedied and the Secured Obligations paid in full.  As an alternative to exercising the power of sale herein conferred upon it, the Collateral Agent may proceed by a suit or suits at law or in equity to foreclose this Agreement and to sell the Collateral or any portion thereof pursuant to a judgment or decree of a court or courts having competent jurisdiction or pursuant to a proceeding by a court-appointed receiver.  Any sale pursuant to the provisions of this Section 4.01, to the fullest extent permitted by applicable law, shall be deemed to conform to the commercially reasonable standards as provided in Section 9-610(b) of the New York UCC or its equivalent in other jurisdictions.
 
Any remedies provided in this Section 4.01 shall be subject to each Intercreditor Agreement.
 
SECTION 4.02. Application of Proceeds
 
.
 
(a) The Collateral Agent shall apply the proceeds of any collection or sale of Collateral in accordance with the applicable clause of Section 20 of the Cash Flow Intercreditor Agreement, and if the Cash Flow Intercreditor Agreement is no longer outstanding, in accordance with the Credit Agreement.
 
Subject to the terms of the Cash Flow Intercreditor Agreement, the Collateral Agent shall have absolute discretion as to the time of application of any such proceeds, moneys or balances in accordance with this Agreement.  Upon any sale of Collateral by the Collateral Agent (including pursuant to a power of sale granted by statute or under a judicial proceeding), the receipt of the Collateral Agent or of the officer making the sale shall be a sufficient discharge to the purchaser or purchasers of the Collateral so sold and such purchaser or purchasers shall not be obligated to see to the application of any part of the purchase money paid over to the Collateral Agent or such officer or be answerable in any way for the misapplication thereof.
 
(b) In making the determination and allocations required by this Section 4.02, the Collateral Agent may conclusively rely upon information supplied by the Administrative Agent as to the amounts of unpaid principal and interest and other amounts outstanding with respect to the Secured Obligations, and the Collateral Agent shall have no liability to any of the Secured Parties for actions taken in reliance on such information, provided that nothing in this sentence shall prevent any Grantor from contesting any amounts claimed by any Secured Party in any information so supplied.  All distributions made by the Collateral Agent pursuant to this Section 4.02 shall be (subject to any decree of any court of competent jurisdiction) final (absent manifest error), and the Collateral Agent shall have no duty to inquire as to the application by the Administrative Agent of any amounts distributed to it.
 
SECTION 4.03. Securities Act, Etc
 
.  In view of the position of the Grantors in relation to the Collateral, or because of other current or future circumstances, a question may arise under the U.S. Securities Act of 1933, as now or hereafter in effect, or any similar statute hereafter enacted analogous in purpose or effect (such Act and any such similar statute as from time to time in effect being called the “Federal Securities Laws”) with respect to any disposition of the Collateral permitted hereunder.  Each Grantor understands that compliance with the Federal Securities Laws might very strictly limit the course of conduct of the Collateral Agent if the Collateral Agent were to attempt to dispose of all or any part of the Collateral, and might also limit the extent to which or the manner in which any subsequent transferee of any Collateral could dispose of the same.  Similarly, there may be other legal restrictions or limitations affecting the Collateral Agent in any attempt to dispose of all or part of the Collateral under applicable “blue sky” or other state securities laws or similar laws analogous in purpose or effect.  Each Grantor recognizes that in light of such restrictions and limitations the Collateral Agent may, with respect to any sale of the Collateral, limit the purchasers to those who will agree, among other things, to acquire such Collateral for their own account, for investment, and not with a view to the distribution or resale thereof.  Each Grantor acknowledges and agrees that in light of such restrictions and limitations, the Collateral Agent, in its sole and absolute discretion and to the extent permitted under applicable law, (a) may proceed to make such a sale whether or not a registration statement for the purpose of registering such Collateral or part thereof shall have been filed under the Federal Securities Laws and (b) may approach and negotiate with a limited number of potential purchasers (including a single potential purchaser) to effect such sale.  Each Grantor acknowledges and agrees that any such sale might result in prices and other terms less favorable to the seller than if such sale were a public sale without such restrictions. In the event of any such sale, the Collateral Agent shall, to the extent permitted under applicable law, incur no responsibility or liability for selling all or any part of the Collateral at a price that the Collateral Agent may in good faith deem reasonable under the circumstances, notwithstanding the possibility that a substantially higher price might have been realized if the sale were deferred until after registration as aforesaid or if more than a limited number of purchasers (or a single purchaser) were approached.  The provisions of this Section 4.03 will apply notwithstanding the existence of a public or private market upon which the quotations or sales prices may exceed substantially the price at which the Collateral Agent sells.
 
 
ARTICLE V
 
 

 
 
Subrogation and Subordination
 
SECTION 5.01. Subordination
 
.
 
(a) Notwithstanding any provision of this Agreement to the contrary, all rights of the Grantors of indemnity, contribution or subrogation under applicable law or otherwise shall be fully subordinated to the indefeasible payment in full in cash of the Secured Obligations.  No failure on the part of any Loan Party to make any payments required under applicable law or otherwise shall in any respect limit the obligations and liabilities of any Grantor with respect to its obligations hereunder, and each Grantor shall remain liable for the full amount of the obligations of such Grantor hereunder.
 
(b) Each Grantor hereby agrees that upon the occurrence and during the continuance of an Event of Default and after notice from the Collateral Agent all Indebtedness owed to it by any Subsidiary shall be fully subordinated to the indefeasible payment in full in cash of the Secured Obligations.
 
 
ARTICLE VI
 
 

 
 
Miscellaneous
 
SECTION 6.01. Notices
 
.  All communications and notices hereunder shall (except as otherwise expressly permitted herein) be in writing and given as provided in Section 10.02 of the Credit Agreement.  All communications and notices hereunder to any Grantor shall be given to it in care of the Borrower’s Agent as provided in Section 10.02 of the Credit Agreement.
 
SECTION 6.02. Waivers; Amendment
 
.
 
(a) No failure or delay by any Secured Party to exercise, and no delay by any such Person in exercising, any right, remedy, power or privilege hereunder or under any other Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.  The rights, remedies, powers and privileges herein provided, and provided under each other Loan Document, are cumulative and not exclusive of any rights, remedies, powers and privileges provided by applicable Law.  No waiver of any provision of this Agreement or consent to any departure by any Grantor therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section 6.02, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given.  Without limiting the generality of the foregoing, the making of a Loan or issuance of a Letter of Credit shall not be construed as a waiver of any Default, regardless of whether any Secured Party may have had notice or knowledge of such Default at the time.  No notice or demand on any Grantor in any case shall entitle any Grantor to any other or further notice or demand in similar or other circumstances.
 
(b) Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Collateral Agent and the Grantor or Grantors with respect to which such waiver, amendment or modification is to apply, subject to any consent required in accordance with Section 10.01 of the Credit Agreement.
 
SECTION 6.03. [Reserved]
 
.
 
SECTION 6.04. Successors and Assigns
 
.  Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include the permitted successors and assigns of such party; and all covenants, promises and agreements by or on behalf of any Grantor or the Collateral Agent that are contained in this Agreement shall bind and inure to the benefit of their respective successors and assigns.
 
SECTION 6.05. Survival of Agreement
 
.  Such representations and warranties have been or will be relied upon by each Secured Party, regardless of any investigation made by any Secured Party or on their behalf and notwithstanding that any Secured Party may have had notice or knowledge of any Default at the time of any Credit Extension, and shall continue in full force and effect as of the time made as long as any Loan or any other Obligation hereunder shall remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.
 
SECTION 6.06. Counterparts; Effectiveness; Several Agreement; Limitation on Assignment
 
.  This Agreement may be executed in counterparts, each of which shall constitute an original but all of which when taken together shall constitute a single contract.  Delivery by telecopierof an executed counterpart of a signature page to this Agreement shall be as effective as delivery of an original executed counterpart of this Agreement.  This Agreement shall become effective as to any Grantor when a counterpart hereof executed on behalf of such Grantor shall have been delivered to the Collateral Agent and a counterpart hereof shall have been executed on behalf of the Collateral Agent, and thereafter shall be binding upon such Grantor and the Collateral Agent and their respective permitted successors and assigns, and shall inure to the benefit of such Grantor, the Collateral Agent and the other Secured Parties and their respective successors and assigns, except that no Grantor shall have the right to assign or transfer its rights or obligations hereunder or any interest herein or in the Collateral (and any such assignment or transfer shall be void) except as permitted by this Agreement or the Credit Agreement.  This Agreement shall be construed as a separate agreement with respect to each Grantor and may be amended, modified, supplemented, waived or released with respect to any Grantor without the approval of any other Grantor and without affecting the obligations of any other Grantor hereunder.
 
SECTION 6.07. Severability
 
.  If any provision of this Agreement is held to be illegal, invalid or unenforceable, the legality, validity and enforceability of the remaining provisions of this Agreement shall not be affected or impaired thereby.  The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
 
SECTION 6.08. [Reserved]
 
.  
 
SECTION 6.09. Governing Law; Jurisdiction; Consent to Service of Process
 
.
 
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
 
(a) ANY LEGAL ACTION OR PROCEEDING ARISING UNDER THIS AGREEMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO WHETHER NOW EXISTING OR HEREAFTER ARISING, MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK CITY OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH GRANTOR AND THE COLLATERAL AGENT CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS.  EACH GRANTOR AND THE COLLATERAL AGENT IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR OTHER DOCUMENT RELATED HERETO.  EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT IN THE MANNER PROVIDED FOR NOTICES (OTHER THAN TELECOPIER) IN SECTION 10.02 OF THE CREDIT AGREEMENT.  NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.
 
SECTION 6.10. WAIVER OF JURY TRIAL
 
.  EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT.  EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
 
SECTION 6.11. Headings
 
.  Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and are not to affect the construction of, or to be taken into consideration in interpreting, this Agreement.
 
SECTION 6.12. Security Interest Absolute
 
.  All rights of the Collateral Agent hereunder, the grant of a security interest in the Collateral and all obligations of each Grantor hereunder shall be absolute and unconditional irrespective of (a) any lack of validity or enforceability of the Credit Agreement, any other Loan Document, any agreement with respect to any of the Secured Obligations or any other agreement or instrument relating to any of the foregoing, (b) any change in the time, manner or place of payment of, or in any other term of, all or any of the Secured Obligations, or any other amendment or waiver of or any consent to any departure from the Credit Agreement, any other Loan Document or any other agreement or instrument, (c) any exchange, release or non-perfection of any Lien on other collateral, or any release or amendment or waiver of or consent under or departure from any guarantee, securing or guaranteeing all or any of the Secured Obligations or (d) any other circumstance that might otherwise constitute a defense available to, or a discharge of, any Grantor in respect of the Secured Obligations or this Agreement.
 
SECTION 6.13. Termination or Release
 
.
 
(a) This Agreement and all other security interests granted hereby shall terminate with respect to all Secured Obligations when all the outstanding Secured Obligations (other than contingent indemnification obligations not then due) have been paid in full in cash, the Lenders have no further commitment to lend under the Credit Agreement, the L/C Obligations have been reduced to zero and the L/C Issuers have no further obligations to issue Letters of Credit under the Credit Agreement.
 
(b) A Grantor shall automatically be released from its obligations hereunder and the Security Interest in the Collateral of such Grantor shall be automatically released upon the consummation of any transaction permitted by the Credit Agreement as a result of which such Grantor ceases to be a Subsidiary of the Company or is otherwise no longer required to be a Grantor hereunder; provided that the Required Lenders shall have consented to such transaction (to the extent required by the Credit Agreement) and the terms of such consent did not provide otherwise.
 
(c) Upon any sale or other transfer by any Grantor of any Collateral (other than any transfer of Collateral to another Grantor) that is permitted under the Credit Agreement, or upon the effectiveness of any written consent to the release of the security interest granted hereby in any Collateral pursuant to Section 10.01 of the Credit Agreement, the Security Interest in such Collateral shall be automatically released.
 
(d) Upon the occurrence of any event or circumstance set forth in Section 2.01(b) hereunder, the Security Interest in such Collateral shall be automatically released.
 
(e) In the event that any Security Interest granted hereunder is in violation of the Credit Agreement or the Agreed Security Principles, the Security Interests in such Collateral shall be automatically released.
 
(f) In connection with any termination or release pursuant to paragraph (a) through (e), the Collateral Agent shall execute and deliver to any Grantor, at such Grantor’s expense, all documents that such Grantor shall reasonably request to evidence such termination or release.  Any execution and delivery of documents pursuant to this Section 6.13 shall be without recourse to or warranty by the Collateral Agent.
 
SECTION 6.14. Collateral Agent Appointed Attorney-in-Fact
 
.
 
(a) Each Grantor hereby appoints the Collateral Agent the attorney-in-fact of such Grantor for the purpose of carrying out the provisions of this Agreement and taking any action and executing any instrument that the Collateral Agent may deem necessary or advisable to accomplish the purposes hereof at any time after and during the continuance of an Event of Default, which appointment is irrevocable and coupled with an interest.  Without limiting the generality of the foregoing, the Collateral Agent shall have the right, upon the occurrence and during the continuance of an Event of Default and notice by the Collateral Agent to the Borrower’s Agent of its intent to exercise such rights, with full power of substitution either in the Collateral Agent’s name or in the name of such Grantor (a) to receive, endorse, assign and/or deliver any and all notes, acceptances, checks, drafts, money orders or other evidences of payment relating to the Collateral or any part thereof; (b) to demand, collect, receive payment of, give receipt for and give discharges and releases of all or any of the Collateral; (c) to commence and prosecute any and all suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect or otherwise realize on all or any of the Collateral or to enforce any rights in respect of any Collateral; (d) to settle, compromise, compound, adjust or defend any actions, suits or proceedings relating to all or any of the Collateral; and (e) to use, sell, assign, transfer, pledge, make any agreement with respect to or otherwise deal with all or any of the Collateral, and to do all other acts and things necessary to carry out the purposes of this Agreement, as fully and completely as though the Collateral Agent were the absolute owner of the Collateral for all purposes; provided that nothing herein contained shall be construed as requiring or obligating the Collateral Agent to make any commitment or to make any inquiry as to the nature or sufficiency of any payment received by the Collateral Agent, or to present or file any claim or notice, or to take any action with respect to the Collateral or any part thereof or the moneys due or to become due in respect thereof or any property covered thereby.  The Collateral Agent and the other Secured Parties shall be accountable only for amounts actually received as a result of the exercise of the powers granted to them herein, and neither they nor their officers, directors, employees or agents shall be responsible to any Grantor for any act or failure to act hereunder, except for their own gross negligence, bad faith or willful misconduct or that of any of their Affiliates, directors, officers, employees, counsel, agents or attorneys-in-fact.
 
(b) Each Grantor hereby irrevocably authorizes the Collateral Agent for the benefit of the Secured Parties at any time and from time to time to file in any relevant jurisdiction any financing statements (including fixture filings) with respect to the Collateral or any part thereof and amendments thereto that (i) indicate the Collateral as all assets of such Grantor or words of similar effect as being of an equal or lesser scope or with greater detail, and (ii) contain the information required by Article 9 of the Uniform Commercial Code or the analogous legislation of each applicable jurisdiction for the filing of any financing statement or amendment, including whether the Grantor is an organization, the type of organization and any organizational identification number issued to the Grantor.  The Grantor agrees to provide such information to the Collateral Agent promptly upon request.
 
SECTION 6.15. General Authority of the Collateral Agent
 
.  By acceptance of the benefits of this Agreement and any other Collateral Documents, each Secured Party (whether or not a signatory hereto) shall be deemed irrevocably (a) to consent to the appointment of the Collateral Agent as its agent hereunder and under such other Collateral Documents, (b) to confirm that the Collateral Agent shall have the authority to act as the exclusive agent of such Secured Party for the enforcement of any provisions of this Agreement and such other Collateral Documents against any Grantor, the exercise of remedies hereunder or thereunder and the giving or withholding of any consent or approval hereunder or thereunder relating to any Collateral or any Grantor’s obligations with respect thereto, (c) to agree that it shall not take any action to enforce any provisions of this Agreement or any other Collateral Document against any Grantor, to exercise any remedy hereunder or thereunder or to give any consents or approvals hereunder or thereunder except as expressly provided in this Agreement or any other Collateral Document and (d) to agree to be bound by the terms of this Agreement and any other Collateral Documents.
 
SECTION 6.16. [Reserved]
 
.
 
SECTION 6.17. Intercreditor Agreement
 
.  Notwithstanding anything herein to the contrary, the liens and security interests granted to the Collateral Agent pursuant to this Agreement and the exercise of any right or remedy by the Collateral Agent hereunder, in each case, with respect to the Collateral are subject to the limitations and provisions of each Intercreditor Agreement. In the event of any conflict between the terms of any Intercreditor Agreement and the terms of this Agreement with respect to the Collateral (other than with respect to Section 2.01), the terms of such Intercreditor Agreement shall govern and control.
 
(Remainder of page intentionally left blank)
 


 

 
 
 


IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written.
 
BASELL HOLDINGS B.V.,
BASELL INTERNATIONAL HOLDINGS B.V.
BASELL FUNDING S.A.R.L.
LYONDELLBASELL INDUSTRIES AF S.C.A.,
as Grantors
 
By:                                                                       
 
Name:
 
Title:


 

 
 
 


 
CITIBANK, N.A. as
 
Collateral Agent,
 
By:                                                                       
 
Name:
 
Title:



 

 
 
 
Schedule I
 
to the Supplement No __ to the
 
Pledge Agreement
 


SCHEDULE I
 

EQUITY INTERESTS
 
 
 
Grantor
 
 
Issuer
 
Number of
Certificate
 
Registered
Owner
Number and
Class of
Equity Interests
Percentage
of Equity
Interests
Basell Holdings B.V.
Basell Canada Inc.
13
Basell Holdings B.V.
20,000 Common Shares
100%
Basell International Holdings B.V.
Basell Australia Holdings Pty Ltd1
  
Basell International Holdings B.V.
  
100%
Basell Funding S.a.r.l.
LyondellBasell Finance Company
1
Basell Funding S.a.r.l
1,000 Common Shares
100%


DEBT SECURITIES
 
 
Grantor
 
Issuer
Principal
Amount
 
Date of Note
 
Maturity Date
Basell AF S.C.A.
Basell Funding S.a.r.l.2
$615,000,000
August 10, 2005
None.



 
1 To be turned over to the Collateral Agent post-closing.
 
2 To be turned over to the Collateral Agent post-closing.

 
Schedule I-
 
 
 


 
 
 

EXHIBIT F-3
 
[FORM OF] U.S. SECURITY AGREEMENT
 
[Borrower and other U.S. entities subject to Equal and Ratable]
 

 
U.S. BORROWER SECURITY AGREEMENT
 
dated as of
 
December 20, 2007
 
between
 

 
BIL ACQUISITION HOLDINGS LIMITED
 
(to be merged with and into LYONDELL CHEMICAL COMPANY
 
substantially concurrently with the initial Credit Extensions)
 
and
 
CITIBANK, N.A.,
 
as Collateral Agent
 

 

 



 
 
 

TABLE OF CONTENTS
 
Definitions 
1
 
 
SECTION 1.01.Credit Agreement1
 
 
SECTION 1.02.Other Defined Terms1
 
ARTICLE II
Pledge of Securities 
3
 
 
SECTION 2.01.Pledge3
 
 
SECTION 2.02.Delivery of the Pledged Collateral4
 
 
SECTION 2.03.Representations, Warranties and Covenants5
 
 
SECTION 2.04.Certification of Limited Liability Company and Limited Partnership Interests6
 
 
SECTION 2.05.Registration in Nominee Name; Denominations6
 
 
SECTION 2.06.Voting Rights; Dividends and Interest7
 
 
ARTICLE IIISecurity Interests in Personal Property9
 
 
SECTION 3.01.Security Interest9
 
 
SECTION 3.02.Representations and Warranties10
 
 
SECTION 3.03.Covenants12
 
 
SECTION 3.04.Other Actions12
 
 
ARTICLE IVRemedies14
 
 
SECTION 4.01.Remedies Upon Default14
 
 
SECTION 4.02.Application of Proceeds16
 
 
ARTICLE VIndemnity, Subrogation and Subordination17
 
 
SECTION 5.01.Indemnity17
 
 
SECTION 5.02.Contribution and Subrogation17
 
 
SECTION 5.03.Subordination17
 
 
ARTICLE VIMiscellaneous18
 
 
SECTION 6.01.Notices18
 
 
SECTION 6.02.Waivers; Amendment18
 
 
SECTION 6.03.Collateral Agent’s Fees and Expenses; Indemnification18
 
 
SECTION 6.04.Successors and Assigns19
 
 
SECTION 6.05.Survival of Agreement19
 
 
SECTION 6.06.Counterparts; Effectiveness; Several Agreement19
 
 
SECTION 6.07.Severability20
 
 
SECTION 6.08.Right of Set-Off20
 
 
SECTION 6.09.Governing Law; Jurisdiction; Consent to Service of Process20
 
 
SECTION 6.10.WAIVER OF JURY TRIAL21
 
 
SECTION 6.11.Headings21
 
 
SECTION 6.12.Security Interest Absolute21
 
 
SECTION 6.13.Termination or Release22
 
 
SECTION 6.14.Additional Restricted Subsidiaries22
 
 
SECTION 6.15.Collateral Agent Appointed Attorney-in-Fact23
 
 
SECTION 6.16.General Authority of the Collateral Agent24
 
 
SECTION 6.17.Miscellaneous24
 


 
 
 

Schedules
 
Schedule I                                Pledged Equity; Pledged Debt
 

 
 
 

U.S. BORROWER SECURITY AGREEMENT dated as of December 20, 2007 between, BIL ACQUISITION HOLDINGS LIMITED, a Delaware corporation (to be merged with and into LYONDELL CHEMICAL COMPANY) (the “Grantor”) and CITIBANK, N.A., as Collateral Agent for the Secured Parties (as defined below) (the “Collateral Agent”).
 
Reference is made to the Credit Agreement dated as of the date hereof (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among LyondellBasell Industries AF S.C.A. (the “Company”), a company existing under the laws of the Grand Duchy of Luxembourg, the Grantor, Basell Holdings B.V., a Dutch corporation limited by shares, Basell Finance Company B.V., and Basell Germany Holdings GmbH, a corporation organized under the laws of Germany, the Subsidiary Guarantors party thereto from time to time, the lenders party thereto from time to time, Citibank, N.A., as Administrative Agent and Collateral Agent and the other Agents party thereto.  The Lenders have agreed to extend credit to the Borrowers subject to the terms and conditions set forth in the Credit Agreement.  The obligations of the Lenders to extend such credit are conditioned upon, among other things, the execution and delivery of this Agreement.  Accordingly, the parties hereto agree as follows:
 
ARTICLE I                                
 

 
Definitions
 
SECTION 1.01. Credit Agreement.
 
(a) Capitalized terms used in this Agreement and not otherwise defined herein have the meanings specified in the Credit Agreement.  All terms defined in the New York UCC (as defined herein) and not defined in this Agreement have the meanings specified therein; the term “instrument” shall have the meaning specified in Article 9 of the New York UCC.
 
(b) The rules of construction specified in Article I of the Credit Agreement also apply to this Agreement.
 
 
“ABL Agent” means Citibank, N.A., in its capacity as collateral agent under the Asset Backed Credit Facilities.
 
“ABL Borrowers” means, collectively, the Grantor, Basell USA Inc., Equistar Chemicals, LP, Houston Refining LP and the other subsidiaries of the Company party to the ABL Credit Agreement, as borrowers.
 
“ABL Credit Agreement” means the Credit Agreement, dated as of the date hereof, among the ABL Borrowers, the ABL Agent and the lenders party thereto (as the same may be amended, supplemented, modified or restated from time to time).
 
“ABL Guarantors” means the Guarantors party to the Subsidiary Guaranty (each as defined in the ABL Credit Agreement).
 
“ABL Intercreditor Agreement” means the Intercreditor Agreement, dated as of the date hereof, among the Collateral Agent, the ABL Agent, the Grantor, the Company and the other parties thereto form time to time, as amended, amended and restated, supplemented or otherwise modified from time to time
 
“ABL Security Agreement” means the Security Agreement, dated as of the date hereof, among the Grantor, Equistar Receivables, LP, Houston Refining LP, Basell U.S.A. Inc., any other Borrowers party thereto and the ABL Agent.
 
“Account Debtor” means any Person who is or who may become obligated to the Grantor under, with respect to or on account of an Account.
 
“Agreement” means this Security Agreement.
 
“Arco Noteholders” means the holders of the Arco Notes.
 
“Arco Notes” means $100,000,000 10 1/4% Debentures due 2010 and the $225,000,000 9.8% Debentures due 2020 issued by the Arco Chemical Company (as predecessor to Lyondell Chemical Company) pursuant to the Arco Notes Indenture.
 
“Arco Notes Indenture” means the indenture governing the Arco Notes dated as of June 15,1988 as supplemented by a Supplemental Indenture dated January 5, 2000.
 
 “Arco Notes Secured Parties” means the Arco Notes Trustee and the Arco Noteholders.
 
“Arco Notes Obligations” means all present and future money, debts and liabilities due, owing or incurred by the Grantor to any Arco Notes Secured Party under or in connection with the Arco Notes (in each case, whether done alone or jointly, or jointly and severally), with any other Person, whether actually or contingently, and whether as principal, surety or otherwise.
 
“Arco Notes Trustee” means any entity acting as trustee under the Arco Notes.
 
 “Article 9 Collateral” has the meaning assigned to such term in Section 3.01(a).
 
“Claiming Party” has the meaning assigned to such term in Section 5.02.
 
“Capital Lease” shall mean, as applied to any Person, any lease of any property by that Person as lessee which is accounted for as a capital lease on the balance sheet of that Person.”
 
“Capitalized Lease Obligations” of any Person shall mean all obligations under Capital Leases of such Person.”
 
“Collateral” means the Article 9 Collateral and the Pledged Collateral.
 
“Collateral Agent” has the meaning assigned to such term in the preliminary statement to this Agreement.
 
“Company” has the meaning assigned to such term in the preliminary statement to this Agreement.
 
“Contracts” means all contracts for the sale, lease, exchange or disposition of Inventory or the performance of services, whether or not performed and whether or not subject to termination upon a contingency or at the option of any party thereto.
 
“Contributing Party” has the meaning assigned to such term in Section 5.02.
 
“Credit Agreement” has the meaning assigned to such term in the preliminary statement of this Agreement.
 
“Credit Agreement Obligations” means the “Obligations” as defined in the Credit Agreement.
 
“Credit Agreement Secured Parties” means the “Secured Parties” as defined in the Credit Agreement.
 
“Domestic Subsidiary” means a Subsidiary of the Company incorporated under the laws of the United States or any state thereof or the District of Columbia.
 
“General Intangibles” has the meaning specified in Article 9 of the New York UCC.
 
“Grantor” has the meaning assigned to such term in the preliminary statement of this Agreement.
 
 “New York UCC” means the Uniform Commercial Code as from time to time in effect in the State of New York.
 
“Pledged Collateral” has the meaning assigned to such term in Section 2.01.
 
“Pledged Debt” has the meaning assigned to such term in Section 2.01.
 
“Pledged Equity” has the meaning assigned to such term in Section 2.01.
 
 “Pledged Securities” means any promissory notes, stock certificates or other securities now or hereafter included in the Pledged Collateral, including all certificates, instruments or other documents representing or evidencing any Pledged Collateral.
 
“Receivables” means all indebtedness (whether constituting Accounts or General Intangibles or Chattel Paper or otherwise) of any Person owing to the Grantor under a Contract, and includes the right to payment of any interest or finance charges and other obligations of such Person with respect thereto.
 
 “Secured Obligations” means, collectively, the Credit Agreement Obligations and the Arco Notes Obligations.
 
“Secured Parties” means, collectively, Credit Agreement Secured Parties and the Arco Notes Secured Parties.
 
 “Security Interest” has the meaning assigned to such term in Section 3.01(a).
 
“Transferred Receivables” has the meaning defined in the ABL Security Agreement.
 
ARTICLE II                                
 

 
Pledge of Securities
 
SECTION 2.01. Pledge.
 
(a) As security for the payment and performance in full of the Secured Obligations, the Grantor hereby assigns and pledges to the Collateral Agent, its successors and assigns, for the benefit of the Secured Parties, and hereby grants to the Collateral Agent, its successors and assigns, for the benefit of the Secured Parties, a security interest in, all of the Grantor’s right, title and interest in, to and under (i) (1) all Equity Interests held by it and listed on Schedule I and, whether now owned or hereafter acquired, (2) any other Equity Interests directly owned by the Grantor of any Wholly Owned Domestic Subsidiary of the Company, whether now owned or hereafter acquired, (3) 100% of the outstanding Equity Interests directly owned by the Grantor of any Wholly Owned Foreign Subsidiary of the Company, whether now owned or hereafter acquired; provided that, with respect to any Secured Obligation of the Grantor, the foregoing pledge of any stock of a Wholly Owned Foreign Subsidiary of the Company that is a “controlled foreign corporation” (within the meaning of Section 957(a) of the Code) shall be limited to 65% of the outstanding voting stock and 100% of the outstanding non-voting stock of such controlled foreign corporation and (4) the certificates representing all such Equity Interests (all such Equity Interests and certificates collectively referred to as  the “Pledged Equity”); provided that the Pledged Equity, shall not include (A) any Equity Interests to the extent that, and for so long as, such a pledge of such Equity Interests would violate law applicable thereto, and (B) any Equity Interests in (1) LyondellBasell Receivables I, L.L.C. or Equistar Receivables II, LLC, (2) Basell Capital Corporation and (3) any Equity Interest in any other Securitization Entity; (ii)(A) the debt securities owned by it and listed opposite the name of the Grantor on Schedule I, (B) any debt securities obtained in the future by the Grantor and (C) the promissory notes and any other instruments evidencing such debt securities (collectively, the “Pledged Debt”); provided that the Pledged Debt shall not include any indebtedness or other obligations owed by (1) LyondellBasell Receivables I, L.L.C., Equistar Receivables II, LLC and Basell Capital Corporation to the ABL Borrowers or the ABL Guarantors and (2) any Pledged Debt owing from any Securitization Entity to the Grantor; (iii)  subject to Section 2.06, all payments of principal or interest, dividends, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of, in exchange for or upon the conversion of, and all other Proceeds received in respect of, the securities referred to in clauses (i) and (ii) above; (iv) subject to Section 2.06, all rights and privileges of the Grantor with respect to the securities and other property referred to in clauses (i), (ii), and (iii) above; and (v) all Proceeds of any of the foregoing (the items referred to in clauses (i) through (iv) above being collectively referred to as the “Pledged Collateral”).
 
(b) The Collateral Agent shall release, (such release to be effected pursuant to the terms of Section 6.13 hereof) any security interest granted to it in the following property (other than to the extent any such property constitutes property described in the proviso contained in Section 2.01(a) above): (i) the Equity Interests of any Subsidiary acquired pursuant to a Permitted Acquisition and subject to Liens permitted by Section 7.01(w) of the Credit Agreement if and so long as the terms of such Liens prohibit the creation of a Lien in favor of the Collateral Agent for the benefit of the Secured Parties on such Equity Interests, (ii) any Equity Interests in any other Securitization Entity and (iii) any Pledged Debt owing from any Securitization Entity to the Grantor.
 
TO HAVE AND TO HOLD the Pledged Collateral, together with all right, title, interest, powers, privileges and preferences pertaining or incidental thereto, unto the Collateral Agent, its successors and assigns, for the benefit of the Secured Parties, forever; subject, however, to the terms, covenants and conditions hereinafter set forth.
 
SECTION 2.02. Delivery of the Pledged Collateral.
 
(a) The Grantor agrees promptly to deliver or cause to be delivered to the Collateral Agent, for the benefit of the Secured Parties, any and all Pledged Securities (other than (i) any uncertificated securities, but only for so long as such securities remain uncertificated, and (ii) any Equity Interests in any direct Wholly Owned Subsidiary that is dormant or inactive (so long as such Subsidiary remains dormant or inactive)) to the extent such Pledged Securities, in the case of promissory notes or other instruments evidencing Indebtedness, are required to be delivered pursuant to paragraph (b) of this Section 2.02.
 
(b) The Grantor will cause any Indebtedness (other than intercompany Indebtedness) for borrowed money having an aggregate principal amount in excess of $10,000,000 owed to the Grantor by any Person to be evidenced by a duly executed promissory note that is pledged and delivered to the Collateral Agent, for the benefit of the applicable Secured Parties, pursuant to the terms hereof.
 
(c) Upon delivery to the Collateral Agent, (i) any Pledged Securities shall be accompanied by stock powers duly executed in blank or other instruments of transfer reasonably satisfactory to the Collateral Agent and (ii) all other property comprising part of the Pledged Collateral shall be accompanied by proper instruments of assignment duly executed by the Grantor and such other instruments or documents as the Collateral Agent may reasonably request. The Grantor hereby authorizes the Collateral Agent to Supplement Schedule I hereto by adding any additional Pledged Securities delivered to the Collateral Agent pursuant hereto.
 
(d) In accordance with the terms of the Cash Flow Intercreditor Agreement, all Pledged Collateral delivered to the Collateral Agent shall also be held by the Collateral Agent as gratuitous bailee for the Interim Facility Finance Parties, the Second Lien Notes Finance Parties and the Second Lien Noteholders (as each such term is defined in the Cash Flow Intercreditor Agreement), solely for the purpose of perfecting the security interest therein granted under the Interim Facility Security Documents and Second Lien Notes Security Documents (as each such term is defined in the Cash Flow Intercreditor Agreement).
 
SECTION 2.03. Representations, Warranties and Covenants.  The Grantor represents and warrants to and with the Collateral Agent, for the benefit of the Secured Parties, that:
 
(a) Schedule I correctly sets forth the percentage of the issued and outstanding units of each class of the Equity Interests of the issuer thereof represented by the Pledged Equity and includes all Equity Interests (other than Equity Interests in any direct Wholly Owned Domestic Subsidiary that is dormant or inactive and Equity Interests of any direct Wholly Owned Foreign Subsidiaries that is dormant, inactive or otherwise immaterial), debt securities in excess of $10,000,000 and promissory notes in excess of $10,000,000, in each case required to be pledged hereunder pursuant to the Credit Agreement;
 
(b) [Reserved];
 
(c) [Reserved];
 
(d) except for restrictions and limitations imposed by the Loan Documents or securities laws generally, the Pledged Collateral is and will continue to be freely transferable and assignable, and none of the Pledged Collateral is or will be subject to any option, right of first refusal, shareholders agreement, charter or by-law provisions or contractual restriction of any nature that might prohibit, materially impair, materially delay or otherwise affect in any manner material and adverse to the Secured Parties the pledge of such Pledged Collateral hereunder, the sale or disposition thereof pursuant hereto.
 
SECTION 2.04. Certification of Limited Liability Company and Limited Partnership Interests.
 
(a) Each interest in any limited liability company or limited partnership controlled by the Grantor, pledged under Section 2.01 and represented by a certificate, shall be a “security” within the meaning of Article 8 of the New York UCC or any other applicable Uniform Commercial Code and shall be governed by Article 8 of the New York UCC or any other applicable Uniform Commercial Code, and each such interest shall at all times hereafter be represented by a certificate.
 
(b) Each interest in any limited liability company or limited partnership controlled by the Grantor, pledged under Section 2.01 and not represented by a certificate shall not be a “security” within the meaning of Article 8 of the New York UCC or any other applicable Uniform Commercial Code and shall not be governed by Article 8 of the New York UCC or any other applicable Uniform Commercial Code, and the Grantor shall at no time elect to treat any such interest as a “security” within the meaning of Article 8 of the New York UCC or any other applicable Uniform Commercial Code or issue any certificate representing such interest, unless the Grantor provides prior written notification to the Administrative Agent of such election and promptly (and in any event within 30 days after such election) delivers any such certificate to the Administrative Agent pursuant to the terms hereof.
 
SECTION 2.05. Registration in Nominee Name; Denominations.  If an Event of Default shall occur and be continuing and the Collateral Agent shall give the Grantor notice of its intent to exercise such rights, (a) the Collateral Agent, on behalf of the Secured Parties, shall have the right (in its sole and absolute discretion) to hold the Pledged Securities in its own name as pledgee, the name of its nominee (as pledgee or as sub-agent) or the name of the Grantor, endorsed or assigned in blank or in favor of the Collateral Agent and the Grantor will promptly give to the Collateral Agent copies of any notices or other communications received by it with respect to Pledged Securities registered in the name of the Grantor and (b) the Collateral Agent shall have the right to exchange the certificates representing Pledged Securities for certificates of smaller or larger denominations for any purpose consistent with this Agreement.
 
SECTION 2.06. Voting Rights; Dividends and Interest.
 
(a) Unless and until (1) an Event of Default shall have occurred and be continuing and (2) the Collateral Agent shall have notified the Grantor that the rights of the Grantor under this Section 2.06 are being suspended:
 
(i) The Grantor shall be entitled to exercise any and all voting and/or other consensual rights and powers inuring to an owner of Pledged Securities or any part thereof for any purpose consistent with the terms of this Agreement, the Credit Agreement and the other Loan Documents.
 
(ii) The Collateral Agent shall promptly execute and deliver to the Grantor, or cause to be executed and delivered to the Grantor, all such proxies, powers of attorney and other instruments as the Grantor may reasonably request for the purpose of enabling the Grantor to exercise the voting and/or consensual rights and powers it is entitled to exercise pursuant to subparagraph (i) above.
 
(iii) The Grantor shall be entitled to receive and retain any and all dividends, interest, principal and other distributions paid on or distributed in respect of the Pledged Securities to the extent and only to the extent that such dividends, interest, principal and other distributions are permitted by, and otherwise paid or distributed in accordance with, the terms and conditions of the Credit Agreement, the other Loan Documents and applicable Laws; provided that any noncash dividends, interest, principal or other distributions that would constitute Pledged Equity or Pledged Debt, whether resulting from a subdivision, combination or reclassification of the outstanding Equity Interests of the issuer of any Pledged Securities or received in exchange for Pledged Securities or any part thereof, or in redemption thereof, or as a result of any merger, consolidation, acquisition or other exchange of assets to which such issuer may be a party or otherwise, shall be and become part of the Pledged Collateral, and shall if certificated be held in trust for the benefit of the Collateral Agent and the Secured Parties and shall be forthwith delivered to the Collateral Agent in the same form as so received (with any necessary endorsement reasonably requested by the Collateral Agent).
 
(b) If (A) an Event of Default has occurred and is continuing and (B) the Collateral Agent shall have notified the Grantor of the suspension of the rights of the Grantor under paragraph (a)(iii) of this Section 2.06, then all rights of the Grantor to dividends, interest, principal or other distributions that the Grantor is authorized to receive with respect to such Pledged Collateral pursuant to paragraph (a)(iii) of this Section 2.06 shall cease, and all such rights shall thereupon become vested in the Collateral Agent, which shall have the sole and exclusive right and authority to receive and retain such dividends, interest, principal or other distributions, subject to the terms of the Credit Agreement and Intercreditor Agreement.  All dividends, interest, principal or other distributions received by the Grantor contrary to the provisions of this Section 2.06 shall be held in trust for the benefit of the Collateral Agent, shall be segregated from other property or funds of the Grantor and shall be forthwith delivered to the Collateral Agent upon demand in the same form as so received (with any necessary endorsement reasonably requested by the Collateral Agent).  Any and all money and other property paid over to or received by the Collateral Agent pursuant to the provisions of this paragraph (b) shall be retained by the Collateral Agent in an account to be established by the Collateral Agent upon receipt of such money or other property and shall be applied in accordance with the provisions of Section 4.02.  After all Events of Default have been cured or waived, the Collateral Agent shall promptly repay to the Grantor (without interest) all dividends, interest, principal or other distributions that the Grantor would otherwise be permitted to retain pursuant to the terms of paragraph (a)(iii) of this Section 2.06 and that remain in such account.
 
(c) If (A) an Event of Default has occurred and is continuing and (B) the Collateral Agent shall have notified the Grantor of the suspension of the rights of the Grantor under paragraph (a)(iii) of this Section 2.06, then all rights of the Grantor to exercise the voting and consensual rights and powers it is entitled to exercise with respect to such Pledged Collateral pursuant to paragraph (a)(i) of this Section 2.06, and the obligations of the Collateral Agent under paragraph (a)(ii) of this Section 2.06, shall cease, and all such rights shall thereupon become vested in the Collateral Agent, which shall have the sole and exclusive right and authority to exercise such voting and consensual rights and powers, subject to the terms of the Credit Agreement and the Intercreditor Agreement; provided that, unless otherwise directed by the Required Lenders, the Collateral Agent shall have the right from time to time following and during the continuance of an Event of Default to permit the Grantor to exercise such rights.  After all Events of Default have been cured or waived, the Grantor shall have the exclusive right to exercise the voting and/or consensual rights and powers that the Grantor would otherwise be entitled to exercise pursuant to the terms of paragraph (a)(i) above.
 
(d) Any notice given by the Collateral Agent to the Grantor suspending the rights of the Grantor under paragraph (a) of this Section 2.06 (i) shall be given in writing, (ii) and (ii) may suspend the rights of the Grantor under paragraph (a)(i) or paragraph (a)(iii) in part without suspending all such rights (as specified by the Collateral Agent in its sole and absolute discretion) and without waiving or otherwise affecting the Collateral Agent’s rights to give additional notices from time to time suspending other rights so long as an Event of Default has occurred and is continuing.
 
ARTICLE III                                
 

 
Security Interests in Personal Property
 
SECTION 3.01. Security Interest.
 
(a) As security for the payment and performance in full of the Secured Obligations, including the Guaranties, the Grantor hereby assigns and pledges to the Collateral Agent, its successors and assigns, for the equal and ratable benefit of the Secured Parties, and hereby grants to the Collateral Agent, its successors and assigns, for the benefit of the Secured Parties, a security interest (the “Security Interest”) in, all right, title and interest in or to any and all of the following assets and properties now owned or at any time hereafter acquired by the Grantor or in which the Grantor now has or at any time in the future may acquire any right, title or interest (collectively, the “Article 9 Collateral”):
 
(i) all Accounts;
 
(ii) all Chattel Paper;
 
(iii) all Documents;
 
(iv) all Letters of Credit (as such term is defined in the New York UCC) and Letter-of-Credit Rights;
 
(v) all Equipment;
 
(vi) all Pledged Collateral;
 
(vii) all General Intangibles;
 
(viii) all Instruments;
 
(ix) all Goods (other than Inventory) and Fixtures;
 
(x) all Investment Property;
 
(xi) all books and records;
 
(xii) all Money and Deposit Accounts; and
 
(xiii) all Proceeds and products of any and all of the foregoing and all Supporting Obligations, collateral security and guarantees given by any Person with respect to any of the foregoing;
 
provided, that notwithstanding anything to the contrary in this Agreement, this Agreement shall not constitute a grant of a security interest in (and the term “Collateral” shall not include) (A) any vehicle covered by a certificate of title or ownership, (B) any property effectively conveyed, sold, contributed or otherwise transferred under (i) the 2005 Securitization Facility (as defined in the ABL Credit Agreement as in effect on the date hereof) or (ii) the 2007 Securitization Facility (as defined in the ABL Credit Agreement as in effect on the date hereof), (C) any property in which an effective grant of security interest has been conveyed under the ABL Security Agreement as in effect on the date hereof so long as the ABL Credit Agreement has not been terminated, (D) any Equipment owned by the Grantor that is subject to a purchase money security interest (within the meaning of Section 9-103 of the UCC) or a or a Capitalized Lease Obligation permitted by the Credit Agreement so long as the contract or other agreement in which such security interests is granted (or the documentation providing for such Capitalized Lease Obligations) prohibits the creation of any other security interest on such, (E) any Equity Interest that is not Pledged Equity, (F) all Inventory and Receivables and all cash Proceeds thereof and (G) any contract, lease, license or other document so long as (and only to the extent that) the grant of a security interest therein would (x) violate a restriction in such contract, lease, license or documents or under any law, regulation, permit, order or decree of any Governmental Authority, unless and until all required consents shall have been obtained (for the avoidance of doubt, the restrictions described herein shall not include negative pledges or similar undertakings in favor of a lender or other financial counterparty) or (y) expressly give any other party in respect of any such contract, lease, instrument, license or other document, the right to terminate its obligations thereunder, provided however, that the limitations set forth in clause (F) above shall not affect, limit, restrict or impair the grant by a Grantor of a security interest pursuant to this Agreement in any such Collateral to the extent that an otherwise applicable prohibition or restriction on such grant is rendered ineffective by any applicable law, including the UCC. The delivery of control agreements with respect to any “deposit account” or “securities account” as such terms are defined in the UCC shall not be required, except with respect to the Working Capital Reserve Account.
 
(b) The Collateral Agent shall release (such release to be effected pursuant to the terms of Section 6.13 hereof) any security interest granted to it in the following property (other than to the extent any such property constitutes property described in the proviso contained in Section 3.01(a) above): Accounts and related assets (including deposit accounts) evidencing such Accounts or proceeds thereof purported to be transferred pursuant to any Receivables Financing or any Securitization Transaction not prohibited by the Credit Agreement.
 
(c) The Grantor hereby irrevocably authorizes the Collateral Agent for the benefit of the Secured Parties at any time and from time to time to file in any relevant jurisdiction any financing statements (including fixture filings) with respect to the Article 9 Collateral or any part thereof and amendments thereto that (i) indicate the Collateral as all assets of the Grantor or words of similar effect as being of an equal or lesser scope or with greater detail, and (ii) contain the information required by Article 9 of the Uniform Commercial Code or the analogous legislation of each applicable jurisdiction for the filing of any financing statement or amendment, including (A) whether the Grantor is an organization, the type of organization and any organizational identification number issued to the Grantor and (B) in the case of a financing statement filed as a fixture filing, a sufficient description of the real property to which such Article 9 Collateral relates.  The Grantor agrees to provide such information to the Collateral Agent promptly upon request.
 
(d) The Security Interest is granted as security only and shall not subject the Collateral Agent or any other Secured Party to, or in any way alter or modify, any obligation or liability of the Grantor with respect to or arising out of the Article 9 Collateral.
 
SECTION 3.02. Representations and Warranties.  The Grantor represents and warrants to the Collateral Agent and the Secured Parties that:
 
(a) The Grantor has good and valid rights in and title to the Article 9 Collateral with respect to which it grants a Security Interest hereunder.
 
(b) The Perfection Certificate has been duly prepared, completed and executed and the information set forth therein, is correct and complete in all material respects as of the Closing Date.  The Uniform Commercial Code financing statements (including fixture filings, as applicable) or other appropriate filings, recordings or registrations (including without limitation Copyright filings) prepared by the Collateral Agent based upon the information provided to the Collateral Agent in the Perfection Certificate for filing in each governmental, municipal or other office specified in the Perfection Certificate, are all the filings, recordings and registrations that are necessary to establish a legal, valid and perfected security interest in favor of the Collateral Agent (for the benefit of the Secured Parties) in respect of all Article 9 Collateral in which the Security Interest may be perfected by filing, recording or registration in the United States (or any political subdivision thereof) and its territories and possessions, and no further or subsequent filing, refiling, recording, rerecording, registration or reregistration is necessary in any such jurisdiction, except as provided under applicable law with respect to the filing of continuation statements.
 
SECTION 3.03. Covenants.
 
(a) [Reserved].  
 
(b) The Grantor shall, at its own expense, take any and all commercially reasonable actions necessary to defend title to the Article 9 Collateral against all Persons and to defend the Security Interest of the Collateral Agent in the Article 9 Collateral and the priority thereof against any Lien not expressly permitted pursuant to Section 7.01 of the Credit Agreement (it being understood that the Grantor shall have the right to Dispose of Collateral to the extent permitted by Section 7.05 of the Credit Agreement).
 
(c) [Reserved].
 
(d) At its option, upon the occurrence and during the continuance of an Event of Default, the Collateral Agent may discharge past due taxes, assessments, charges, fees, Liens, security interests or other encumbrances at any time levied or placed on the Article 9 Collateral and not permitted pursuant to Section 7.01 of the Credit Agreement, and may pay for the maintenance and preservation of the Article 9 Collateral to the extent the Grantor fails to do so as required by the Credit Agreement or this Agreement and within a reasonable period of time after the Collateral Agent has requested that it do so, and the Grantor agrees to reimburse the Collateral Agent promptly after demand for any payment made or any reasonable expense incurred by the Collateral Agent pursuant to the foregoing authorization.  Nothing in this paragraph shall be interpreted as excusing the Grantor from the performance of, or imposing any obligation on the Collateral Agent or any Secured Party to cure or perform, any covenants or other promises of the Grantor with respect to taxes, assessments, charges, fees, Liens, security interests or other encumbrances and maintenance as set forth herein or in the other Loan Documents.
 
(e) The Grantor (rather than the Collateral Agent or any Secured Party) shall remain liable (as between itself and any relevant counterparty) to observe and perform all the conditions and obligations to be observed and performed by it under each contract, agreement or instrument relating to the Article 9 Collateral, all in accordance with the terms and conditions thereof, and the Grantor agrees to indemnify and hold harmless the Collateral Agent and the Secured Parties from and against any and all liability for such performance.
 
SECTION 3.04. Other Actions.  In order to further insure the attachment, perfection and priority of, and the ability of the Collateral Agent to enforce, the Security Interest, the Grantor agrees, in each case at the Grantor’s own expense, to take the following actions with respect to the following Article 9 Collateral:
 
Instruments.  If the Grantor shall at any time hold or acquire any Instrument constituting Collateral and evidencing an amount in excess of $10,000,000, the Grantor shall forthwith endorse, assign and deliver the same to the Collateral Agent for the benefit of the applicable Secured Parties, accompanied by such instruments of transfer or assignment duly executed in blank as the Collateral Agent may from time to time reasonably request.
 
ARTICLE IV                                
 

 
Remedies
 
SECTION 4.01. Remedies Upon Default.  Upon the occurrence and during the continuance of an Event of Default, it is agreed that the Collateral Agent shall have the right to exercise any and all rights afforded to a secured party with respect to the Secured Obligations under the Uniform Commercial Code or other applicable law and also may (i) require the Grantor to, and the Grantor agrees that it will at its expense and upon request of the Collateral Agent forthwith, assemble all or part of the Collateral as directed by the Collateral Agent and make it available to the Collateral Agent at a place and time to be designated by the Collateral Agent that is reasonably convenient to both parties; (ii) occupy any premises owned or, to the extent lawful and permitted, leased by the Grantor where the Collateral or any part thereof is assembled or located for a reasonable period in order to effectuate its rights and remedies hereunder or under law, without obligation to the Grantor in respect of such occupation; provided that the Collateral Agent shall provide the Grantor with notice thereof prior to or promptly after such occupancy; (iii) exercise any and all rights and remedies of the Grantor under or in connection with the Collateral, or otherwise in respect of the Collateral; provided that the Collateral Agent shall provide the Grantor with notice thereof prior to or promptly after such exercise; and (iv) subject to the mandatory requirements of applicable law and the notice requirements described below, sell or otherwise dispose of all or any part of the Collateral securing the Secured Obligations at a public or private sale or at any broker’s board or on any securities exchange, for cash, upon credit or for future delivery as the Collateral Agent shall deem appropriate.  The Collateral Agent shall be authorized at any such sale of securities (if it deems it advisable to do so) to restrict the prospective bidders or purchasers to Persons who will represent and agree that they are purchasing the Collateral for their own account for investment and not with a view to the distribution or sale thereof, and upon consummation of any such sale the Collateral Agent shall have the right to assign, transfer and deliver to the purchaser or purchasers thereof the Collateral so sold.  Each such purchaser at any sale of Collateral shall hold the property sold absolutely, free from any claim or right on the part of the Grantor, and the Grantor hereby waives (to the extent permitted by law) all rights of redemption, stay and appraisal which the Grantor now has or may at any time in the future have under any rule of law or statute now existing or hereafter enacted.
 
The Collateral Agent shall give the Grantor 10 days’ written notice (which the Grantor agrees is reasonable notice within the meaning of Section 9-611 of the New York UCC or its equivalent in other jurisdictions) of the Collateral Agent’s intention to make any sale of Collateral.  Such notice, in the case of a public sale, shall state the time and place for such sale and, in the case of a sale at a broker’s board or on a securities exchange, shall state the board or exchange at which such sale is to be made and the day on which the Collateral, or portion thereof, will first be offered for sale at such board or exchange.  Any such public sale shall be held at such time or times within ordinary business hours and at such place or places as the Collateral Agent may fix and state in the notice (if any) of such sale.  At any such sale, the Collateral, or portion thereof, to be sold may be sold in one lot as an entirety or in separate parcels, as the Collateral Agent may (in its sole and absolute discretion) determine.  The Collateral Agent shall not be obligated to make any sale of any Collateral if it shall determine not to do so, regardless of the fact that notice of sale of such Collateral shall have been given.  The Collateral Agent may, without notice or publication, adjourn any public or private sale or cause the same to be adjourned from time to time by announcement at the time and place fixed for sale, and such sale may, without further notice, be made at the time and place to which the same was so adjourned.  In case any sale of all or any part of the Collateral is made on credit or for future delivery, the Collateral so sold may be retained by the Collateral Agent until the sale price is paid by the purchaser or purchasers thereof, but the Collateral Agent shall not incur any liability in case any such purchaser or purchasers shall fail to take up and pay for the Collateral so sold and, in case of any such failure, such Collateral may be sold again upon like notice.  At any public (or, to the extent permitted by law, private) sale made pursuant to this Agreement, any Secured Party may bid for or purchase, free (to the extent permitted by law) from any right of redemption, stay, valuation or appraisal on the part of the Grantor (all said rights being also hereby waived and released to the extent permitted by law), the Collateral or any part thereof offered for sale and may make payment on account thereof by using any claim then due and payable to such Secured Party from the Grantor as a credit against the purchase price, and such Secured Party may, upon compliance with the terms of sale, hold, retain and dispose of such property without further accountability to the Grantor therefor.  For purposes hereof, a written agreement to purchase the Collateral or any portion thereof shall be treated as a sale thereof; the Collateral Agent shall be free to carry out such sale pursuant to such agreement and no Grantor shall be entitled to the return of the Collateral or any portion thereof subject thereto, notwithstanding the fact that after the Collateral Agent shall have entered into such an agreement all Events of Default shall have been remedied and the Secured Obligations paid in full.  As an alternative to exercising the power of sale herein conferred upon it, the Collateral Agent may proceed by a suit or suits at law or in equity to foreclose this Agreement and to sell the Collateral or any portion thereof pursuant to a judgment or decree of a court or courts having competent jurisdiction or pursuant to a proceeding by a court-appointed receiver.  Any sale pursuant to the provisions of this Section 4.01, to the fullest extent permitted by applicable law, shall be deemed to conform to the commercially reasonable standards as provided in Section 9-610(b) of the New York UCC or its equivalent in other jurisdictions.
 
Any remedies provided in this Section 4.01 shall be subject to each Intercreditor Agreement.
 
SECTION 4.02. Application of Proceeds.
 
(a) The Collateral Agent shall, subject to the applicable clause of Section 20 of the Cash Flow Intercreditor Agreement, apply the proceeds of any collection or sale of the Collateral as well as any Collateral consisting of cash, at any time after receipt as follows:
 
(i) first, to the payment of all reasonable and documented costs and expenses incurred by the Collateral Agent in connection with such collection or sale or otherwise in connection with this Agreement, the other Loan Documents or any of the Secured Obligations, including all court costs and the reasonable fees and expenses of its agents and legal counsel, the repayment of all advances made by the Collateral Agent hereunder or under any other Loan Document on behalf of the Grantor and any other reasonable and documented costs or expenses incurred in connection with the exercise of any right or remedy hereunder or under any other Loan Document;
 
(ii) second, to the Secured Parties, an amount equal to all Secured Obligations owing to them on the date of any distribution, and, if such moneys shall be insufficient to pay such amounts in full, then ratably as between the Credit Agreement Secured Parties and the Arco Notes Secured Parties (without priority of any one over any other) in proportion to the unpaid amounts of Credit Agreement Obligations and Arco Notes Obligations; provided that any such application among the Credit Agreement Secured Parties shall be subject to the provisions of the Credit Agreement; and
 
(iii) third, any surplus then remaining shall be paid to the Grantors or their successors or assigns or to whomsoever may be lawfully entitled to receive the same or as a court of competent jurisdiction may direct.
 
Subject to the terms of the Cash Flow Intercreditor Agreement, the Collateral Agent shall have absolute discretion as to the time of application of any such proceeds, moneys or balances in accordance with this Agreement.  Upon any sale of Collateral by the Collateral Agent (including pursuant to a power of sale granted by statute or under a judicial proceeding), the receipt of the Collateral Agent or of the officer making the sale shall be a sufficient discharge to the purchaser or purchasers of the Collateral so sold and such purchaser or purchasers shall not be obligated to see to the application of any part of the purchase money paid over to the Collateral Agent or such officer or be answerable in any way for the misapplication thereof.
 
(b) If at any time any moneys collected or received by the Collateral Agent pursuant to this Agreement are distributable pursuant to paragraph (a) above to the Arco Notes Trustee, and if the Arco Notes Trustee shall notify the Collateral Agent in writing that no provision is made under the Arco Notes Indenture for the application by the Arco Notes Trustee of such moneys and that the Arco Notes Indenture does not effectively provide for the receipt and the holding by the Arco Notes Trustee of such moneys pending the application thereof, then the Collateral Agent, after receipt of such moneys pending the application thereof, and after receipt of such notification, shall at the direction of the Arco Notes Trustee, invest such amounts in investments permitted by the Arco Notes Indenture maturing within 90 days after they are acquired by the Collateral Agent or, in the absence of such direction, hold such moneys uninvested and shall hold all such amounts so distributable and all such investments and the net proceeds thereof in trust solely for the Arco Notes Trustee (in its capacity as trustee) and for no other purpose until such time as the Arco Notes Trustee shall request in writing the delivery thereof by the Collateral Agent for application pursuant to the Arco Notes Indenture.  The Collateral Agent shall not be responsible for any diminution in funds resulting from any such investment or any liquidation or any liquidation thereof prior to maturity.
 
(c) In making the determination and allocations required by this Section 4.02, the Collateral Agent may conclusively rely upon information supplied by the Arco Notes Trustee as to the amounts of unpaid principal and interest and other amounts outstanding with respect to the Arco Notes Obligations and information supplied by the Administrative Agent as to the amounts of unpaid principal and interest and other amounts outstanding with respect to the Credit Agreement Obligations, and the Collateral Agent shall have no liability to any of the Secured Parties for actions taken in reliance on such information; provided that nothing in this sentence shall prevent the Grantor from contesting any amounts claimed by any Secured Party in any information so supplied.  All distributions made by the Collateral Agent pursuant to this Section 4.02 shall be (subject to any decree of any court of competent jurisdiction) final (absent manifest error), and the Collateral Agent shall have no duty to inquire as to the application by the Administrative Agent or the Arco Notes Trustee of any amounts distributed to them.
 
SECTION 4.03. Securities Act, Etc.  In view of the position of the Grantor in relation to the Pledged Collateral, or because of other current or future circumstances, a question may arise under the U.S. Securities Act of 1933, as now or hereafter in effect, or any similar statute hereafter enacted analogous in purpose or effect (such Act and any such similar statute as from time to time in effect being called the “Federal Securities Laws”) with respect to any disposition of the Pledged Collateral permitted hereunder.  The Grantor understands that compliance with the Federal Securities Laws might very strictly limit the course of conduct of the Collateral Agent if the Collateral Agent were to attempt to dispose of all or any part of the Pledged Collateral, and might also limit the extent to which or the manner in which any subsequent transferee of any Pledged Collateral could dispose of the same.  Similarly, there may be other legal restrictions or limitations affecting the Collateral Agent in any attempt to dispose of all or part of the Pledged Collateral under applicable “blue sky” or other state securities laws or similar laws analogous in purpose or effect.  The Grantor recognizes that in light of such restrictions and limitations the Collateral Agent may, with respect to any sale of the Pledged Collateral, limit the purchasers to those who will agree, among other things, to acquire such Pledged Collateral for their own account, for investment, and not with a view to the distribution or resale thereof.  The Grantor acknowledges and agrees that in light of such restrictions and limitations, the Collateral Agent, in its sole and absolute discretion and to the extent permitted under applicable law, (a) may proceed to make such a sale whether or not a registration statement for the purpose of registering such Pledged Collateral or part thereof shall have been filed under the Federal Securities Laws and (b) may approach and negotiate with a limited number of potential purchasers (including a single potential purchaser) to effect such sale.  The Grantor acknowledges and agrees that any such sale might result in prices and other terms less favorable to the seller than if such sale were a public sale without such restrictions. In the event of any such sale, the Collateral Agent shall, to the extent permitted under applicable law, incur no responsibility or liability for selling all or any part of the Pledged Collateral at a price that the Collateral Agent, may in good faith deem reasonable under the circumstances, notwithstanding the possibility that a substantially higher price might have been realized if the sale were deferred until after registration as aforesaid or if more than a limited number of purchasers (or a single purchaser) were approached.  The provisions of this Section 4.03 will apply notwithstanding the existence of a public or private market upon which the quotations or sales prices may exceed substantially the price at which the Collateral Agent sells.
 
ARTICLE V                                
 

 
[Reserved]
 
ARTICLE VI                                
 

 
Miscellaneous
 
SECTION 6.01. Notices.  All communications and notices hereunder shall (except as otherwise expressly permitted herein) be in writing and given as provided in Section 10.02 of the Credit Agreement.
 
SECTION 6.02. Waivers; Amendment.
 
(a) No failure or delay by any Secured Party to exercise, and no delay by any such Person in exercising, any right, remedy, power or privilege hereunder or under any other Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.  The rights, remedies, powers and privileges herein provided, and provided under each other Loan Document, are cumulative and not exclusive of any rights, remedies, powers and privileges provided by applicable Law.  No waiver of any provision of this Agreement or consent to any departure by the Grantor therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section 6.02, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given.  Without limiting the generality of the foregoing, the making of a Loan or issuance of a Letter of Credit shall not be construed as a waiver of any Default, regardless of whether any Secured Party may have had notice or knowledge of such Default at the time.  No notice or demand on the Grantor in any case shall entitle the Grantor to any other or further notice or demand in similar or other circumstances.
 
(b) Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Collateral Agent and the Grantor, subject to any consent required in accordance with Section 10.01 of the Credit Agreement.
 
SECTION 6.03. [Reserved].
 
SECTION 6.04. Successors and Assigns.  Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include the permitted successors and assigns of such party; and all covenants, promises and agreements by or on behalf of the Grantor or the Collateral Agent that are contained in this Agreement shall bind and inure to the benefit of their respective successors and assigns.
 
SECTION 6.05. Survival of Agreement.  Such representations and warranties have been or will be relied upon by each Secured Party, regardless of any investigation made by any Secured Party or on their behalf and notwithstanding that any Secured Party may have had notice or knowledge of any Default at the time of any Credit Extension, and shall continue in full force and effect as of the time made as long as any Loan or any other Obligation hereunder shall remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.
 
SECTION 6.06. Counterparts; Effectiveness; Several Agreement; Limitation on Assignment.  This Agreement may be executed in counterparts, each of which shall constitute an original but all of which when taken together shall constitute a single contract.  Delivery by telecopier of an executed counterpart of a signature page to this Agreement shall be as effective as delivery of an original executed counterpart of this Agreement.  This Agreement shall become effective as to the Grantor when a counterpart hereof executed on behalf of the Grantor shall have been delivered to the Collateral Agent and a counterpart hereof shall have been executed on behalf of the Collateral Agent, and thereafter shall be binding upon the Grantor and the Collateral Agent and their respective permitted successors and assigns, and shall inure to the benefit of the Grantor, the Collateral Agent and the other Secured Parties and their respective successors and assigns, except that no Grantor shall have the right to assign or transfer its rights or obligations hereunder or any interest herein or in the Collateral (and any such assignment or transfer shall be void) except as permitted by this Agreement or the Credit Agreement.  
 
SECTION 6.07. Severability.  If any provision of this Agreement is held to be illegal, invalid or unenforceable, the legality, validity and enforceability of the remaining provisions of this Agreement shall not be affected or impaired thereby.  The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
 
SECTION 6.08. [Reserved].  
 
SECTION 6.09. Governing Law; Jurisdiction; Consent to Service of Process.
 
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
 
(a) ANY LEGAL ACTION OR PROCEEDING ARISING UNDER THIS AGREEMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO WHETHER NOW EXISTING OR HEREAFTER ARISING, MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK CITY OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE GRANTOR AND THE COLLATERAL AGENT CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS.  THE GRANTOR AND THE COLLATERAL AGENT IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED THERETO.  EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS IN THE MANNER PROVIDED FOR NOTICES (OTHER THAN TELECOPIER) IN SECTION 10.02 OF THE CREDIT AGREEMENT.  NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.
 
SECTION 6.10. WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
 
SECTION 6.11. Headings.  Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and are not to affect the construction of, or to be taken into consideration in interpreting, this Agreement.
 
SECTION 6.12. Security Interest Absolute.  All rights of the Collateral Agent hereunder, the Security Interest, the grant of a security interest in the Pledged Collateral and all obligations of the Grantor hereunder shall be absolute and unconditional irrespective of (a) any lack of validity or enforceability of the Credit Agreement, any other Loan Document, any agreement with respect to any of the Secured Obligations or any other agreement or instrument relating to any of the foregoing, (b) any change in the time, manner or place of payment of, or in any other term of, all or any of the Secured Obligations, or any other amendment or waiver of or any consent to any departure from the Credit Agreement, any other Loan Document or any other agreement or instrument, (c) any exchange, release or non-perfection of any Lien on other collateral, or any release or amendment or waiver of or consent under or departure from any guarantee, securing or guaranteeing all or any of the Secured Obligations or (d) any other circumstance that might otherwise constitute a defense available to, or a discharge of, the Grantor in respect of the Secured Obligations or this Agreement.
 
SECTION 6.13. Termination or Release.
 
(a) This Agreement, the Security Interest and all other security interests granted hereby shall terminate with respect to all Secured Obligations when all the outstanding Credit Agreement Obligations (other than contingent indemnification obligations not then due) have been paid in full in cash, the Lenders have no further commitment to lend under the Credit Agreement, the L/C Obligations have been reduced to zero and the L/C Issuers have no further obligations to issue Letters of Credit under the Credit Agreement.
 
(b) Upon any sale or other transfer by the Grantor of any Collateral (other than any transfer of Collateral to another Grantor) that is permitted under the Credit Agreement, or upon the effectiveness of any written consent to the release of the security interest granted hereby in any Collateral pursuant to Section 10.01 of the Credit Agreement, the Security Interest in such Collateral shall be automatically released.
 
(c) In the event that a Security Interest in any Collateral granted hereunder is in violation of the Credit Agreement, the Collateral Agent shall release the Security Interest in any such Collateral.
 
(d) Upon the occurrence of any event or circumstance set forth in Sections 2.01(b) or 3.01(b) hereunder, the Security Interest in such Collateral shall be automatically released.
 
(e) In connection with any termination or release pursuant to paragraph (a) through (d), the Collateral Agent shall execute and deliver to the Grantor, at the Grantor’s expense, all documents that the Grantor shall reasonably request to evidence such termination or release.  Any execution and delivery of documents pursuant to this Section 6.13 shall be without recourse to or warranty by the Collateral Agent.
 
SECTION 6.14. [Reserved].  
 
SECTION 6.15. Collateral Agent Appointed Attorney-in-Fact.  The Grantor hereby appoints the Collateral Agent the attorney-in-fact of the Grantor for the purpose of carrying out the provisions of this Agreement and taking any action and executing any instrument that the Collateral Agent may deem necessary or advisable to accomplish the purposes hereof at any time after and during the continuance of an Event of Default, which appointment is irrevocable and coupled with an interest.  Without limiting the generality of the foregoing, the Collateral Agent shall have the right, upon the occurrence and during the continuance of an Event of Default and notice by the Collateral Agent to the Grantor of its intent to exercise such rights, with full power of substitution either in the Collateral Agent’s name or in the name of the Grantor (a) to receive, endorse, assign and/or deliver any and all notes, acceptances, checks, drafts, money orders or other evidences of payment relating to the Collateral or any part thereof; (b) to demand, collect, receive payment of, give receipt for and give discharges and releases of all or any of the Collateral; (c) to sign the name of the Grantor on any invoice or bill of lading relating to any of the Collateral; (d) to send verifications of Accounts to any Account Debtor; (e) to commence and prosecute any and all suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect or otherwise realize on all or any of the Collateral or to enforce any rights in respect of any Collateral; (f) to settle, compromise, compound, adjust or defend any actions, suits or proceedings relating to all or any of the Collateral; (g) to notify, or to require the Grantor to notify, Account Debtors to make payment directly to the Collateral Agent; and (h) to use, sell, assign, transfer, pledge, make any agreement with respect to or otherwise deal with all or any of the Collateral, and to do all other acts and things necessary to carry out the purposes of this Agreement, as fully and completely as though the Collateral Agent were the absolute owner of the Collateral for all purposes; provided that nothing herein contained shall be construed as requiring or obligating the Collateral Agent to make any commitment or to make any inquiry as to the nature or sufficiency of any payment received by the Collateral Agent, or to present or file any claim or notice, or to take any action with respect to the Collateral or any part thereof or the moneys due or to become due in respect thereof or any property covered thereby.  The Collateral Agent and the other Secured Parties shall be accountable only for amounts actually received as a result of the exercise of the powers granted to them herein, and neither they nor their officers, directors, employees or agents shall be responsible to the Grantor for any act or failure to act hereunder, except for their own gross negligence, bad faith or willful misconduct or that of any of their Affiliates, directors, officers, employees, counsel, agents or attorneys-in-fact.
 
SECTION 6.16. General Authority of the Collateral Agent.  By acceptance of the benefits of this Agreement and any other Collateral Documents, each Secured Party (whether or not a signatory hereto) shall be deemed irrevocably (a) to consent to the appointment of the Collateral Agent as its agent hereunder and under such other Collateral Documents, (b) to confirm that the Collateral Agent shall have the authority to act as the exclusive agent of such Secured Party for the enforcement of any provisions of this Agreement and such other Collateral Documents against the Grantor, the exercise of remedies hereunder or thereunder and the giving or withholding of any consent or approval hereunder or thereunder relating to any Collateral or the Grantor’s obligations with respect thereto, (c) to agree that it shall not take any action to enforce any provisions of this Agreement or any other Collateral Document against the Grantor, to exercise any remedy hereunder or thereunder or to give any consents or approvals hereunder or thereunder except as expressly provided in this Agreement or any other Collateral Document and (d) to agree to be bound by the terms of this Agreement and any other Collateral Documents.  In furtherance of the foregoing provisions of this Section 6.16, each Secured Party, by its acceptance of the benefits hereof, agrees that it shall have no right individually to realize upon any of the Collateral hereunder, it being understood and agreed by such Secured Party that all rights and remedies hereunder may be exercised solely by the Collateral Agent for the benefit of the applicable Secured Parties in accordance with the terms of this Section 6.16.  
 
SECTION 6.17. Arco Notes Secured Parties.  The obligations of the Collateral Agent to the Arco Notes Secured Parties hereunder shall be limited solely to (i) holding the Collateral for the benefit of the Arco Notes Secured Parties for so long as (A) any Arco Notes Obligations remain outstanding and (B) any Arco Notes Obligations are secured by such Collateral and (ii) distributing any proceeds received by the Collateral Agent from the sale, collection or realization of the Collateral to the Arco Notes Secured Parties in respect of the Arco Notes Obligations in accordance with the terms of this Agreement.  Neither the holders of the Arco Notes nor the Arco Notes Trustee shall be entitled to exercise (or direct the Collateral Agent to exercise) any rights or remedies hereunder with respect to the Arco Notes Obligations, including without limitation the right to enforce the security interest in the Collateral, request any action, institute proceedings, give any instructions, make any election, give any notice to account debtors, make collections, sell or otherwise foreclose on any portion of the Collateral or execute any amendment, supplement, or acknowledgment hereof.  This Agreement shall not create any liability of the Collateral Agent or the Credit Agreement Secured Parties to any of the Arco Notes Secured Parties by reason of actions taken with respect to the creation, perfection or continuation of the security interest on the Collateral, actions with respect to the occurrence of an Event of Default, actions with respect to the foreclosure upon, sale, release, or depreciation of, or failure to realize upon, any of the Collateral or action with respect to the collection of any claim for all or any part of the Secured Obligations from any account debtor, guarantor or any other party or the valuation, use or protection of the Collateral.  By acceptance of the benefits under this Agreement and certain other Collateral Documents, the Arco Notes Secured Parties and the Arco Notes Trustee will be deemed to have acknowledged and agreed that the provisions of the preceding sentence are intended to induce the Lenders to permit such Persons to be Secured Parties under this Agreement and certain of the other Collateral Documents and are being relied upon by the Lenders as consideration therefor.
 
(a) The Collateral Agent shall not be required to ascertain or inquire as to the performance by the Grantor or any other obligor of the Arco Notes Obligations.
 
(b) Notwithstanding anything to the contrary herein, nothing in this Agreement shall or shall be construed to (i) result in the security interest in the Collateral securing the Arco Notes Obligations less than equally and ratably with the Credit Agreement Obligations pursuant to the Arco Notes Indenture to the extent required or (ii) modify or affect the rights of the Arco Notes Secured Parties to receive the pro rata share specified in Section 4.02(a)(ii) of any proceeds of any collection or sale of Collateral.
 
(c) The parties hereto agree that the Arco Notes Obligations and the Credit Agreement Obligations are, and will be, equally and ratably secured with each other by the Liens on the Collateral created pursuant to this Agreement, and that it is their intention to give full effect to the equal and ratable provisions of the Arco Notes Indentures, as in effect on the date hereof.  To the extent that the rights and benefits herein or in any other Collateral Document conferred on the Arco Notes Secured Parties shall be held to exceed the rights and benefits required so to be conferred by such provisions, such rights and benefits shall be limited so as to provide such Arco Notes Secured Parties only those rights and benefits that are required by such provisions.  Any and all rights not herein expressly given to the Arco Notes Trustee are expressly reserved to the Collateral Agent and the Secured Parties other than the Arco Notes Secured Parties.  The Collateral Agent’s liability shall be limited as provided in the Credit Agreement and the Collateral Agent shall be entitled to all the benefits of the indemnity provisions under the Credit Agreement.
 
SECTION 6.18. Intercreditor Agreement.  Notwithstanding anything herein to the contrary, the liens and security interests granted to the Collateral Agent pursuant to this Agreement and the exercise of any right or remedy by the Collateral Agent hereunder, in each case, with respect to the Collateral are subject to the limitations and provisions of each Intercreditor Agreement. In the event of any conflict between the terms of any Intercreditor Agreement and the terms of this Agreement with respect to the Collateral (other that with respect to Sections 2.01(a) and 3.01(a)), the terms of such Intercreditor Agreement shall govern and control.
 

 

 
(Remainder of page intentionally left blank)
 

 
 
 

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written.
 
BIL ACQUISITION HOLDINGS LIMITED (to be merged with and into LYONDELL CHEMICAL COMPANY)
By
   
 
Name:
 
Title:

 
 
   
   
   



 

 
 
 

 



CITIBANK, N.A. as
Collateral Agent,
By
   
 
Name:
 
Title:




 


 
 
 
Schedule I
to the Supplement No __ to the
Security Agreement

EQUITY INTERESTS
 
Issuer
Number of
Certificate
Registered
Owner
Number and
Class of
Equity Interest
Percentage
of Equity Interests
         
         
         
         
         

DEBT SECURITIES
 
Issuer
Principal
Amount
Date of Note
Maturity Date
       
       
       
       
       

 

 

 
 
 




EX-4.3 3 lyo10k-032808ex43.htm INTERIM LOAN CREDIT AGREEMENT DATED AS OF DECEMBER 20, 2007 lyo10k-022808ex43.htm
EXHIBIT 4.3


BRIDGE LOAN AGREEMENT
 
Dated as of December 20, 2007
 
among
 
LYONDELLBASELL FINANCE COMPANY, as Borrower,
 
BASELL AF S.C.A., as the Company,
 
The GUARANTORS party hereto,
 
The LENDERS party hereto,
 
MERRILL LYNCH CAPITAL CORPORATION,
as Administrative Agent,
 
 
CITIBANK, N.A.,
as Collateral Agent,
 
__________________________________________
 
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,
 
GOLDMAN SACHS CREDIT PARTNERS L.P.
 
CITIGROUP GLOBAL MARKETS INC.,
 
ABN AMRO INCORPORATED
 
 
and
 
 
UBS SECURITIES LLC,
 
as Joint Lead Arrangers and Bookrunners
 
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,
 
as Transaction Coordinator
 
__________________________________________
 
Cahill Gordon & Reindel llp
80 Pine Street
New York, NY  10005

 
 
 

TABLE OF CONTENTS
   
Page
     
ARTICLE 1
 
DEFINITIONS
 
SECTION 1.01.
DEFINED TERMS
  1
SECTION 1.02.
TERMS GENERALLY
51
SECTION 1.03.
EFFECTUATION OF TRANSACTION
52
SECTION 1.04.
ACCOUNTING TERMS
52
SECTION 1.05.
ROUNDING
52
SECTION 1.06.
REFERENCES TO AGREEMENTS, LAWS, ETC.
52
SECTION 1.07.
TIMES OF DAY
53
SECTION 1.08.
TIMING OF PAYMENT OR PERFORMANCE
53
SECTION 1.09.
RESOLUTION OF DRAFTING AMBIGUITIES.
53
     
ARTICLE 2
 
THE CREDITS
 
SECTION 2.01.
COMMITMENT
53
SECTION 2.02.
LOANS AND BORROWINGS
54
SECTION 2.03.
REQUEST FOR BORROWING
54
SECTION 2.04.
FUNDING OF BORROWINGS
54
SECTION 2.05.
TERMINATION OF COMMITMENTS
55
SECTION 2.06.
REPAYMENT OF LOANS; EVIDENCE OF DEBT
55
SECTION 2.07.
PREPAYMENT OF LOANS
56
SECTION 2.08.
FEES
57
SECTION 2.09.
INTEREST
57
SECTION 2.10.
ALTERNATE RATE OF INTEREST
58
SECTION 2.11.
INCREASED COSTS
58
SECTION 2.12.
BREAK FUNDING
59
SECTION 2.13.
TAXES
60
SECTION 2.14.
MATTERS APPLICABLE TO ALL REQUESTS FOR COMPENSATION
62
SECTION 2.15.
REPLACEMENT OF LENDERS
63
SECTION 2.16.
ILLEGALITY
63
SECTION 2.17.
PAYMENTS GENERALLY.
64
     
ARTICLE 3
 
REPRESENTATIONS AND WARRANTIES
 
SECTION 3.01.
EXISTENCE, QUALIFICATION AND POWER; COMPLIANCE WITH LAWS.
65
SECTION 3.02.
AUTHORIZATION; NO CONTRAVENTION.
65
SECTION 3.03.
GOVERNMENTAL AUTHORIZATION; OTHER CONSENTS
66
SECTION 3.04.
BINDING EFFECT.
66
SECTION 3.05.
FINANCIAL STATEMENTS; NO MATERIAL ADVERSE EFFECT.
66

 
-i-
 

SECTION 3.06.
LITIGATION.
67
SECTION 3.07.
OWNERSHIP OF PROPERTY; LIENS.
67
SECTION 3.08.
ENVIRONMENTAL MATTERS.
67
SECTION 3.09.
TAXES.
68
SECTION 3.10.
ERISA COMPLIANCE.
69
SECTION 3.11.
SUBSIDIARIES; EQUITY INTERESTS.
69
SECTION 3.12.
MARGIN REGULATIONS; INVESTMENT COMPANY ACT.
69
SECTION 3.13.
DISCLOSURE.
69
SECTION 3.14.
[RESERVED].
70
SECTION 3.15.
ANTI-TERRORISM LAWS.
70
SECTION 3.16.
INTELLECTUAL PROPERTY; LICENSES, ETC.
70
SECTION 3.17.
SOLVENCY.
70
SECTION 3.18.
USE OF PROCEEDS.
70
SECTION 3.19.
[RESERVED].
71
SECTION 3.20.
SECURITY DOCUMENTS.
71
SECTION 3.21.
WORKS COUNCIL.
71
     
ARTICLE 4
 
CONDITIONS OF LENDING
 
SECTION 4.01.
CONDITIONS OF LENDING.
72
     
ARTICLE 5
 
GENERAL COVENANTS
 
SECTION 5.01.
LIMITATION ON RESTRICTED PAYMENTS
75
SECTION 5.02.
CORPORATE EXISTENCE
78
SECTION 5.03.
PAYMENTS OF TAXES AND OTHER CLAIMS
78
SECTION 5.04.
MAINTENANCE OF PROPERTIES AND INSURANCE
78
SECTION 5.05.
COMPLIANCE WITH LAWS
79
SECTION 5.06.
ANTI-MONEY LAUNDERING
79
SECTION 5.07.
LIMITATIONS ON TRANSACTIONS WITH AFFILIATES
79
SECTION 5.08.
LIMITATION ON INCURRENCE OF ADDITIONAL INDEBTEDNESS
81
SECTION 5.09.
LIMITATION ON DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES
85
SECTION 5.10.
CHANGE OF CONTROL
87
SECTION 5.11.
LIMITATION ON ASSET SALES
88
SECTION 5.12.
COMPLIANCE WITH ENVIRONMENTAL LAWS.
90
SECTION 5.13.
BOOKS AND RECORDS
90
SECTION 5.14.
LIMITATION ON LIENS
90
SECTION 5.15.
ADDITIONAL SUBSIDIARY GUARANTEES
91
SECTION 5.16.
CONDUCT OF BUSINESS
91
SECTION 5.17.
ADDITIONAL COLLATERAL
91
SECTION 5.18.
LIMITATION ON ADDITIONAL LIENS ON THE COLLATERAL
92
SECTION 5.19.
MERGER, CONSOLIDATION, AND SALE OF ASSETS
92
SECTION 5.20.
[RESERVED].
94
SECTION 5.21.
ERISA
94
SECTION 5.22.
HOLDING COMPANY
94

 
-ii-
 
 
SECTION 5.23.
USE OF PROCEEDS OF THE PERMANENT SECURITIES
95
SECTION 5.24.
EXCHANGE NOTES
95
     
ARTICLE 6
 
INFORMATION COVENANTS
 
SECTION 6.01.
ANNUAL FINANCIAL STATEMENTS
96
SECTION 6.02.
QUARTERLY FINANCIAL STATEMENTS
96
SECTION 6.03.
PARENT GUARANTOR
97
SECTION 6.04.
COMPLIANCE CERTIFICATE
97
SECTION 6.05.
PROJECTIONS
98
SECTION 6.06.
[RESERVED]
98
SECTION 6.07.
INFORMATION; MISCELLANEOUS
98
SECTION 6.08.
NOTIFICATION OF DEFAULT
99
SECTION 6.09.
INSPECTION OF BOOKS AND RECORDS
99
SECTION 6.10.
INSPECTION RIGHTS
99
SECTION 6.11.
[RESERVED]
100
SECTION 6.12.
KNOW YOUR CUSTOMER CHECKS
100
SECTION 6.13.
NO PERSONAL LIABILITY
100
SECTION 6.14.
PERMANENT SECURITIES.
101
   
 
ARTICLE 7
 
EVENTS OF DEFAULT
 
SECTION 7.01.
EVENTS OF DEFAULT
101
SECTION 7.02.
REMEDIES.
104
SECTION 7.03.
APPLICATION OF FUNDS ON ENFORCEMENT
104
     
ARTICLE 8
 
[RESERVED]
 
ARTICLE 9
 
GUARANTEE
 
SECTION 9.01.
THE GUARANTEE
105
SECTION 9.02.
OBLIGATIONS UNCONDITIONAL
105
SECTION 9.03.
REINSTATEMENT
107
SECTION 9.04.
SUBROGATION; SUBORDINATION
107
SECTION 9.05.
REMEDIES
107
SECTION 9.06.
INSTRUMENT FOR THE PAYMENT OF MONEY
107
SECTION 9.07.
CONTINUING GUARANTEE
107
SECTION 9.08.
GENERAL LIMITATION ON GUARANTEE OBLIGATIONS
107
SECTION 9.09.
RELEASE OF GUARANTORS
108
SECTION 9.10.
RIGHT OF CONTRIBUTION
108
SECTION 9.11.
CERTAIN DUTCH MATTERS
108
SECTION 9.12.
GUARANTEE LIMITATIONS
109

 
-iii-
 

SECTION 9.13.
GUARANTEE LIMITATIONS IN RESPECT OF MILLENNIUM CHEMICALS INC
112
SECTION 9.14.
NON-U.S. GUARANTEE LIMITATIONS
112
SECTION 9.15.
LIMITATION ON GUARANTEE BY ADDITIONAL GUARANTORS
112
     
ARTICLE 10
 
THE AGENTS
 
SECTION 10.01.
APPOINTMENT
113
SECTION 10.02.
NATURE OF DUTIES
115
SECTION 10.03.
RESIGNATION BY THE AGENTS
115
SECTION 10.04.
THE ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY
115
SECTION 10.05.
INDEMNIFICATION
116
SECTION 10.06.
LACK OF RELIANCE ON AGENTS
116
SECTION 10.07.
COLLATERAL AGENT UNDER ITALIAN LAW
116
SECTION 10.08.
RELEASE FROM RESTRICTIONS OF SELF DEALING
117
SECTION 10.09.
PERPETUITY PERIOD
117
     
ARTICLE 11
 
MISCELLANEOUS
 
SECTION 11.01.
NOTICES
117
SECTION 11.02.
SURVIVAL OF AGREEMENT
118
SECTION 11.03.
BINDING EFFECT
118
SECTION 11.04.
SUCCESSORS AND ASSIGNS
118
SECTION 11.05.
EXPENSES; INDEMNITY
121
SECTION 11.06.
RIGHT OF SET-OFF
122
SECTION 11.07.
APPLICABLE LAW
123
SECTION 11.08.
WAIVERS; AMENDMENTS
123
SECTION 11.09.
INTEREST RATE LIMITATION
124
SECTION 11.10.
ENTIRE AGREEMENT
125
SECTION 11.11.
WAIVER OF JURY TRIAL
125
SECTION 11.12.
SEVERABILITY
125
SECTION 11.13.
COUNTERPARTS
125
SECTION 11.14.
HEADINGS
125
SECTION 11.15.
JURISDICTION; CONSENT TO SERVICE OF PROCESS
125
SECTION 11.16.
CONFIDENTIALITY
126
SECTION 11.17.
CONVERSION OF CURRENCIES
127
SECTION 11.18.
NO ADVISORY OR FIDUCIARY RESPONSIBILITY
127
SECTION 11.19.
PATRIOT ACT NOTICE
128
SECTION 11.20.
JOINT LEAD ARRANGERS BOOKRUNNERS AND GLOBAL COORDINATORS
128
SECTION 11.21.
COLLATERAL AND GUARANTEE MATTERS
128
 
 
-iv-
 

SCHEDULES
 
Schedule 1.01(a)                            Security Documents
Schedule 1.01(b)                           Security Principles
Schedule 1.01(c)                           Guarantors
Schedule 1.01(f)                            Mortgaged Properties
Schedule 1.01(g)                           Easement Instruments
Schedule 1.01(k)                            Excluded Collateral
Schedule 2.01                                Commitments of Lenders
Schedule 3.08                                Environmental Matters
Schedule 3.11                                Subsidiaries and Other Equity Investments
Schedule 4.01(a)(iii)                      Certain Security Interests and Guarantees
Schedule 4.01(a)(v)(B)                  Local Counsel Jurisdictions
Schedule 6.07                                Website for Notices

 
-v-
 

EXHIBITS
 
Exhibit A                           Assignment and Acceptance
Exhibit B                            Form of Borrowing Request
Exhibit C-1                         Form of Initial Note
Exhibit C-2                         Form of Extended Note
Exhibit D                            Form of Description of Exchange Notes
Exhibit E                            Form of Exchange and Registration Rights Agreement
Exhibit F                            Mandatory Cost Formula
Exhibit G                            Form of Intercreditor Agreement
Exhibit H                            Form of Intercompany Note
Exhibit I                             Accession Letter
Exhibit J                             Form of Foreign Lender Tax Certificate
Exhibit K                            Form of U.S. Legal Opinion of Skadden, Arps, Slate, Meagher & Flom LLP
Exhibit L                            Funds Flow Memorandum
Exhibit M                           Compliance Certificate

 
-vi-
 

BRIDGE LOAN AGREEMENT dated as of December 20, 2007 (this Agreement), among LYONDELLBASELL FINANCE COMPANY (Borrower), BASELL AF S.C.A. (the Company), the GUARANTORS party hereto from time to time, the LENDERS party hereto from time to time, MERRILL LYNCH CAPITAL CORPORATION, as administrative agent (in such capacity, the Administrative Agent) and CITIBANK, N.A., as collateral agent (in such capacity, the Collateral Agent) for the Lenders and MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, GOLDMAN SACHS CREDIT PARTNERS L.P., CITIGROUP GLOBAL MARKETS INC., ABN AMRO INCORPORATED and UBS SECURITIES LLC, as joint lead arrangers and bookrunners (in such capacity, the Joint Lead Arrangers) and MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, as transaction coordinator (in such capacity, the Transaction Coordinator).
 
R E C I T A L S :
 
WHEREAS, pursuant to an Agreement and Plan of Merger dated as of July 16, 2007 (the Merger Agreement) among the Company, BIL Acquisition Holdings Limited (MergerCo) and Lyondell Chemical Company (Lyondell), MergerCo will merge with and into Lyondell (the Merger) with the effect that Lyondell and its subsidiaries will become subsidiaries of the Company (the Acquisition);
 
WHEREAS, to partially pay the consideration for the Acquisition and the refinancing of certain debt of the Company and its subsidiaries and Lyondell and its subsidiaries (the Refinancing), certain affiliates of Borrower will draw down loans under the Senior Secured Credit Facilities on the Closing Date (as hereinafter defined);
 
WHEREAS, to refinance certain debt of Lyondell, certain affiliates of Borrower will enter into a securitization facility and the Asset Backed Credit Facilities on the Closing Date;
 
WHEREAS, it is currently intended that Borrower will issue the Permanent Securities and the proceeds thereof will subsequently be used to repay the Loans;
 
NOW, THEREFORE, the Lenders are willing to extend credit to Borrower on the terms and subject to the conditions set forth herein.  Accordingly, the parties hereto agree as follows:
 
ARTICLE 1
 
DEFINITIONS
 
As used in this Agreement, the following terms shall have the following meanings:
 
Section 1.01.  Defined Terms.
 
2010 Debentures shall mean the $100,000,000 aggregate principal amount of 10% Debentures due 2010 of Lyondell.
 
2015 Notes shall mean, collectively, the $615,000,000 aggregate principal amount of 8⅜% Senior Notes due 2015 of the Company and the 500,000,000 aggregate principal amount of 8⅜% Senior Notes due 2015 of the Company.

 
 

2027 Notes shall mean the U.S.$300,000,000 aggregate principal amount of 8.10% guaranteed notes due March 15, 2027 issued by Montell Finance Company B.V. (now known as Basell Finance Company B.V.).
 
Accession Letter shall mean a document substantially in the form set out in Exhibit I, or such other form (if any) as may be agreed between the Administrative Agent and the Loan Parties agent.
 
Acquired Indebtedness shall mean Indebtedness of a Person or any of its subsidiaries existing at the time such Person becomes a Restricted Subsidiary of the Company or at the time it merges or consolidates with the Company or any of its Restricted Subsidiaries or assumed in connection with the acquisition of assets from such Person and in each case not incurred by such Person in connection with, or in anticipation or contemplation of, such Person becoming a Restricted Subsidiary of the Company or such acquisition, merger or consolidation, except for Indebtedness of a Person or any of its subsidiaries that is repaid at the time such Person becomes a Restricted Subsidiary of the Company or at the time it merges or consolidates with the Company or any of its Restricted Subsidiaries.
 
Acquisition shall having the meaning assigned to such term in the recital hereto.
 
Additional Guarantor shall mean a company which becomes a Guarantor in accordance with Section 5.15.
 
Administrative Agent shall have the meaning assigned to such term in the preamble to this Agreement.
 
Affiliate shall mean, with respect to any specified Person, any other Person who directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, such specified Person.  The term control shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise; and the terms controlling and controlled have meanings correlative of the foregoing; provided, however, that none of the Finance Parties or their respective Affiliates shall be deemed to be an Affiliate of the Company.
 
Agents shall mean the Administrative Agent and the Collateral Agent.
 
Agreement shall have the meaning assigned to such term in the introductory paragraph of this Agreement.
 
Agreement Currency shall have the meaning assigned to such term in Section 11.17(b).
 
Anti-Terrorism Laws shall mean:
 
(a)           the Executive Order No. 13224 of September 23, 2001, Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten To Commit, or Support Terrorism (the Executive Order);
 
(b)           the Patriot Act;
 
(c)           the Money Laundering Control Act of 1986, Public Law 99-570;

 
-2-
 
 
(d)           the International Emergency Economic Powers Act, 50 U.S.C. 1701 et seq, and the Trading with the Enemy Act, 50 U.S.C. App. 1 et seq, and any Executive Order or regulation promulgated thereunder and administered by the Office of Foreign Assets Control (OFAC) of the U.S. Department of the Treasury; and
 
(e)           any similar law enacted in the United States of America subsequent to the date of this Agreement.
 
Applicable Creditor shall have the meaning assigned to such term in Section 11.17(b).
 
Applicable Margin shall mean:
 
 
(a)           during the period beginning on the Closing Date through and including the day that is 180 days after the Closing Date, 4.625%,
 
 
(b)           during the period beginning on the 181st day after the Closing Date through and including the day that is 270 days after the Closing Date, 5.125%, and
 
 
(c)           during the period beginning on the 271st day after the Closing Date and thereafter 5.625%;
 
provided, however, that in the event that a Rate Increasing Event has occurred on or prior to any date that is the first day of any period referred to in (a), (b) or (c) above and is continuing on any such date, the margins specified in clauses (a), (b) and (c) above with respect to any Loans to which such Rate Increasing Event relates shall be increased by 0.5% for the period relating to such date.
 
Approved Fund shall mean any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course of its business and that is administered or managed by a Lender, an Affiliate of a Lender or an entity or an Affiliate of an entity that administers or manages a Lender.
 
Acquisition Agreement means that certain Agreement and Plan of Merger, dated as of July 16, 2007, by and among the Company, BIL Acquisition and Lyondell.
 
Arco Notes shall mean the $100,000,000 in aggregate principal amount of 10% Debentures due 2010 and $225,000,000 in aggregate principal amount of 9.8% Debentures due 2020, in each case issued by ARCO Chemical Company.
 
Asset Acquisition shall mean:
 
(a)           an Investment by the Company or any Restricted Subsidiary of the Company in any other Person pursuant to which such Person shall become a Restricted Subsidiary of the Company or of any Restricted Subsidiary of the Company, or shall be merged with or into the Company or any Restricted Subsidiary of the Company, or
 
(b)           the acquisition by the Company or any Restricted Subsidiary of the Company of the assets of any Person (other than a Restricted Subsidiary of the Company) which constitute all or substantially all of the assets of such Person or comprises any division or line of business of such Person or any other properties or assets of such Person other than in the ordinary course of business.

 
-3-
 

Asset Backed Credit Facilities shall mean:
 
(1)           the asset based revolving credit agreement dated as of the Closing Date among Lyondell Chemical Company, Equistar Chemicals, LP, Houston Refining LP, Basell USA Inc. and certain subsidiaries of the Company party thereto as co-borrowers from time to time thereunder, the lenders and agents party thereto and Citibank, N.A., as administrative agent and collateral agent;
 
(2)           any credit facility provided on the basis of the value of inventory, accounts receivable or other current assets (and related documents) or similar instrument, including any similar credit support agreements or guarantees incurred from time to time; and
 
(3)           any such agreements, instruments or guarantees governing Indebtedness incurred to Refinance any Indebtedness or commitment referred to in (1) and (2) whether by the same or any other lender or group of lenders.
 
Asset Sale shall mean any direct or indirect sale, issuance, conveyance, transfer, lease (other than operating leases entered into in the ordinary course of business), assignment or other transfer for value by the Company or any of its Restricted Subsidiaries (including any Sale and Leaseback Transaction) to any Person other than the Company or a Restricted Subsidiary of the Company of (a) any Qualified Capital Stock of any Restricted Subsidiary of the Company (other than to qualifying directors or nominal shareholders if required by applicable law or other similar legal requirements); or (b) any other property or assets of the Company or any Restricted Subsidiary of the Company other than in the ordinary course of business; provided, however, that Asset Sales shall not include
 
(i)           a transaction or series of related transactions for which the Company or its Restricted Subsidiaries receive fair market value as determined in good faith by the Company for the property or assets and the aggregate consideration is less than $75 million,
 
(ii)           the transfer of accounts receivable and related assets (including contract rights) of the type specified in the definition of Qualified Securitization Transaction to a Securitization Entity for the fair market value thereof,
 
(iii)           sales or grants of licenses to use the patents, trade secrets, know-how and other intellectual property of the Company or any of its Restricted Subsidiaries to the extent that such license does not prohibit the Company or any of its Restricted Subsidiaries from using the technologies licensed (other than pursuant to exclusivity or non-competition arrangements negotiated on an arms-length basis) or require the Company or any of its Restricted Subsidiaries to pay any fees for any such use,
 
(iv)           the sale, lease, conveyance, disposition or other transfer
 
(A)           of all or substantially all of the assets of the Company as permitted under Section 5.19,
 
(B)           of any Capital Stock or other ownership interest in or assets or property, including Indebtedness, of an Unrestricted Subsidiary or a Person which is not a subsidiary,
 
(C)           pursuant to the creation of any Lien or any foreclosure of assets or other remedy provided by applicable law to a creditor of the Company or any subsidiary of the Company with a Lien on such assets, which Lien is permitted under the Loan Documents; provided that such foreclosure or other remedy is conducted in a commercially reasonable manner or in accordance with any bankruptcy law,

 
-4-
 

(D)           involving only cash or Cash Equivalents or inventory in the ordinary course of business or obsolete or worn out property or property that is no longer useful in the conduct of the business of the Company or its Restricted Subsidiaries (in the reasonable and good faith judgment of the board of directors of the Company) in the ordinary course of business consistent with past practices of the Company or such Restricted Subsidiaries or
 
(E)           including only the lease or sublease of any real or personal property in the ordinary course of business,
 
(v)           the consummation of any transaction in accordance with the terms of Section 5.01 or Section 5.19, and
 
(vi)           Permitted Investments.
 
Assignment and Acceptance shall mean an assignment and acceptance entered into by a Lender and an assignee, and accepted by the Administrative Agent and Borrower (if required by such assignment and acceptance), substantially in the form of Exhibit A or such other form as shall be approved by the Administrative Agent.
 
Attributable Indebtedness shall mean, on any date, in respect of any Capitalized Lease of any Person, the capitalized amount thereof of any liability that would be required to appear on a balance sheet of such Person prepared as of such date in accordance with GAAP.
 
Attorney Costs shall mean and includes all reasonable fees, reasonable out-of-pocket expenses and disbursements of Cahill Gordon & Reindel llp, Allen & Overy LLP and (without duplication) a single external local counsel to the Joint Lead Arrangers in each jurisdiction reasonably determined by the Administrative Agent.
 
Auditors Determination shall have the meaning given to it in Section 9.12(a)(vi).
 
Audited Financial Statements shall mean the audited consolidated financial statements of (i) the Companys predecessor, Basell N.V. (now Basell Holdings B.V.), for the fiscal year ended December 31, 2004 and the seven-month period ended July 31, 2005 and (ii) the Company and its subsidiaries, for the period beginning April 20, 2005 and ended December 31, 2005 and the fiscal year ended December 31, 2006.
 
Basel II shall have the meaning given to it in Section 2.11(a).
 
Basell Parent Company shall mean any entity of which the Company is a direct or indirect wholly-owned subsidiary (other than shares held by qualifying directors or nominal shareholders if required by applicable law or otherwise due to similar legal requirements).

 
-5-
 

Blavatnik Group shall mean, collectively:
 
(a)           Mr. Leonard Blavatnik, his spouse, direct descendents, siblings, parents, children of siblings, or grandchildren, grand nieces and grand nephews, and any other members of the immediate Blavatnik family; or
 
(b)           any trust or any other entity directly or indirectly controlled by, or for the benefit of, one or more members of the Blavatnik family described above; or
 
(c)           any trust (a Blavatnik Charitable Trust):
 
(i)           for the benefit of a charity created by any member of the Blavatnik family described above; or
 
(ii)           to which any such member of the Blavatnik family is a substantial donor or grantor; or
 
(d)           the estate, executor, administrator, committee of beneficiaries of any member of the Blavatnik Group listed in paragraphs (a) and (b) of this definition;
 
provided that, in the case of paragraphs (c)(i) and (c)(ii) of this definition, a member of the Blavatnik Group described in paragraphs (a) or (b) of this definition maintains control thereof.
 
For purposes of this definition only, control of a Blavatnik Charitable Trust means the possession of the power to direct or cause the direction of management and policies of such Blavatnik Charitable Trust in respect of the issued share capital of the Company owned by such Blavatnik Charitable Trust.
 
Board shall mean the Board of Governors of the Federal Reserve System of the United States of America (or any successor).
 
Board of Directors shall mean, as to any Person, the board of directors (or similar governing body) of such Person (or, if such Person is a partnership and does not have a board of directors (or similar governing body), the board of directors (or similar governing body) of such Persons general partner) or any duly authorized committee thereof.
 
Borrower shall have the meaning assigned to such term in the preamble to this Agreement.
 
Borrowing shall mean a group of Loans as to which a single Interest Period is in effect.
 
Borrowing Request shall mean a request by Borrower in accordance with the terms of Section 2.03 and substantially in the form of Exhibit B.
 
Business Day shall mean any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Laws of, are in fact closed in, the state of New York and:

 
-6-
 

(a)           if such day relates to any interest rate settings as to a Dollar Loan, any fundings, disbursements, settlements and payments in Dollars in respect of any such Dollar Loan, or any other dealings in Dollars to be carried out pursuant to this Agreement in respect of any such Dollar Loan, means any such day on which dealings in deposits in Dollars are conducted by and between banks in the London interbank eurodollar market; and
 
(b)           if such day relates to any interest rate settings as to a Euro Loan, any fundings, disbursements, settlements and payments in Euros in respect of any such Euro Loan, or any other dealings in Euros to be carried out pursuant to this Agreement in respect of any such Euro Loan, means a TARGET Day.
 
Capital Stock shall mean:
 
(a)           with respect to any Person that is a corporation, any and all shares or other equivalents (however designated and whether or not voting) of corporate stock, including each class of Common Stock and Preferred Stock of such Person and
 
(b)           with respect to any Person that is not a corporation, any and all partnership interests, participations or other equivalents (however designated and whether or not voting) of corporate stock, membership or other equity interests of such Person.
 
Capitalized Lease Obligation shall mean, as to any Person, the obligations of such Person under a lease that are required to be classified and accounted for as capital lease obligations under GAAP and, for purposes of this definition, the amount of such obligations at any date shall be the capitalized amount of such obligations at such date, determined in accordance with GAAP.
 
Capitalized Leases shall mean all leases which, in accordance with GAAP, are recorded as capitalized leases; provided that for all purposes hereunder the amount of principal obligations under any Capitalized Lease shall be the Attributable Indebtedness related thereto.
 
Cash Collateral Account shall mean a blocked account at Citibank, N.A. (or another commercial bank selected in compliance with the Senior Secured Credit Facilities in the name of the Collateral Agent) and otherwise established in a manner reasonably satisfactory to the Collateral Agent.
 
Cash Equivalents shall mean:
 
(a)           time deposits or demand deposits in local currencies held by it from time to time in the ordinary course of business,
 
(b)           an obligation, maturing within two years after the date of its acquisition, issued or guaranteed by the United States of America, Australia, Switzerland, Japan, Canada or any state which was a member state of the European Union on December 31, 2003, or an instrumentality or agency thereof,
 
(c)           a certificate of deposit or bankers acceptance, maturing within one year after the date of its acquisition, issued by any lender under the Credit Facilities, or a U.S. national or state bank or trust company or a European, Canadian, Australian, Swiss or Japanese bank, in each case having capital, surplus and undivided profits of at least $100,000,000 and whose long-term unsecured debt has a rating of A or better by S&P or A2 or better by Moodys or the equivalent rating by any other nationally recognized rating agency,

 
-7-
 

(d)           commercial paper, maturing within 365 days after the date of its acquisition, which has a rating of A1 or better by S&P or P1 or better by Moodys, or the equivalent rating by any other nationally recognized rating agency,
 
(e)           repurchase agreements and reverse repurchase agreements with an outstanding term not in excess of one year after the date of its acquisition with any financial institution which has been elected as a primary government securities dealer by the Federal Reserve Board or in respect of instruments set forth in clauses (c) or (d) above of the credit quality set forth in such applicable clause,
 
(f)           Money Market preferred stock maturing within six months after the date of its acquisition or municipal bonds issued by a corporation organized under the laws of any state of the United States, Australia, Switzerland, Japan, Canada or any state which was a member state of the European Union on December 31, 2003 or an instrumentality or agency thereof, which has a rating of A or better by S&P or Moodys or the equivalent rating by any other nationally recognized rating agency,
 
(g)           tax exempt floating rate option tender bonds backed by letters of credit issued by a national or state bank whose long-term unsecured debt has a rating of AA or better by S&P or Aa2 or better by Moodys or the equivalent rating by any other nationally recognized rating agency, and
 
(h)           shares of any fund holding assets consisting (except for de minimis amounts) of the type specified in clauses (a) through (g) above.
 
Casualty Event shall mean any event that gives rise to the receipt by the Company or any Restricted Subsidiary of any insurance proceeds or condemnation awards in respect of any equipment, fixed assets or Real Property (including any improvements thereon) to replace or repair such equipment, fixed assets or Real Property.
 
Casualty Prepayment Event shall mean any event that gives rise to the receipt by the Company or any Restricted Subsidiary of any insurance proceeds or condemnation awards in respect of any equipment, fixed assets or Real Property (including any improvements thereon) to replace or repair such equipment, fixed assets or Real Property.
 
Change in Law shall mean the introduction of, or any change in or in the interpretation of, any law, treaty or governmental rule, regulation or order or the compliance with any guideline, request or directive from any Governmental Authority (whether or not having the force of law).
 
Change of Control shall mean the occurrence of any of the following:
 
(a)           Sponsor ceases to hold legally and beneficially:
 
(i)           issued share capital having the right to cast at least 51% (or, following a Listing, at least 35%) of the votes capable of being cast in general meetings of the Company; or
 
(ii)           before a Listing, the right to determine the composition of the majority of the Board of Directors or equivalent body of the Company;

 
-8-
 

(b)           following a Listing, any Person or group of Persons acting in concert (other than Sponsor) owns, directly or indirectly, a greater percentage of the issued share capital or issued share capital with voting rights of the Company than the Sponsor or, at any time, otherwise acquires control of the Company; or
 
(c)           the replacement of a majority of the Board of Directors of the Company over a two-year period from the directors who constituted the Board of Directors of the Company at the beginning of such period, and such replacement shall not have been approved by a vote of at least a majority of the Board of Directors of the Company, then still in office who either were members of such Board of Directors at the beginning of such period or whose election as a member of such Board of Directors was previously so approved; or
 
(d)           the adoption by the stockholders of the Company of a plan or proposal for the liquidation or dissolution of the Company, or the adoption by the Company of a plan for the liquidation or dissolution of Borrower, other than, in each case, a transaction complying with Section 5.19.
 
Change of Control Notice shall have the meaning given to it in Section 5.10(b).
 
Change of Control Price shall have the meaning given to it in Section 5.10(b).
 
Change of Control Purchase Date shall have the meaning given to it in Section 5.10(b).
 
Charges shall have the meaning assigned to such term in Section 11.09.
 
Clean-Up Period shall have the meaning given to it in Section 7.02(b).
 
Closing Date shall mean the first date on which all of the conditions precedent in Article 4 are satisfied or waived and any Loans are drawn.
 
Code shall mean the U.S. Internal Revenue Code of 1986, as amended from time to time, and rules and regulations related thereto.
 
Collateral shall mean, collectively, all assets and property of the Company and its subsidiaries that are from time to time subject to, or required to be subject to, a Lien pursuant to the Security Documents.
 
Collateral Agent shall have the meaning assigned to such term in the preamble to this Agreement.
 
Collateral and Guarantee Requirement shall mean, at any time, the requirement that, subject to the Security Principles:
 
(a)           the Administrative Agent shall have received each Collateral Document required to be delivered on the Closing Date pursuant to Section 4.01(a)(iii) or subsequent to the Closing Date pursuant to Sections 5.15 or 5.17 at such time, duly executed by each Loan Party party thereto;

 
-9-
 

(b)           all Loan Party Obligations shall have been unconditionally guaranteed (together, the Guaranties) by (x) on the Closing Date, the Company, each Borrower and each Restricted Subsidiary set forth on Schedule 1.01(c) and (y) after the Closing Date, by each Material Subsidiary (each, a Guarantor), in each case to the extent permitted by applicable law, regulation and contractual provision and to the extent such guarantee would not result in material adverse tax consequences and would not result in a material qualification (including any going concern or like qualification) in such Guarantors audit report, in each case, as reasonably determined by the Company;
 
(c)           the Guarantees shall have been secured by, subject to the Intercreditor Agreement, the Legal Reservations and the Perfection Requirements, a second-priority security interest to the extent legally possible and to the extent required by the Security Documents in all Equity Interests of (i) each Wholly Owned Domestic Subsidiary of a Guarantor domiciled in the U.S. and (ii) each material Wholly Owned Foreign Subsidiary of any Guarantor (other than the Parent Guarantor), in each instance, (other than, in each case, the Equity Interests of Basell Capital Corporation, LyondellBasell Receivables I, LLC or any other securitization entity) only to the extent directly owned by the relevant Guarantor;
 
(d)           except as set forth on Schedule 1.01(k), to the extent otherwise permitted hereunder or under any Security Document and to the extent legally possible and to the extent required by the Security Documents, the Guarantees shall have been secured by a second-priority security interest in, and mortgages on, substantially all tangible and intangible assets of the Company and each other Guarantor (including accounts (other than the Equity Interests not referred to in (c) above but including accounts receivable subject to Receivables Financing) or any Securitization Transactions), inventory (other than inventory subject to any Asset Backed Credit Facility or Receivables Financing not prohibited by this Agreement), equipment, investment property, contract rights, intellectual property, other general intangibles, material owned or ground leased Real Property, intercompany notes and proceeds of the foregoing), in each case, subject to the Legal Reservations and the perfection Requirements, with the priority required by the Security Documents; provided that security interests in Real Property shall be limited to the Mortgaged Properties;
 
(e)           none of the Collateral shall be subject to any Liens other than Liens permitted by Section 5.14; and
 
(f)           the Collateral Agent shall have received (i) counterparts of a Mortgage or appropriate security interest with respect to each owned or ground leased Real Property or Easement Instrument described on Schedule 1.01(f) or required to be delivered pursuant to Sections 4.01, 5.15 or 5.17 at such time (the Mortgaged Properties) duly executed and delivered by the record owner of such Real Property or, in the case of Real Property subject to a ground lease, the tenant holding the leasehold interest in such Real Property; provided, however, that with respect to any Mortgaged Property subject to a ground lease, the Loan Party holding the tenants interest therein shall not be required to deliver a Mortgage with regard to any ground lease for which a consent must be obtained, (ii) in respect of any Real Property located in the United States other than any Excluded Easements, a Title Policy or Title Policies issued by the Title Company (each as defined in the Senior Secured Credit Facilities) insuring the Lien of each such Mortgage as a valid Lien on the property described therein, free of any other Liens except as expressly permitted by Section 5.14, (iii) in respect of any Mortgaged Property located outside the United States, evidence that the Administrative Agent may reasonably request that the Mortgage or other appropriate security interest constitutes subject to the Intercreditor Agreement, the Legal Reservations and the Perfection Requirements a second-priority security interest in respect of the relevant Real Property and that the record owner of such Mortgaged Property holds good title to it and (iv) such Surveys, abstracts, certificates, title documents, existing appraisals, legal opinions and other documents as the Administrative Agent may reasonably request with respect to any such Mortgaged Property, in each case in form and substance reasonably satisfactory to the Administrative Agent and Collateral Agent.  Excluded Easements shall mean those pipeline easements and other similar Real Property owned by Equistar Chemicals, L.P. that are not situated within a plant or other facility that is (1) described on Schedule 1.01(f) and (2) with respect to which the Collateral Agent is obtaining a Title Policy as contemplated in this clause (f).  Easement Instrument means any instrument, agreement or understanding pursuant to which an interest in land is created, including without limitation, each of the instruments and agreements described or referenced on Scheduel 1.01(g).

 
-10-
 

The foregoing definition shall not require the creation or perfection of pledges of or security interests in, or the obtaining of title insurance or surveys with respect to, (i) assets for which creation or perfection of security interests is not required pursuant to the Security Documents and (ii) assets as to which the Administrative Agent under the Senior Secured Credit Facilities and the Borrowers Agent under the Senior Secured Credit Facilities reasonably determine that the cost of creating or perfecting such pledges or security interests in such assets or obtaining title insurance or surveys in respect of such assets shall be excessive in relation to the benefits to be obtained by the Lenders therefrom.  The Administrative Agent shall grant extensions of time for the perfection of security interests in or the obtaining of title insurance or other items required by the Collateral and Guarantee Requirement with respect to particular assets (including extensions beyond the Closing Date for the perfection of security interests in the assets of the Loan Parties on such date) where the Administrative Agent under the Senior Secured Credit Facilities determines, in consultation with the Company, that perfection cannot be accomplished using commercially reasonable efforts by the time or times at which it would otherwise be required by the Senior Secured Credit Facilities or the Security Documents.
 
Notwithstanding the foregoing provisions of this definition or anything in this Agreement or any other Loan Document to the contrary, Liens required to be granted from time to time pursuant to the Collateral and Guarantee Requirement shall be subject to exceptions and limitations set forth in the Security Documents and, to the extent appropriate in the applicable jurisdiction, as agreed between the Administrative Agent under the Senior Secured Credit Facilities and the Company in relation to the Senior Secured Credit Facilities and as may be further agreed by the.
 
Commitment Papers shall mean (a) the amended and restated Project Hugo Commitment Letter dated as of October 29, 2007, between the Company and the Joint Lead Arrangers other than UBS Securities LLC, (b) the Joinder Agreement dated as of October 29, 2007, between the Company and the Joint Lead Arrangers pursuant to which UBS Securities LLC was joined and became a party to the Commitment Letter referred to in clause (a) of this definition and (c) the Fee Letter.
 
Commitments shall mean as to any Lender, its obligation to make one or more Initial Loans in Dollars Borrower pursuant to Section 2.01(a) on the Closing Date, in an aggregate amount not to exceed the amount set forth under such Lenders name on Schedule 2.01 opposite the caption Commitment Amount or in the Assignment and Acceptance pursuant to which a Lender acquires its Commitment, as the same may be adjusted pursuant to Sections 2.05 and 11.04.
 
Common Stock of any Person shall mean any and all shares, interests or other participations in, and other equivalents (however designated and whether voting or non-voting) of such Persons common stock or other equivalents of corporate stock, whether outstanding on the Closing Date or issued after the Closing Date, and includes, without limitation, all series and classes of such common stock.
 
 
-11-
 

Company shall have the meaning assigned to such term in the preamble to this Agreement.
 
Company Materials shall have the meaning given to it in Section 6.07.
 
Compliance Certificate shall mean a certificate substantially in the form of Exhibit M.
 
Consolidated EBITDA shall mean, with respect to any person, for any period, the sum (without duplication) of
 
(1)           Consolidated Net Income,
 
(2)           to the extent Consolidated Net Income has been reduced thereby,
 
 
 
(a)
after-tax items classified as extraordinary losses,
 
 
 
(b)
all income taxes of such person and its Restricted Subsidiaries paid or accrued in accordance with GAAP for such period (other than income taxes attributable to extraordinary gains or losses),
 
 
(c)
Consolidated Interest Expense,
 
 
 
(d)
Consolidated Non-cash Charges,
 
 
 
(e)
the amount of net loss resulting from the payment of any premiums or similar amounts that are required to be paid under the terms of the instrument(s) governing any Indebtedness upon the repayment or other extinguishment of such Indebtedness in accordance with the terms of such Indebtedness,
 
 
 
(f)
costs and expenses paid in such period that are related to any expense or cost reductions that have occurred or are associated with the good faith projected cost savings described in clause (3) below,
 
 
 
(g)
management fees and mergers and acquisitions advisory fees paid to the Sponsor during such period, and
 
 
 
(h)
any inventory write-up in connection with purchase accounting in respect of acquisitions (including, without limitation, the Acquisition),
 
(3)           the amount of net cost savings projected by the Company in good faith to be realized by specified actions taken or to be taken prior to or during such period; provided that (x) such cost savings are reasonably identifiable and factually supportable, (y) such actions have been taken or are to be taken within twelve months of the date or determination to take such action and the benefit is expected to be realized within twelve months of taking such action, and (z) the aggregate amount of such cost savings added pursuant to this clause (3) shall not exceed $150 million, all as determined on a consolidated basis for such person and its Restricted Subsidiaries in accordance with GAAP.

 
-12-
 

Consolidated First Lien Senior Secured Leverage Ratio shall mean the Consolidated Senior Secured Leverage Ratio, but calculated substituting Consolidated First Lien Senior Secured Debt for Indebtedness.
 
Consolidated First Lien Senior Secured Debt shall mean (a) Consolidated Total Debt secured by a Lien on any assets of the Company or any of its Restricted Subsidiaries (other than (i) any Indebtedness under Asset Backed Credit Facilities, Receivables Financings or Qualified Securitization Transactions not prohibited by this Agreement, (ii) any Loans subject to prepayment out of funds in the Cash Collateral Account and (iii) any Indebtedness secured by a Lien ranking junior to the Lien securing the Obligations under the Senior Secured Credit Facilities on a basis at least as substantially favorable to the lenders thereunder as the basis on which the Lien securing the Loans ranks junior to the Lien securing the Obligations under the Senior Secured Credit Facilities) minus (b) Unrestricted Cash.
 
Consolidated Fixed Charge Coverage Ratio shall mean, with respect to any Person, the ratio of Consolidated EBITDA of such Person during the four full fiscal quarters ended either on the last day of the quarter immediately prior to the Closing Date or, if later, the last quarter of which shall be the most recent quarter for which financial statements have been provided to Lenders pursuant to Article 6 (the Four Quarter Period) ending on or prior to the date of the transaction giving rise to the need to calculate the Consolidated Fixed Charge Coverage Ratio (the Transaction Date) to Consolidated Fixed Charges of such Person for the Four Quarter Period.
 
(a)           In addition to the foregoing, for purposes of this definition, Consolidated EBITDA and Consolidated Fixed Charges shall be calculated after giving effect on a pro forma basis for the period of such calculation to:
 
(i)           the incurrence or repayment or other reduction or discharge of any Indebtedness of such Person or any of its Restricted Subsidiaries (and the application of the proceeds thereof) giving rise to the need to make such calculation and any incurrence or repayment of other Indebtedness (and the application of the proceeds thereof), other than the incurrence or repayment of Indebtedness in the ordinary course of business for working capital purposes pursuant to working capital facilities, occurring during the Four Quarter Period or at any time subsequent to the last day of the Four Quarter Period and prior to the Transaction Date, as if such incurrence or repayment, as the case may be (and the application of the proceeds thereof), occurred on the first day of the Four Quarter Period;
 
(ii)           if since the beginning of the four-quarter reference period any Person was designated as an Unrestricted Subsidiary or redesignated as or otherwise became an Unrestricted Subsidiary, such event shall be deemed to have occurred on the first day of the four-quarter reference period; and
 
(iii)           any Asset Sales or Asset Acquisitions (including any Asset Acquisition giving rise to the need to make such calculation) occurring during the Four Quarter Period or at any time subsequent to the last day of the Four Quarter Period and on or prior to the Transaction Date, as if such Asset Sale or Asset Acquisition (including the incurrence, assumption or liability for any such Acquired Indebtedness) occurred on the first day of the Four Quarter Period.
 
(b)           If such Person or any of its Restricted Subsidiaries directly or indirectly guarantees Indebtedness of a Person other than the Company or a Restricted Subsidiary of the Company, the preceding paragraph (a) will give effect to the incurrence of such guaranteed Indebtedness as if such Person or any Restricted Subsidiary of such Person had directly incurred or otherwise assumed such guaranteed Indebtedness.  Furthermore, in calculating Consolidated Fixed Charges for purposes of determining the denominator (but not the numerator) of this Consolidated Fixed Charge Coverage Ratio:

 
-13-
 

(i)           interest on outstanding Indebtedness determined on a fluctuating basis as of the Transaction Date and which will continue to be so determined thereafter shall be deemed to have accrued at a fixed rate per annum equal to the rate of interest on such Indebtedness in effect on the Transaction Date;
 
(ii)          if interest on any Indebtedness actually incurred on the Transaction Date may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate, or other rates, then the interest rate in effect on the Transaction Date will be deemed to have been in effect during the Four Quarter Period; and
 
(iii)         notwithstanding clause (b)(i) above, interest on Indebtedness determined on a fluctuating basis, to the extent such interest is covered by agreements relating to Interest Swap Obligations, shall be deemed to accrue at the rate per annum resulting after giving effect to the operation of such agreements.
 
Consolidated Fixed Charges shall mean, with respect to any Person for any period, the sum, without duplication, of:
 
(a)           Consolidated Interest Expense, plus
 
(b)           the sum of
 
(i)           the amount of all dividend payments on any series of Preferred Stock of such Person and its Restricted Subsidiaries (other than dividends paid in Qualified Capital Stock and other than dividends paid to such Person or to a Restricted Subsidiary of such Person) paid, accrued or scheduled to be paid or accrued during such period and
 
(ii)          tax actually paid in cash and attributable to the item referred to in clause (i) above.
 
Consolidated Interest Expense shall mean, with respect to any Person for any period, the sum of, without duplication:
 
(a)           the aggregate of the interest expense of such Person and its Restricted Subsidiaries for such period determined on a consolidated basis in accordance with GAAP, including without limitation,
 
(i)           any amortization of debt discount,
 
(ii)          the net amount paid (or deducting the net amount received) by the Company and its Restricted Subsidiaries in respect of the relevant period under Interest Swap Obligations or Currency Agreements (to the extent, and only to the extent, in respect of interest rate protection),
 

 
-14-
 

(iii)         all capitalized interest, and
 
(iv)         the interest portion of any deferred payment obligation,
 
but excluding, in each case, any amortization or write-off of deferred financing costs or fees incurred in connection with the incurrence of any Indebtedness or any Qualified Securitization Transaction; and
 
(b)           the interest component of Capitalized Lease Obligations paid, accrued and/or scheduled to be paid or accrued by such Person and its Restricted Subsidiaries during such period as determined on a consolidated basis in accordance with GAAP.
 
Consolidated Leverage Ratio shall mean, with respect to any Person as of any date of determination, the ratio of (1) consolidated Indebtedness of such Person as of the end of the most recent fiscal quarter for which financial statements are available under Sections 6.01 or 6.02 hereof to (2) the aggregate amount of the Consolidated EBITDA of such Person for the period of the most recent four consecutive quarters for which financial statements are available under Sections 6.01 or 6.02 hereof, in each case with such pro forma adjustments to consolidated Indebtedness and Consolidated EBITDA as are appropriate and consistent with the pro forma provisions set forth in the definition of Consolidated Fixed Charge Coverage Ratio.
 
Consolidated Net Income shall mean, with respect to any Person, for any period, the sum of:
 
(a)           aggregate net income (or loss) of such Person and its Restricted Subsidiaries for such period on a consolidated basis, determined in accordance with GAAP; plus
 
(b)           cash dividends or distributions paid to such Person or a Restricted Subsidiary of such Person by any other Person (the Payor) other than a Restricted Subsidiary of the referent Person, to the extent not otherwise included in Consolidated Net Income, which have been derived from cash flow of the Payor;
 
(c)           provided that there shall be excluded therefrom (but only to the extent included in the calculation of the foregoing)
 
(i)           after-tax gains or losses from Asset Sales or abandonments or reserves relating thereto,
 
(ii)          after-tax items classified as extraordinary or non-recurring gains or losses (including, for the avoidance of doubt and irrespective of its classification, the effect of any impairment of goodwill arising as a result of the Acquisition) and any gains or losses on the disposal or reversal of impairment losses on assets,
 
(iii)         the net income of any Person acquired in a pooling of interests transaction accrued prior to the date it becomes a Restricted Subsidiary of the Person or is merged or consolidated with the Person or any Restricted Subsidiary of the Person,
 
(iv)         the net income (but not loss) of any Restricted Subsidiary of the Person that is not a guarantor to the extent that the declaration of dividends or similar distributions by that Restricted Subsidiary of that income is restricted; provided, however, that the net income of Restricted Subsidiaries shall only be excluded in any calculation of Consolidated Net Income of the Company as a result of application of this clause (iv) if the restriction on dividends or similar distributions results from consensual restrictions other than any restriction contained in clauses (ii), (iv), (v), (xi), (xvi) and (xvii) of Section 5.09 hereof,

 
-15-
 

(v)          the net income or loss of any Person, other than a Restricted Subsidiary of the Person, except to the extent of cash dividends or distributions paid to the Person or to a Restricted Subsidiary of the Person by such Person (net of associated tax),
 
(vi)         any restoration to income of any contingency reserve, except to the extent that provision for such reserve was made out of Consolidated Net Income accrued at any time following the Closing Date,
 
(vii)        income or loss attributable to discontinued operations (including, without limitation, operations disposed of during such period whether or not such operations were classified as discontinued),
 
(viii)       in the case of a successor to the Person by consolidation or merger or as a transferee of the referent Persons assets, any earnings or losses of the successor corporation prior to such consolidation, merger or transfer of assets,
 
(ix)          all dividends received by the Company as described in clause (iv) of the second paragraph of the definition of Indebtedness to the extent the Company is obligated to apply such dividends in the repayment of such Indebtedness, and
 
(x)       any increase in amortization or depreciation as a result of the receipt of any insurance proceeds from damage to property.
 
Consolidated Net Tangible Assets shall mean, as of any date, the total amount of assets (less applicable reserves and other properly deductible items) of the Company and its Restricted Subsidiaries on a consolidated basis, as of the last day of the most recently ended period for which financial statements were delivered pursuant to Sections 6.01 and 6.02, determined in accordance with GAAP, after deducting therefrom (1) all current liabilities (excluding any thereof which are by their terms extendible or renewable at the option of the obligor thereon to a time more than 12 months after the time as of which the amount thereof is being computed and excluding current maturities of long term debt), and (2) all goodwill, trade names, trademarks, patents, purchased technology, unamortized debt discount and other like intangible assets.
 
Consolidated Non-cash Charges shall mean, with respect to any Person, for any period, the aggregate depreciation, amortization and other non-cash expenses of such Person and its Restricted Subsidiaries reducing Consolidated Net Income of such Person and its Restricted Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP (excluding any such charges constituting an extraordinary item or loss or any such charge which requires an accrual of or a reserve for cash charges for any future period).
 
Consolidated Senior Secured Leverage Ratio shall mean the Consolidated Leverage Ratio, but calculated by excluding all Indebtedness other than Senior Secured Indebtedness.

 
-16-
 

Consolidated Total Debt shall mean, as of any date, the principal amount of Indebtedness of the Company and its Restricted Subsidiaries that is outstanding on such date and consists of Indebtedness (other than Indebtedness under the Structured Financing Transaction) for borrowed money (adjusted to take into account any liability or receivable arising under any Swap Contract entered into in connection with hedging any currency exposure to such Indebtedness) and Attributable Indebtedness.
 
Contractual Obligation shall mean, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.
 
Contribution Indebtedness shall mean Indebtedness of the Company or the Indebtedness of any Restricted Subsidiary of the Company in an aggregate principal amount not greater than twice the aggregate amount of cash contributions made to the capital of the Company or such Restricted Subsidiary after the Closing Date; provided that:
 
(1)           if the aggregate principal amount of such Contribution Indebtedness is greater than one times such cash contributions to the capital of the Company or such Restricted Subsidiary, as applicable, the amount in excess shall be Indebtedness with a Stated Maturity later than the Final Maturity Date; and
 
(2)           such Contribution Indebtedness (a) is incurred within 180 days after the making of such cash contributions and (b) is so designated as Contribution Indebtedness pursuant to an Officers Certificate on the Incurrence date thereof.
 
Control shall have the meaning given to it in the definition of Affiliate.
 
Controlled Foreign Corporation shall mean an entity that is a controlled foreign corporation for purposes of Section 957(a) of the Internal Revenue Code.
 
Credit Facilities shall mean:
 
(a)           the Senior Secured Credit Facilities,
 
(b)           the Asset Backed Credit Facilities,
 
(c)           any credit agreement (and related document) or similar instrument, including any similar credit support agreements or guarantees, governing other revolving credit, working capital or term Indebtedness incurred from time to time, and
 
(d)           any such agreements, instruments or guarantees governing Indebtedness incurred to Refinance any Indebtedness or commitments referred to in (a), (b)  and (c) whether by the same or any other lender or group of lenders.
 
Currency Agreement shall mean any foreign exchange contract, currency swap agreement or other similar agreement or arrangement entered into by the Company or any of its Restricted Subsidiaries.
 
Debt Issuance shall mean the incurrence or issuance of any Indebtedness not permitted hereunder.

 
-17-
 

Debt Issuance Prepayment Event shall mean the occurrence of a Debt Issuance.
 
Debtor Relief Laws shall mean the Bankruptcy Code of the United States, the Dutch Bankruptcy Act (Faillissementswet), the German Insolvency Law, the Luxembourg insolvency laws and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, faillissement, surseance van betaling, onderbewindstelling, ontbinding, or similar debtor relief Laws of the United States, The Netherlands , Luxembourg or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally (including, in the case of Loan Parties incorporated or organized in England, Wales or Hong Kong, administration, administrative receivership, voluntary arrangement and schemes of arrangement).
 
Default shall mean an event or condition the occurrence of which is, or with the lapse of time or the giving of notice or both would be, an Event of Default.
 
Defaulting Lender shall mean any Lender with respect to which a Lender Default is in effect.
 
Description of Exchange Notes shall mean the description of the terms and conditions of the proposed Senior Second Lien Notes due 2015 of Borrower, substantially in the form of Exhibit D, which notes are intended to refinance the Loans.
 
Disposition shall mean the sale, transfer, license, lease or other disposition (including any sale and leaseback transaction and any sale or issuance of Equity Interests) of any property by any Person, including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith.
 
Disqualified Capital Stock shall mean that portion of any Capital Stock which, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event, matures or is mandatorily redeemable (other than redeemable only for Capital Stock of such Person that is not itself Disqualified Capital Stock), pursuant to a sinking fund obligation or otherwise, or is redeemable at the sole option of the holder thereof on or prior to the final maturity date of the notes; provided, however, that any Capital Stock that would not constitute Disqualified Capital Stock but for provisions thereof giving holders thereof the right to require such Person to purchase or redeem such Capital Stock upon the occurrence of a change of control occurring prior to the Final Maturity Date shall not constitute Disqualified Capital Stock if:
 
(a)           the change of control provisions applicable to such Capital Stock are not more favorable to the holders of such Capital Stock than the terms set forth in Section 5.10; and
 
(b)           any such requirement only becomes operative after compliance with such terms applicable to the notes, including the purchase of any notes tendered pursuant thereto.
 
Notwithstanding the preceding sentence, only the portion of such Capital Stock which so matures or is mandatorily redeemable or is so convertible or exchangeable prior to the Final Maturity Date shall be so deemed Disqualified Capital Stock.  The amount of any Disqualified Capital Stock that does not have a fixed redemption, repayment or repurchase price will be calculated in accordance with the terms of such Disqualified Capital Stock as if such Disqualified Capital Stock were redeemed, repaid or repurchased on any date on which the amount of such Disqualified Capital Stock is to be determined pursuant hereto; provided, however, that if such Disqualified Stock could not be required to be redeemed, repaid or repurchased at the time of such determination, the redemption, repayment or repurchase price will be the book value of such Disqualified Capital Stock as reflected in the most recent financial statements of such Person.

 
-18-
 

Dollar or $ shall mean lawful money of the United States.
 
Dollar Borrowing shall mean any Borrowing denominated in Dollars.
 
Dollar Equivalent shall mean, at the time of determination thereof, (a) if such amount is expressed in Dollars, such amount, (b) if such amount is expressed in Euro, the equivalent of such amount in Dollars determined by using the rate of exchange quoted by the Administrative Agent in New York, New York at 11:00 a.m. (New York time) on the date of determination (or, if such date is not a Business Day, the last Business Day prior thereto) to prime banks in New York for the spot purchase in the New York foreign exchange market of Dollars with such amount of Euro and (c) if such amount is denominated in any other currency, the equivalent of such amount in Dollars as determined by the Administrative Agent using any method of determination it reasonably deems appropriate.
 
Dollar Loan shall mean any Loan denominated in Dollars.
 
Domestic Subsidiary shall mean any subsidiary that is organized under the Laws of the United States, any state thereof or the District of Columbia.
 
Dutch Civil Code shall mean the Dutch Civil Code (Burgerlijk Wetboek).
 
Dutch Loan Party means a Loan Party incorporated under the laws of or established in The Netherlands.
 
EMU Legislation shall mean the legislative measures of the European Union Economic and Monetary Union.
 
Engagement Letter shall mean the amended and restated Project Hugo Engagement Letter dated as of October 29, 2007, between the Company and the Joint Lead Arrangers (including the joinder agreement dated as of October 29, 2007 among the Company and the Joint Lead Arrangers pursuant to which UBS Securities LLC was joined and became a party thereto).
 
Environment shall mean indoor air, ambient air, surface water, groundwater, drinking water, land surface, subsurface strata, and natural resources such as wetlands, flora and fauna.
 
Environmental Laws shall mean the common law and any and all federal, state, local, and foreign statutes, Laws, regulations, ordinances, rules, judgments, orders, decrees, permits, licenses, agreements or governmental restrictions relating to pollution, the protection of the Environment, the generation, treatment, storage, transport, distribution, handling or recycling of Hazardous Materials or the presence, Release or threat of Release of Hazardous Materials and, to the extent relating to exposure to Hazardous Materials, human health and to workplace health and safety.
 
Environmental Liability shall mean any liability, contingent or otherwise (including any liability for damages, costs of investigation and remediation, fines, penalties or indemnities), of the Loan Parties or any Restricted Subsidiary resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or recycling of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the Release or threatened Release of any Hazardous Materials or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

 
-19-
 

Environmental Permit shall mean any permit, approval, identification number, license or other authorization required under any Environmental Law.
 
Equistar Notes shall mean the $150,000,000 in aggregate principal amount of 7.55% Senior Notes due 2026 of Equistar Chemicals L.P.
 
Equity Interests shall mean, with respect to any Person, all of the Capital Stock of such Person and all warrants, options or other rights to acquire Capital Stock of such Person (including any contribution from Shareholders without any issuance of shares but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).
 
Equity Issuance Prepayment Event shall mean any issuance of Equity Interests in the Company to any Person other than a Loan Party, excluding any issuances to the Sponsor.
 
Equity Offering shall mean any sale of Qualified Capital Stock of the Company or any capital contribution to the equity of the Company.
 
ERISA shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time.
 
ERISA Affiliate shall mean any trade or business (whether or not incorporated) that is under common control with a Loan Party or any Restricted Subsidiary within the meaning of Section 414 of the Code or Section 4001 of ERISA.
 
ERISA Event shall mean (a) a Reportable Event with respect to a Pension Plan; (b) with respect to a Pension Plan, the failure to satisfy the minimum funding standard of Section 412 of the Code and Section 302 of ERISA, whether or not waived;  (c) the failure to make by its due date a required contribution under Section 412(m) of the Code (or Section 430(j) of the Code, as amended by the Pension Protection Act of 2006) with respect to any Pension Plan or the failure to make any required contribution to a Multiemployer Plan; (d ) a withdrawal by a Loan Party, any Subsidiary or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (e) a complete or partial withdrawal by a Loan Party, any Subsidiary or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (f) the filing of a notice of intent to terminate, the treatment of a Plan amendment as a termination under Section 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan or the occurrence of any event or condition which could reasonably be expected to constitute grounds under ERISA for the termination of or the appointment of a trustee to administer any Pension Plan, in each case where Plan assets are not sufficient to pay all Plan liabilities; (g) an event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; (h) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon a Loan Party, any Subsidiary or any ERISA Affiliate; or (i) the occurrence of a nonexempt prohibited transaction (within the meaning of Section 4975 of the Code or Section 406 of ERISA) which could reasonably be expected to result in liability to a Loan Party or any Restricted Subsidiary.
 
 
-20-
 

EURIBOR shall mean, in relation to any Euro Loan, (a) the percentage rate per annum determined by the Banking Federation of the European Union for the relevant period, in each case displayed on the appropriate page of the Reuters screen, and (b) if the rate referenced in the preceding clause (a) does not appear on such page or service or such page or service shall not be available for the relevant period of that Loan, the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Administrative Agent at its request quoted by three major banks selected by the Administrative Agent to leading banks in the European interbank market, at or about 11 a.m. Brussels time on the second full Business Day next preceding the first day of the relevant period in relation to which such rate is calculated.
 
Euro and shall mean the lawful currency of the Participating Member States introduced in accordance with EMU Legislation.
 
Euro Borrowing shall mean any Borrowing denominated in Euro.
 
Euro Equivalent shall mean at the time of determination thereof, (a) if such amount is expressed in Euro, such amount, (b) if such amount is expressed in Dollars, the equivalent of such amount in Euro determined by using the rate of exchange quoted by the Administrative Agent in New York, New York at 11:00 a.m. (New York time) on the date of determination (or, if such date is not a Business Day, the last Business Day prior thereto) to prime banks in New York for the spot purchase in the New York foreign exchange market of Euro with such amount of Dollars and (c) if such amount is denominated in any other currency, the equivalent of such amount in Euro as determined by the Administrative Agent using any method of determination it reasonably deems appropriate.
 
Euro Loan shall mean any Loan denominated in Euro.
 
Event of Default shall have the meaning assigned to such term in Article 7.
 
Exchange Act shall mean the Securities Exchange Act of 1934, as amended, or any successor statute or statutes thereto.
 
Exchange and Registration Rights Agreement shall mean the exchange and registration rights agreement, substantially in the form of Exhibit E.
 
Exchange Documents shall mean the Exchange Note Indenture and the Exchange Notes.
 
Exchange Note Amount shall mean, with respect to any Net Sale Proceeds with respect to an Asset Sale at any time, an amount equal to the product of (a) such Net Sale Proceeds times (b) a fraction, the numerator of which is the aggregate principal amount of Exchange Notes outstanding at such time and the denominator of which is the sum of (i) the aggregate principal amount of Exchange Notes outstanding at such time and (ii) the aggregate principal amount of Loans outstanding at such time.
 
Exchange Note Holders shall mean registered holders of the Exchange Notes.
 
Exchange Note Indenture shall mean the indenture to be entered into relating to the Exchange Notes, having terms and conditions substantially as set forth in the Description of Exchange Notes (with such changes to cure any ambiguity, omission, defect or inconsistency as the Joint Lead Arrangers and the Company shall approve), as the same may be amended, modified or supplemented.
 
 
-21-
 

Exchange Note Trustee shall mean the trustee under the Exchange Note Indenture.
 
Exchange Notes shall mean the securities issued under the Exchange Note Indenture.
 
Exchange Request shall have the meaning assigned to such term in Section 5.24(b).
 
Excluded Subsidiary shall mean (a) any subsidiary that is not a Wholly Owned Subsidiary (for so long as such subsidiary remains a non-Wholly Owned Subsidiary), (b) each subsidiary of a Guarantor listed on Schedule 1.01(c) and any successor entity and each subsidiary that is not a Material Subsidiary, in each case, for so long as such subsidiary is not a Material Subsidiary, (c) any subsidiary that is prohibited by applicable Law, or contractual restrictions or any of the other matters referred to in the Security Principles, from guaranteeing the Loan Party Obligations and (d) any other subsidiary with respect to which, in the reasonable judgment of the Administrative Agent and the Company, the cost or other consequences (including any adverse tax consequences) of providing a guarantee shall be excessive in view of the benefits to be obtained by the Lenders therefrom or which would otherwise contravene the Security Principles.
 
Excluded Taxes shall mean, in the case of each Lender and Agent,
 
(a)           taxes imposed on or measured by its net income (or branch profits), and franchise or capital taxes imposed on it in lieu of net income taxes, in each case (i) by the jurisdiction (or any political subdivision thereof) under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable Lending Office is located, (ii) by reason of any other connection between the jurisdiction imposing such tax and such Agent or Lender (or its applicable Lending Office) other than any connections arising solely from such Agent or Lender (or its applicable Lending Office) having executed, delivered, been a party to, received or perfected a security interest under or performed its obligations under, received payment under or enforced, this Agreement or any other Loan Document, or (iii) under 49 para. 1 Nr. 5 lit. c (aa) of the German Income Tax Act solely by virtue of the Lender having security over German-situs real estate (inlndischen Grundbesitz) or over rights subject to the civil law provisions applicable to real estate (inlndische Rechte, die den Vorschriften des brgerlichen Rechts ber Grundstcke unterliegen),
 
(b)           in the case of a Foreign Lender or Foreign Agent other than an assignee pursuant to a request by Borrower under Section 2.15,
 
(i)          with respect to any Loan to Borrower, any U.S. federal withholding tax that is imposed on amounts payable to or for the account of a Foreign Lender pursuant to a law in effect at the time such Foreign Lender becomes a party hereto (or designates a new Lending Office), except to the extent that such Foreign Lender (or its assignor, if any) was entitled, immediately prior to the time of designation of a new Lending Office (or assignment), to receive additional amounts from Borrower with respect to such withholding tax pursuant to Section 2.13,
 
(ii)         any withholding tax that is attributable to such Foreign Lenders failure to comply with Section 2.13(d),
 
(c)           any withholding tax imposed on payments to a Lender by the German tax authorities under  50a para. 7 German Income Tax Act as in effect at the time such Lender becomes a party hereto by virtue of the Lender having security over German-situs real estate (inlndischen Grundbesitz) or over rights subject to the civil law provisions applicable to real estate (inlndische Rechte, die den Vorschriften des brgerlichen Rechts ber Grundstcke unterliegen), except to the extent that such Lender (or its assignor, if any) was entitled, immediately prior to the time of an assignment, to receive additional amounts from Borrower with respect to such withholding tax pursuant to Section 2.13; or
 
 
-22-
 

(d)           any U.S. federal backup withholding imposed under Section 3406 of the Code.
 
Existing Notes shall mean, collectively, the 2015 Notes, the 2027 Notes, the 10% Senior Secured Notes due 2013 of Lyondell, the 8% Senior Unsecured Notes due 2014 of Lyondell, the Senior Unsecured Notes due 2014 of Lyondell, the 8% Senior Unsecured Notes due 2016 of Lyondell, the 6.875% Senior Unsecured Notes due 2017 of Lyondell, the 2010 Debentures, the 9.8% Debentures due 2020 of Lyondell, the 10⅛% Senior Unsecured Notes due 2008 of Equistar Chemicals L.P., the 10⅝% Senior Unsecured Notes due 2011 of Equistar Chemicals L.P., the 7.55% Senior Notes due 2026 of Equistar Chemicals L.P., the 7⅝% Senior Notes due 2026 of Millennium America Inc. and the 8% Unsecured Notes due 2009 of Equistar Chemicals L.P., in each case to the extent outstanding on the Closing Date and the 4% Convertible Debentures due 2026 of Millennium Chemicals Inc. (to the extent not converted on the Closing Date).
 
Extended Loans shall have the meaning assigned to such term in Section 2.01(b).
 
Extended Notes shall have the meaning assigned to such term in Section 2.06(f).
 
Extension Date shall mean the date the Initial Loans are converted into Extended Loans pursuant to Section 2.01(b).
 
Extension Margin shall mean:
 
 
(a)            during the period beginning on the Extension Date through and including the day which is 90 days after the Extension Date, 6.125%, and
 
 
(b)            during each three-month period thereafter, the Extension Margin for the prior three-month period plus 0.5%;
 
provided, however, that in the event that a Rate Increasing Event has occurred on or prior to any date that is the first day of any period referred to in (a) or (b) above and is continuing on any such date, the margins specified in clauses (a) and (b) above with respect to any Loans to which such Rate Increasing Event relates shall be increased by 0.5% for the period relating to such date.
 
Fee Letter shall mean the amended and restated Project Hugo Fee Letter dated as of December 20, 2007, between the Company and the Joint Lead Arrangers.
 
Fees shall mean all amounts payable pursuant to, or referred to in, Section 2.08.
 
Final Maturity Date shall mean the eighth anniversary of the Closing Date or, if such date is not a Business Day, the Business Day immediately preceding such eighth anniversary.
 
Finance Party shall mean the Agents, Lenders and Joint Lead Arrangers.
 
Financial Indebtedness shall mean (without duplication), at any time, the principal amount of Indebtedness of the Company and its Restricted Subsidiaries outstanding at such time, referred to in paragraphs (a), (b), (f), (h) and (i) of the definition of Indebtedness (but, as to such clause (i), only in respect of paragraphs (a), (b), (f) and (h) of such definition).
 
 
-23-
 

Foreign Lender shall mean any Lender that is organized under the laws of a jurisdiction other than the United States of America.  For purposes of this definition, the United States of America, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.
 
Foreign Plan shall mean any employee benefit plan, program, policy, arrangement or agreement maintained or contributed to by, or entered into with, a Loan Party or any subsidiary with respect to employees employed outside the United States.
 
Foreign Subsidiary shall mean any direct or indirect Restricted Subsidiary of the Company which is not a Domestic Subsidiary.
 
Funds Flow Memorandum shall mean the funds flow memorandum substantially in the form attached hereto as Exhibit L containing details of the flow of funds on the Closing Date.
 
GAAP shall mean generally accepted accounting principles in the United States of America as in effect on the Closing Date as adopted by the Company, except as otherwise set forth in Article 6; provided that the Company may make a one-time election to switch to International Financial Reporting Standards, if permitted to do so by the SEC in its filings with the SEC.  All ratios and calculations based on GAAP contained in this Agreement shall be computed in conformity with GAAP unless this Agreement otherwise provides.
 
German Guarantor shall have the meaning given to it in Section 9.12(a).
 
GmbH-Act shall have the meaning assigned to it in Section 9.12(a)(iii)(B).
 
Governmental Authority shall mean any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, court, administrative tribunal, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.
 
Group shall mean the Company and its subsidiaries from time to time, including, on and from the Closing Date, Lyondell and its subsidiaries.
 
Guaranteed Obligations shall have the meaning given to it in Section 9.01
 
Guarantor shall mean each Parent Guarantor, each Person listed on Schedule 1.01(c) and each Additional Guarantor; provided that upon the release and discharge of such Person from such guarantee in accordance with this Agreement, such Person shall cease to be a Guarantor.
 
Hazardous Materials shall mean all materials, chemicals, substances, wastes, pollutants, contaminants, constituents and compounds of any nature or in any form, including petroleum or petroleum distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas or mold that are regulated pursuant to, or can give rise to liability under, any applicable Environmental Law.
 
Hedging Obligations shall mean, with respect to any Person, the obligations of such Person under (i) interest rate swap agreements, interest rate cap agreements and interest rate collar agreements, (ii) forward foreign exchange contracts or currency swap agreements, (iii) other agreements or arrangements designed to protect such Person against fluctuations in interest rates or currency values, (iv) commodity price protection agreements or commodity price hedging agreements designed to manage fluctuations in prices or costs of raw materials, manufactured products or related commodities and (v) emissions rights trading agreements.
 
 
-24-
 

Holders shall mean the Lenders and the Exchange Note Holders.
 
Holding Company shall mean, in relation to a company, corporation or other legal entity, any other company, corporation or other legal entity in respect of which the former company, corporation or other legal entity is a Subsidiary.
 
Indebtedness shall mean with respect to any Person, without duplication,
 
(a)           all Obligations of such Person for borrowed money,
 
(b)           all Obligations of such Person evidenced by bonds, debentures, notes or other similar instruments,
 
(c)           all Capitalized Lease Obligations of such Person,
 
(d)           all Obligations of such Person issued or assumed as the deferred purchase price of property that is due more than six months after taking delivery of such property, all conditional sale obligations and all Obligations under any title retention agreement (but excluding trade accounts payable and other accrued liabilities arising in the ordinary course of business that are not overdue by 90 days or more or are being contested in good faith by appropriate proceedings promptly instituted and diligently conducted),
 
(e)           all Obligations for the reimbursement of any obligor on any letter of credit, bankers acceptance or similar credit transaction,
 
(f)           guarantees in respect of Indebtedness referred to in clauses (a) through (e) above and clause (h) below,
 
(g)           all Obligations of any other Person of the type referred to in clauses (a) through (f) which are secured by any lien on any property or asset of such Person, the amount of such Obligation being deemed to be the lesser of the fair market value of such property or asset or the amount of the Obligation so secured,
 
(h)           all net Obligations under Currency Agreements and Interest Swap Obligations of such Person,
 
(i)           all Receivables Financings and obligations under Asset Backed Credit Facilities, and
 
(j)           all Disqualified Capital Stock issued by such Person and Preferred Stock issued by Restricted Subsidiaries of such Person with the amount of Indebtedness represented by such Disqualified Capital Stock or Preferred Stock being equal to the greater of its voluntary or involuntary liquidation preference and its maximum fixed repurchase price, but excluding accrued dividends, if any which, in the case of (d) above, would appear as a liability on the balance sheet of such Person in accordance with GAAP.
 
 
-25-
 

For purposes hereof, the maximum fixed repurchase price of any Disqualified Capital Stock or Preferred Stock which does not have a fixed repurchase price shall be calculated in accordance with the terms of such Disqualified Capital Stock or Preferred Stock as if such Disqualified Capital Stock or Preferred Stock were purchased on any date on which Indebtedness shall be required to be determined pursuant to this Agreement, and if such price is based upon, or measured by, the fair market value of such Disqualified Capital Stock or Preferred Stock, such fair market value shall be determined reasonably and in good faith by the Board of Directors of the issuer of such Disqualified Capital Stock or Preferred Stock.
 
Notwithstanding the foregoing, Indebtedness shall not include:
 
(i)           advances paid by customers in the ordinary course of business for services or products to be provided or delivered in the future,
 
(ii)          deferred taxes,
 
(iii)         unsecured indebtedness of the Company and/or its Restricted Subsidiaries incurred to finance insurance premiums in a principal amount not in excess of the insurance premiums to be paid by the Company and/or its Restricted Subsidiaries for a three year period beginning on the date of any incurrence of such indebtedness,
 
(iv)         Indebtedness owed or incurred by any Restricted Subsidiary whose activities are limited to holding shares in Qualified Joint Ventures (but only to the extent that (A) the creditors under the relevant agreement have no recourse to the Company other than such Restricted Subsidiary; and (B) the recourse those creditors have to such Restricted Subsidiary is limited to the proceeds (if any) of dividends received by such Restricted Subsidiary in respect of such Restricted Subsidiarys investment in such Qualified Joint Ventures),
 
(v)          Limited Recourse Stock Pledge or any non-recourse guarantee given solely to support such pledge,
 
(vi)         any Indebtedness which has been defeased in accordance with GAAP or defeased pursuant to the deposit of cash or government obligations (in an amount sufficient to satisfy all such Indebtedness at the Stated Maturity thereof or redemption, as applicable, and all payments of interest and premium, if any) in a trust or account created or pledged for the sole benefit of the holders of such Indebtedness, and subject to no other Liens, and other applicable terms of the instrument governing such Indebtedness or
 
(vii)        Indebtedness for which irrevocable notice of redemption has been duly given and for which redemption money in the necessary amount has been irrevocably deposited with the applicable trustee or paying agent in trust for the holders of such Indebtedness.
 
    Indemnified Taxes shall mean all Taxes other than Excluded Taxes.
 
Indemnitee shall have the meaning assigned to such term in Section 11.05(b).

 
-26-
 

Independent Financial Advisor shall mean a firm which, in the judgment of the Board of Directors of the Company, is independent and qualified to perform the task for which it is to be engaged.
 
Initial Loans shall have the meaning assigned to such term in Section 2.01(a).
 
Initial Maturity Date shall mean the first anniversary of the Closing Date or, if such date is not a Business Day, the Business Day immediately preceding such first anniversary.
 
Initial Notes shall have the meaning assigned to such term in Section 2.06(f).
 
Initial Public Equity Offering shall mean a firm commitment underwritten offering of shares of Capital Stock of the applicable Person (a) registered on an appropriate form under the Securities Act or any similar offering in other jurisdictions or (b) listed on an internationally recognized exchange or traded on an internationally recognized market.
 
Intercreditor Agreement shall mean the intercreditor agreement, substantially in the form of Exhibit G, dated as of the Closing Date entered into between, among others, the Agents, after the issue of the Permanent Securities, the trustee of the Permanent Securities (or in the case of any other refinancing of this agreement, the equivalent under that other refinancing), certain parties to the Senior Secured Credit Facilities, Borrower and the Company.
 
Interest Payment Date shall have the meaning assigned to such term in Section 2.09(d).
 
Interest Period shall mean, as to any Borrowing, the period commencing on the date such Borrowing is disbursed and ending on the numerically corresponding day in the calendar month that is one, two, three or six months thereafter, as Borrower may elect; provided that
 
(i)       any Interest Period that would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day;
 
(ii)         any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period;
 
(iii)         the last Interest Period applicable to Initial Loans shall end on the Initial Maturity Date (or, if later, the Extension Date); and
 
(iv)         no Interest Period shall extend beyond the Final Maturity Date.
 
Interest Swap Obligations shall mean the obligations of any Person pursuant to any arrangement with any other Person, whereby, directly or indirectly, such Person is entitled to receive from time to time periodic payments calculated by applying either a floating or a fixed rate of interest on a stated notional amount in exchange for payments made by such other Person calculated by applying a fixed or a floating rate of interest on the same notional amount and shall include, without limitation, interest rate swaps, caps, floors, collars and similar agreements.

 
-27-
 

Investment shall mean, with respect to any Person, any direct or indirect loan or other extension of credit (including, without limitation, a guarantee) or capital contribution to (by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others), or any purchase or acquisition by such Person of any Capital Stock, bonds, notes, debentures or other securities or evidences of Indebtedness issued by, any other Person.  Investment excludes (i) extensions of trade credit, (ii) commissions, loans, advances, fees and compensation paid in the ordinary course of business to officers, directors and employees, and (iii) reimbursement obligations in respect of letters of credit and tender, bid, performance, government contract, surety and appeal bonds, in each case solely with respect to obligations of the Company or any of its Restricted Subsidiaries in accordance with normal trade practices of the Company or such Restricted Subsidiary, as the case may be.  For the purposes of Section 5.01,
 
(a)           Investment shall include and be valued at the fair market value of the net assets of any Restricted Subsidiary of the Company at the time that such Restricted Subsidiary is designated an Unrestricted Subsidiary and shall exclude the fair market value of the net assets of any Unrestricted Subsidiary at the time that such Unrestricted Subsidiary is designated a Restricted Subsidiary of the Company and
 
(b)           the amount of any Investment in any Person is the original cost of such Investment plus the cost of all additional Investments therein by the Company or any of its Restricted Subsidiaries, without any adjustments for increases or decreases in value, or write-ups, write-downs or write-offs with respect to such Investment, reduced by the payment of dividends or distributions in connection with such Investment or any other amounts received in respect of such Investment;
 
provided that no such payment of dividends or distributions or receipt of any such other amounts shall reduce the amount of any Investment if such payment of dividends or distributions or receipt of any such amounts would be included in Consolidated Net Income.
 
If the Company or any Restricted Subsidiary of the Company sells or otherwise disposes of any Common Stock of any direct or indirect Restricted Subsidiary of the Company such that, after giving effect to any such sale or disposition, the Company no longer owns, directly or indirectly, greater than 50% of the outstanding Common Stock of such Restricted Subsidiary, the Company will be deemed to have made an Investment on the date of any such sale or disposition equal to the fair market value of the Common Stock of such Restricted Subsidiary not sold or disposed of.
 
IRS shall mean the Internal Revenue Service of the United States.
 
Joint Lead Arrangers shall have the meaning assigned to such term in the preamble to this Agreement.
 
Judgment Currency shall have the meaning assigned to such term in Section 11.17.
 
Laws shall mean, as to any Person, collectively, all international, foreign, federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case binding on such Person or to which such Person or any of its property or assets is subject.

 
-28-
 

Legal Reservations shall mean:
 
(a)           the principle that equitable remedies may be granted or refused at the discretion of a court;
 
(b)           the limitation of enforcement by laws relating to insolvency, reorganization, penalties and other laws generally affecting the rights of creditors;
 
(c)           the time barring of claims under the statutes of limitation;
 
(d)           the possibility that an undertaking to assume liability for or indemnify a person against non-payment of UK stamp duty may be void;
 
(e)           defenses of set-off or counterclaim; and
 
(f)           principles which are set out in the qualifications as to matters of law in any legal opinion delivered on the Closing Date in connection with this Agreement.
 
Lender Default shall mean (i) the refusal (which has not been retracted) of a Lender to make available any portion of any Borrowing, or (ii) a Lender having notified in writing Borrower and/or the Administrative Agent that it does not intend to comply with its obligations under Section 2.04.
 
Lenders shall mean (a) the financial institutions listed on the signature pages of this Agreement (other than any such financial institution that has ceased to be a party hereto pursuant to an Assignment and Acceptance) together their respective successors and assigns as permitted hereunder and any Affiliate of any such financial instution, and (b) any financial institution that has become a party hereto pursuant to an Assignment and Acceptance.
 
Lending Office shall mean, as to any Lender, such office or offices as a Lender may from time to time notify Borrower and the Administrative Agent.
 
LIBOR shall mean, in relation to any Loan:
 
(a)           the rate per annum equal to the rate determined by the Administrative Agent to be the offered rate that appears on the page of the Dow Jones Market screen (or any successor thereto) that displays an average British Bankers Association Interest Settlement Rate for deposits in Dollars or Euros (for delivery on the first day of such Interest Period), with a term equivalent to such Interest Period, determined as of approximately 11:00 a.m. (London time) two (2) Business Days prior to the first day of such Interest Period, or, if different, the date on which quotations would customarily be provided by leading banks in the London Interbank Market for deposits of amounts in Dollars or Euros for delivery on the first day of such Interest Period, or
 
(b)           if the rate referenced in the preceding clause (a) does not appear on such page or service or such page or service shall not be available, the rate per annum equal to the rate determined by the Administrative Agent (acting reasonably) to be the offered rate on such other page or other service that displays an average British Bankers Association Interest Settlement Rate for deposits in Dollars or Euros (for delivery on the first day of such Interest Period), with a term equivalent to such Interest Period, determined as of approximately 11:00 a.m. (London time) two (2) Business Days prior to the first day of such Interest Period, or, if different, the date on which quotations would customarily be provided by leading banks in the London Interbank Market for deposits of amounts in Dollars or Euros for delivery on the first day of such Interest Period, or

 
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(c)           if the rates referenced in the preceding clauses (a) and (b) are not available, the rate per annum determined by the Administrative Agent as the rate of interest at which deposits in Dollars or Euros for delivery on the first day of such Interest Period in Same Day Funds in the approximate amount of the Eurocurrency Rate Loan being made, continued or converted by Merrill Lynch Capital Corporation, London Branch and with a term equivalent to such Interest Period would be offered by Merrill Lynch Capital Corporation, London Branch to major banks in the London interbank eurodollar market at their request at approximately 11:00 a.m. (London time) two (2) Business Days prior to the first day of such Interest Period or, if different, the date on which quotations would customarily be provided by leading banks in the London Interbank Market for deposits of amounts in the relevant currency for delivery on the first day of such Interest Period.
 
Lien shall mean any lien, mortgage, deed of trust, pledge, security interest, charge or encumbrance of any kind (including any conditional sale or other title retention agreement, any lease in the nature thereof and any agreement to give any security interest), but not including any interests in accounts receivable and related assets conveyed by the Company or any of its subsidiaries in connection with any Qualified Securitization Transaction.
 
Limited Recourse Stock Pledge shall mean the pledge of the Equity Interests in any joint venture (that is not a Restricted Subsidiary) or any Unrestricted Subsidiary to secure non-recourse debt of such joint venture or Unrestricted Subsidiary, which pledge is made by a Restricted Subsidiary of the Company, the activities of which are solely limited to making and managing Investments, and owning Equity Interests, in such joint venture or Unrestricted Subsidiary, but only for so long as its activities are so limited.
 
Listing shall mean a listing of all or any part of the share capital of the Company or any of its subsidiaries or any Holding Company of the Company or any of its subsidiaries (excluding Access Industries, Inc., the Sponsor (to the extent not a subsidiary of the Company) and any such Holding Company of the Company or any of its subsidiaries, but in each case only if a majority of the investments of such company are not constituted by the Company or any of its subsidiaries) on any investment exchange or any other sale or issue by way of flotation or public offering or any equivalent circumstances in relation to the Company or any of its subsidiaries or any Holding Company of the Company or any of its subsidiaries (excluding Access Industries, Inc., the Sponsor (to the extent not a subsidiary of the Company) and any such Holding Company of the Company or any of its subsidiaries, but in each case only if a majority of the investments of such company are not constituted by the Company or any of its subsidiaries) in any jurisdiction or country.
 
Loan Documents shall mean this Agreement, the Security Documents, the Loan Notes (if any), the Exchange Documents, the Exchange and Registration Rights Agreement, the Intercreditor Agreement and the Commitment Papers.
 
Loan Notes shall mean the Initial Notes and the Extended Notes.
 
Loan Parties shall mean Borrower, the Company and each other Guarantor.
 
Loan PartyObligations shall mean all advances to, and debts, liabilities, obligations, covenants and duties of, any Loan Party and its subsidiaries arising under any Loan Document or otherwise with respect to any Loan, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against any Loan Party or subsidiary of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding.  Without limiting the generality of the foregoing, the Obligations of the Loan Parties under the Loan Documents (and of their subsidiaries to the extent they have obligations under the Loan Documents) include (a) the obligation (including guarantee obligations) to pay principal, interest, reimbursement obligations, charges, expenses, fees, Attorney Costs, indemnities and other amounts payable by any Loan Party or subsidiary under any Loan Document and (b) the obligation of any Loan Party or subsidiary to reimburse any amount in respect of any of the foregoing that any Lender, in its sole discretion, may elect to pay or advance on behalf of such Loan Party or such subsidiary to the extent originally payable by that Loan Party or subsidiary.
 
 
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Loans shall mean the Initial Loans and the Extended Loans.
 
Lyondell shall have the meaning given to it in the introductory paragraph to this Agreement.
 
Management Agreement shall mean the Management Agreement dated as of December 11, 2007, between, among others, the Company and certain of its subsidiaries and Nell Limited as in effect on the Closing Date.
 
Management Determination shall have the meaning given to it in Section 9.12(a)(v).
 
Mandatory Cost shall mean the percentage rate per annum calculated by the Administrative Agent in accordance with Exhibit F.
 
Margin Loans shall mean the loan originally entered into between, among others, AI Chemical Investments LLC, Merrill Lynch International and Merrill Lynch, Pierce, Fenner & Smith Incorporated on or about August 20, 2007 in order to finance the acquisition of certain shares in the capital of Lyondell (as amended, transferred or novated from time to time (including to certain subsidiaries of the Company)).
 
Margin Stock shall have the meaning assigned to such term in Regulation U.
 
Material Adverse Effect shall mean (a) a material adverse effect on the business, operations, assets, liabilities (actual or contingent) or financial condition of the Company and its Restricted Subsidiaries (taken as a whole), (b) a material adverse effect on the ability of Borrower or the Loan Parties (taken as a whole) to perform their respective payment obligations under any Loan Document to which Borrower or any of the Loan Parties is a party or (c) a deficiency in the rights and remedies of the Lenders under the Loan Documents (taken as a whole) which is materially adverse to the Lenders.
 
Material Subsidiary shall mean at any date of determination, each of the Companys subsidiaries (a) whose total assets at the last day of the relevant fiscal year were equal to or greater than 2.5% of the Total Assets of the Company and the Restricted Subsidiaries at such date or (b) whose EBITDA for the most recently ended fiscal year for which financial statements have been delivered pursuant to Section 6.01(a) is equal to or greater than 2.5% of the Consolidated EBITDA for such fiscal year.
 
Maximum Rate shall have the meaning given to it in Section 11.09.

 
-31-
 

Merger Agreement shall have the meaning assigned to such term in the recital hereto.
 
Moodys shall mean Moodys Investors Service, Inc. and its successors.
 
Mortgaged Properties shall have the meaning set forth in paragraph (f) of the definition of Collateral and Guarantee Requirement.
 
Multiemployer Plan shall mean any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which any Loan Party, any Subsidiary or any ERISA Affiliate makes or is obligated to make contributions, during the preceding five plan years, has made or been obligated to make contributions or otherwise could reasonably be expected to incur liability.
 
Net Assets shall have the meaning given to it in Section 9.12.
 
Net Cash Proceeds shall mean, with respect to any Debt Issuance or any Equity Issuance Prepayment Event, the cash proceeds thereof, net of customary fees, commissions, costs, taxes and other expenses incurred in connection therewith.
 
Net Casualty Proceeds shall mean Net Proceeds (with respect to a Casualty Event) as defined in the Senior Secured Credit Facilities.
 
Net Proceeds shall mean (a) Net Sale Proceeds, Net Casualty Proceeds, Net Recovery Proceeds, or Net Cash Proceeds, as applicable or (b) in the case of a Permanent Securities Prepayment Event, the gross proceeds from the issuance of the Permanent Securities minus an amount equal to the amount by which the funding fee exceeds the rebate applicable thereto under the Engagement Letter.
 
Net Proceeds Offer shall have the meaning assigned to such term in Section 5.11.
 
Net Recovery Proceeds shall mean 100% of the cash proceeds actually received by the Company or any of its Restricted Subsidiaries from a Recovery Event, net of related fees, taxes and transaction costs properly incurred in achieving any such recovery.
 
Net Sale Proceeds shall mean, with respect to any Asset Sale, the proceeds (including cash received from the sale of non-cash consideration) in the form of cash or Cash Equivalents including payments in respect of deferred payment obligations when received in the form of cash or Cash Equivalents (other than the portion of any such deferred payment constituting interest) received by the Company or any of its Restricted Subsidiaries from such Asset Sale net of
 
(a)           all out-of-pocket expenses and fees relating to such Asset Sale (including, without limitation, legal, accounting and investment banking fees and sales commissions),
 
(b)           taxes paid or payable after taking into account any reduction in consolidated tax liability due to available tax credits or deductions and any tax sharing arrangements,
 
(c)           repayment of Indebtedness that is required to be repaid in connection with such Asset Sale,
 
(d)           all distributions and other payments required to be made to minority interest holders in subsidiaries or joint ventures as a result of such Asset Sale or to any other Person (other than the Company or a Restricted Subsidiary of the Company) owning a beneficial interest in the assets disposed of in such Asset Sale;

 
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(e)           the decrease in proceeds from Qualified Securitization Transactions which results from such Asset Sale; and
 
(f)           appropriate amounts to be provided by the Company or any Restricted Subsidiary of the Company, as a reserve, in accordance with GAAP, against any liabilities associated with such Asset Sale and retained by, the Company or any Restricted Subsidiary of the Company, after such Asset Sale, including pension and other post-employment benefit liabilities, liabilities related to environmental matters and liabilities under any indemnification obligations associated with such Asset Sale.
 
Non-Consenting Lender shall have the meaning assigned to such term in Section 2.15(c).
 
Non-Responsive Lender shall mean, with respect to any amendment, waiver or modification, any Lender who does not respond affirmatively or negatively within 20 Business Days to a request for such amendment, waiver or modification.
 
Notes shall mean the Loan Notes and the Exchange Notes as originally executed or as they may from time to time be amended pursuant to the applicable provisions hereof.
 
Notice Deadline shall have the meaning given to it in Section 5.10(b).
 
Obligations shall mean all obligations for principal, premium, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness.
 
Organization Documents shall mean (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the certificate or articles of formation, association or organization and operating agreement; and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.
 
Other Taxes shall mean any and all present or future stamp or documentary taxes or any other excise, property, intangible, mortage recording or similar taxes or charges or similar levies which arise from any payment made under any Loan Document or from the execution, delivery, registration or enforcement of, or otherwise with respect to any Loan Documents.
 
Overnight Rate shall mean, for any day, (a) with respect to any amount denominated in Dollars, the Federal Funds Rate, and (b) with respect to any amount denominated in Euro, the rate of interest per annum at which overnight deposits in Euro, in an amount approximately equal to the amount with respect to which such rate is being determined, would be offered for such day by a branch or Affiliate of Merrill Lynch Capital Corporation in the applicable offshore interbank market for such currency to major banks in such interbank market.

 
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Parent shall mean BI S. r.l., a socit responsabilit limite whose registered office is 15-17 Avenue Gaston Diderich, L-1420 Luxembourg.
 
Parent Guarantors shall mean the Company and Basell Funding S..r.l.
 
Pari Passu Indebtedness shall mean, in the case of the Loans, any Indebtedness of the Company that ranks equally in right of payment with the Loans and, in the case of the guarantees thereof, any Indebtedness of the applicable Guarantor that ranks equally in right of payment to the guarantee of the Loans of such Guarantor.
 
Participant shall have the meaning assigned to such term in Section 11.04(c).
 
Participating Member State shall mean each state so described in any EMU legislation.
 
Party shall mean a party to this Agreement.
 
Patriot Act shall mean the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act of 2001.
 
Paying Agent shall mean the Person acting as paying agent in respect of the Exchange Notes, as described in the Description of Exchange Notes.
 
PBGC Settlement shall mean the settlement agreement between Lyondell and the Pension Benefit Guaranty Corporation (or any successor entity) (the PBGC) as amended, modified, restated or replaced from time to time.
 
Pension Plan shall mean any employee pension benefit plan (as such term is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA or to the minimum funding standards under Section 412 of the Code or Section 302 of ERISA and is sponsored or maintained by any Loan Party, any Subsidiary or any ERISA Affiliate or to which any Loan Party, any Subsidiary or any ERISA Affiliate contributes or has an obligation to contribute, or in the case of a multiple employer or other plan described in Section 4064(a) of ERISA, has made contributions at any time during the immediately preceding five (5) plan years or with respect to which a Loan Party, Subsidiary or ERISA Affiliate could reasonably be expected to incur liability (including under Section 4063 or 4069 of ERISA).
 
Perfection Certificate shall mean a certificate in the form of Exhibit G-1 to the Senior Secured Credit Facilities, as the same shall be supplemented from time to time by a Perfection Certificate Supplement or otherwise.
 
Perfection Requirements means the making or the procuring of the appropriate registrations, filings, endorsements, notarizations, stamping and/or notifications of the Security Documents and/or the Lien created thereunder, to the extent to be made other than by the Company or its subsidiaries.
 
Permanent Securities shall mean any debt securities issued by Borrower or one of its Affiliates to refinance the Loans or Exchange Notes in whole or in part.
 
Permanent Securities Prepayment Event shall mean the issuance of any Permanent Securities on or before the first anniversary of the Closing Date.

 
-34-
 

Permitted Business shall mean any business which is the same, similar, related or complementary to the businesses in which the Company and its Restricted Subsidiaries were engaged on the Closing Date (including, for the avoidance of doubt, following the consummation of the Acquisition), except to the extent that after engaging in any new business, the Company and its Restricted Subsidiaries, taken as a whole, remain substantially engaged in similar lines of business as were conducted by them on the Closing Date.
 
Permitted Collateral Liens shall mean the following types of Liens:
 
(a)           Liens on the Collateral (i) to secure the Loans and the Permanent Securities or (ii) to secure other Indebtedness permitted to be incurred pursuant to this Agreement, provided that the assets and properties securing such Indebtedness referred to in this subclause (ii) will also secure the Loans on at least a second ranking basis; provided further that, after giving effect to the incurrence of such Indebtedness referred to in this subclause (ii), prior to the Extension Date, the Consolidated Senior Secured Leverage Ratio is less than 4.0:1 on the date of incurrence and, thereafter, the Consolidated Senior Secured Leverage Ratio is less than 4.25:1 on the date of incurrence;
 
(b)           Liens on the Collateral securing Indebtedness under the Senior Secured Credit Facilities permitted to be incurred pursuant to Section 5.08(c)(ii) or incremental facilities under the Senior Secured Credit Facilities in an amount not to exceed $1.0 billion prior to the Extension Date and thereafter $2.0 billion, provided that the assets and properties securing such Indebtedness will also secure the Loans;
 
(c)           Liens on any property or assets of a Restricted Subsidiary of the Company granted in favor of the Company or any of its subsidiaries which are Guarantors; provided that any Liens of the type described in this clause (c) will be subject to the Liens granted and evidenced by the Security Documents;
 
(d)           Liens securing obligations of the Company or any Restricted Subsidiary of the Company under Hedging Obligations permitted under Section 5.08, provided that each of the parties thereto will have entered into the Intercreditor Agreement and that such Liens may not extend to or cover any assets or property other than the assets and properties that secure the Loans;
 
(e)           Liens as in effect on the Closing Date securing the 2015 Notes, the Arco Notes and the Equistar Notes;
 
(f)           any extension, renewal or replacement, in whole or in part, of any Lien described in the foregoing clauses (a) through (e) and clause (g) below; provided that any such extension, renewal or replacement will be no more restrictive in any material respect than the Lien so extended, renewed or replaced and will not extend in any material respect to any additional property or assets; and
 
(g)           Liens described in clauses (a), (c), (d), (f), (g), (h), (i), (j), (l), (m), (n), (p) (but only in respect of Liens described in clauses (a) and (l)), (q) and (s) through (v) of the definition of Permitted Liens.
 
Permitted Indebtedness shall have the meaning assigned to such term in Section 5.08(c).

 
-35-
 

Permitted Investments shall mean:
 
(a)           Investments by the Company or any Restricted Subsidiary of the Company in any Person that is or will become immediately after such Investment a Restricted Subsidiary of the Company or that will merge or consolidate into the Company or a Restricted Subsidiary of the Company;
 
(b)           Investments in the Company by any Restricted Subsidiary of the Company; provided that any Indebtedness evidencing such Investment is unsecured and subordinated (other than pursuant to intercompany notes pledged under the Credit Facilities), pursuant to a written agreement, to the Companys obligations under the Loans and this Agreement;
 
(c)           Investments in cash and Cash Equivalents;
 
(d)           loans and advances to employees and officers of the Company and its subsidiaries in the ordinary course of business or as required by applicable law or for travel, relocation and related expenses;
 
(e)           Investments in Unrestricted Subsidiaries or joint ventures not to exceed (A) on or prior to the Extension Date, $250 million and, thereafter, the greater of (i) $500 million and (ii) 2% of Consolidated Net Tangible Assets, plus (B)
 
(i)           the aggregate amount net of tax withheld at source returned in cash on or with respect to any Investments made in Unrestricted Subsidiaries and joint ventures whether through interest payments, principal payments, dividends or other distributions or payments on account of such Investment,
 
(ii)          the cash proceeds net of tax withheld at source received by the Company or any Restricted Subsidiary of the Company from the disposition of all or any portion of such Investments (other than to a Restricted Subsidiary of the Company),
 
(iii)         upon redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary of the Company, the fair market value of such subsidiary, and
 
(iv)         Investments in Specified Joint Ventures in an amount not to exceed $20 million;
 
provided, however, that the net after-tax amount has not been included in Consolidated Net Income for the purpose of calculating clause (iii)(A) of Section 5.01(c);
 
(f)           Investments in securities received pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of any debtors of the Company or its Restricted Subsidiaries or received in settlement of debts created in the ordinary course of business and owing to the Company or a Restricted Subsidiary of the Company or in satisfaction of judgments or in settlement of any litigation or arbitration;
 
(g)           Investments made by the Company or its Restricted Subsidiaries as a result of consideration received in connection with an Asset Sale made in compliance with Section 5.11;
 
(h)           Investments existing on the Closing Date;

 
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(i)           any Investment by the Company or a wholly owned subsidiary of the Company in a Securitization Entity or any Investment by a Securitization Entity in any other Person in connection with a Qualified Securitization Transaction; provided that any Investment in a Securitization Entity is in the form of a purchase money note or an equity interest;
 
(j)           payments to any Basell Parent Company for the purposes described in clause (b)(v) of Section 5.01 which, when aggregated with the payment made under such clause, will not exceed 1.5 million in any fiscal year;
 
(k)          any Indebtedness of the Company to any of its subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such subsidiary which assets are subsequently conveyed by the Company to a Securitization Entity in a Qualified Securitization Transaction;
 
(l)           Investments through the licensing of technology in a Person that is or will be as a result of such Investment a Qualified Joint Venture;
 
(m)         purchase of shares of Royal Dutch Shell plc and BASF AG required to satisfy Basell B.V.s obligations under its stock option plans or stock appreciation rights as such plans and rights were in effect on the Closing Date;
 
(n)          Investments held by any Person (other than an Affiliate of the Company) that becomes a Restricted Subsidiary of the Company; provided that such Investments were not acquired in contemplation of the acquisition of such Person;
 
(o)          Hedging Obligations entered into in the ordinary course of business and otherwise permitted under this Agreement;
 
(p)          Limited Recourse Stock Pledges; and
 
(q)          any Investment in a Permitted Business having an aggregate fair market value, taken together with all other Investments made pursuant to this clause (q) that are at that time outstanding, not to exceed, on or prior to the Extension Date, $125 million, and thereafter, $250 million (with the fair market value of each such Investment being measured at the time made and without giving effect to subsequent changes in value).
 
Permitted Liens shall mean the following types of Liens:
 
(a)           Liens existing on the Closing Date (including the extension, re-issuance or renewal of such Liens);
 
(b)           Liens securing Indebtedness under Credit Facilities permitted to be incurred pursuant to, and in an amount no greater than that specified in, Section 5.08(c)(ii);
 
(c)           Liens securing Indebtedness under Asset Backed Credit Facilities permitted by clause (xv) of Section 5.08;
 
(d)           Liens on any property or assets of a Restricted Subsidiary of the Company that is not a guarantor granted in favor of the Company, a Restricted Subsidiary of the Company that is a guarantor or any wholly-owned Restricted Subsidiary of the Company;

 
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(e)           Liens securing any Capitalized Lease Obligation and Liens to secure Indebtedness (including Capitalized Lease Obligations) permitted by clause (xiv)(B) of Section 5.08 covering only the property or assets acquired with such Indebtedness;
 
(f)           Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into by the Company or any Restricted Subsidiary of the Company in the ordinary course of business;
 
(g)           statutory Liens of landlords and carriers, warehousemen, mechanics, suppliers, materialmen, repairmen, employees, pension plan administrators or other like Liens arising in the ordinary course of business of the Company or any Restricted Subsidiary of the Company and with respect to amounts not yet subject to penalties for non-payment or being contested in good faith by appropriate proceedings or Liens arising solely by virtue of any statutory or common law provisions relating to attorneys liens or bankers liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a creditor depositary institution;
 
(h)           Liens for taxes, assessments, government charges or claims that are extinguished within 60 days of notice of their existence, are not yet subject to penalties for non-payment or that are being contested in good faith by appropriate proceedings;
 
(i)           Liens incurred or deposits made to secure the performance of tenders, bids or trade or government contracts, or to secure leases, statutory or regulatory obligations, surety, judgment or appeal bonds, completion guarantee, surety, letters of credit, performance bonds, guarantees or other obligations of a like nature incurred in the ordinary course of business (other than obligations for the payment of borrowed money);
 
(j)           zoning restrictions, minor survey exceptions, minor encumbrances, easements, licenses, reservations of, or rights of others for, licenses reservations, title defects, rights of others for rights-of-way, utilities, sewers, electrical lines, telephone lines, telegraph wires, restrictions, encroachments and other similar charges, encumbrances or title defects or zoning or other restrictions as to the use of real property or Liens incurred in the ordinary course of business that do not in the aggregate materially interfere with in any material respect the ordinary conduct of the business of the Company and its Restricted Subsidiaries on the properties subject thereto, taken as a whole;
 
(k)           Liens arising by reason of any judgment, decree or order of any court so long as any appropriate legal proceedings that may have been duly initiated for the review of such judgment, decree or order shall not have been finally terminated or the period within which such proceedings may be initiated shall not have expired;
 
(l)           Liens on property of, or on shares of Capital Stock or Indebtedness of, any Person existing at the time such property or Person is acquired by, merged with or into or consolidated with, the Company or any Restricted Subsidiary of the Company; provided that such Liens (i) do not extend to or cover any property or assets of the Company or any Restricted Subsidiary of the Company other than the property or assets acquired (other than assets and property affixed or appurtenant thereto) or than those of the Person merged into or consolidated with the Company or Restricted Subsidiary of the Company and (ii) were created prior to, and not in connection with or in contemplation of, such acquisition, merger or consolidation;

 
-38-
 

(m)           Liens securing the Hedging Obligations of the Company or any Restricted Subsidiary of the Company permitted under clause (iv) of Section 5.08 or any collateral for the Indebtedness to which such Hedging Obligations relate;
 
(n)           Liens incurred or deposits made in the ordinary course of business in connection with workers compensation, unemployment insurance and other types of social security or other insurance (including unemployment insurance);
 
(o)           Liens made to secure obligations arising from statutory, regulatory, contractual, or warranty requirements of the Company or any Restricted Subsidiary of the Company in the ordinary course of business, including rights of offset and set-off;
 
(p)           any extension, amendment, renewal or replacement, in whole or in part, of any Lien described in the foregoing clauses (a) through (o); provided that any such extension, renewal or replacement shall be no more restrictive in any material respect than the Lien so extended, amended, renewed or replaced and shall not extend to any additional property or assets;
 
(q)           Liens securing Indebtedness incurred to refinance, refund, extend, renew or replace Indebtedness that has been secured by a Lien permitted by this Agreement; provided that (i) such new Lien shall be limited to all or part of the same property and assets that secured or, under the written agreements pursuant to which the original Lien arose, could secure the original Lien plus improvements and accessions to, such property or proceeds or distributions thereof); and (ii) the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of (A) the outstanding principal amount or, if greater, committed amount of the Indebtedness at the time the original Lien became a Permitted Lien and (B) an amount necessary to pay any fees and expenses, including premiums, related to such refinancing, refunding, extension, renewal or replacement;
 
(r)           Liens in favor of the Company or any Restricted Subsidiary of the Company;
 
(s)           Liens securing Indebtedness incurred to finance the construction, purchase or lease of, or repairs, improvements or additions to, property, plant or equipment of such Person;
 
(t)           Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods;
 
(u)          any interest or title of a lessor in the property subject to any lease other than a Capitalized Lease Obligations;
 
(v)          Liens upon specific items of inventory or other goods and proceeds of any Person securing such Persons obligations in respect of bankers acceptances issues or credit for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;
 
(w)          Liens granted to the Administrative Agent for its compensation and indemnities pursuant to this Agreement;
 
(x)           lease or subleases or licenses or sublicenses of real property granted in the ordinary course of business to others that do not materially interfere with the ordinary course of business of the Company and the Restricted Subsidiaries of the Company;

 
-39-
 

(y)          Liens incurred in the ordinary course of business of the Company or any Restricted Subsidiary of the Company with respect to obligations that do not exceed, on or prior to the Extension Date, $125 million and, thereafter, $250 million at any one time outstanding;
 
(z)           Liens on receivables and assets related thereto incurred in connection with a Qualified Securitization Transaction;
 
(aa)         Liens over shares in joint-ventures or in any Restricted Subsidiary of the Company acting as a special purpose vehicle with the sole purpose to hold shares in a joint-venture to secure Indebtedness or other obligations of such joint-venture or Restricted Subsidiary of the Company;
 
(bb)        any netting or set-off arrangements entered into by the Company or any Restricted Subsidiary of the Company in the ordinary course of its banking arrangements (including, for the avoidance of doubt, cash pooling arrangements) for the purposes of netting debit and credit balances of the Company or any Restricted Subsidiary of the Company;
 
(cc)         Liens resulting from any Limited Recourse Stock Pledge;
 
(dd)        any Lien arising as a result of a sale, transfer or other disposal which is an Asset Sale in compliance with Section 5.11;
 
(ee)         Liens securing Acquired Indebtedness permitted to be incurred under this Agreement; provided that such Liens were in existence prior to the contemplation of the incurrence of such Indebtedness under this Agreement; and provided further such Liens do not extend to or over any property or assets not subject to such Lien at the time of such incurrence other than any assets acquired thereafter which are required to be pledged pursuant to the terms of such Indebtedness;
 
(ff)          from and after the first date when the Loans are rated Investment Grade, any Liens other than on any manufacturing facility in the United States and any Member State of the European Union (as it existed on December 31, 2003);
 
(gg)        Liens arising by reason of deposits necessary to qualify the Issuer or any other Restricted Subsidiary of the Company to conduct business, maintain self insurance or comply with any law and Liens securing the PBGC Settlement; and
 
(hh)        Permitted Collateral Liens.
 
Person shall mean any natural person, corporation, business trust, joint venture, association, company, partnership, limited liability company or government, individual or family trusts, or any agency or political subdivision thereof.
 
Plan shall mean any employee benefit plan (as such term is defined in Section 3(3) of ERISA) established by any Loan Party or subsidiary or, with respect to any such plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA Affiliate.
 
Preferred Stock of any Person shall mean any Capital Stock of such Person that has preferential rights to any other Capital Stock of such Person with respect to dividends or redemptions or upon liquidation.

 
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Prepayment Event shall mean (a) prior to the Initial Maturity Date, any Debt Issuance Prepayment Event, any Equity Issuance Prepayment Event, any Permanent Securities Prepayment Event, any Casualty Prepayment Event, any Recovery Prepayment Event or any Asset Sale Prepayment Event and (b) thereafter, any Permanent Securities Prepayment Event or any event which would require a Net Proceeds Offer.
 
Pro Forma Financial Statements shall have the meaning given to it in Section 3.05(a)(i).
 
Pro Rata Share shall mean, for any Lender at any time, the Euro Equivalent of such Lenders Commitment divided by the Euro Equivalent of the Commitments of all Lenders (or, if the Commitments have been terminated, the Euro Equivalent of the aggregate outstanding principal amount of such Lenders Initial Loans divided by the Euro Equivalent of the aggregate outstanding principal amount of all Initial Loans), all determined at such time.
 
Process Agent shall have the meaning assigned to such term in Section 11.15(c).
 
Public Indebtedness shall mean any indebtedness consisting of bonds, debentures, notes or other similar debt securities issued in (a) a public offering registered under the Securities Act, (b) listed on a recognized securities exchange or (c) a private placement to institutional investors that is underwritten for resale in accordance with Rule 144A or Regulation S, whether or not it includes registration rights entitling the holders of such debt securities to registration thereof with the U.S. Securities Exchange Commission for public resale.
 
Purchased Loans shall have the meaning given to it in Section 5.10(b).
 
Qualified Capital Stock shall mean any Capital Stock that is not Disqualified Capital Stock.
 
Qualified Development Agency Debt shall mean Indebtedness which (a) has a Weighted Average Life to Maturity at least six months after the Final Maturity Date, (b) bears interest at a rate lower than the lowest rate on the Senior Secured Credit Facilities at the date such Indebtedness is incurred, and (c) is issued by, or guaranteed by, a state development bank or like governmental agency or organization.
 
Qualified Joint Venture shall mean (a) any Person that is not a subsidiary of the Company or any of its Restricted Subsidiaries that the Company or any of its Restricted Subsidiaries has a direct or indirect ownership interest in that is engaged in a Permitted Business or (b) any entity through which the Company has an ownership interest as described in clause (a), in the case of (a) and (b), for which the Sponsor does not hold an ownership interest (other than through its ownership interest in the Company).
 
Qualified Securitization Transaction shall mean any transaction or series of transactions that may be entered into by the Company or any of its Restricted Subsidiaries pursuant to which the Company or any of its Restricted Subsidiaries may sell, convey or otherwise transfer pursuant to customary terms to
 
(a)           a Securitization Entity or to the Company which subsequently transfers to a Securitization Entity (in the case of a transfer by the Company or any of its subsidiaries) and

 
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(b)           any other Person (in the case of transfer by a Securitization Entity), or may grant a security interest in any accounts receivable (whether now existing or arising or acquired in the future) of the Company or any of its Restricted Subsidiaries, and any assets related thereto including, without limitation, all collateral securing such accounts receivable, all contracts and contract rights and all guarantees or other obligations in respect of such accounts receivable, proceeds of such accounts receivable and other assets (including contract rights) which are customarily transferred or in respect of which security interests are customarily granted in connection with asset securitization transactions involving accounts receivable.
 
Following the Initial Public Equity Offering of a Basell Parent Company, references in the foregoing definition to the Company shall be deemed also to refer to such Basell Parent Company.
 
Quotation Day shall mean, in relation to any period for which an interest rate is to be determined:
 
(a)           (if the currency is euro) two days in which the Trans-European Automated Real-time Gross Settlement Express Transfer payment system is open for the settlement of payments in Euro before the first day of that period; or
 
(b)           (for any other currency) two Business Days before the first day of that period,
 
unless market practice differs in the Relevant Interbank Market for a currency, in which case the Quotation Day for that currency will be determined by the Agent in accordance with market practice in the Relevant Interbank Market (and if quotations for that currency and period would normally be given by leading banks in the Relevant Interbank Market on more than one day, the Quotation Day will be the last of those days).
 
Rate Increasing Event shall mean with respect to any tranche of the Loans or the Exchange Notes, such Loans or Exchange Notes being rated Caa1 or lower by Moodys or CCC+ or lower by S&P.
 
Rating Agency shall mean (1) S&P or (2) Moodys or (3) if neither S&P nor Moodys shall exist, a nationally recognized securities rating agency or agencies, as the case may be, selected by the Company, which shall be substituted for S&P or Moodys or both, as the case may be.
 
Real Property shall mean, collectively, all right, title and interest (including any leasehold, easement, mineral or other estate) in and to any and all parcels of or interests in real property owned, leased or operated by any Person, whether by lease, license or other means, together with, in each case, all easements, hereditaments and appurtenances relating thereto, all improvements and appurtenant fixtures and equipment, all general intangibles and contract rights and other property and rights incidental to the ownership, lease or operation thereof.
 
Receivables Financings shall mean factoring, securitizations of receivables or any other receivables financing (including, without limitation, through the sale of receivables in a factoring arrangement or through the sale of receivables to lenders or to special purpose entities formed to borrow from such lenders against such receivables), whether or not recourse to the Company or any of its Restricted Subsidiaries, including the Asset Backed Credit Facilities secured by receivables described in paragraph (2) of the definition thereof and any other Qualified Securitization Transaction.

 
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Recovery Event shall mean any event that gives rise to the receipt by the Company or any of its Restricted Subsidiaries of proceeds pursuant to or in respect of the Acquisition Agreement or any due diligence report delivered to the Joint Lead Arrangers in connection with the Transactions or any related breach of contract, warranty claim, reliance letter or legal action or proceedings (whether by way of judgment on or settlement of any such claim).
 
Recovery Prepayment Event shall mean any event or occurrence generating Net Recovery Proceeds for any Loan Party or any Subsidiary thereof.
 
Refinance shall mean, in respect of any security or Indebtedness, to refinance, extend, renew, refund, replace, repay, prepay, redeem, defease or retire, or to issue a security or Indebtedness in exchange or replacement for, such security or Indebtedness in whole or in part.  Refinanced and Refinancing shall have correlative meanings.
 
Refinancing Indebtedness shall mean any Refinancing by the Company or any Restricted Subsidiary of the Company of Indebtedness incurred in accordance with the Fixed Charge Coverage Ratio test set forth in Section 5.08 or Indebtedness described in subclauses (i), (ii)(B), (iii), (x), (xvii), (xviii) or (xix) of Section 5.08(c) in each case that does not
 
(a)           result in an increase in the aggregate principal amount of Indebtedness of such Person as of the date of such proposed Refinancing (plus the amount of any premium required to be paid under the terms of the instrument governing such Indebtedness and plus the amount of reasonable expenses and fees incurred by the Company in connection with such Refinancing) or
 
(b)           create Indebtedness with
 
(i)           a Weighted Average Life to Maturity that is less than the Weighted Average Life to Maturity of the Indebtedness being Refinanced or
 
(ii)           a final maturity earlier than the final maturity of the Indebtedness being Refinanced;
 
(c)       comprise Indebtedness, Disqualified Stock or Preferred Stock of a subsidiary of the Company (other than Borrower) that is not a Guarantor that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company, Borrower or any Guarantor;
 
provided that if such Indebtedness being Refinanced is subordinated or junior to the Loans, then such Refinancing Indebtedness shall be subordinated on terms at least as favorable to Lenders as those contained in the documentation governing the Indebtedness being Refinanced.
 
Register shall have the meaning assigned to such term in Section 11.04(b)(iii).
 
Registrar shall mean the Person acting as Registrar in respect of the Exchange Notes, as described in the Description of Exchange Notes.
 
Regulation U shall mean Regulation U of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof.

 
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Related Parties shall mean, with respect to any specified Person, such Persons Affiliates and the respective directors, officers, employees, agents and advisors of such Person and such Persons Affiliates.
 
Release shall mean any spilling, leaking, seepage, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, disposing, depositing, dispersing or migrating in, into, onto or through the Environment.
 
Relevant Default shall have the meaning given to it in Section 7.02.
 
Relevant Interbank Market shall mean, in relation to Euro, the European interbank market and, in relation to any other currency, the London interbank market.
 
Reportable Event shall mean any of the events set forth in Section 4043(c) of ERISA or the regulations issued thereunder, other than events for which the thirty (30) day notice period has been waived.
 
Required Lenders shall mean, at any date, Holders having or holding Loans or Exchange Notes representing more than 50% of the Dollar Equivalent of all Loans and Exchange Notes outstanding at such date; provided that Loans and Exchange Notes held or deemed held by any Defaulting Lender or Non-Responsive Lender shall be excluded for purposes of making a determination of Required Lenders.
 
Responsible Officer shall mean the chief executive officer, president, vice president, chief financial officer, treasurer or assistant treasurer or other similar officer of a Loan Party (or, if such Loan Party is a partnership, the similar governing body) (including, in the case of each Loan Party other than any Loan Party organized, formed or incorporated in the United States, the authorized number of managing directors or a general attorney or an attorney under a power of attorney of such Loan Party) and, as to any document delivered on the Closing Date, any secretary of such Loan Party.  Any document delivered hereunder that is signed by a Responsible Officer of a Loan Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Loan Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party.
 
Restricted Investment shall mean an Investment other than a Permitted Investment.
 
Restricted Payment shall mean to
 
(a)           declare or pay any dividend or make any distribution, other than dividends or distributions payable in Qualified Capital Stock of the Company and dividends or distributions payable solely to the Company or a Restricted Subsidiary of the Company, and other than pro rata dividends or other distributions made by a Subsidiary that is not a wholly-owned Subsidiary to minority shareholders (or owners of an equivalent interest in the case of a Subsidiary that is an entity other than a corporation), on or in respect of shares of the Companys Capital Stock to holders of such Capital Stock,
 
(b)           purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any warrants, rights or options to purchase or acquire shares of any class of such Capital Stock,

 
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(c)           make any principal payment on, purchase, defease, redeem, prepay, decrease or otherwise acquire or retire for value, prior to any scheduled final maturity, scheduled repayment or scheduled sinking fund payment, any Indebtedness of the Company that is subordinate or junior in right of payment to the Loans (other than the purchase, repurchase or other acquisition of Indebtedness of the Company that is subordinate or junior in right of payment to the notes purchased in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case, due within one year of the date of such purchase, repurchase or other acquisition or which is owed to a Restricted Subsidiary of the Company); or
 
(d)           make any Investment other than Permitted Investments.
 
Restricted Subsidiary of any Person shall mean any subsidiary of such Person which at the time of determination is not an Unrestricted Subsidiary.
 
S&P shall mean Standard & Poors Ratings Services or any successor to the rating agency business thereof.
 
Sale and Leaseback Transaction shall mean any direct or indirect arrangement with any Person or to which any such Person is a party, providing for the leasing to the Company or a Restricted Subsidiary of the Company of any property, whether owned by the Company or any Restricted Subsidiary of the Company on the Issue Date or later acquired, which has been or is to be sold or transferred by the Company or such Restricted Subsidiary to such Person or to any other Person from whom funds have been or are to be advanced by such Person on the security of such property.
 
Same Day Funds shall mean (a) with respect to disbursements and payments in Dollars, immediately available funds, and (b) with respect to disbursements and payments in Euro, same day or other funds as may be determined by the Administrative Agent to be customary in the place of disbursement or payment for the settlement of international banking transactions in Euro.
 
SEC shall mean the U.S. Securities and Exchange Commission or any successor thereto.
 
Secured Documents shall mean the Loan Documents and the Finance Documents (as defined in the Senior Secured Credit Facilities).
 
Secured Party shall mean a Finance Party or a Secured Party (as defined in the Senior Secured Credit Facilities), as the case may be.
 
Securities Act shall mean the U.S. Securities Act of 1933, as amended from time to time.
 
Securitization Entity shall mean Basell Capital Corporation, Basell Polyolefins Company, BUBA, LyondellBasell Receivables I LLC and each other entity to which the Company or any subsidiary of the Company transfers accounts receivable or equipment and related assets which engages in no activities other than in connection with the financing of accounts receivable or equipment and which is designated by the Board of Directors of the Company (as provided below) as a Securitization Entity
 
(a)           no portion of the Indebtedness or any other Obligations (contingent or otherwise) of which

 
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(i)           is guaranteed by the Company or any subsidiary of the Company (other than the Securitization Entity), excluding guarantees of Obligations (other than the principal of, and interest on, Indebtedness) pursuant to Standard Securitization Undertakings,
 
(ii)           is recourse to or obligates the Company or any subsidiary of the Company (other than the Securitization Entity) in any way other than pursuant to Standard Securitization Undertakings or
 
(iii)           subjects any property or asset of the Company or any subsidiary of the Company (other than the Securitization Entity), directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than pursuant to Standard Securitization Undertakings and other than any interest in the accounts receivable or equipment and related assets being financed (whether in the form of an equity interest in such assets or subordinated indebtedness payable primarily from such financed assets) retained or acquired by the Company or any subsidiary of the Company,
 
(b)           with which neither the Company nor any subsidiary of the Company has any material contract, agreement, arrangement or understanding other than on terms no less favorable to the Company or such subsidiary than those that might be obtained at the time from persons that are not Affiliates of the Company, other than fees payable in the ordinary course of business in connection with servicing receivables of such entity (other than Standard Securitization Undertakings), and
 
(c)           to which neither the Company nor any subsidiary of the Company has any obligation to maintain or preserve such entitys financial condition or cause such entity to achieve certain levels of operating results (other than Standard Securitization Undertakings).
 
Any such designation by the Board of Directors of the Company shall be evidenced to the Lenders by filing with the Administrative Agent a certified copy of the resolution of the Board of Directors of the Company giving effect to such designation and an officers certificate certifying that such designation complied with the foregoing conditions.  Following the Initial Public Equity Offering of a Basell Parent Company, references in the foregoing definition to the Company shall be deemed also to refer to such Basell Parent Company.
 
Security Documents shall mean the mortgages, pledges, security agreements or similar agreements or related documents pursuant to which Liens are granted on property or assets in favor of the Collateral Agent (on its own behalf and on behalf of the Secured Parties) set forth on Schedule 1.01(a) hereto.
 
Security Principles shall mean the principles set forth on Schedule 1.01(b).
 
Senior Secured Credit Facilities shall mean the Credit Agreement dated December 20, 2007 by and between, among others, the company, Citigroup Global Markets Inc., Goldman Sachs Credit Partners, L.P., Merrill Lynch, Pierce, Fenner & Smith Incorporated, ABN AMRO Incorporated and UBS Securities LLC, as Joint Lead Arrangers and Joint Bookrunners, and Citicorp North America Inc., as Administrative Agent, Collateral Agent and Swingline Lender, together with the documents related thereto (including any term loans and revolving loans thereunder or which may be split out or refinanced by any separate facility agreement, and any guarantees and security documents), as amended, extended, renewed, replaced, restated, supplemented or otherwise modified (in whole or in part, and without limitation as to amount, terms, conditions, covenants and other provisions) from time to time including any incremental facility thereunder.

 
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Senior Secured Indebtedness shall mean any Indebtedness secured by a Lien on any assets of the Company or any of its Restricted Subsidiaries and the Lien securing such Indebtedness ranks equally with or prior to the Lien securing the Loans (excluding Indebtedness under Qualified Securitization Transactions, the Asset Backed Credit Facilities and the 2015 Notes).
 
Significant Subsidiary shall mean any Restricted Subsidiary of the Company which, at the date of determination, is a Significant Subsidiary as such term is defined in Regulation S-X under the Exchange Act, as such regulation is in effect on the Closing Date; provided that in no event shall Significant Subsidiary include any subsidiary that would otherwise be a Significant Subsidiary solely by virtue of the size of a loss it has incurred.
 
Specified Joint Ventures shall mean Al-Waha Petrochemical Company and Saudi Ethylene and Polyethylene Company.
 
Sponsor shall mean:
 
(a)           the Blavatnik Group; and/or
 
(b)           other funds, limited partnerships or companies managed or controlled by Mr. Leonard Blavatnik including, without limitation, AI Petrochemicals for so long as so managed or controlled.
 
Standard Securitization Undertakings shall mean representations, warranties, undertakings, covenants and indemnities entered into by the Company or any subsidiary of the Company which are reasonably customary in an accounts receivable securitization transaction.  Following the Initial Public Equity Offering of a Basell Parent Company, references in the foregoing definition to the Company shall be deemed also to refer to such Basell Parent Company.
 
Stated Maturity shall mean, (i) with respect to any Loan, the Final Maturity Date (unless the Loans are not converted pursuant to Section 2.01(b), in which case all references shall mean the Initial Maturity Date) and (ii) with respect to any security, the date specified in such security as the fixed date on which the final payment of principal of such security is due and payable, including pursuant to any mandatory redemption provision (but excluding any provision providing for the repurchase of such security at the option of the holder thereof upon the happening of any contingency beyond our control unless such contingency has occurred).
 
Statutory Reserves Adjustment shall mean, with respect to any currency, a fraction (expressed as a decimal), the numerator of which is one and the denominator of which is one minus any reserve, liquid asset or similar requirement established by any Governmental Authority of the United States of America or of the jurisdiction of such currency or any jurisdiction in which Loans in such currency are made to which banks in such jurisdiction are subject for any category of deposits or liabilities customarily used to fund loans in such currency or by reference to which interest rates applicable to Loans in such currency are determined.
 
Structured Financing Transaction shall mean the structured financing transaction, as in effect the Closing Date, entered into in July 2007 by the Company and certain of its Restricted Subsidiaries and a European bank pursuant to which Basell Funding issued Dutch certification van aandelen (Certificates) to a special purpose vehicle (BAFB) with respect to 50 fixed-return preferred shares issued by Basell Holdings to Basell Funding for a consideration of 1,000,000,000; the Certificates give BAFB the right to receive from the Company dividends and other distributions that Basell Funding receives from Basell Holdings in relation to the preferred shares; together with a put and call option agreement entered into between the Company and the European bank with respect to the shares of BAFB and pursuant to which, at any time at their respective sole discretion either the Company can call or the European bank can put the shares of BAFB for a purchase price of 1,000,000,000; and the related Swap Contracts in respect of the aforementioned.

 
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Subordinated Indebtedness shall mean (a) with respect to Borrower, any Indebtedness of Borrower that is by its terms subordinated in right of payment to the Loans and the Exchange Notes, and (b) with respect to any Guarantor, any Indebtedness of such Guarantor that is by its terms subordinated in right of payment to its Guarantee of the Loans and the Exchange Notes.
 
subsidiary shall mean with respect to any Person, (a) a corporation a majority of whose Voting Stock is at the time, directly or indirectly, owned by such Person, by one or more subsidiaries of such Person or by such Person and one or more subsidiaries thereof; (b) any other Person (other than a corporation), including, without limitation, a partnership, limited liability company, business trust or joint venture, in which such Person, one or more subsidiaries thereof or such Person and one or more subsidiaries thereof, directly or indirectly, at the date of determination thereof, has at least a majority ownership interest entitled to vote in the election of directors, managers or trustees thereof (or other Person performing similar functions), (3) any partnership (a) the sole general partner of the managing partner of which is such Person or a subsidiary of such Person or (b) the only general partners of which are such Person or one or more subsidiaries of such Person (or any combination thereof) or (4) with respect to the Company, for so long as the Company or any of its Restricted Subsidiaries has a 50% ownership interest in Lyondell Bayer Manufacturing Maasvladle VOF, Lyondell Bayer Manufacturing Maasvlakle VOF.  For the purposes of this Agreement, references to subsidiaries of the Company under this Agreement shall be deemed to include Lyondell and its subsidiaries after giving effect to the Acquisition.
 
Swap Contract shall mean (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, emission rights, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a Master Agreement), including any such obligations or liabilities under any Master Agreement.
 
TARGET Day shall mean any day on which the Trans-European Automated Real-time Gross Settlement Express Transfer (TARGET) payment system (or, if such payment system ceases to be operative, such other payment system (if any) determined by the Administrative Agent in consultation with the Company to be a suitable replacement) is open for the settlement of payments in Euros.
 
 
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Tax shall mean all present or future tax, duty, levy, impost, deduction, withholding, assessment, fee or other charge imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto, whether disputed or not.
 
Tax Sharing Agreement shall mean the Tax Sharing Agreement dated on or about December 18, 2007 as in effect on the the Closing Date under which the Company and its subsidiaries agree to make payments (the Tax Payments) to Nell Limited; providing for (i) payments of up to 17.5% of the amount of those Dutch or French net operating losses of entities of the Company and its Restricted Subsidiaries that arose in taxable years ending prior to 2007 and that are scheduled thereto (the Qualifying Net Operating Loss Carryovers), (ii) maximum aggregate Tax Payments of not more than $175,000,000 and (iii) any Tax Payment thereunder is to be accompanied by a certificate from independent counsel to the Company or its parent company that (x) such Tax Payment will be used by an indirect U.S.-taxpayer shareholder to pay taxes associated with taxable income of the Company and/or its subsidiaries taxable to such shareholder by reason of such shareholders indirect ownership of the Company and its subsidiaries and (y) as a result of the utilization of Qualifying Net Operating Loss Carryovers by the subsidiaries of the Company, the U.S.-taxpayer shareholders U.S. federal income tax liabilities for such taxable year was increased by an amount equal to such Tax Payment.  Payments under the Tax Sharing Agreement are to be made promptly after the certificate is provided and in any event within 90 days after the end of the fiscal year in which the Qualifying Net Operating Loss Carryovers are used.
 
Threshold Amount shall mean an amount equal to the lesser of (i) $100,000,000 or (ii) only so long as any of the 2015 Notes are outstanding, 20,000,000 in respect of the Threshold Amount referred to in Section 7.01(e) and 30,000,000 in respect of the Threshold Amount referred to in Section 7.01(h).
 
Total Assets shall mean, with respect to any Person, total assets of such Persons on a consolidated basis, shown on the most recent balance sheet of such Persons as may be expressly stated without giving effect to amortization of the amount of intangible assets since the Closing Date.
 
Transaction Documents shall mean the Secured Documents and the Acquisition Agreement.
 
Transactions shall mean, collectively, the transactions contemplated by this Agreement, any Asset Backed Credit Facilities, any Receivables Financing entered into on the Closing Date, the Senior Secured Credit Facilities, the repayment of certain existing Indebtedness of the Company and its subsidiaries (including the Margin Loans) and Lyondell and its subsidiaries, the Acquisition (including the conversion of the Millennium 4% Convertible Debentures due 2026) and the intercompany transfers of the proceeds of any Asset Backed Credit Facilities or Receivables Financings funded on the Closing Date, the Senior Secured Credit Facilities and the Loans to be made on the Closing Date, and the payment of any fees and expenses in connection therewith.
 
Unfunded Current Liability shall mean, with respect to any Plan, the amount, if any, by which the Accumulated Benefit Obligation (as defined under Statement of Financial Accounting Standards No. 87 (SFAS 87)) under the Plan as of the close of its most recent plan year, determined in accordance with SFAS 87 as in effect on the Closing Date, exceeds the fair market value of the assets allocable thereto.
 
Uniform Commercial Code or UCC shall mean the Uniform Commercial Code as the same may from time to time be in effect in the State of New York or the Uniform Commercial Code (or similar code or statute) of another jurisdiction, to the extent it may be required to apply to any item or items of Collateral.

 
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Unpaid Sum shall mean any sum due and payable but unpaid by a Loan Party under the Loan Documents.
 
Unrestricted Cash shall mean cash and Cash Equivalents, other than as disclosed on the consolidated financial statements of Company as a line item on the balance sheet as restricted cash or similar caption but including cash and Cash Equivalents so disclosed as restricted cash to the extent that such cash and Cash Equivalents are restricted solely on account of being set aside for repayment, defeasing or cash collateralizing Indebtedness included in clause (a) of the definition of Consolidated First Lien Senior Secured Debt (other than cash and Cash Equivalents under the Structured Financing Transaction).
 
Unrestricted Subsidiary of any Person shall mean:
 
(a)           any subsidiary of such Person that at the time of determination has been designated an Unrestricted Subsidiary and
 
(b)           any subsidiary of an Unrestricted Subsidiary.
 
The Board of Directors of the Company may designate any of its subsidiaries (including any newly acquired or newly formed subsidiary) to be an Unrestricted Subsidiary of the Company if:
 
(i)           such subsidiary does not own any Capital Stock of, or does not own or hold any Lien on any property of, the Company or any other subsidiary of the Company that is not a subsidiary of the subsidiary to be so designated;
 
(ii)           such designation complies with Section 5.01;
 
(iii)           each subsidiary to be designated as an Unrestricted Subsidiary and each of its subsidiaries has not at the time of designation, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness under which the lender has recourse to any of the assets of the Company or any of its Restricted Subsidiaries unless otherwise permitted under this Agreement; and
 
(iv)           if such designation occurs prior to the Extension Date, if such subsidiary is an existing subsidiary, it is not a Material Subsidiary.
 
The Board of Directors of the Company may designate any Unrestricted Subsidiary to be a Restricted Subsidiary only if:
 
(A)           immediately after giving effect to such designation, the Company is able to incur at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) in compliance with Section 5.08(b);
 
(B)           immediately before and immediately after giving effect to such designation, no default or Event of Default will have occurred and be continuing;
 
 
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(C)           any Guarantee by the Company or any Restricted Subsidiary of the Company of any Indebtedness of the subsidiary being so designated shall be deemed an Incurrence of such Indebtedness and an Investment by the Company or such Restricted Subsidiary (or both, if applicable) at the time of such designation; and
 
(D)           if applicable, the Investment and incurrence of Indebtedness referred to in (B) above would be permitted under the covenants described above under Section 5.01 and Section 5.08.
 
Any such designation by the Board of Directors of the Company will be evidenced to the Lenders by promptly filing with the Administration Agent a copy of the board resolution approving the designation and an officers certificate certifying that the designation complied with this Agreement.
 
U.S. or United States shall mean the United States of America.
 
U.S. Guarantor shall mean a Guarantor incorporated or otherwise organized under the laws of, or of any State (including the District of Columbia) of, the United States.
 
U.S. Loan Party shall mean an Loan Party incorporated or otherwise organized under the laws of, or of any state (including the District of Columbia) of, the United States.
 
Voting Stock shall mean any class or classes of Capital Stock pursuant to which the holders thereof have the general voting power under ordinary circumstances to elect at least a majority of the board of directors, managers or trustees (or Persons performing similar functions) of any Person (irrespective of whether or not, at the time, stock of any other class or classes shall have, or might have, voting power by reason of the happening of any contingency).
 
Website Lender shall have the meaning given to it in Section 6.11.
 
Weighted Average Life to Maturity shall mean, when applied to any Indebtedness at any date, the number of years obtained by dividing:
 
 
(a)
the then outstanding aggregate principal amount of such Indebtedness by
 
 
(b)
the sum of the total of the products obtained by multiplying
 
 
(i)
the amount of each then remaining installment, sinking fund, serial maturity or other required payment of principal, including payment at final maturity, in respect thereof, by
 
 
(ii)
the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment.
 
Wholly Owned Subsidiary shall mean, with respect to any Person, a subsidiary of such Person all of the outstanding Equity Interests of which (other than (x) directors qualifying shares and (y) shares issued to third parties, in each case in a de minimis amount and to the extent required by applicable Law) are owned by such Person and/or by one or more wholly owned subsidiaries of such Person.
 
Section 1.02.  Terms Generally.  The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document:  (a) the meanings of defined terms are equally applicable to the singular and plural forms of the defined terms; (b) the words herein, hereto, hereof and hereunder and words of similar import when used in any Loan Document shall refer to such Loan Document as a whole and not to any particular provision thereof: (c) Article, Section, Exhibit and Schedule references are to the Loan Document in which such reference appears; (d) the term including is by way of example and not limitation; (e) the term documents includes any and all instruments, documents, agreements, certificates, notices, reports, financial statements and other writings, however evidenced, whether in physical or electronic form; (f) in the computation of periods of time from a specified date to a later specified date, the word from means from and including; the words to and until each mean to but excluding; and the word through means to and including; and (g) Section headings herein and in the other Loan Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Loan Document.

 
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Section 1.03.  Effectuation of Transaction.  Each of the representations and warranties of Borrower and the Company contained in this Agreement (and all corresponding definitions) are made after giving effect to the Transaction, unless the context otherwise requires.
 
Section 1.04.  Accounting Terms.
 
(a)           All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in accordance with, GAAP, except as otherwise specifically prescribed herein. Unless otherwise stated herein and except with respect to Article 5 and Section 9.12, references to a person with respect to accounting terms or items that appear in such persons financial statements shall be deemed a reference to that person and its subsidiaries on a consolidated basis, except for references to the Company and its Restricted Subsidiaries, which will be deemed references to the Company and Restricted Subsidiaries on a consolidated basis.
 
(b)           Notwithstanding anything to the contrary herein, for purposes of this Agreement (including in determining compliance with any test or covenant contained herein) with respect to any period during which any specified transaction occurs, the First Lien Senior Secured Leverage Ratio and the Consolidated Fixed Charge Coverage Ratio shall be calculated with respect to such period and such transaction on a pro forma basis.
 
Section 1.05.  Rounding.  Any financial ratios required to be calculated by the Company pursuant to this Agreement (or required to be satisfied in order for a specific action to be permitted under this Agreement) shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding up if there is no nearest number).
 
Section 1.06.  References to Agreements, Laws, Etc..  Unless otherwise expressly provided herein, (a) references to Organization Documents, agreements (including the Loan Documents) and other contractual instruments shall be deemed to include all subsequent amendments, restatements, extensions, supplements and other modifications thereto, but only to the extent that such amendments, restatements, extensions, supplements and other modifications are permitted by the Loan Documents; and (b) references to any Law shall include all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting such Law.

 
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Section 1.07.  Times of Day.  Unless otherwise specified, all references herein to times of day shall be references to Eastern time (daylight or standard, as applicable).
 
Section 1.08.  Timing of Payment or Performance.  Unless otherwise specified, when the payment of any obligation or the performance of any covenant, duty or obligation is stated to be due or performance required on a day which is not a Business Day, the date of such payment (other than as described in the definition of Interest Period) or performance shall extend to the immediately succeeding Business Day.
 
Section 1.09.  Resolution of Drafting Ambiguities.   Each Loan Party acknowledges and agrees that it was represented by counsel in connection with the execution and delivery of the Loan Documents to which it is a party, that it and its counsel reviewed and participated in the preparation and negotiation hereof and thereof and that any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be employed in the interpretation hereof or thereof.
 
ARTICLE 2
 
THE CREDITS
 
Section 2.01.  Commitment.
 
(a)           Subject to the terms and conditions set forth herein, each Lender with a Commitment in Dollars agrees to make a loan denominated in Dollars, in each case to Borrower (each, an Initial Loan and collectively, the Initial Loans) on the Closing Date in a principal amount not to exceed its Commitment.  Amounts repaid in respect of Initial Loans may not be reborrowed.
 
(b)           Each Lender agrees, if the Initial Loans have not been repaid prior to the Initial Maturity Date, that the then outstanding principal amount of each of its Initial Loans shall automatically be converted, at the option of each such Lender, into either (i) a loan (individually, an Extended Loan and collectively, the Extended Loans) to Borrower on the Initial Maturity Date in an aggregate principal amount equal to the then outstanding principal amount of such Initial Loan or Initial Loans or (ii) Exchange Notes that shall be issued by Borrower upon such election under the Exchange Note Indenture; provided that the initial issuance of Exchange Notes must aggregate not less than $100,000,000 or the Euro Equivalent.  Any Initial Loans with respect to which the applicable Lender has not elected to have converted into Exchange Notes shall be converted into Extended Loans.  Other than as set forth in paragraph (c) below, Extended Loans and Exchange Notes shall be in the same currency as the Initial Loans from which they are converted.
 
(c)           At the time of the automatic conversion of Initial Loans into Extended Loans or Exchange Notes, as described in Section 2.01(b), Lenders who are affiliates of the Joint Lead Arrangers may, on five (5) days notice to Borrower, elect that all or a portion of the Extended Loans or Exchange Notes held by them, in an amount in the aggregate for all such affiliates up to 50% of the Euro Equivalent of the aggregate principal amount of Extended Loans and Exchange Notes (the Redenomination Limit) be denominated in Euro.  If such election is made, any conversion of Initial Loans denominated in Euro into Extended Loans or Exchange Notes denominated in Dollars shall be made into the Dollar Equivalent of such Euro-denominated Initial Loans.  If an aggregate principal amount of Initial Loans in excess of the Redenomination Limit requests Extended Loans or Exchange Notes be redenominated in Dollars, such redenomination shall be made pro rata among all Lenders requesting such redenomination based on the amount of Initial Loans requested to be redenominated.  Such redenomination shall be conditioned upon the Administrative Agent arranging a Dollar to Euro hedge up to the full amount converted under this Section 2.01(c) for Borrower lasting until the Final Maturity Date provided by any Finance Party at such counterparty's commercial rate then offered to companies of the credit quality of Borrower.
 
 
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Section 2.02.  Loans and Borrowings.
 
(a)           The Initial Loans shall be made by the Lenders ratably in accordance with their respective Commitments.  The failure of any Lender to make any Loan required to be made by it shall not relieve any other Lender of its obligations hereunder; provided that the Commitments of the Lenders are several and no Lender shall be responsible for any other Lenders failure to make Loans as required.
 
(b)           Each Lender at its option may make any Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan; provided that any exercise of such option shall not affect the obligation of Borrower to repay such Loan in accordance with the terms of this Agreement.
 
Section 2.03.  Request for Borrowing.  To request the Borrowing of the Initial Loans, Borrower shall notify the Administrative Agent of such request in writing by a Borrowing Request signed by Borrower not later than 12:00 noon, New York time, one (1) Business Day before the date of the proposed Borrowing.  Such Borrowing Request shall be irrevocable.  Each such Borrowing Request shall be consistent with the Funds Flow Memorandum and shall specify the following information:
 
(a)           the aggregate amount of the requested Borrowing;
 
(b)           the date of such Borrowing, which shall be a Business Day;
 
(c)           the initial Interest Period to be applicable thereto, which shall be a period contemplated by the definition of the term Interest Period; and
 
(d)           the location and number of Borrowers account to which funds are to be disbursed.
 
Promptly following receipt of the Borrowing Request in accordance with this Section, the Administrative Agent shall advise each Lender of the details thereof and of the amount of such Lenders Loan to be made as part of the requested Borrowing.
 
Section 2.04.  Funding of Borrowings.
 
(a)           Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds in Dollars or in Euro, in accordance with its Commitments, by noon New York time, to the account of the Administrative Agent most recently designated by it for such purpose by notice to the Lenders.  The Administrative Agent will make such Loans available to Borrower in accordance with the Borrowing Request.
 
(b)           Unless the Administrative Agent shall have received notice from a Lender prior to the Closing Date that such Lender will not make available to the Administrative Agent such Lenders share of the Initial Loans, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with Section 2.04(a) and may, in reliance upon such assumption, make available to Borrower a corresponding amount.  In such event, if a Lender has not in fact made its share of the Initial Loans available to the Administrative Agent, then the applicable Lender and Borrower agree to pay to the Administrative Agent forthwith on demand (without duplication) such corresponding amount with interest thereon, for each day from and including the date such amount is made available to Borrower to but excluding the date of payment to the Administrative Agent, at (i) in the case of such Lender, a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation or (ii) in the case of Borrower, the interest rate applicable to the Loans calculated in accordance with Section 2.09.  If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lenders Loan included in such Borrowing.

 
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Section 2.05.  Termination of Commitments.  The Commitments will terminate at 5:00 p.m., New York time, on the Closing Date or, if earlier, on February 15, 2008.
 
Section 2.06.  Repayment of Loans; Evidence of Debt.
 
(a)           Each Initial Loan then outstanding will mature on the Initial Maturity Date and, to the extent then unpaid, will automatically be converted into, at the option of each Lender, either Extended Loans or Exchange Notes.
 
(b)           The Extended Loans will mature on the Final Maturity Date.  Each Extended Loan shall bear interest as described in Section 2.09 from the Extension Date until such Loan shall be paid in full or exchanged for an Exchange Note.
 
(c)           Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of Borrower to such Lender resulting from each Loan made by such Lender, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.
 
(d)           The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder, (ii) the amount and currency of any principal or interest due and payable or to become due and payable from Borrower to each Lender hereunder and (iii) any amount received by the Administrative Agent hereunder for the account of the Lenders and each Lenders share thereof.
 
(e)           The entries made in the accounts maintained pursuant to Sections 2.06(c) and 2.06(d) shall be prima facie evidence of the existence and amounts of the obligations recorded therein absent manifest error in the reasonable judgment of the Administrative Agent; provided that the failure of any Lender or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligation of Borrower to repay the Loans in accordance with the terms of this Agreement.
 
(f)           To the extent requested by any Lender, Borrower shall execute and deliver to such Lender an Initial Note dated the Closing Date, substantially in the form of Exhibit C-1 hereto to evidence the portion of the Initial Loan made by such Lender to Borrower and with appropriate insertions (the Initial Notes).  Unless converted to an Exchange Note and to the extent requested by any Lender, Borrower shall execute and deliver to such Lender an Extended Note dated the Initial Maturity Date substantially in the form of Exhibit C-2 hereto to evidence the Extended Loan made on such date, in the principal amount of the Initial Notes of Borrower held by such Lender on such date and with other appropriate insertions (collectively, the Extended Notes).
 
(g)           Each Lender will have the option at any time or from time to time after the Initial Maturity Date to receive Exchange Notes in exchange for the Extended Loans of such Lender then outstanding pursuant to Section 2.01(b) of this Agreement; provided that no Exchange Notes shall be issued until Borrower has received requests to issue at least $100.0 million (or the Euro Equivalent) in aggregate principal amount of Exchange Notes.  The principal amount of the Exchange Notes will equal 100% of the aggregate principal amount of the Extended Loans for which they are exchanged.  If a Default shall have occurred and be continuing on the date of such exchange, any notices given or cure periods commenced while the Initial Loans or Extended Loans were outstanding shall be deemed given or commenced (as of the actual dates thereof) for all purposes with respect to the Exchange Notes (with the same effect as if the Exchange Notes had been outstanding as of the actual dates thereof).

 
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Section 2.07.  Prepayment of Loans.
 
(a)           Voluntary Prepayments.  Subject to Section 2.12 and 2.07(c), Borrower shall have the right at any time and from time to time to prepay any Loan in whole or in part, in an aggregate principal amount that is an integral multiple of the Euro Equivalent of 1.0 million and not less than the Euro Equivalent of 1.0 million or, if less, the amount outstanding at a prepayment price equal to 100% of principal amount of the Loan or portion thereof being so prepaid, plus accrued and unpaid interest thereon.
 
(b)           Mandatory Prepayments.  On each occasion that a Prepayment Event occurs (but subject to Sections 2.07(e) and 2.07(f)), Borrower shall, within, one (1) Business Day after the occurrence of a Permanent Securities Prepayment Event, or within five (5) Business Days after the occurrence of any other Prepayment Event, prepay the Loans in an aggregate amount equal to (i) in the case of a Permanent Securities Prepayment Event, 100% of the Net Proceeds therefrom, (ii) in the case of a Debt Issuance Prepayment Event, 100% of the Net Cash Proceeds therefrom, (iii) in the case of an Equity Issuance Prepayment Event, 100% of the Net Cash Proceeds therefrom, (iv) in the case of an Casualty Prepayment Event, 100% of the Net Casualty Proceeds therefrom, and (v) in the case of Recovery Prepayment Event, 100% of the Net Recovery Proceeds therefrom.
 
(c)           Notice of Prepayments.  Borrower shall notify the Administrative Agent by telephone (confirmed by telecopy) of any prepayment of any Borrowing hereunder, three (3) Business Days before the date of prepayment.  Each such notice shall be irrevocable and shall specify the prepayment date and the principal amount of each Borrowing or portion thereof to be prepaid.  Promptly after it receives any such notice, the Administrative Agent shall advise the Lenders of the contents thereof.
 
(d)           Application to Loans.  (1)  Upon receipt of any amount payable to the Lenders pursuant to Section 2.07(a) or 2.07(b), the Administrative Agent shall distribute such amount in the following order:  first, to the payment of all expenses due and payable to the Agents under Section 11.05; second, to the payment of all expenses due and payable to the Lenders under Section 11.05, ratably among the Lenders in accordance with the aggregate amount of the Euro Equivalents of such payments owed to each such Lender; third, to the payment of interest then due and payable on the Loans, ratably among the Lenders in accordance with the aggregate amount of the Euro Equivalent of interest owed to each such Lender; and fourth, to the payment of the principal amount of the Loans that is then due and payable, ratably among such Lenders in accordance with the Euro Equivalent of the aggregate principal amount owed to each such Lender.
 
(ii)           Repayments of Borrowings shall be accompanied by accrued interest on the amount repaid.
 
(e)           Application to Other Indebtedness or Equity.  Notwithstanding anything to the contrary in this Agreement, Borrower shall not be obligated to apply Net Proceeds to the prepayment of the Loans (and Borrower shall not be required to apply Net Proceeds to the purchase of Exchange Notes), other than the Net Proceeds of the issuance of the Permanent Securities and the Net Cash Proceeds of any Equity Offering or capital contributions received by the Company, to the extent that such Net Proceeds are required to be and are applied pursuant to the Senior Secured Credit Facilities in satisfaction of obligations under the Senior Secured Credit Facilities.

 
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(f)           Temporary Investment.  Pending the final application of any Net Proceeds pursuant to this Section 2.07 (other than proceeds of Permanent Securities), Borrower or the applicable Restricted Subsidiary may apply such Net Proceeds temporarily to reduce Indebtedness outstanding under a revolving credit facility or otherwise invest such Net Proceeds in Cash Equivalents.
 
Section 2.08.  Fees.  The Company agrees to pay to the Administrative Agent, for the account of the Persons specified therein, the fees set forth in the Fee Letter, as amended, restated, supplemented or otherwise modified from time to time, at the times specified therein (the Fees).  All Fees shall be paid on the dates due in immediately available funds and, once paid, shall not be refundable under any circumstances.
 
Section 2.09.  Interest.
 
(a)           The unpaid principal amount of each Initial Loan shall bear interest from time to time from the date of the Borrowing thereof until maturity (whether by acceleration or otherwise) at a rate per annum equal to (i) in the case of Euro Loans, the Applicable Margin plus EURIBOR for the Interest Period in effect at such time, and (ii) in the case of Dollar Loans, the Applicable Margin plus LIBOR for the Interest Period in effect at such time.
 
(b)           The unpaid principal amount of each Extended Loan shall bear interest for the period from and including the Extension Date to, but excluding, the earlier of the maturity thereof (whether by acceleration or otherwise) and the date of exchange for an Exchange Note, at a rate per annum equal to (i) in the case of Euro Loans, the Extension Margin plus EURIBOR for the Interest Period in effect at such time plus, and (ii) (i) in the case of Dollar Loans, the Extension Margin plus LIBOR for the Interest Period in effect at such time.
 
(c)           Notwithstanding the foregoing, if any principal of or interest on any Loan or any Fees or other amount payable by Borrower hereunder is not paid when due, whether at stated maturity, upon acceleration or otherwise, such overdue amount shall bear interest, after as well as before judgment, at a rate per annum equal to (A) in the case of overdue principal of any Loan, 2.0% plus the rate otherwise applicable to such Loan as provided in the preceding paragraphs of this Section or (B) in the case of any other amount, to the extent permitted by applicable law, the rate set forth in clause (A) of this Section 2.09(c)(i); provided that this Section 2.09(c)(i) shall not apply to any payment default that has been waived by the Lenders pursuant to Section 11.08;
 
(d)           Accrued interest on each Loan shall be payable (i) in respect of each Initial Loan, quarterly in arrears on the last Business Day of each March, June, September and December or, if earlier, on the date that is the last day of each Interest Period, and on the Initial Maturity Date (and, if later, the Extension Date), (ii) in respect of each Extended Loan, in arrears on the last Business Day of each March, June, September and December, following the Initial Maturity Date, on the date on which such Extended Loan is exchanged for an Exchange Note as contemplated hereby and on the Final Maturity Date, (iii) on the date of any prepayment (on the amount prepaid), (iv) at maturity (whether by acceleration or otherwise), and (v) after maturity, on demand (each such date referred to in clauses (i), (ii), (iii), (iv) and (v) being an Interest Payment Date); provided that interest accrued pursuant to Section 2.09(c) shall be payable on demand.
 
(e)           Notwithstanding the foregoing clauses but without giving effect to any increase in the interest rates (i) pursuant to Section 2.09(c) or (ii) as a result of the occurence of a Rate Increasing Event as described in the provisos contained in the definitions of Applicable Margin and Extension Margin, the interest rate borne by the Loans shall not exceed 12.0% per annum.

 
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(f)           All interest hereunder shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).  EURIBOR and LIBOR shall be determined by the Administrative Agent, and such determinations shall be prima facie evidence thereof absent manifest error.
 
Section 2.10.  Alternate Rate of Interest.  If prior to the commencement of any Interest Period:
 
(a)         the Administrative Agent determines (which determination shall be conclusive absent manifest error) that adequate and reasonable means do not exist for ascertaining EURIBOR or LIBOR for such Interest Period; or
 
(b)         the Administrative Agent is advised by any Lender that EURIBOR or LIBOR, as the case may be, for such Interest Period will not adequately and fairly reflect the cost to such Lender of making or maintaining its Loans for such Interest Period;
 
then the Administrative Agent shall give notice thereof to Borrower by telephone or telecopy as promptly as practicable thereafter and, until the Administrative Agent notifies Borrower that the circumstances giving rise to such notice no longer exist, the affected Borrowing shall bear interest at such rate per annum specified by each affected Lender to represent its cost of funds therefor plus the Applicable Margin on the Extension Margin, as applicable (plus any amount due under Section 2.09(c)).
 
Section 2.11.  Increased Costs.
 
(a)           If any Lender determines that as a result of a Change in Law after the Closing Date, or such Lenders compliance therewith, there shall be any increase in the cost to such Lender of agreeing to maintaining any Loans (or, in the case of any Taxes not excluded below, any Loans), or a reduction in the amount received or receivable by such Lender in connection with any of the foregoing (excluding for purposes of this Section 2.11(a) any such increased costs or reduction in amount resulting from (i) Indemnified Taxes or Excluded Taxes, (ii) reserve requirements contemplated by Section 2.11(c), (iii) the requirements of the European Central Bank reflected in the Mandatory Cost (other than as set forth below) or the Mandatory Cost, as calculated hereunder, does not represent the cost to such Lender of complying with the requirements of the Financial Services Authority or the European Central Bank in relation to its making, funding or maintaining of Loans and (iv) the implementation or application of or compliance with the International Convergence of Capital Measurement and Capital Standards, a Revised Framework published by the Basel Committee on Banking Supervision in June 2004 in the form existing on the date of this Agreement (Basel II) or any other law or regulation which implements Basel II (whether such implementation, application or compliance is by a government, regulator, the Lenders or any of its Affiliates or the Agents or any of its Affiliates)), then from time to time within fifteen (15) days after demand by such Lender setting forth in reasonable detail such increased costs (with a copy of such demand to the Administrative Agent given in accordance with Section 2.14), Borrower shall pay to such Lender such additional amounts as will compensate such Lender for such increased cost or reduction or, if applicable, the portion of such cost that is not represented by the Mandatory Cost.
 
(b)           If any Lender determines that the introduction of any Law regarding capital adequacy or any change therein or in the interpretation thereof, in each case after the Closing Date, or compliance by such Lender (or its Lending Office) therewith, has the effect of reducing the rate of return on the capital of such Lender or any corporation controlling such Lender as a consequence of such Lenders obligations hereunder (taking into consideration its policies with respect to capital adequacy and such Lenders desired return on capital), then from time to time upon demand of such Lender setting forth in reasonable detail the charge and the calculation of such reduced rate of return (with a copy of such demand to the Administrative Agent given in accordance with Section 2.14), Borrower shall pay to such Lender such additional amounts as will compensate such Lender for such reduction within fifteen (15) days after receipt of such demand.

 
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(c)           Borrower shall pay to each Lender, (i) as long as such Lender shall be required to maintain reserves with respect to liabilities or assets consisting of or including funds or deposits, additional interest on the unpaid principal amount of each applicable Loan of Borrower equal to the actual costs of such reserves allocated to such Loan by such Lender (as determined by such Lender in good faith, which determination shall be conclusive in the absence of manifest error), and (ii) as long as such Lender shall be required to comply with any reserve ratio requirement or analogous requirement of any other central banking or financial regulatory authority imposed in respect of the maintenance of the Loans of Borrower, such additional costs (expressed as a percentage per annum and rounded upwards, if necessary, to the nearest five decimal places) equal to the actual costs allocated to such Loan by such Lender (as determined by such Lender in good faith, which determination shall be conclusive absent manifest error) which in each case shall be due and payable on each date on which interest is payable on such Loan, provided Borrower shall have received at least fifteen (15) days prior notice (with a copy to the Administrative Agent) of such additional interest or cost from such Lender.  If a Lender fails to give notice fifteen (15) days prior to the relevant Interest Payment Date, such additional interest or cost shall be due and payable fifteen (15) days from receipt of such notice.
 
(d)           Failure or delay on the part of any Lender to demand compensation pursuant to this Section 2.11 shall not constitute a waiver of such Lenders right to demand such compensation.
 
(e)           If any Lender requests compensation under this Section 2.11, then such Lender will, if requested by Borrower, use commercially reasonable efforts to designate another Lending Office for any Loan affected by such event; provided that such efforts are made on terms that, in the reasonable judgment of such Lender, cause such Lender and its Lending Office(s) to suffer no material economic, legal or regulatory disadvantage, and providedfurther that nothing in this Section 2.11(e) shall affect or postpone any of the Loan Party Obligations of Borrower or the rights of such Lender pursuant to Section 2.11(a), (b), (c) or (d).
 
Section 2.12.  Break Funding. Upon demand of any Lender (with a copy to the Administrative Agent) from time to time, Borrower shall promptly compensate such Lender for and hold such Lender harmless from any loss, cost or expense actually incurred by it as a result of:
 
(a)           any continuation, conversion, payment or prepayment of any Loan of Borrower on a day other than the last day of the Interest Period for such Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise); or
 
(b)           any failure by Borrower (for a reason other than the failure of such Lender to make a Loan) to prepay, borrow, continue or convert any Loan of Borrower on the date or in the amount notified by Borrower;
 
including any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain such Loan or from fees payable to terminate the deposits from which such funds were obtained.
 
For purposes of calculating amounts payable by Borrower to the Lenders under this Section 2.12, each Lender shall be deemed to have funded each Loan made by it at the rate applicable to such Interest Period for such Loan by a matching deposit or other borrowing in the London interbank eurodollar market for a comparable amount and for a comparable period, whether or not such Loan was in fact so funded.

 
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Section 2.13.  Taxes.
 
(a)           Except as required by law, any and all payments by the Loan Parties to or for the account of any Agent or any Lender under any Loan Document shall be made free and clear of and without deduction for any Taxes.  If any Loan Party or other applicable withholding agent shall be required by any Laws to withhold or deduct any Indemnified Taxes or Other Taxes from or in respect of any sum payable under any Loan Document to or for the account of any Agent or any Lender, (i) the sum payable by the applicable Loan Party shall be increased as necessary so that after making all required withholdings or deductions of Indemnified Taxes or Other Taxes (including withholdings or deductions applicable to additional sums payable under this Section 2.13), each Lender receives an amount equal to the sum it would have received had no such withholdings or deductions of Indemnified Taxes or Other Taxes been made, (ii) such Loan Party or other applicable withholding agent (as applicable) shall make such withholdings or deductions, (iii) such Loan Party or other applicable withholding agent (as applicable) shall pay the full amount withheld or deducted to the relevant taxation authority or other authority in accordance with applicable Law, and (iv) within thirty (30) days after the date of such payment (or, if receipts or evidence are not available within thirty (30) days, as soon as possible thereafter), if a Loan Party made the withholding or deduction, such Loan Party shall furnish to the Administrative Agent or affected Lender (as the case may be) the original or a copy of a receipt evidencing payment thereof or other evidence reasonably acceptable to such Agent or Lender.
 
(b)           The Loan Parties agree to pay any and all Other Taxes except for any such tax resulting from an assignment or participation by a Lender or Participant (Assignment Tax), but only if such Assignment Taxes result from a connection between the jurisdiction imposing such tax and such Lender or Participant other than any connection arising solely from such Lender or Participant having executed, delivered, been a party to, received or perfected a security interest under or performed its obligations under,  received payment under or enforced, this Agreement or any other Loan Document.
 
(c)           Each Loan Party jointly and severally agrees to indemnify and hold harmless each Agent and each Lender for (i) the full amount of Indemnified Taxes and Other Taxes payable by such Agent or such Lender (including Indemnified Taxes or Other Taxes imposed directly on the Agent or Lender) whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant taxing authority and (ii) any expenses (excluding any Excluded Taxes) arising therefrom or with respect thereto.  A certificate as to the amount of such payment or liability, along with a reasonably detailed description of such payment or liability, delivered to the applicable Loan Party shall be conclusive absent manifest error.
 
(d)           Each Foreign Lender shall, to the extent it is legally entitled to do so, (v) on or prior to the Closing Date in the case of each Foreign Lender that is a signatory hereto, (w) on or prior to the date of the Assignment and Acceptance pursuant to which such Foreign Lender becomes a Lender, (x) on or prior to the date on which any such form or certification expires or becomes obsolete or incorrect, (y) after the occurrence of any event involving such Foreign Lender that requires a change in the most recent form or certification previously delivered by it to Borrower and the Administrative Agent, and (z) from time to time if reasonably requested by Borrower or the Administrative Agent, provide the Administrative Agent and Borrower with two completed originals of each of the following, as applicable:

 
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(i)       IRS Form W-8ECI (claiming exemption from U.S. federal withholding tax because the income is effectively connected with a U.S. trade or business) or any successor form;
 
(ii)      IRS Form W-8BEN (claiming exemption from, or a reduction of, U.S. federal withholding tax under an income tax treaty) or any successor form;
 
(iii)     in the case of a Foreign Lender claiming exemption under Section 871(h) or 881(c) of the Code, an IRS Form W-8BEN or any successor form and a certificate substantially in the form of Exhibit J (to claim exemption from U.S. federal withholding tax under the portfolio interest exemption); or
 
(iv)     any other applicable form, certificate or document prescribed by the IRS certifying as to such Foreign Lenders entitlement to such exemption from U.S. federal withholding tax or reduced rate with respect to specified payments to be made by Borrower to such Foreign Lender under the Loan Documents.
 
To the extent it is legally entitled to do so, any Foreign Lender which does not act or ceases to act for its own account with respect to any portion of any sums paid or payable to such Foreign Lender under any of the Loan Documents shall deliver to Administrative Agent and Borrower, on or prior to the date such Foreign Lender becomes a Lender, or on or prior to such later date when such Foreign Lender ceases to act for its own account with respect to any portion of any such sums paid or payable (and on or prior to the date on which any such form or certification expires or becomes obsolete or incorrect, after the occurrence of any event involving such Foreign Lender that requires a change in the most recent form or certification previously delivered by it to Borrower and the Administrative Agent, and from time to time thereafter if reasonably requested by Borrower or Administrative Agent), two completed originals of IRS Form W-8IMY (or any successor forms) properly completed and duly executed by such Foreign Lender, together with all information required to be transmitted with such form, and any other certificate or statement of exemption required under the Code or reasonably requested by Borrower or the Administrative Agent, to establish that such Foreign Lender is not acting for its own account with respect to a portion of any such sums payable to such Foreign Lender and to establish that such portion may be received without deduction for, or at a reduced rate of, U.S. federal withholding tax (including, if the Foreign Lender is claiming the portfolio interest exemption with respect to one or more of its beneficial owners, a certificate substantially in the form of Exhibit J with respect to such beneficial owners).
 
In addition to the foregoing, any Lender that is entitled to an exemption from or reduction of withholding tax under the law of any jurisdiction in which Borrower is doing business, or any treaty to which such jurisdiction is a party, with respect to payments under this Agreement or any other Loan Document shall deliver to Borrower and the Administrative Agent, at the time or times prescribed by applicable law, such properly completed and executed documentation prescribed by applicable law or reasonably requested by Borrower or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate, provided that such Lender has received written notice from Borrower or the Administrative Agent advising it of the availability of such exemption or reduction and supplying all applicable documentation.
 
The Administrative Agent shall, to the extent it is legally entitled to do so, provide Borrower with, (i) with respect to any amount received on behalf of a Lender, one completed original of IRS Form W-9 or W8-IMY, as applicable, (ii) with respect to any fee received by the Administrative Agent hereunder, one completed original of IRS Form W-9 or applicable W-8 and (iii) any other documentation reasonably requested by Borrower as will permit any payment of such fee to be made without withholding or at a reduced rate of withholding.  Thereafter and from time to time, the Administrative Agent shall, to the extent it is legally entitled to do so, provide Borrower such additional duly completed and signed copies of one or more of such forms (or such successor forms) or documentation on or prior to the date on which any such form or documentation expires or becomes obsolete or incorrect.

 
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(e)           Each Lender that is a United States Person within the meaning of Section 7701(a)(30) of the Code shall, on the date such Lender becomes a party hereto, provide Borrower and the Administrative Agent with two completed originals of IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding and shall update such form from time to time if such form expires or becomes obsolete or incorrect.
 
(f)           Any Lender or Agent claiming any additional amounts or indemnification payments pursuant to this Section 2.13 shall use its reasonable efforts (if requested by Borrower) to change the jurisdiction of its Lending Office or take other steps (in each case, at Borrowers expense) if such a change or other steps would reduce any such additional amounts or indemnification payments (or any similar amount that may thereafter accrue) and would not, in the sole determination of such Lender or Agent, result in any unreimbursed cost or expense or be otherwise disadvantageous to such Lender or Agent.
 
(g)           If any Lender or Agent determines, in its sole good faith discretion, that it has received a refund in respect of any Indemnified Taxes or Other Taxes as to which indemnification or additional amounts have been paid to it by Borrower pursuant to this Section 2.13, it shall promptly remit the portion of such refund to the applicable Loan Party that will leave it in no better or worse after-tax position (taking into account all out-of-pocket expenses of the Lender or Agent, as the case may be, than if the Indemnified Tax or Other Tax giving rise to such refund had not been imposed in the first instance); provided that the Loan Parties, upon the request of the Lender or Agent, as the case may be, agree promptly to return such refund (plus any penalties, interest or other charges imposed by the relevant taxing authority) to such party in the event such party is required to repay such refund to the relevant taxing authority.  This clause (g) shall not be construed to require any Lender or Agent to make available its tax returns (or any other information relating to its taxes that it deems confidential) to any Loan Party or any other Person.
 
Section 2.14.  Matters Applicable to All Requests for Compensation.
 
(a)           Any Agent or any Lender claiming compensation under Sections 2.10 through 2.13 and Section 2.16 shall deliver a certificate to Borrower setting forth the additional amount or amounts to be paid to it hereunder which shall be conclusive in the absence of manifest error.  In determining such amount, such Agent or such Lender may use any reasonable averaging and attribution methods.
 
(b)           With respect to any Lenders claim for compensation under Section 2.10, 2.11, 2.13 or 2.16, Borrower shall not be required to compensate such Lender for any amount incurred more than one hundred and twenty (120) days prior to the date that such Lender notifies Borrower of the event that gives rise to such claim; provided that, if the circumstance giving rise to such claim is retroactive, then such 120-day period referred to above shall be extended to include the period of retroactive effect thereof.  If any Lender requests compensation by Borrower under Section 2.11, Borrower may, by notice to such Lender (with a copy to the Administrative Agent), suspend the obligation of such Lender to continue Loans from one Interest Period to another until the event or condition giving rise to such request ceases to be in effect (in which case the provisions of Section 2.14(c) shall be applicable); provided that such suspension shall not affect the right of such Lender to receive the compensation so requested.

 
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(c)           If the obligation of any Lender to maintain any Loan shall be suspended pursuant to Section 2.14(b)) hereof, such Lenders applicable Loans shall be repaid on the last day(s) of the then current Interest Period(s) for such Loans.
 
Section 2.15.  Replacement of Lenders.
 
(a)           If at any time (i) Borrower becomes obligated to pay additional amounts or indemnity payments described in Section 2.11 or 2.13 as a result of any condition described in such Sections or any Lender ceases to maintain any Loans as a result of any condition described in Section 2.11 or Section 2.16, (ii) any Lender becomes a Defaulting Lender or (iii) any Lender becomes a Non-Consenting Lender, then the Company may, on ten (10) Business Days prior written notice to the Administrative Agent and such Lender, replace such Lender by causing such Lender to (and such Lender shall be obligated to) assign pursuant to Section 11.04(b) (with the assignment fee to be paid by the Company in each such instance) all of its rights and obligations under this Agreement to one or more assignees; provided that neither the Administrative Agent nor any Lender shall have any obligation to Borrower to find a replacement Lender or other such Person; and providedfurther that (A) in the case of any such assignment resulting from a Lender becoming a Non-Consenting Lender, the applicable assignees shall have agreed to, and shall be sufficient (together with all other consenting Lenders) to cause the adoption of, the applicable departure, waiver or amendment of the Loan Documents and (B) in the case of any such assignment resulting from a claim for compensation under Section 2.11 or payments required to be made pursuant to Section 2.13, such assignment will result in a reduction in such compensation or payments.
 
(b)           Any Lender being replaced pursuant to Section 2.15(a) above shall (i) execute and deliver an Assignment and Acceptance with respect to such Lenders outstanding Loans and participations in respect thereof, and (ii) deliver any Notes evidencing such Loans to Borrower or to the Administrative Agent.  Pursuant to such Assignment and Acceptance, (A) the assignee Lender shall acquire all or a portion, as the case may be, of the assigning Lenders outstanding Loans and participations in respect thereof, (B) all obligations of Borrower owing to the assigning Lender relating to the Loans and participations so assigned shall be paid in full by the assignee Lender to such assigning Lender concurrently with such Assignment and Acceptance and (C) upon such payment and, if so requested by the assignee Lender, delivery to the assignee Lender of the appropriate Note or Notes executed by Borrower, the assignee Lender shall become a Lender hereunder and the assigning Lender shall cease to constitute a Lender hereunder with respect to such assigned Loans and participations, except with respect to indemnification provisions under this Agreement, which shall survive as to such assigning Lender.  In connection with any such replacement, if any such Non-Consenting Lender or Defaulting Lender does not execute and deliver to the Administrative Agent a duly executed Assignment and Acceptance reflecting such replacement within five (5) Business Days of the date on which the assignee Lender executes and delivers such Assignment and Acceptance to such Non-Consenting Lender or Defaulting Lender, then such Non-Consenting Lender or Defaulting Lender shall be deemed to have executed and delivered such Assignment and Acceptance without any action on the part of the Non-Consenting Lender or Defaulting Lender.
 
(c)           In the event that (i) Borrower or the Administrative Agent has requested that the Lenders consent to a departure or waiver of any provisions of the Loan Documents or agree to any amendment thereto, (ii) the consent, waiver or amendment in question requires the agreement of all affected Lenders in accordance with the terms of Section 11.08 and (iii) the Required Lenders have agreed to such consent, waiver or amendment, then any Lender who does not agree to such consent, waiver or amendment shall be deemed a Non-Consenting Lender.
 
Section 2.16.  Illegality.  If any Lender reasonably determines that any change in law has made it unlawful, or that any Governmental Authority has asserted after the Closing Date that it is unlawful, for any Lender or its applicable lending office to make or maintain its Loans, then such Loans will bear interest at a rate per annum specified by such Lender to represent its cost of funds therefor plus the Applicable Margin plus any amounts due under Section 2.09(c).

 
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Section 2.17.  Payments Generally.
 
(a)           All payments to be made by Borrower shall be made without condition or deduction for any counterclaim, defense, recoupment or setoff.  Except as otherwise expressly provided herein and except with respect to principal of and interest on Euro Loans, all payments by Borrower hereunder shall be made to the Administrative Agent, for the account of the respective Lenders to which such payment is owed, at the applicable Administrative Agents office in Dollars and in Same Day Funds not later than 2:00 p.m. (New York, New York time) on the date specified herein.  Except as otherwise expressly provided herein, all payments by Borrower hereunder with respect to principal and interest on Euro Loans shall be made to the Administrative Agent, for the account of the respective Lenders to which such payment is owed, at the Administrative Agents office in Euro and in Same Day Funds not later than 2:00 p.m. (London time) on the dates specified herein.  If, for any reason, Borrower is prohibited by any Law from making any required payment hereunder in Euro, Borrower shall make such payment in Dollars in the Dollar Amount of the Euro payment amount.  The Administrative Agent will promptly distribute to each Lender its pro rata share (or other applicable share as provided herein) of such payment in like funds as received by wire transfer to such Lenders applicable Lending Office.  All payments received by the Administrative Agent (i) after 2:00 p.m. (New York time), in the case of payments in Dollars, or (ii) after 2:00 p.m. (London time) in the case of payments in Euro, shall in each case be deemed received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue.
 
(b)           If any payment to be made by Borrower shall come due on a day other than a Business Day, payment shall be made on the immediately succeeding Business Day, and such extension of time shall be reflected in computing interest or fees, as the case may be; provided that, if such extension would cause payment of interest on or principal of Loans to be made in the next succeeding calendar month, such payment shall be made on the immediately preceding Business Day.
 
(c)           Unless Borrower has notified the Administrative Agent, prior to the date any payment is required to be made by it to the Administrative Agent hereunder, that Borrower will not make such payment, the Administrative Agent may assume that Borrower has timely made such payment and may (but shall not be so required to), in reliance thereon, make available a corresponding amount to the Person entitled thereto.  If and to the extent that such payment was not in fact made to the Administrative Agent in Same Day Funds, then each Lender shall forthwith on demand repay to the Administrative Agent the portion of such assumed payment that was made available to such Lender in Same Day Funds, together with interest thereon in respect of each day from and including the date such amount was made available by the Administrative Agent to such Lender to the date such amount is repaid to the Administrative Agent in Same Day Funds at the applicable Overnight Rate from time to time in effect.
 
(d)           If any Lender makes available to the Administrative Agent funds for any Loan to be made by such Lender as provided in the foregoing provisions of this Article 2, and such funds are not made available to Borrower by the Administrative Agent because the conditions set forth in Article 4 are not satisfied or waived in accordance with the terms hereof, the Administrative Agent shall return such funds (in like funds as received from such Lender) to such Lender, without interest.
 
(e)           Nothing herein shall be deemed to obligate any Lender to obtain the funds for any Loan in any particular place or manner or to constitute a representation by any Lender that it has obtained or will obtain the funds for any Loan in any particular place or manner.

 
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(f)           Whenever any payment received by the Administrative Agent under this Agreement or any of the other Loan Documents is insufficient to pay in full all amounts due and payable to the Administrative Agent and the Lenders under or in respect of this Agreement and the other Loan Documents on any date, such payment shall be distributed by the Administrative Agent and applied by the Administrative Agent and the Lenders in the order of priority set forth in Section 2.07(d).  If the Administrative Agent receives funds for application to the Loan Party Obligations under or in respect of the Loan Documents under circumstances for which the Loan Documents do not specify the manner in which such funds are to be applied, the Administrative Agent may (to the fullest extent permitted by mandatory provisions of applicable Law), but shall not be obligated to, elect to distribute such funds to each of the Lenders in accordance with such Lenders pro rata share of the principal amount of all Loans outstanding at such time plus accrued interest thereon, in repayment or prepayment of such of the outstanding Loans or other Loan Party Obligations then owing to such Lender.
 
ARTICLE 3
 
REPRESENTATIONS AND WARRANTIES
 
Each Loan Party represents and warrants to the Agents and the Lenders that:
 
Section 3.01.  Existence, Qualification and Power; Compliance with Laws.  Subject to Legal Reservations, each Loan Party and each Material Subsidiary (a) is a Person duly organized or formed, validly existing and in good standing, in each case where such concept exists, under the Laws of the jurisdiction of its incorporation or organization, (b) has all requisite constitutional, corporate or other similar power and authority to (i) own or lease its material assets and carry on its business substantially as currently conducted and (ii) execute, deliver and perform its obligations under the Loan Documents to which it is a party, (c) is duly qualified and in good standing, in each case where such concept exists, under the Laws of each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification, (d) is in compliance with all Laws, orders, writs and injunctions and (e) has all requisite governmental licenses, authorizations, consents and approvals to operate its business as currently conducted; except in each case referred to in clause (c), (d) or (e), to the extent that failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
 
Section 3.02.  Authorization; No Contravention.  The execution, delivery and performance by each Loan Party of each Loan Document to which such Person is a party, and the consummation of the Transaction, are within such Loan Partys corporate or other powers, have been duly authorized by all necessary corporate or other organizational action, and do not (a) contravene the terms of any of such Persons Organization Documents; (b) in any material way, conflict with or result in any breach or contravention of or the creation of any Lien under (other than as permitted by Section 5.14), or require any payment to be made under, (i) except payments as set forth in the Funds Flow Memorandum dated the Closing Date and delivered to the Administrative Agent, any Contractual Obligation to which such Person is a party or affecting such Person or the properties of such Person or any of its subsidiaries or (ii) any order in any material way, injunction, writ or decree of any Governmental Authority or any arbitral award to which such Person or its property is subject in any material way; or (c) violate any material Law in any material way; except with respect to any conflict, breach or contravention or payment (but not creation of Liens) referred to in clause (b)(i), to the extent that such conflict, breach, contravention, violation or payment could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 
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Section 3.03.  Governmental Authorization; Other Consents.  Subject to Legal Reservations, no material approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required of a Loan Party in connection with (a) the execution, delivery or performance by, or enforcement against, any Loan Party of this Agreement or any other Loan Document, or for the consummation of the Transaction, (b) the grant by any Loan Party of the Liens granted by it pursuant to the Security Documents, (c) the perfection or maintenance of the Liens created under the Security Documents (including the priority thereof) or (d) the exercise by the Administrative Agent or any Lender of its rights under the Loan Documents or the remedies in respect of the Collateral pursuant to the Security Documents, except for (i) filings, notices and consents and registrations necessary to perfect the Liens on the Security granted by the Loan Parties in favor of the Secured Parties, (ii) the approvals, consents, exemptions, authorizations, actions, notices and filings which have been duly obtained, taken, given or made and are in full force and effect (or, with respect to consummation of the Transaction, will be duly obtained, taken, given or made and will be in full force and effect, in each case within the time period required to be so obtained, taken, given or made); (iii) those approvals, consents, exemptions, authorizations or other actions, notices or filings, the failure of which to obtain or make could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect and (iv) those not required in accordance with the Security Principles.
 
Section 3.04.  Binding Effect.  This Agreement and each other Loan Document dated on or prior to the date this representation is made has been duly executed and delivered by each Loan Party that is a party thereto.  This Agreement and each other Loan Document dated on or prior to the date this representation is made constitutes, a legal, valid and binding obligation of such Loan Party, enforceable against each Loan Party that is a party thereto in accordance with its terms, except as such enforceability may be limited by (i) Debtor Relief Laws and by general principles of equity, (ii) the need for filings and registrations necessary to perfect the Liens on the Collateral granted by the Loan Parties in favor of the Secured Parties and (iii) the effect of foreign Laws, rules and regulations as they relate to pledges of Equity Interests in Foreign Subsidiaries (other than those pledges made under the Laws of the jurisdiction of formation of the applicable Foreign Subsidiary).
 
Section 3.05.  Financial Statements; No Material Adverse Effect.
 
(a)           (i)  The unaudited pro forma consolidated balance sheet of the Company and its subsidiaries as of September 30, 2007 (including the notes thereto) (the Pro Forma Balance Sheet) and the related pro forma consolidated statement of income of the Company and its subsidiaries for the twelve months ended September 30, 2007 (together with the Pro Forma Balance Sheet, the Pro Forma Financial Statements), copies of which have heretofore been furnished to each Lender, have been prepared giving effect (as if such events had occurred on January 1, 2006 in the case of the pro forma consolidated statement of income and September 30, 2007 in the case of the Pro Forma Balance Sheet) to the Transactions.  The Pro Forma Financial Statements have been prepared in good faith, based on assumptions believed by the Company to be reasonable as of the date of delivery thereof, and so far as it was then aware, shall present fairly in all material respects on a pro forma basis the estimated financial position of the Company and its subsidiaries as of September 30, 2007 and their estimated results of operations for the period covered thereby, assuming that the events specified in the preceding sentence had actually occurred on January 1, 2006 or September 30, 2007, as applicable.
 
(ii)           The Audited Financial Statements fairly present in all material respects the financial condition of the Company and its subsidiaries as of the dates thereof and their results of operations for the period covered thereby in accordance with GAAP consistently applied throughout the periods covered thereby, except as otherwise expressly noted therein.  During the period from December 31, 2006 to and including the Closing Date, there has been (x) no sale, transfer or other disposition by the Company or any of its subsidiaries of any material part of the business or property of the Company or any of its subsidiaries, taken as a whole, and (y) no purchase or other acquisition by the Company or any of its subsidiaries of any business or property (including any Equity Interests of any other Person) material in relation to the consolidated financial condition of the Company and its subsidiaries, in each case, which is not reflected in the foregoing financial statements or in the notes thereto or has not otherwise been disclosed in writing to the Lenders prior to the Closing Date.

 
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(b)           The forecasts of consolidated balance sheets, income statements and cash flow statements of the Company and its subsidiaries which have been furnished to the Administrative Agent prior to the Closing Date have been prepared in good faith on the basis of the assumptions stated therein, which assumptions were believed to be reasonable at the time of preparation of such forecasts, it being understood that actual results may vary from such forecasts and that such variations may be material.
 
(c)           The Company and its subsidiaries shall have outstanding no Financial Indebtedness or Disqualified Equity Interests other than (i) the Loans and other Loan Party Obligations, (ii) the loans under the Senior Secured Credit Facilities, (iii) the Existing Notes, (iv) Existing Indebtedness (including letters of credit issued and outstanding on the Closing Date), (E) the Asset Backed Credit Facility, Receivables Financing and Securitization Transactions and (F) liabilities incurred in the ordinary course of business and (b) liabilities disclosed in the Pro Forma Financial Statements, in each case to the extent permitted by Section 5.08.
 
Section 3.06.  Litigation.  There are no actions, suits, proceedings, claims or disputes pending or, to the knowledge of Borrower, threatened in writing or contemplated, at law, in equity, in arbitration or before any Governmental Authority, by or against any Loan Party or any of its subsidiaries or against any of their properties or revenues that could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
 
Section 3.07.  Ownership of Property; Liens.
 
(a)           Each Loan Party and each of its subsidiaries has good record fee simple title (or otherwise holds full legal (and, if applicable, beneficial) ownership under applicable Law) to, or valid leasehold interests in, or easements or other limited property interests in, all Real Property necessary in the ordinary conduct of its business, free and clear of all Liens except for (x) minor defects in title that do not materially interfere with its ability to conduct its business or to utilize such assets for their intended purposes and (y) Liens permitted under Section 5.14 and except where the failure to have such title could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
 
(b)           As of the Closing Date, Schedule 7 to the Perfection Certificate dated the Closing Date contains a true and complete list of each interest in material Real Property owned or ground leased by the Loan Parties and describes the type of interest therein held by each such entity.
 
Section 3.08.  Environmental Matters.
 
In each case, except as set forth on Schedule 3.08,
 
(a)           There are no claims, actions, suits, proceedings, demands, notices or, to the knowledge of any Loan Party and each of its subsidiaries, investigations alleging actual or potential liability of any Loan Party or its subsidiaries under or for violation of, or otherwise relating to, any Environmental Law that could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 
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(b)           Except for items that could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, (i) each Loan Party and each of their respective subsidiaries and each of their Real Property, other assets and operations are in compliance with all applicable Environmental Laws, including all Environmental Permits; (ii) none of the properties currently or, to the knowledge of any Loan Party or any of its subsidiaries, formerly, owned, leased or operated by any Loan Party or any of its subsidiaries is listed or formally proposed for listing on the National Priority List under CERCLA, or the German register of contaminated sites (Altlaster register) or any analogous list maintained pursuant to any Environmental Law; (iii) all asbestos or asbestos-containing material on, at or in any property or facility currently owned, leased or operated by any Loan Party or any of its subsidiaries is in compliance with Environmental Laws; and (iv) there has been no Release of Hazardous Materials by any Person on, at, under or from any property or facility currently or formerly owned, leased or operated by any Loan Party or any of its subsidiaries and there has been no Release of Hazardous Materials by any Loan Party or any of its subsidiaries at any other location.
 
(c)           The properties and facilities owned, leased or operated by the Loan Parties and their subsidiaries do not contain any Hazardous Materials in amounts or concentrations which (i) constitute a violation of, (ii) require investigation or other response or corrective action under, or (iii) could reasonably be expected to give rise to liability under, Environmental Laws, which violations, actions and/or liabilities, individually or in the aggregate, could, reasonably be expected to result in a Material Adverse Effect.
 
(d)           None of the Loan Parties or their subsidiaries is undertaking or financing, in whole or in part, either individually or together with other potentially responsible parties, any investigation, response or other corrective action relating to any actual or threatened Release of Hazardous Materials at any property, facility or location pursuant to any Environmental Law except for such investigation, response or other corrective action that, individually or in the aggregate, could not, reasonably be expected to result in a Material Adverse Effect.
 
(e)           All Hazardous Materials generated, used, treated, handled or stored by any Loan Party or any of their subsidiaries at, or transported by or on behalf of any Loan Party or any of their subsidiaries to or from, any property or facility currently or formerly owned, leased or operated by any Loan Party or any of its subsidiaries have been disposed of in a manner which could not reasonably be expected to result, individually or in the aggregate, in a Material Adverse Effect.
 
(f)           Except as could not reasonably be expected to result, individually or in the aggregate, in a Material Adverse Effect, none of the Loan Parties or any of their subsidiaries has contractually assumed, and is not subject or a party to any judgment, order, decree or agreement which imposes, any liability or obligation under or relating to any Environmental Law.
 
Section 3.09.  Taxes.  Except as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (a) each of the Loan Parties and each of their respective subsidiaries has (i) timely filed all Tax returns required to be filed and all such tax returns are true and correct, (ii) timely paid all Taxes levied or imposed upon it or its properties (whether or not shown on a tax return), and (iii) satisfied all of its Tax withholding obligations; (b) there are no current, pending or threatened audits, examinations or claims with respect to Taxes of any Loan Party or any of their respective subsidiaries and (c) none of the Loan Parties has ever participated in a listed transaction within the meaning of Treasury Regulation Section 1.6011-4.
 
 
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Section 3.10.  ERISA Compliance.
 
(a)           Except as could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect, each Plan is in compliance with the applicable provisions of ERISA, the Code and other federal or state Laws.
 
(b)           (i) No ERISA Event has occurred or is reasonably expected to occur and (ii) neither any Loan Party, any subsidiary nor any ERISA Affiliate has engaged in a transaction that could be subject to Section 4069 or 4212(c) of ERISA, except, with respect to each of the foregoing clauses of this Section 3.10(b), as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
 
(c)           Except where noncompliance could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect, (i) each Foreign Plan has been maintained in compliance with its terms and with the requirements of any and all applicable laws, statutes, rules, regulations and orders and has been maintained, where required, in good standing with applicable regulatory authorities, and (ii) neither any Loan Party nor any Subsidiary has incurred any obligation in connection with the termination of or withdrawal from any Foreign Plan.
 
Section 3.11.  Subsidiaries; Equity Interests.
 
As of the Closing Date (after giving effect to any part of the Transaction that is consummated on or prior to the Closing Date), no Loan Party has any subsidiaries other than dormant or inactive entities and those specifically disclosed in Schedule 3.11 hereto, and all of the outstanding Equity Interests owned by the Loan Parties (or a subsidiary of any Loan Party) in such subsidiaries have been validly issued and are fully paid and all Equity Interests owned by a Loan Party (or a subsidiary of any Loan Party) in such subsidiaries are owned free and clear of all Liens except (i) those created under the Security Documents and (ii) any Lien that is permitted under Section 5.14.  As of the Closing Date, Schedules 1(a) and 10(a) and (b) to the Perfection Certificate set forth the name, jurisdiction and ownership interest of each Loan Party in each direct Domestic Subsidiary or any material Foreign Subsidiary which is not dormant or inactive, including the percentage of such ownership, and no such entities have any direct or indirect Material Subsidiaries.
 
Section 3.12.  Margin Regulations; Investment Company Act.
 
(a)           Borrower is not engaged nor will it engage, principally or as one of its important activities, in the business of purchasing or carrying Margin Stock, or extending credit for the purpose of purchasing or carrying Margin Stock, and no proceeds of any Borrowings will be used for any purpose that violates Regulation U.
 
(b)           Neither Borrower, nor any Person Controlling Borrower, or any of the subsidiaries of Borrower is or is required to be registered as an investment company under the Investment Company Act of 1940.
 
Section 3.13.  Disclosure.
 
As of the Closing Date, to the best of the Loan Parties knowledge, no report, financial statement, certificate or other written information furnished by or on behalf of any Loan Party to any Agent or any Lender in connection with the transactions contemplated hereby and the negotiation of this Agreement or delivered hereunder or any other Loan Document (as modified or supplemented by other information so furnished) when taken as a whole contains any material misstatement of fact or, as of the Closing Date only, omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not materially misleading; provided that, with respect to projected financial information and pro forma financial information, Borrower represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time of preparation; it being understood that such projections may vary from actual results and that such variances may be material.

 
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Section 3.14.  [Reserved].
 
Section 3.15.  Anti-Terrorism Laws.
 
(a)           To the best knowledge of the Loan Parties organized in the United States, no such Loan Party nor any of its subsidiaries: (i) is, or is controlled by or is acting on behalf of, a Restricted Party; (ii) has received funds or other property from a Restricted Party; or (iii) is in breach of or is the subject of any action or investigation under any Anti-Terrorism Law.
 
(b)           Each of the Loan Parties organized in the United States and, to the best of such Loan Parties knowledge, each of its subsidiaries has taken reasonable measures to ensure compliance with the Anti-Terrorism Laws.
 
Section 3.16.  Intellectual Property; Licenses, Etc.  Each of the Loan Parties and their subsidiaries own, license or otherwise possess the right to use, all of the trademarks, service marks, trade names, domain names, copyrights, patents, trade secrets, know-how, database rights, design rights and other intellectual property rights (collectively, IP Rights) that are material to the operation of their respective businesses as currently conducted, and, without conflict with the rights of any Person, except to the extent such conflicts could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  To the knowledge of the Loan Parties, the operation of the businesses as currently conducted does not infringe upon any IP Rights held by any Person except for such infringements, individually or in the aggregate, which could not reasonably be expected to have a Material Adverse Effect.  No claim or litigation brought against any Loan Party alleging the infringement or misuse of any IP Rights is pending or, to the knowledge of the Loan Parties, threatened against any Loan Party or any of its subsidiaries, which could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
 
Except pursuant to licenses and other user agreements entered into by each Loan Party in the ordinary course of business, on and as of the Closing Date (i) each Loan Party owns and possesses the right to use the copyrights, patents and trademarks identified with such Loan Partys name on Schedule 12(a) or 12(b), as applicable, to the Perfection Certificate, and (ii) the registrations listed on Schedule 12(a) and 12(b) are valid and in full force and effect, except, in each case, to the extent failure to own or possess such right to use or of such registrations to be valid and in full force and effect could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
 
Section 3.17.  Solvency.
 
On the Closing Date, the Loan Parties (taken as a whole) after giving effect to the Transaction, are Solvent.
 
Section 3.18.  Use of Proceeds.  Borrower will use the proceeds of Loans made on the Closing Date solely to finance the Transactions.

 
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Section 3.19.  [Reserved].

 
Section 3.20.  Security Documents.
 
(a)           Subject to Legal Reservations, the Security Documents are or in the case of each Security Document delivered pursuant to the Senior Secured Credit Facilities will, upon execution and deliver thereof, be effective to create in favor of the Collateral Agent for the benefit of the Secured Parties (or in favor of the relevant Secured Parties directly, as applicable), legal, valid and enforceable Liens on, and security interests in, the Collateral described therein to the extent intended to be created thereby and (i) when financing statements and other filings in appropriate form are filed in the offices specified on Schedule 7 to the Perfection Certificate and registration achieved (if applicable), (ii) when all appropriate filings, recordings, endorsements, notarizations, stamping, registrations and/or notifications are made as required under applicable Law and (iii) upon the taking of possession or control by the Collateral Agent of such Collateral with respect to which a security interest may be perfected only by possession or control (which possession or control shall be given to the Collateral Agent to the extent possession or control by the Collateral Agent is required by the Security Agreement), the Liens created by the Security Documents shall constitute fully perfected Liens on, and security interests in (to the extent intended to be created thereby), all right, title and interest of the grantors in such Collateral, in each case subject to no Liens other than Liens permitted hereunder.
 
(b)           When the Security Agreement governed by U.S. Law or a short form thereof is properly filed in the United States Patent and Trademark Office and the United States Copyright Office, the Liens created by such Security Agreement shall constitute fully perfected Liens on, and security interests in, all right, title and interest of the grantors thereunder (to the extent intended to be created thereby) in the IP Rights to the extent that a security interest can be created under Article 9 of the UCC and can be perfected by the filing of a financing statement in accordance therewith, except as the enforcement thereof may be limited by applicable bankruptcy, insolvency or similar laws affecting the enforcement of rights of creditors generally and except to the extent that enforcement of rights and remedies set forth therein may be limited by equitable principles (regardless of whether enforcement is considered in a court of law or a proceeding in equity), in each case subject to no Liens other than Liens permitted hereunder (it being understood that subsequent recordings in the United States Patent and Trademark Office and the United States Copyright Office may be necessary to perfect a Lien on registered patents and copyrights acquired by the grantors thereof after the Closing Date).
 
(c)           Notwithstanding anything herein (including this Section 3.20) or in any other Loan Document to the contrary, no Loan Party makes any representation or warranty as to the effects of perfection or non-perfection, the priority or the enforceability of any pledge of or security interest (other than with respect to those pledges and security interests made under the Laws of the jurisdiction of formation of the applicable Foreign Subsidiary) in any Equity Interests of any Foreign Subsidiary, or as to the rights and remedies of the Agents or any Lender with respect thereto, under foreign Law.
 
Section 3.21.  Works Council.
 
None of the Dutch Loan Parties other than Basell Benelux B.V. has, or is required to have, a (central) works council ((centrale) ondernemingsraad) and there is no (central) works council which under the Dutch Works Councils Act (Wet op de ondernemingsraden) would have the right to give advice in connection with any Loan Document.

 
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ARTICLE 4
 
CONDITIONS OF LENDING
 
Section 4.01.  Conditions of Lending.  The obligation of each Lender to fund the Loans on the Closing Date hereunder is subject to satisfaction of the following conditions precedent:
 
(a)           The Administrative Agents receipt of the following, each of which shall be originals or facsimiles (followed promptly by originals) unless otherwise specified, each properly executed by a Responsible Officer of the signing Loan Party to the extent such Loan Party is a party thereto, each in form and substance reasonably satisfactory to the Administrative Agent and its legal counsel:
 
(i)       executed counterparts of this Agreement (including all of the Lenders party hereto);
 
(ii)      an Initial Loan Note executed by Borrower in favor of each Lender that has requested an Initial Loan Note more than three (3) Business Days prior to the Closing Date;
 
(iii)     except where delivery after the Closing Date is contemplated therein, each Security Document set forth on Schedule 4.01(a)(iii) hereto, duly executed by each Loan Party thereto, together with:
 
(A)           certificates, if any, representing the Pledged Equity referred to therein accompanied, if applicable, by undated stock powers executed in blank and instruments evidencing the Pledged Debt indorsed in blank, and
 
(B)           where appropriate and customary in each relevant jurisdiction where the Guarantors are organized, evidence that all other actions, recordings and filings that the Administrative Agent may deem reasonably necessary to satisfy the Collateral and Guarantee Requirement (and as have been notified to Borrower or its counsel no later than three (3) Business Days prior to the Closing Date) shall have been taken, completed or otherwise provided for in a manner reasonably satisfactory to the Administrative Agent;
 
(iv)     such certificates of resolutions or other action, incumbency certificates and/or other certificates of Responsible Officers of each Loan Party as the Administrative Agent may reasonably require (and as have been notified to Borrower no later than three (3) Business Days before the Closing Date) evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with this Agreement and the other Loan Documents to which such Loan Party is a party or is to be a party on the Closing Date;
 
(v)      (A)           the executed legal opinion of Skadden, Arps, Slate, Meagher & Flom LLP, special U.S. counsel to the Company and certain other Loan Parties, substantially in the form of Exhibit H; and
 
(B)               the executed legal opinion of local counsel to the Lenders or the Loan Parties, as applicable, in the jurisdictions listed on Schedule 4.01(a)(v)(B), in form and substance reasonably satisfactory to the Administrative Agent;

 
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(C)               a certificate signed by a Company Financial Officer certifying that since the date of the Acquisition Agreement there has been no Material Adverse Change;
 
(vi)     a certificate signed by a Company Financial Officer attesting to the Solvency of the Loan Parties (taken as a whole) after giving effect to the Transactions, from;
 
(vii)    except as contemplated by Section 6.14(a) of the Senior Secured Credit Facilities, evidence that all insurance (including title insurance) required to be maintained pursuant to the Loan Documents has been obtained and is in effect and that the Collateral Agent has been named as loss payee, mortgagee and additional insured under each insurance policy with respect to such insurance as to which the Collateral Agent shall have requested to be so named;
 
(viii)   a Borrowing Request relating to the Borrowings made on the Closing Date; and
 
(ix)      the Intercreditor Agreement, executed and delivered by a duly authorized officer of the applicable Loan Parties and of the Collateral Agent and other agents party thereto;
 
(b)           prior to or substantially simultaneously with the Loans made on the Closing Date, arrangements reasonably satisfactory to the Joint Lead Arrangers shall have been made to pay all fees and expenses (to the extent invoices for such expenses have been provided at least five (5) Business Days prior to the Closing Date) required to be paid hereunder by the Company or Borrower from the Borrowings made on the Closing Date;
 
(c)           prior to or substantially simultaneously with the Initial Loans made on the Closing Date, the Acquisition shall have been consummated in accordance with the terms of the Acquisition Agreement except for the filing of the merger certificate which shall occur substantially concurrently, without giving effect to any amendments or waivers thereto (excluding any waiver by Lyondell of the conditions set forth in Section 6.3(a)(i) of the Acquisition Agreement) that are materially adverse to the Lenders made without reasonable consent of the Joint Lead Arrangers (such consent not to be unreasonably withheld or delayed), and in compliance with applicable material Laws and regulatory approvals;
 
(d)           all of the conditions precedent included in Article IV of the Senior Secured Credit Facilities have been satisfied or waived and the Senior Secured Credit Facilities remain in full force and effect;
 
(e)           the Company and its subsidiaries shall have outstanding no Financial Indebtedness or Disqualified Equity Interests other than (A) the Initial Loan, (B) the loans under the Senior Secured Credit Facilities, (C) the Existing Notes, (D) Existing Indebtedness (including letters of credit issued and outstanding on the Closing Date), and (E) the Asset Backed Credit Facility, Receivables Financing and Securitization Transactions and (F) liabilities incurred in the ordinary course of business and (G) liabilities disclosed in the Pro Forma Financial Statements, in each case to the extent permitted by Section 5.08;
 
(f)           the Administrative Agent shall have received all documentation and other information mutually agreed to be required by regulatory authorities under applicable know your customer and anti-money laundering rules and regulations, including the Patriot Act.

 
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(g)           The representations and warranties of Borrower and each other Loan Party contained in Article 3 or any other Loan Document shall be true and correct in all material respects on and as of the Closing Date.
 
(h)           No Default shall exist or would result from such proposed Borrowing or from the application of the proceeds therefrom.
 
(i)           The Administrative Agent shall have received a Borrowing Request in accordance with the requirements hereof.

 
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ARTICLE 5
 
GENERAL COVENANTS
 
Each of Borrower, the Company and each other Loan Party covenants and agrees with each Lender that, so long as this Agreement shall remain in effect and until the Commitments have been terminated and the principal of and interest on each Loan, all Fees and all other expenses or amounts payable under any Loan Document have been paid in full, unless the Required Lenders shall otherwise consent in writing, Borrower, the Company and each other Loan Party shall comply with the covenants set forth in this Article 5.
 
Section 5.01.  Limitation on Restricted Payments.  (a) The Company will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, make any Restricted Payment.
 
 
(b)              Notwithstanding the foregoing, the provisions set forth in the immediately preceding paragraph do not prohibit:
 
(i)       the payment of any dividend or consummation of any irrevocable redemption within 60 days after the date of declaration of such dividend or the giving of a redemption notice if the dividend or redemption would have been permitted on the date of declaration or giving of notice;
 
(ii)      any Restricted Payments, either (A) solely in exchange for shares of Qualified Capital Stock of the Company or (B) if no Default or Event of Default shall have occurred and be continuing or would be caused thereby, through the application of net cash proceeds of a substantially concurrent Equity Offering (other than to a subsidiary of the Company) or capital contribution received by the Company;
 
(iii)     the acquisition or repayment of any Indebtedness of the Company that is subordinate or junior in right of payment to the Loans or Disqualified Capital Stock of the Company either (A) solely in exchange for shares of Qualified Capital Stock of the Company, or (B) if no Default or Event of Default shall have occurred and be continuing, through the application of net cash proceeds of (1) a substantially concurrent Equity Offering or (2) incurrence for cash of Refinancing Indebtedness (in the case of (1) or (2), other than to a subsidiary of the Company);
 
(iv)     beginning on the fifth anniversary of the date on which the 2015 Notes were issued, so long as no Default or Event of Default shall have occurred and be continuing or would be caused thereby, repurchases by the Company of, or dividends to Parent to permit repurchases by Parent of, Common Stock of the Company or Parent from employees, former employees, directors or former directors of the Company or any of its subsidiaries (or permitted transferees of such persons) or their authorized representatives upon the death, disability or termination of employment of such employees or directors, in an aggregate amount for all periods not to exceed 2.0% of the Capital Stock of the Company from time to time at fair market value at the date of such repurchase;
 
(v)      payments to Parent for legal, audit, tax and other expenses directly relating to the administration of Parent, including customary compensation payable to the Parents directors and employees, not to exceed 1.5 million in any fiscal year;

 
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(vi)     so long as no Default or Event of Default shall have occurred and be continuing or would be caused thereby, ongoing service and management fees pursuant to the Management Agreement in an aggregate annual amount not to exceed (x) in respect of any fiscal year in which the Consolidated EBITDA (as defined in the Senior Secured Credit Facilities) of the Company is less than $6.0 billion (the EBITDA Threshold), $25.0 million and (y) in respect of any fiscal year in which the Consolidated EBITDA (as defined in the Senior Secured Credit Facilities) of the Company is greater than the EBITDA Threshold, $30.0 million;
 
(vii)    cash payments in lieu of issuing fractional shares pursuant to the exercise or conversion of any exercisable or convertible securities;
 
(viii)   payments or distributions to dissenting shareholders pursuant to applicable law in connection with or in contemplation of the Acquisition or any merger, consolidation or transfer of assets that complies with Section 5.19;
 
(ix)      payments of dividends on Disqualified Capital Stock issued in accordance with Section 5.08;
 
(x)       directors fees (including non-executive directors of the Company) or, if the Company is a partnership, directors fees of the general partner of the Company in an amount not to exceed $1.5 million per year;
 
(xi)      so long as no Default or Event of Default shall have occurred and be continuing or would be caused thereby, any purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of the 2015 Notes upon a Change of Control or an Asset Sale to the extent required by the indenture relating to the 2015 Notes, but only if Borrower (A) in the case of a Change of Control prior to the Initial Maturity Date, has first prepaid all Loans and Loan Notes in accordance with Section 5.10(a) hereof, (B) in the case of a Change of Control on or after the Initial Maturity Date, has first purchased each Loan of each Lender that elects to have such Loan purchased in accordance with Section 5.10(b) hereof, or (C) or in the case of an Asset Sale, has first purchased all Loans in accordance with Section 5.11(d) hereof;
 
(xii)     any Restricted Payment made to consummate the Acquisition and the fees and expenses related thereto; provided, however, that such Restricted Payments will be excluded in the calculation of the amount of Restricted Payments;
 
(xiii)    after the Extension Date, so long as no Default or Event of Default shall have occurred and be continuing or would be caused thereby, (i) prior to Listing, Restricted Payments by the Company in an amount not to exceed $50 million per annum and $200 million in the aggregate, and (ii) following Listing, the payment of dividends on the listed Common Stock at a rate not to exceed 6% per annum of the net cash proceeds received by the Company in connection with such Listing or any subsequent Listing; provided that if such Listing was of the share capital of a Holding Company of the Company, the net proceeds of any such dividend are used to fund a corresponding dividend in equal or greater amount on the share capital of such Holding Company;
 
(xiv)    dividends or other distributions on Disqualified Capital Stock issued by the Company to the extent such Disqualified Capital Stock constitutes Indebtedness under the indenture and was issued in compliance therewith; provided that prior to the Extension Date, no Restricted Payments may be made pursuant to this Section 5.01(b)(xiv) unless no Default or Event of Default shall have occurred or be continuing;

 
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(xv)     distributions by any Restricted Subsidiary of the Company of chemicals to a holder of Capital Stock of such Restricted Subsidiary if such distributions are made pursuant to a provision in a joint venture agreement or other arrangement entered into in connection with the establishment of such Restricted Subsidiary that requires such holder to pay a price for such chemicals equal to that which would be paid in a comparable transaction negotiated on an arms-length basis (or pursuant to a provision that imposes a substantially equivalent requirement); and
 
(xvi)    after the Extension Date, payments under the Tax Sharing Agreement.
 
(c)           In addition to the foregoing, the Company may make Restricted Investments and, after the Extension Date, the Company may make Restricted Payments if at the time of such Restricted Payment or immediately after giving effect thereto:
 
(i)       no Default or an Event of Default shall have occurred and be continuing or would be caused thereby;
 
(ii)      the Company is able to incur at least $1.00 of additional Indebtedness other than Permitted Indebtedness in compliance with Section 5.08;
 
(iii)     the aggregate amount of Restricted Payments made after the Closing Date, including the fair market value as determined reasonably and in good faith by the Board of Directors of the Company of non-cash amounts constituting Restricted Payments, shall not exceed the sum of:
 
(A)           50% of the cumulative Consolidated Net Income (or if cumulative Consolidated Net Income shall be a loss, minus 100% of such loss) of the Company earned from the end of the quarter immediately preceding the Closing Date through the last day of the last full fiscal quarter for which financial statements are reported immediately preceding the date the Restricted Payment occurs (the Reference Date) (treating such period as a single accounting period); provided, however, that for purposes of this sub-clause (iii)(A) only, to the extent any amounts that would constitute net income but which have been used to make a Permitted Investment described in clause (e) of the definition thereof, such amounts shall be excluded from Consolidated Net Income; plus
 
(B)           100% of the aggregate net cash proceeds or the fair market value, as determined in good faith by the Company,  of property other than cash (including Capital Stock) of Persons engaged in a Permitted Business or property used or useful in a Permitted Business received by the Company or its Restricted Subsidiaries from any Person (other than a subsidiary of the Company) from the issuance and sale subsequent to the Closing Date and on or prior to the Reference Date of Qualified Capital Stock of the Company (including Disqualified Capital Stock of the Company that is converted into or exchanged for Qualified Capital Stock of the Company subsequent to the Closing Date) or debt securities of the Company or its Restricted Subsidiaries that are convertible into or exchangeable for Qualified Capital Stock of the Company, but only when and to the extent such debt securities are converted into or exchanged for Qualified Capital Stock of the Company; plus

 
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(C)           without duplication of any amounts included in clause (B) above, 100% of the aggregate net cash proceeds of any equity contribution received by the Company; plus
 
(D)           without duplication of any amounts included in clause (B) above, 100% of the aggregate net cash proceeds of any sales or distributions of the type described in clause (e)(i) or (ii) of the definition of Permitted Investments but only to the extent such net cash proceeds are not utilized in accordance therewith (including Disqualified Capital Stock of the Company that is converted into or exchanged for Qualified Capital Stock of the Company subsequent to the Closing Date).
 
In determining the aggregate amount of Restricted Payments made subsequent to the Closing Date in accordance with clause (iii) of the immediately preceding paragraph, cash amounts expended pursuant to clauses (i), (ii)(B), (iii)(B)(1), (iv) and (xiii) of paragraph (b) above shall be included in such calculation.
 
(d)           Not later than the date of making any Restricted Payment pursuant to paragraph (c) or clause (b)(xi), the Company shall deliver to the Administrative Agent an officers certificate stating that such Restricted Payment complies with this Agreement and setting forth in reasonable detail the basis upon which the required calculations were computed, which calculations may be based upon the Companys quarterly financial statements last provided to the Lenders pursuant to Article 6.
 
Section 5.02.  Corporate Existence.  The Company shall (a) preserve, renew and maintain in full force and effect its legal existence under the Laws of the jurisdiction of its organization except (x) in a transaction permitted by Section 5.11 or 5.19 and (y) subject to Section 5.19(c)(II)(C), any Restricted Subsidiary may merge and amalgamate, consolidate or amalgamate with any other Restricted Subsidiary and (b) take all reasonable action to maintain all rights, privileges (including its good standing, where such concept exists), permits, licenses and franchises necessary or desirable in the normal conduct of its business, except (i) to the extent that failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect or (ii) pursuant to a transaction permitted by Section 5.11 or 5.19 or clause (y) of this Section 5.02.
 
Section 5.03.  Payments of Taxes and Other Claims.  The Company shall timely pay, discharge or otherwise satisfy as the same shall become due and payable in the normal conduct of its business, all its obligations and liabilities in respect of the taxes, assessments and governmental charges or levies imposed upon it or upon its income or profits or in respect of its property, except, in each case, to the extent the failure to pay or discharge the same could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
 
Section 5.04.  Maintenance of Properties and Insurance.  (a)  The Company shall, except if the failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, maintain, preserve and protect all of its material properties and equipment necessary in the operation of its business in good working order, repair and condition, ordinary wear and tear excepted and casualty or condemnation excepted.
 
(b)           The Company shall maintain with reputable insurance companies, insurance with respect to its assets, properties and business against loss or damage to the extent available on commercially reasonable terms of the kinds customarily insured against by Persons of similar size engaged in the same or similar industry, of such types and in such amounts (after giving effect to any self-insurance (including captive industry insurance) reasonable and customary for similarly situated Persons of similar size engaged in the same or similar businesses as the Company and the Restricted Subsidiaries) as are customarily carried under similar circumstances by such other Persons.  With respect to each Mortgaged Property located in the U.S., obtain flood insurance in such total amount as required by applicable Law, if at any time the area in which any improvements are located on any Mortgaged Property is designated a flood hazard area in any Flood Insurance Rate Map published by the Federal Emergency Management Agency (or any successor agency), and, if required by law, comply with the National Flood Insurance Program as set forth in the Flood Disaster Protection Act of 1973, as amended from time to time.

 
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Section 5.05.  Compliance with Laws.  The Company shall comply in all material respects with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its business or property, except to the extent the failure to comply therewith could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
 
Section 5.06.  Anti-Money Laundering.  Each Loan Party will use commercially reasonable efforts to ensure that no funds used to pay the obligations under the Loan Documents are derived from any unlawful activity.
 
Section 5.07.  Limitations on Transactions with Affiliates.  (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, enter into any transaction or series of related transactions with, or for the benefit of, any of its Affiliates (each, an Affiliate Transaction) involving aggregate payments or consideration in excess of $10.0 million, other than:
 
(i)       Affiliate Transactions permitted under the provision described in clause (b) of this Section 5.07; and
 
(ii)      Affiliate Transactions on terms that are no less favorable to the Company or the relevant Restricted Subsidiary than those terms that might reasonably have been obtained in a comparable transaction at such time on an arms length basis by the Company or the relevant Restricted Subsidiary and an unrelated person or, if no such comparable transaction with a person who is not an affiliate is available on terms that are fair from a financial point of view to the Company or such Restricted Subsidiary as certified by an Independent Financial Advisor.
 
The Board of Directors of the Company and the Board of Directors of the relevant Restricted Subsidiary must approve each Affiliate Transaction to which they are a party that involves aggregate payments or other property with a fair market value in excess of $25.0 million.  This approval must be evidenced by a board resolution that states that the Board of Directors has determined that the transaction complies with the foregoing provisions.  If the Company or any Restricted Subsidiary of the Company enters into an Affiliate Transaction that involves payments or other property with an aggregate fair market value of more than $100 million, then prior to the consummation of the Affiliate Transaction, the parties to such Affiliate Transaction must obtain a favorable opinion as to the fairness of such transaction or series of related transactions to the Company or the relevant Restricted Subsidiary, as the case may be, from a financial point of view, from an Independent Financial Advisor and mail the same to the Agents and the Lenders.
 
(b)           The restrictions described in the preceding paragraph (a) do not apply to:

 
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(i)       reasonable fees and compensation paid to and employee benefit arrangements, customary insurance and indemnity provided on behalf of, officers, directors, managers, employees or consultants of the Company or any Restricted Subsidiary of the Company as determined in good faith by the Companys Board of Directors or senior management;
 
(ii)       transactions exclusively between or among the Company and any of its Restricted Subsidiaries or exclusively between or among such Restricted Subsidiaries, provided such transactions are not otherwise prohibited by this Agreement;
 
(iii)     any agreement as in effect as of the Closing Date or any amendment or renewal thereto or any transaction contemplated thereby or in any replacement agreement thereto so long as any such amendment or renewal or replacement agreement is not more disadvantageous to the Lenders (as determined by the Board of Directors of the Company in their reasonable and good faith judgment) in any material respect than the original agreement;
 
(iv)     Investments of the type described in clauses (d), (e), (j), (l) and (n) in the definition of Permitted Investments and Restricted Payments made in compliance with Section 5.01;
 
(v)      transactions between any of the Company, any of its subsidiaries and any Securitization Entity in connection with a Qualified Securitization Transaction, in each case provided that such transactions are not otherwise prohibited by this Agreement;
 
(vi)     transactions with customers, clients, suppliers, distributors or other purchases or sales of goods or services, in each case in the ordinary course of business and otherwise in compliance with the terms of this Agreement which when taken together are fair to the Company or the Restricted Subsidiaries of the Company as applicable, in the reasonable determination of the board of directors of the Company or the senior management thereof, or are on terms no less favorable as might reasonably have been obtained at such time from an unaffiliated party;
 
(vii)    transactions with Qualified Joint Ventures entered into in the ordinary course of business and in a manner consistent with past practice;
 
(viii)   the issuance or sale of any of the Companys Capital Stock (other than Disqualified Capital Stock) or capital contributions received by the Company;
 
(ix)      transactions entered into between or among the Company or any of its Restricted Subsidiaries and any joint venture, or other Affiliate that would otherwise be subject to this covenant solely because the Company or a Restricted Subsidiary of the Company owns any Capital Stock of or otherwise controls such Person;
 
(x)       transactions entered into by a Person prior to the time such person becomes a Restricted Subsidiary of the Company or is merged or consolidated into the Company or a Restricted Subsidiary of the Company (provided such transaction is not entered into in contemplation of such event);

 
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(xi)      dividends and distributions to the Company and its Restricted Subsidiaries by any Unrestricted Subsidiary of the Company or joint venture; and
 
(xii)     transactions entered into between or among the Company or any of its Restricted Subsidiaries and any Affiliate of the Company or any of its Restricted Subsidiaries  that is engaged in a Permitted Business on terms that are no less favorable as might reasonably been obtained as such time from an unaffiliated third party or, if no such comparable transaction with a Person who is not an Affiliate of the Company is available, on terms that are fair from a financial point of view to the Company or such Restricted Subsidiary as certified by an Independent Financial Advisor
 
Section 5.08.  Limitation on Incurrence of Additional Indebtedness.  (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume, guarantee, acquire, become liable, contingently or otherwise, with respect to, or otherwise become responsible for payment of (collectively, incur) any Indebtedness other than Permitted Indebtedness;
 
(b)           In addition, on and after the Extension Date, if no Default or Event of Default shall have occurred and be continuing at the time of or as a consequence of the incurrence of any such Indebtedness, the Company and its Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness), if on the date of the incurrence of such Indebtedness, after giving effect to the incurrence thereof, the Consolidated Fixed Charge Coverage Ratio of the Company is greater than 2.0 to 1.0.
 
(c)           Paragraph (a) and (b) of this Section 5.08 shall not prohibit the incurrence of the following Indebtedness (collectively Permitted Indebtedness):
 
(i)                 Indebtedness under the Loans and this Agreement in an amount not to exceed $8.0 billion in aggregate principal amount, and the Permanent Securities, in one or more tranches, the indenture relating to the Permanent Securities, if any, and the guarantees thereof and hereof;
 
(ii)                 (A)  Indebtedness incurred pursuant to the Credit Facilities in an aggregate principal amount not to exceed $12.45 billion at any one time outstanding less the amount of any payments actually made by or on behalf of the Company or its subsidiaries under the Credit Facilities with the proceeds of any Asset Sale (excluding any temporary reduction in revolving credit facilities pending final application of the proceeds in accordance with this Agreement) and (B) if no Default or Event of Default shall have occurred and be continuing at the time of or as a consequence of the incurrence of any such Indebtedness, the Company and its Restricted Subsidiaries may incur Indebtedness under incremental facilities  under the Senior Secured Credit Facilities in an amount not to exceed $1.0 billion, if on the date of the incurrence of such Indebtedness, after giving effect to the incurrence thereof, the Consolidated First Lien Secured Leverage Ratio of the Company is less than 2.5 to 1.0;
 
(iii)                 other Indebtedness of the Company and its Restricted Subsidiaries outstanding on the Closing Date (after giving effect to the Acquisition) reduced by the amount of any prepayments with proceeds of any Asset Sale (excluding any temporary reduction in revolving credit facilities pending final application of the proceeds in accordance with this Agreement);
 
(iv)                 the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred for the purpose of (A) fixing or hedging interest rate or currency risk with respect to any fixed or floating rate Indebtedness that is permitted by this Agreement to be outstanding or any receivable or liability the payment of which is determined by reference to a foreign currency; provided that the notional principal amount of any such Hedging Obligation does not exceed the principal amount of the Indebtedness to which such Hedging Obligation relates or (B) managing fluctuations in the price or cost of raw materials, emissions, manufactured products or related commodities; provided that such obligations are entered into in the ordinary course of business to hedge or mitigate risks to which the Company or any of its Restricted Subsidiaries are exposed in the conduct of its business or the management of its liabilities (as determined by the Companys or such Restricted Subsidiarys principal financial officer in the exercise of his or her good faith business judgment);

 
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(v)                 Indebtedness of a Restricted Subsidiary of the Company to the Company or to a Restricted Subsidiary of the Company for so long as such Indebtedness is held by the Company or a Restricted Subsidiary of the Company, in each case subject to no Lien held by a person other than the Company or a Restricted Subsidiary of the Company (other than the pledge of intercompany notes under the Credit Facilities); provided that if as of any date any Person other than the Company or a Restricted Subsidiary of the Company owns or holds any such Indebtedness or holds a Lien in respect of such Indebtedness (other than the pledge of intercompany notes under the Credit Facilities), it shall be deemed the incurrence of Indebtedness not constituting Permitted Indebtedness under this clause by the issuer of such Indebtedness on such date;
 
(vi)                 Indebtedness of the Company to a Restricted Subsidiary of the Company for so long as such Indebtedness is held by a Restricted Subsidiary of the Company, in each case subject to no Lien (other than Liens securing intercompany notes pledged under the Credit Facilities); provided that (a) any Indebtedness of the Company to any Restricted Subsidiary of the Company (other than pursuant to intercompany notes pledged under the Credit Facilities) is unsecured and subordinated, pursuant to a written agreement, to the Companys obligations under the Loan Documents and (b) if as of any date any Person other than a Restricted Subsidiary of the Company owns or holds any such Indebtedness or any Person holds a Lien in respect of such Indebtedness (other than pledges of intercompany notes securing the Credit Facilities), it shall be deemed the incurrence of Indebtedness under this clause not constituting Permitted Indebtedness by the Company on such date;
 
(vii)                 Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds, overdrafts, pooling arrangements and money market lines in the ordinary course of business;
 
(viii)                 Indebtedness of the Company or any of its Restricted Subsidiaries represented by letters of credit for the account of the Company or such Restricted Subsidiary, as the case may be, in order to provide security for workers compensation or environmental claims, payment obligations in connection with self-insurance or similar requirements in the ordinary course of business;
 
(ix)                 Refinancing Indebtedness;
 
(x)                 Indebtedness arising from agreements of the Company or a subsidiary providing for indemnification, adjustment of purchase price, earn out or similar obligations, in each case, incurred in connection with the disposition of any business, assets or subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or subsidiary for the purpose of financing such acquisition; provided that the maximum aggregate liability in respect of all such Indebtedness shall at no time exceed the gross proceeds actually received by the Company and the subsidiary in connection with such disposition;

 
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(xi)                 Obligations in respect of bankers acceptances, tender, bid, judgment, appeal, performance or governmental contract bonds and completion guarantees, surety, standby letters of credit and warranty and contractual service obligations of a like nature, trade letters of credit and documentary letters of credit and similar bonds or guarantees provided by the Company or any subsidiary of the Company in the ordinary course of business;
 
(xii)                 Guarantees by the Company or a Restricted Subsidiary of the Company of Indebtedness incurred by the Company or a Restricted Subsidiary of the Company so long as the incurrence of such Indebtedness by the Company or any such Restricted Subsidiary is otherwise permitted by the terms of this Agreement;
 
(xiii)                 Indebtedness of the Company or any subsidiary of the Company incurred in the ordinary course of business not to exceed, on or prior to the Extension Date, $100 million and, thereafter, $200 million in the aggregate at the date of incurrence, in each case, at any one time outstanding;
 
(A)           representing Capitalized Lease Obligations or
 
(B)           constituting Indebtedness incurred to finance the acquisition of, or cost of design, construction, installation or improvement of, property or assets of the Company or any Restricted Subsidiary of the Company used in the business of the Company or any Restricted Subsidiary of the Company; provided, however, that such Indebtedness shall not exceed the cost of such property or assets and shall not be secured by any property or assets of the Company or any Restricted Subsidiary of the Company other than the property and assets so acquired;
 
(xiv)               (i) the incurrence by the Company or a Restricted Subsidiary of the Company of Indebtedness pursuant to Asset Backed Credit Facilities secured by inventory not to exceed, in the aggregate for all such Indebtedness, $1.5 billion and (ii) the incurrence by a Securitization Entity of Indebtedness in a Qualified Securitization Transaction that is not recourse to the Company or any subsidiary of the Company (except for Standard Securitization Undertakings);
 
(xv)               Indebtedness of the Company or a Restricted Subsidiary of the Company to any of its subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company or such Restricted Subsidiary from any such subsidiary which assets are subsequently conveyed by the Company or such Restricted Subsidiary to a Securitization Entity in a Qualified Securitization Transaction;
 
(xvi)               Guarantees by the Company or a Restricted Subsidiary of the Company of Indebtedness incurred by Qualified Joint Ventures not to exceed, on or prior to the Extension Date, $125 million and, thereafter, $250 million in the aggregate at any one time outstanding;
 
(xvii)              Indebtedness of a Person existing at the time that person becomes a Restricted Subsidiary of the Company or assumed in connection with an Asset Acquisition by the Company or a Restricted Subsidiary of the Company and not incurred in connection with or in anticipation of, such Person becoming a Restricted Subsidiary; provided that the holders of any such Indebtedness do not, at any time, have direct or indirect recourse to any property or assets of the Company or any Restricted Subsidiary other than the property or assets of such acquired Person; provided, further, that on the date of such acquisition and after giving pro forma effect thereto, either (a) the Company would have been able to incur at least $1.00 of additional Indebtedness pursuant to clause (b) of this Section 5.08 (assuming for this purpose that the Extension Date has occurred) or (b) the Consolidated Fixed Charge Coverage Ratio would be greater than or equal to the Consolidated Fixed Charge Coverage Ratio immediately prior to giving pro forma effect to such acquisition; providedfurther that Indebtedness incurred pursuant to this clause (xvii) on or prior to the Extension Date shall not exceed in the aggregate $125 million;

 
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(xviii)             Contribution Indebtedness; and
 
(xix)                additional Indebtedness of the Company and its Restricted Subsidiaries in an aggregate principal amount not to exceed the greater of (i) $750 million and (ii) 3% of Consolidated Net Tangible Assets of the Company at the date of incurrence, in each case, in the aggregate at any one time outstanding.
 
 
(d)           Notwithstanding the foregoing, Indebtedness incurred by Restricted Subsidiaries of the Company that are not Guarantors in accordance with Section 5.08(b) and clauses (ii), and (xvii) of Section 5.08(c) may not exceed $500 million in the aggregate at any one time outstanding.  For purposes of determining compliance with any restriction on the incurrence of Indebtedness in dollars where Indebtedness is denominated in a different currency, the amount of such Indebtedness will be the dollar Equivalent determined on the date of such determination, provided that if any such Indebtedness denominated in a different currency is subject to a Currency Agreement (with respect to dollars) covering principal amounts payable on such Indebtedness, the amount of such Indebtedness expressed in dollars will be adjusted to take into account the effect of such agreement.  The principal amount of any Refinancing Indebtedness incurred in the same currency as the Indebtedness being Refinanced will be the dollar Equivalent of the Indebtedness Refinanced determined on the date such Indebtedness being Refinanced was initially incurred.  Notwithstanding any other provision of this covenant, for purposes of determining compliance with this Section 5.08, increases in Indebtedness solely due to fluctuations in the exchange rates of currencies will not be deemed to exceed the maximum amount that the Company or a Restricted Subsidiary of the Company may incur under this Section 5.08.
 
(e)              For purposes of determining any particular amount of Indebtedness under this Section 5.08:
 
(i)                   obligations with respect to letters of credit, guarantees or Liens, in each case supporting Indebtedness otherwise included in the determination of such particular amount, will not be included;
 
(ii)                  any Liens granted pursuant to the equal and ratable provisions referred to in Section 5.14 will not be treated as Indebtedness; and
 
(iii)                 accrual of interest, accrual of dividends, the accretion of accreted value, the obligation to pay commitment fees and the payment of interest in the form of additional Indebtedness will not be treated as Indebtedness.
 
(f)             For purposes of determining compliance with this Section 5.08, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Indebtedness described in clauses (i) through (xix) of paragraph (c) above, or is entitled to be incurred pursuant to paragraph (b) above, the Company will be permitted to classify such item of Indebtedness on the date of its incurrence and, except with respect to Indebtedness incurred under clauses (ii), (xiv) and (xvi) of paragraph (c) above, reclassify such item of Indebtedness, in each case in any manner that complies with this Section 5.08.  Notwithstanding the foregoing, Indebtedness under the Senior Secured Credit Facilities up to the maximum amounts permitted under clause (ii) of paragraph (c) above (and any amounts incurred to Refinance such Indebtedness) will be deemed to have been incurred pursuant to clause (ii) of paragraph (c) above, Indebtedness pursuant to Asset Backed Credit Facilities up to the maximum amounts permitted under clause (xiv) (i) above will be deemed to have been incurred pursuant to clause (xiv) above and guarantees by the Company or any Restricted Subsidiaries of Indebtedness incurred by Qualified Joint Ventures up to the maximum amounts permitted under clause (xvi) of paragraph (c) above will be deemed to have been incurred pursuant to clause (xvi) of paragraph (c) above.  Indebtedness of the type described in clauses (ii), (xiv) or (xvi) of paragraph (c) above may be not be reclassified; provided that such Indebtedness may, in each case, be incurred in excess of such maximum amounts if otherwise permitted by this Section 5.08.

 
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Section 5.09.       Limitation on Dividend and Other Payment Restrictions Affecting Subsidiaries.  The Company will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly make any Restricted Payment or immediately after giving effect thereto, create or otherwise cause or permit to exist or become effective any consensual encumbrance or restriction on the ability of any Restricted Subsidiary of the Company to (a) pay dividends or make any other distributions on or in respect of its Capital Stock; (b) make loans or advances or to pay any Indebtedness or other obligation owed to the Company, Borrower or any other Restricted Subsidiary of the Company; or (c) transfer any of its property or assets to the Company, Borrower or any other Restricted Subsidiary of the Company, except for such encumbrances or restrictions existing under or by reason of:
 
(i)       applicable law, rules, regulations and/or orders;
 
(ii)      the Loan Documents (including, without limitation, any Liens permitted by such Loan Documents), the indenture relating to the Permanent Securities permitted by Section 5.08(c)(i) (including, without limitation, any Liens permitted by this Agreement or the indenture relating to the Permanent Securities), provided that encumbrances or restrictions contained in such other indenture are no less favorable to the Company in any material respect as determined by the Board of Directors of the Company in their reasonable and good faith judgment than those in this Agreement;
 
(iii)      customary non-assignment provisions of any contract or any lease governing a leasehold interest of the Company or any Restricted Subsidiary of the Company;
 
(iv)     any agreements existing at the time of any merger or consolidation with any Person or the acquisition of any Person or the properties or assets of such Person (including agreements governing Acquired Indebtedness), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person or the properties or assets of the Person merged or consolidated with or so acquired or any subsidiary of such Person and as amended or modified; provided, however, that any such amendment or modification is no less favorable to the Company in any material respect as determined by the Board of Directors of the Company in their reasonable and good faith judgment than the provisions prior to such amendment or modification;
 
(v)      agreements existing on the Closing Date (after giving effect to the Acquisition) to the extent and in the manner such agreements are in effect on such date and any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings thereof; provided that such amendments, modifications, restatements, increases, supplements, refundings, replacements or refinancings are no more restrictive (as determined by the Board of Directors of the Company in their reasonable and good faith judgment) in any material respect, taken as a whole, with respect to such dividend and other payment restrictions than those contained in such agreements or instruments as in effect on the Closing Date;

 
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(vi)     restrictions imposed by any agreement to sell assets or Capital Stock permitted under this Agreement to any Person pending the closing of such sale;
 
(vii)    any agreement or instrument governing Capital Stock of any Person that is acquired and as amended or modified provided, however, that any such amendment or modification is no less favorable to the Company in any material respect as determined by the Board of Directors of the Company in their reasonable and good faith judgment than the provisions prior to such amendment or modification;
 
(viii)   Indebtedness or other contractual requirements of a Securitization Entity in connection with a Qualified Securitization Transaction; provided that such restrictions apply only to such Securitization Entity;
 
(ix)      Liens incurred in accordance with Section 5.14;
 
(x)       restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business;
 
(xi)      the Senior Secured Credit Facilities and any Asset Backed Credit Facilities as in effect on the Closing Date and as amended or modified, so long as such amendment or modification is not materially more restrictive, taken as a whole, as at the time of execution of such amendment or modification;
 
(xii)     customary restrictions in construction loans, purchase money obligations, Capitalized Lease Obligations, security agreements or mortgages securing Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent such restrictions restrict the transfer of the property subject to such Capitalized Lease Obligations, security agreements or mortgages;
 
(xiii)    customary provisions in joint venture agreements and other similar agreements (in each case relating solely to the respective joint venture or similar entity or the equity interests therein) entered into in the ordinary course of business;
 
(xiv)    customary provisions in Hedging Obligations permitted under this Agreement and entered into in the ordinary course of business;
 
(xv)     contracts entered into in the ordinary course of business, not relating to Indebtedness, and that do not, individually or in the aggregate, detract from the value of property or assets of the Company or any Restricted Subsidiary of the Company in any manner material to the Company or such Restricted Subsidiary;
 
 
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(xvi)   encumbrances or restrictions imposed by indentures or other similar instruments governing other Indebtedness Incurred by the Company or any Restricted Subsidiary of the Company (and if such Indebtedness is guaranteed, by the guarantors of such Indebtedness) ranking equally with the Loans and the Exchange Notes (or any guarantee), provided that the encumbrances or restrictions imposed by such other indentures or instruments are not materially more restrictive taken as a whole than the encumbrances or restrictions imposed by this Agreement; and
 
(xvii)  encumbrances or restrictions imposed by Credit Facilities (other than the Senior Secured Credit Facilities); provided that the provisions relating to such encumbrances or restrictions contained in such Credit Facilities are no less favorable to the Company in any material respects (as determined by the Board of Directors of the Company in their reasonable and good faith judgment) than the provisions relating to such encumbrances or restrictions contained in the Senior Secured Credit Facilities as in effect on the Closing Date and as amended or modified, so long as such amendment or modification is not materially more restrictive, taken as a whole, as at the time of execution of such amendment or modification.
 
Section 5.10.  Change of Control.
 
(a)             Upon a Change of Control prior to the Initial Maturity Date, Borrower shall prepay each Lenders Loans and Loan Notes (including any Subsequent Initial Notes and Subsequent Extended Notes), without any premium, plus accrued and unpaid interest, if any, to the date of prepayment in accordance with the terms contemplated in this Section 5.10.
 
(b)             If a Change of Control shall occur on or after the Initial Maturity Date, Borrower shall notify the Administrative Agent thereof in writing (a Change of Control Notice) within two (2) Business Days after the occurrence thereof, which Change of Control Notice shall include (i) a brief description of such Change of Control (which identifies the parties giving rise to such Change of Control) and (ii) the designation of a Business Day not less than 15 days nor more than 30 days after the date of such Change of Control Notice as the Change of Control Purchase Date on which Borrower shall purchase each Loan of each Lender that elects, on or prior to the Notice Deadline (as defined below), to have such Loan purchased at a purchase price of 100% of principal amount of such Loan plus accrued and unpaid interest thereon to but excluding the Change of Control Purchase Date (the Change of Control Price).  The Administrative Agent shall promptly provide the Change of Control Notice to the Lenders.  Not less than five (5) Business Days prior to the Change of Control Purchase Date (the Notice Deadline), each Lender shall notify the Administrative Agent in writing whether or not such Lender would like Borrower to purchase such Lenders Loans, and any Lender that does not so notify the Administrative Agent on or prior to the Notice Deadline shall be deemed to have elected not to have its Loans so purchased.  On the Business Day prior to the Change of Control Purchase Date, the Administrative Agent shall notify Borrower of the aggregate principal amount of Loans that Lenders have requested Borrower to purchase pursuant to the immediately preceding sentence (the Purchased Loans).  Not later than 10 a.m., London time on the Change of Control Purchase Date, Borrower shall pay to the Administrative Agent the Change of Control Price for each Purchased Loan in immediately available funds in the currency in which such Purchased Loan was made, and the Administrative Agent shall promptly distribute the Change of Control Price to each Lender holding a Purchased Loan.

 
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Section 5.11.  Limitation on Asset Sales.
 
(a)           The Company will not, and will not permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless:
 
(i)       the Company or the applicable Restricted Subsidiary of the Company receives consideration at the time of such Asset Sale at least equal to the fair market value of the assets that are sold or otherwise disposed of, as determined in good faith by the Companys Board of Directors;
 
(ii)      at least 75% of the consideration received by the Company or the applicable Restricted Subsidiary from the Asset Sale is in the form of cash or Cash Equivalents, and is received at the time of the Asset Sale (which shall be deemed to include other consideration converted to cash or Cash Equivalents within 90 days of such Asset Sale).  For the purposes of this provision, each of the following will be deemed to be cash:  the amount of any liabilities as shown in the Companys or such Restricted Subsidiarys most recent balance sheet (other than contingent liabilities and liabilities that are by their terms subordinated to the Loans or any guarantee thereof), that are assumed by the transferee of any such assets pursuant to a customary novation agreement that releases the Company or such Restricted Subsidiary from further liability; and
 
(iii)     upon the consummation of an Asset Sale, the Company applies, or causes the applicable Restricted Subsidiary to apply, the Net Sale Proceeds relating to the Asset Sale within 365 days of having received the Net Sale Proceeds in accordance with paragraph (b) below.
 
 
(b)             The Company must apply the Net Sale Proceeds either:
 
(i)       to prepay any Indebtedness under the Senior Secured Credit Facilities or of a Restricted Subsidiary of the Company that is not a guarantor and, in the case of any such Indebtedness under any revolving credit facility, effect a permanent reduction in the availability under such revolving credit facility, and/or
 
(ii)      to make an investment in or expenditures for properties and assets (including Capital Stock of any entity) that will be used in a Permitted Business (Replacement Assets), and/or
 
(iii)     to make an acquisition of (A) assets of any Person or division or (B) Capital Stock of a Person that as a result of such acquisition becomes a Restricted Subsidiary of the Company, in either case, conducting a Permitted Business (Related Businesses).
 
(c)             Pending the final application of any such Net Sale Proceeds, the Company or any Restricted Subsidiary of the Company may temporarily reduce revolving credit borrowings or otherwise invest such Net Sale Proceeds in any manner that is not prohibited by the terms of this Agreement.
 
(d)             On the 366th day after an Asset Sale or any earlier date, if any, on which the Board of Directors of the Company or the Board of Directors of the applicable Restricted Subsidiary determines not to apply the Net Sale Proceeds in accordance with the preceding paragraph (b) (each, a Net Proceeds Offer Trigger Date), such aggregate amount of Net Sale Proceeds which have not been applied or contractually committed to be applied (and to the extent not subsequently applied, the Net Proceeds Offer Trigger Date related thereto shall be deemed to be the date of termination of such contractual commitment or any earlier date, if any, on which the Board of Directors of the Company or the Board of Directors of the applicable Restricted Subsidiary determines not to apply the Net Sale Proceeds in accordance with such contractual commitment) on or before such Net Proceeds Offer Trigger Date as permitted by the preceding paragraph (the Net Proceeds Amount) shall be applied by the Company or such Restricted Subsidiary to make an offer to repay or prepay (the Net Proceeds Offer) on a date that is not less than 30 nor more than 45 days following the applicable Net Proceeds Offer Trigger Date, from: (i) each of the Lenders and (ii) all holders of other Indebtedness that (x) is equal in right of payment with the Loans and (y) contains provisions requiring that an offer to purchase such other Indebtedness be made with the proceeds from the Asset Sale, on a pro rata basis, the maximum principal amount of Loans and other Indebtedness that may be purchased with the Net Proceeds Offer Amount.  Notwithstanding the foregoing, the obligation to apply the Net Proceeds Amount in accordance with Section 2.07 hereof shall be suspended until such time as the aggregate amount of the Net Proceeds Offer Amount is equal to or exceeds (i) until the later of (A) the Extension Date and (B) the first date on which there are no 2015 Notes outstanding, 20.0 million and (ii) thereafter, $100.0 million.  The offer price in any Net Proceeds Offer will be equal to 100% of the principal value of the Loans to be repaid or prepaid, plus any accrued and unpaid interest to the date of repayment or prepayment.

 
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(e)           The following events will be deemed to constitute an Asset Sale and the Net Sale Proceeds for such Asset Sale must be applied in accordance with this Section 5.11:
 
              (i)in the event any non-cash consideration received by the Company or any Restricted Subsidiary of the Company in connection with any Asset Sale is converted into or sold or otherwise disposed of for cash (other than interest received with respect to any such non-cash consideration), or
 
              (ii)in the event of the transfer of substantially all, but not all, of the property and assets of the Company and its Restricted Subsidiaries as an entirety to a person in a transaction permitted under Section 5.19 and as a result thereof Borrower is no longer an obligor on the Loans, the successor corporation shall be deemed to have sold the properties and assets of the Company and its Restricted Subsidiaries not so transferred for purposes of this Section 5.11, and shall comply with the provisions of this Section 5.11with respect to such deemed sale as if it were an Asset Sale.  In addition, the fair market value of such properties and assets of the Company or its Restricted Subsidiaries deemed to be sold shall be deemed to be Net Sale Proceeds for purposes of this covenant.
 
(f)           Notwithstanding the provisions described in the preceding paragraphs (a)-(e), the Company and its Restricted Subsidiaries may consummate an Asset Sale without complying with such provisions to the extent
 
(i)                 the consideration for such Asset Sale constitutes Replacement Assets or Related Businesses; and
 
(ii)                 such Asset Sale is for fair market value.
 
(g)           Any consideration that does not constitute Replacement Assets or Related Businesses that is received by the Company or any of its Restricted Subsidiaries in connection with any Asset Sale permitted under this paragraph will constitute Net Sale Proceeds and will be subject to the provisions described in the preceding paragraphs.

 
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(h)           Each Net Proceeds Offer will be mailed to the Administrative Agent within 30 days following the Net Proceeds Offer Trigger Date, and shall comply with the procedures set forth in this Agreement.  Upon receiving notice of the Net Proceeds Offer, Lenders may elect to tender their Loans for repayment in whole or in part, in exchange for cash.  To the extent Lenders properly tender Loans in an amount exceeding the Net Proceeds Offer Amount, Loans of tendering Lenders will be repaid or prepaid on a pro rata basis (based on amounts tendered).  A Net Proceeds Offer shall remain open for a period of 20 Business Days or such longer period as may be required by law.
 
(i)           After consummation of any Net Proceeds Offer, any Net Proceeds Offer Amount not applied to any such purchase may be used for any purpose permitted by the other provisions of the indenture, and the Net Proceeds Offer Amount shall be reset to zero.
 
Section 5.12.  Compliance with Environmental Laws.
 
(a)           The Company shall comply, and cause all lessees and other Persons occupying Real Property to comply, with all Environmental Laws and Environmental Permits applicable to its operations, facilities and Real Property, except where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; obtain and renew all material Environmental Permits applicable to its operations, facilities and Real Property; and conduct all responses required by, and in accordance with, Environmental Laws; provided that neither the Company nor any of its subsidiaries shall be required to undertake any response to the extent that its obligation to do so is being contested in good faith and by proper proceedings and appropriate reserves are being maintained with respect to such circumstances in accordance with GAAP.
 
 
(b)           If a Default caused by reason of a breach of Section 3.08 or Section 5.12(a) shall have occurred and be continuing for more than 20 days without the Company commencing activities reasonably likely to cure such Default in accordance with Environmental Laws, at the written request of the Administrative Agent or the Required Lenders through the Administrative Agent, the Company shall provide to the Lenders within 45 days after such request, at the expense of the Company or Borrower, an environmental assessment report regarding the matters which are subject of such Default, including, where appropriate, soil and/or groundwater sampling, prepared by environmental consulting firm and, in the form and substance, reasonably acceptable to the Administrative Agent and indicating the presence or absence of Hazardous Materials and the estimated cost of any compliance or response to address them.
 
Section 5.13.  Books and Records.  The Company shall maintain proper books of record and account, in which entries that are full, true and correct in all material respects and which reflect all material financial transactions and matters involving the assets and business of the Loan Parties or a Restricted Subsidiary, as the case may be (it being understood and agreed that certain Foreign Subsidiaries maintain individual books and records in conformity with generally accepted accounting principles in their respective countries of organization and that such maintenance shall not constitute a breach of the representations, warranties or covenants hereunder).
 
Section 5.14.  Limitation on Liens.  The Company shall not, and shall not permit any of its Restricted Subsidiaries to, create, incur or otherwise cause or suffer to exist or become effective any Liens of any kind upon any property or assets of the Company or any Restricted Subsidiary of the Company, now owned or hereafter acquired, which secures Pari Passu Indebtedness or Subordinated Indebtedness , other than Permitted Liens, unless such Indebtedness is incurred in accordance with this Agreement, and

 
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(1)           if such Lien secures Pari Passu Indebtedness, the obligations or the Person granting such Lien under the Loan documents are secured on an equal and ratable basis with the obligations so secured until such time as such obligation is no longer secured by a Lien, or
 
(2)           if such Lien secures Subordinated Indebtedness, any such Lien shall be subordinated to a Lien granted to the Finance Parties in the same collateral as that securing such Lien to the same extent as such Subordinated Indebtedness is subordinated to the Loans and until such time as such obligation is no longer secured by a Lien.
 
Section 5.15.  Additional Subsidiary Guarantees.  (a) The Company will cause (i) each Restricted Subsidiary of the Company that, after the Closing Date, guarantees the Senior Secured Credit Facilities (or any facility refinancing or replacing such facilities) or (ii) each Restricted Subsidiary of the Company that, after the Closing Date, guarantees any Public Indebtedness of the Company or any other Restricted Subsidiary of the Company to execute and deliver to the Administrative Agent an Accession Letter to which such Restricted Subsidiary will accede to this Agreement as a Guarantor.
 
(b)            Notwithstanding the foregoing, the Company shall not be obligated to cause any such Restricted Subsidiary to sign an Accession Letter to the extent that such signature would reasonably be expected to give rise to or result in:
 
(1)           any violation of applicable law, rule, regulation or order that cannot be avoided or otherwise prevented through measures reasonably available to the Company or such Restricted Subsidiary; or
 
(2)           any liability for the officers, directors or shareholders of such Restricted Subsidiary.
 
Section 5.16.  Conduct of Business.  None of the Company or any of its Restricted Subsidiaries (other than a Securitization Entity) will engage in any businesses other than a Permitted Business, except to such extent as would not be material to the Company and its subsidiaries taken as a whole.
 
Section 5.17.  Additional Collateral.  (a) The Company will cause (i) each Restricted Subsidiary of the Company that, after the Closing Date, provides security, directly or indirectly, under the Senior Secured Credit Facilities (or any facility refinancing or replacing such facilities) to pledge substantially all of its assets that secure the obligations under the Senior Secured Credit Facilities (or any facility refinancing or replacing such facilities) to secure the Loan Party Obligations hereunder on at least a second-ranking basis.
 
(a)            Notwithstanding the foregoing, the Company shall not be obligated to cause any such Restricted Subsidiary to provide such security to the extent that such security would reasonably be expected to give rise to or result in:
 
(1)           any violation of applicable law, rule, regulation or order that cannot be avoided or otherwise prevented through measures reasonably available to the Company or such Restricted Subsidiary; or
 
(2)           any liability for the officers, directors or shareholders of such Restricted Subsidiary.

 
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Section 5.18.  Limitation on Additional Liens on the Collateral.  The Company shall not, and shall not permit any Restricted Subsidiary of the Company to incur any Liens with respect to the Collateral, and the Company shall not, and shall not permit any Restricted Subsidiary of the Company to, grant to any Person other than the Collateral Agent, for the benefit of the Secured Parties and the holders and the other beneficiaries described in the Security Documents, any Lien whatsoever in any of the Collateral, except that the Company and its Restricted Subsidiaries may incur Permitted Collateral Liens and the Collateral may be discharged and released in accordance with the Loan Documents; provided, however, that, except with respect to any discharge or release in accordance with the Loan Documents, the incurrence of Permitted Collateral Liens or any action expressly permitted by the Loan Documents, the security documents may not be amended, extended, renewed, restated, supplemented or otherwise modified or replaced, unless contemporaneously with any such action, the Company delivers to the Administrative Agent with a copy to the Lenders (on a non-reliance basis), either (a) a solvency opinion, in form and substance reasonably satisfactory to the Administrative Agent from an Independent Financial Advisor confirming the solvency of the Company and its Restricted Subsidiaries, taken as a whole, after giving effect to any transactions related to such amendment, extension, renewal, restatement, supplement, modification or replacement, or (b) an opinion of counsel, in form and substance reasonably satisfactory to the Administrative Agent, confirming that, after giving effect to any transactions related to such amendment, extension, renewal, restatement, supplement, modification or replacement, the Lien or Liens created under the Security Documents, so amended, extended, renewed, restated, supplemented, modified or replaced are valid Liens not otherwise subject to any limitation, imperfection or new hardening period, in equity or at law, that such Lien or Liens were not otherwise subject to immediately prior to such amendment, extension, renewal, restatement, supplement, modification or replacement.  In the event that the Company complies with the requirements of this Section 5.18, the Administrative Agent or the Collateral Agent, as the case may be, shall (subject to customary protections and indemnifications) consent to such amendments without the need for instructions from the Lenders.
 
Section 5.19.  Merger, Consolidation, and Sale of Assets.  (a) The Company will not, in a single transaction or series of related transactions, consolidate or merge with or into any Person, or sell, transfer, or otherwise dispose of (or permit any Restricted Subsidiary of the Company to sell, assign, transfer, lease, convey or otherwise dispose of) all or substantially all of the Companys assets (determined on a consolidated basis for the Company and the Companys Restricted Subsidiaries) unless:
 
(i)       either (A) the Company shall be the surviving or continuing entity or (B) the Person (if other than the Company) formed by such consolidation or merger is an entity organized and validly existing under the laws of the United States, any State thereof, the District of Columbia or any state which was a member state of the European Union on December 31, 2003 or Canada or any province thereof (the Surviving Entity);
 
(ii)      the Surviving Entity, if any, expressly assumes by a joinder or other agreement in form and substance reasonably satisfactory to the Administrative Agent all rights and obligations of the Company under the Loan Document to which it is a party;
 
(iii)      immediately after giving effect to such transaction, including the assumption of the Loans, (I) the Company or the Surviving Entity is able to incur at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) pursuant to Section 5.08(b) hereof (assuming for this purpose that the Extension Date has occurred) or (II) the Fixed Charge Coverage Ratio at the time of such transaction and after giving pro forma effect thereto as if such transaction had occurred at the beginning of the applicable four-quarter period will be equal to or greater than it was immediately before such transaction;

 
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(iv)     immediately before and after giving effect to such transaction, including the assumption of the Loans, no Default or Event of Default occurred or exists; and
 
(v)      the Company or the Surviving Entity shall have delivered to the Lenders an officers certificate and an opinion of counsel, stating that all requirements under this Agreement for such a transaction have been satisfied, it being understood that such opinion of counsel may rely as to certain matters of fact on such officers certificate.
 
(b)           Each Guarantor (other than any guarantor whose guarantee is to be released in accordance with the terms of this Agreement in connection with any transaction complying with the provisions of Section 5.11 will not, and the Company will not cause or permit any other Guarantor to, consolidate with or merge with or into any Person other than Borrower or any other Guarantor unless:
 
(i)       the entity formed by or surviving any such consolidation or merger (if other than the guarantor) or to which such sale, lease, conveyance or other disposition shall have been made assumes by Accession Letter all of the obligations of the Guarantor on the guarantee;
 
(ii)      immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing; and
 
(iii)     either (I) at the time of such transaction and after giving pro forma effect thereto as if such transaction had occurred at the beginning of the applicable four-quarter period, the Company will be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Consolidated Fixed Charge Coverage Ratio test set forth under Section 5.08(b) (assuming for this purpose that the Extension Date has occurred)or (II) the Consolidated Fixed Charge Coverage Ratio at the time of such transaction and after giving pro forma effect thereto as if such transaction had occurred at the beginning of the applicable four-quarter period will be equal to or greater than it was immediately before such transaction.
 
Any merger or consolidation of a Guarantor with and into Borrower (with Borrower being the surviving entity) or another Guarantor need not comply with paragraph (a) of this Section 5.19.
 
(c)           Notwithstanding anything in this section to the contrary,
 
(i)       the Company or Borrower may (A) merge with an Affiliate that has no material assets or liabilities and that is incorporated or organized solely for the purpose of reincorporating or reorganizing the Company or Borrower, as the case may be, in any state of the United States, the District of Columbia or any state which was a member state of the European Union on December 31, 2003 and (B) may otherwise convert its legal form under the laws of its jurisdiction of organization, in each case, without complying with clause (iii) of the first paragraph of this covenant;
 
(ii)      any transaction characterized as a merger under applicable law where each of the constituent entities survives, will not be treated as a merger for purposes of this Section 5.19, but instead will be treated as
 
(A)           an Asset Sale, if the result of such transaction is the transfer of assets by the Company, Borrower or another Restricted Subsidiary of the Company, or

 
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(B)           an Investment, if the result of such transaction is the acquisition of assets by the Company, Borrower or another Restricted Subsidiary of the Company,
 
(C)           neither Millennium Chemicals Inc. nor Millennium Holdings LLC nor any of their respective subsidiaries as of the Closing Date may be merged with or into the Company or any other Restricted Subsidiary of the Company (other than with or into Millennium Holdings LLC or any of its other subsidiaries as of the Closing Date).
 
Section 5.20.  [Reserved].

 
Section 5.21.  ERISA.
 
Promptly after any Loan Party or any ERISA Affiliate knows or has reason to know of the occurrence of any of the following events that, individually or in the aggregate (including in the aggregate such events previously disclosed or exempt from disclosure hereunder, to the extent the liability therefor remains outstanding), would reasonably be expected to have a Material Adverse Effect, deliver to the Administrative Agent and each of the Lenders a certificate of a Responsible Officer setting forth details as to such occurrence and the action, if any, that the Loan Party or such ERISA Affiliate is required or proposes to take, together with any notices (required, proposed or otherwise) given to or filed with or by the Loan Party, such ERISA Affiliate, the PBGC, a Plan participant (other than notices relating to any individual participants benefits) or the Plan administrator with respect thereto:  that a Reportable Event has occurred; that an accumulated funding deficiency has been incurred or an application is to be made to the Secretary of the Treasury for a waiver or modification of the minimum funding standard (including any required installment payments) or an extension of any amortization period under Section 412 of the Code (or Section 430 of the Code as amended by the Pension Protection Act of 2006) with respect to a Plan; that a Plan having an Unfunded Current Liability has been or is to be terminated, reorganized, partitioned or declared insolvent under Title IV of ERISA (including the giving of written notice thereof); that a Plan has an Unfunded Current Liability that has or will result in a lien under ERISA or the Code; that proceedings will be or have been instituted to terminate a Plan having an Unfunded Current Liability (including the giving of written notice thereof); that a proceeding has been instituted against a Loan Party or an ERISA Affiliate pursuant to Section 515 of ERISA to collect a delinquent contribution to a Plan; that the PBGC has notified a Loan Party or any ERISA Affiliate of its intention to appoint a trustee to administer any Plan; that a Loan Party or any ERISA Affiliate has failed to make a required installment or other payment pursuant to Section 412 of the Code with respect to a Plan; or that a Loan Party or any ERISA Affiliate has incurred or will incur (or has been notified in writing that it will incur) any liability (including any contingent or secondary liability) to or on account of a Plan pursuant to Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201 or 4204 of ERISA or Section 4971 or 4975 of the Code.
 
Section 5.22.  Holding Company.  The Company shall not conduct, transact or otherwise engage in any business or operations other than (i) those incidental to its ownership of the Equity Interests of its subsidiaries, (ii) those incidental to the maintenance of its legal existence, (iii) the performance of the Loan Documents, the Senior Secured Credit Facilities and obligations related thereto the Security Documents to which it is a party the Existing Notes (only to the extent that the Company is a party thereto on the Closing Date), the Management Agreement, the Tax Sharing Agreement, the Acquisition Agreement, the Structured Financing and the other agreements contemplated by the Acquisition Agreement, (iv) any public offering of its common stock or any other issuance of its Equity Interests not prohibited by Article 5, (v) any transaction that the Company has entered into on or prior to the Closing Date, (iv) any public offering of its common stock or any other issuance of its Equity Interests not prohibited by Article 5, (v) any transaction that the Company and Basell Funding have entered into on or prior to the Closing Date, (vi) obligations of the Company under European Securitization Transactions (as defined in the Senior Secured Credit Facitlities) in effect on the Closing Date, (vii) performance guarantees made in the ordinary course of business, (viii) non-speculative hedging obligations, (ix) the making of loans or payments to its subsidiaries as permitted hereunder and under the Senior Secured Credit Facilities, (x) the provisions of administrative and management services to its subsidiaries of a type customarily provided by a holding company to its subsidiaries and employing employees whose services are required for the operation of the Company and its subsidiaries and other administrative and management services to holding companies of the Company, and (xi) rights under and liabilities incurred resulting from Taxes or loans being made to it, as the same are permitted hereunder.

 
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Section 5.23.  Use of Proceeds of the Permanent Securities.  The Company and Borrower shall apply the Net Proceeds from the sale of the Permanent Securities to repay the Loans to the extent required by Section 2.07(b).
 
Section 5.24.  Exchange Notes.
 
(a)           Borrower shall, as promptly as practicable after being requested to do so by the Joint Lead Arrangers at any time on or after the Initial Maturity Date, (i) select a bank or trust company reasonably acceptable to the Lenders to act as Exchange Note Trustee, (ii) enter into the Exchange Note Indenture and the Exchange and Registration Rights Agreement substantially in the form of Exhibit E, and (iii) cause counsel to Borrower to deliver to the Administrative Agent an executed legal opinion in form and substance customary for a transaction of that type to be mutually agreed upon by Borrower and the Administrative Agent (including, without limitation, with respect to due authorization, execution and delivery; validity; and enforceability of the Exchange Documents and the Exchange and Registration Rights Agreement referred to in clause (ii) above).
 
(b)           Subject to the provisions of Section 2.01(b) and 2.06(g) Borrower shall, on the fifth Business Day following the written request (the Exchange Request) of the holder of any Loan (or beneficial owner of a portion thereof) at any time after the day that is five Business Days before the Initial Maturity Date:
 
(i)       execute and deliver, cause each other Loan Party to execute and deliver, and cause the Exchange Note Trustee to execute and deliver, the Exchange Note Indenture if such Exchange Note Indenture has not previously been executed and delivered; and
 
(ii)       execute and deliver to such holder or beneficial owner in accordance with the Exchange Note Indenture an Exchange Note bearing interest as set forth therein (which, at the election of such holder or beneficial owner, may be fixed at a rate not higher than the rate then applicable to such Loan) in exchange for such Loan dated the date of the issuance of such Exchange Note, payable to the order of such holder or owner, as the case may be, in the same currency and principal amount as such Loan (or portion thereof) being exchanged, subject to the succeeding paragraph.
 
The Exchange Request shall specify the principal amount of the Loans to be exchanged pursuant to this Section, which shall be (i) in integral multiples of 1,000,000 or the entire remaining aggregate principal amount of the Euro Loans of such Lender and (ii) with respect to Dollar Loans being exchanged, an integral multiple of $1,000,000 or the entire remaining aggregate principal amount of the Euro Loans of such Lender (the Exchange Note Amount).

 
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Loans delivered to Borrower under this Section in exchange for Exchange Notes shall be canceled by Borrower, and the corresponding amount of the Loan deemed repaid and the Exchange Notes shall be governed by and construed in accordance with the terms of the Exchange Note Indenture.
 
The Exchange Note Trustee shall at all times be a corporation organized and doing business under the laws of the United States or the State of New York, in good standing and having its principal offices in the Borough of Manhattan, in The City of New York, which is authorized under such laws to exercise corporate trust powers and is subject to supervision or examination by federal or state authority and which has a combined capital and surplus of not less than the Dollar Equivalent of $500,000,000.
 
(c)           The holders of such Exchange Notes shall have the registration rights with respect to such Exchange Notes described in Exhibit E.
 
ARTICLE 6
 
INFORMATION COVENANTS
 
Each of Borrower and the Company covenants and agrees with each Lender that, so long as this Agreement shall remain in effect and until the Commitments have been terminated and the principal of and interest on each Loan, all Fees and all other expenses or amounts payable under any Loan Document have been paid in full, unless the Required Lenders shall otherwise consent in writing, Borrower and the Company shall:
 
Section 6.01.  Annual Financial Statements.  The Company shall deliver to the Administrative Agent for prompt further distribution to each Lender, as soon as available, but in any event within ninety (90) days (one-hundred and twenty (120) days in the case of the fiscal year ended December 31, 2008) (or such earlier date on which the Company is required to make any public filing of such information) after the end of each fiscal year of the Company beginning with the 2007 fiscal year, a consolidated balance sheet of the Company and its subsidiaries as at the end of such fiscal year, and the related consolidated statements of income and retained earnings and of cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on without material qualification (including any going concern or like qualification) by an independent registered public accounting firm of nationally recognized standing.
 
Notwithstanding the foregoing, the obligations to deliver financial statements pursuant to this Sections 6.01 will be satisfied with respect to financial information of the Company by furnishing (A) the applicable financial statements of the Company or (B) the Companys, as applicable, Form 10-K, filed with the SEC or prior to or in lieu of any such requirement to file with the SEC, such equivalent information is made public by the Company in compliance with such corresponding obligations under the Permanent Securities or the Exchange Notes; provided that, to the extent such information is in lieu of information required to be provided hereunder, such materials are accompanied by a report and opinion of an independent registered public accounting firm of nationally recognized standing, which report and opinion shall be prepared in accordance with generally accepted auditing standards and shall not be subject to any going concern or like qualification or material exception or any qualification or exception as to the scope of such audit.
 
Section 6.02.  Quarterly Financial Statements.  The Company shall deliver to the Administrative Agent for prompt further distribution to each Lender (as soon as available, but in any event within forty-five (45) days (sixty (60) days in the case of the first three fiscal quarters of 2008) (or such earlier date on which the Company is required to make any public filing of such information), after the end of each of the first three (3) fiscal quarters of each fiscal year of the Company, a consolidated balance sheet of the Company and its subsidiaries as at the end of such fiscal quarter, and the related consolidated statements of income and cash flows, each for such fiscal quarter and the portion of the fiscal year then ended, setting forth in each case in comparative form the figures for the corresponding fiscal quarter of the previous fiscal year and the corresponding portion of the previous fiscal year, all certified (subject to normal year-end adjustments) as to fairness of presentation and consistency by a Responsible Officer of the Company as fairly presenting in all material respects the financial condition, results of operations and cash flows of the Company and its subsidiaries in accordance with GAAP, subject only to normal year-end audit adjustments and the absence of footnotes and (2) deliver to the Administrative Agent for each Lender, promptly, any other information, documents and other reports which the Company or any subsidiary is (when registered) required to file with the SEC pursuant to Section 13(a) or 15(d) of the Exchange Act.

 
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Notwithstanding the foregoing, the obligations to deliver financial statements pursuant to this Sections 6.02 will be satisfied with respect to financial information of the Company by furnishing (A) the applicable financial statements of the Company or (B) the Companys, as applicable, Form 10-Q, filed with the SEC or prior to or in lieu of any such requirement to file with the SEC, such equivalent information is made public by the Company in compliance with such corresponding obligations under the Permanent Securities or the Exchange Notes.
 
Section 6.03.  Parent Guarantor.  From and after the date on which an entity which (i) owns directly or indirectly 100% of the Equity Interests of the Company and (ii) does not hold any other assets other than its investment in the Company or any intermediate holding company and de minimis assets necessary to maintain its corporate existence (and any such intermediate holding company shall not hold any asset other than its investment in the Company and de minimis assets necessary to maintain its corporate existence), guarantees on a senior unconditional basis all of the obligations of the Company under this Agreement (the Parent Guarantor), all references to the Company in Sections 6.01 and 6.02 above shall be references to the Parent Guarantor.
 
Section 6.04.  Compliance Certificate.
 
(a)           The Company shall deliver to the Administrative Agent for prompt further distribution to each Lender:
 
(i)       no later than five (5) days after the delivery of the financial statements required by Sections 6.01 and 6.02, a duly completed Compliance Certificate substantially in the Form of Exhibit M signed by a Responsible Officer;
 
(ii)         together with the delivery of each Compliance Certificate delivered in connection with the delivery of financial statements required under Section 6.01 or 6.02 pursuant to clause (i) above, (A) a description of each event, condition or circumstance during the last fiscal quarter covered by such Compliance Certificate requiring a mandatory prepayment under Section 2.07(b) and (B) a list of each Subsidiary of the Company that identifies each Subsidiary as a Restricted or an Unrestricted Subsidiary as of the date of delivery of such Compliance Certificate or confirming there has been no change since the date of the last such certificate; and
 
(iii)         promptly, such additional information regarding the business, legal, financial or corporate affairs of the Loan Parties or any of their respective subsidiaries, or compliance with the terms of the Loan Documents, as the Administrative Agent or any Lender through the Administrative Agent may from time to time reasonably request.

 
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(b)           Upon request by the Administrative Agent, representatives of senior management of the Company reasonably agreed by the Administrative Agent and the Company shall give a presentation in each fiscal year of the Company to the Lenders within 30 days after the Company has delivered its financial statements pursuant to Section 6.01 about the business, financial performance and prospects of the Company and its subsidiaries, and such other matters as any Lender may (through the Administrative Agent) reasonably request.
 
Section 6.05.  Projections.  Deliver to the Administrative Agent for each Lender, promptly, and in any event no later than thirty (30) days after the end of each fiscal year of the Company, a consolidated budget for the following fiscal year prepared by the Company for approval by its Board of Directors, the following two fiscal years of the Company (including (A) a projected consolidated cashflow statement and profit and loss account of financial position of the Company and its subsidiaries as of the end of each such fiscal year, (B) in respect of each principal operating division of the Company and its subsidiaries, an income statement beginning with EBITDA by business group, and projected levels of the First Lien Senior Secured Leverage Ratio as of the end of each fiscal quarter in the first fiscal year of the period presented and (C) a summary of the material underlying assumptions applicable thereto) (collectively, the Projections).
 
Section 6.06.  [Reserved].
 
Section 6.07.  Information; Miscellaneous.  Documents required to be delivered pursuant to Sections 6.01 and 6.02 may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which the Company (or any direct or indirect parent of the Company) posts such documents, or provides a link thereto on the website on the Internet at the website address listed on Schedule 6.07; or (ii) on which such documents are posted on the Companys behalf on IntraLinks/IntraAgency or another website identified in the notice provided pursuant to clause (z) immediately below, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent); provided that: (y) upon written request by the Administrative Agent or any Lender, the Company shall deliver paper copies of the information referred to in Sections 6.01, 6.02 or 6.04 as requested by the Administrative Agent or Lender (as applicable) and (z) the Company shall notify (which may be by facsimile or electronic mail) the Administrative Agent of the posting of any such documents.  Notwithstanding anything contained herein, in every instance Borrower shall be required to provide paper copies of the Compliance Certificates required by Section 6.04 to the Administrative Agent; provided, however, that if such Compliance Certificate is first delivered by electronic means, the date of such delivery by electronic means shall constitute the date of delivery for purposes of compliance with Section 6.04.  Each Lender shall be solely responsible for timely accessing posted documents or requesting delivery of paper copies of such documents from the Administrative Agent and maintaining its copies of such documents.
 
The Company hereby acknowledges that (a) the Administrative Agent and/or the Joint Lead Arrangers will make available to the Lenders materials and/or information provided by or on behalf of the Company hereunder (collectively, Company Materials) by posting the Company Materials on IntraLinks or another similar electronic system (the Platform) and (b) certain of the Lenders may be public-side Lenders (i.e., Lenders that do not wish to receive material non-public information with respect to the Company or its securities) (each, a Public Lender).  The Company hereby agrees that it will identify that portion of the Company Materials that may be distributed to the Public Lenders and that (w) all such Company Materials shall be clearly and conspicuously marked PUBLIC which, at a minimum, shall mean that the word PUBLIC shall appear prominently on the first page thereof; (x) by marking Company Materials PUBLIC, the Company shall be deemed to have authorized the Administrative Agent, the Joint Lead Arrangers and the Lenders to treat such Company Materials as not containing any material non-public information (although it may be sensitive and proprietary) with respect to the Company or its securities for purposes of United States federal and state securities laws (provided, however, that to the extent such Company Materials constitute Information, they shall be treated as set forth in Section 11.16); (y) all Company Materials marked PUBLIC are permitted to be made available through a portion of the Platform designated Public Investor; and (z) the Administrative Agent and the Arrangers shall be entitled to treat any Company Materials that are not marked PUBLIC as being suitable only for posting on a portion of the Platform not designated Public Investor.

 
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Section 6.08.  Notification of Default.  The Company shall promptly after a Responsible Officer of a Loan Party has obtained knowledge thereof, notify the Administrative Agent (i) of the occurrence of any Default; and (ii) of any matter that has resulted or could reasonably be expected to result in a Material Adverse Effect.  Each notice pursuant to this Section 6.08 shall be accompanied by a written statement of a Responsible Officer of the Company (x) that such notice is being delivered pursuant to Section 6.08(i) or (ii) (as applicable) and (y) setting forth details of the occurrence referred to therein and stating what action the Company has taken and proposes to take with respect thereto.
 
Section 6.09.  Inspection of Books and Records.  The Company shall permit representatives and independent contractors of the Administrative Agent or the Required Lender or, as provided in the second proviso below, any Lender to visit and inspect any of its properties, to examine its corporate, financial and operating records as is reasonably specified, and make copies thereof or abstracts therefrom, and to discuss its affairs, finances and accounts with its directors, officers, and independent public accountants, all at the reasonable expense of Borrower and at such reasonable times during normal business hours, upon reasonable advance notice to the Company; provided that, excluding any such visits and inspections during the continuation of an Event of Default, only the Administrative Agent on behalf of the Lenders may exercise rights of the Administrative Agent and the Lenders under this Section 6.09 and the Administrative Agent shall not exercise such rights more often than two (2) times during any calendar year at Borrowers expense; provided further that when an Event of Default exists, the Administrative Agent or any Lender (or any of their respective representatives or independent contractors) may do any of the foregoing at the expense of Borrower at any time during normal business hours and upon reasonable advance notice.  The Administrative Agent and the Lenders shall give the Company the opportunity to participate in any discussions with the Companys independent public accountants.  Notwithstanding anything to the contrary in this Section 6.09, at all times during such visits and inspections to the Administrative Agent or any Lender (or their respective representatives or contractors) must comply with all applicable site regulations as the Company or its subsidiaries or any of their respective officers or employees may require by reasonable notice of the same.
 
Section 6.10.  Inspection Rights.  The Company shall permit representatives and independent contractors of the Administrative Agent or the Required Lenders or, as provided in the second proviso below, any Lender to visit and inspect any of its properties, to examine its corporate, financial and operating records as is reasonably specified, and make copies thereof or abstracts therefrom, and to discuss its affairs, finances and accounts with its directors, officers, and independent public accountants, all at the reasonable expense of Borrower and at such reasonable times during normal business hours, upon reasonable advance notice to the Company; provided that, excluding any such visits and inspections during the continuation of an Event of Default, only the Administrative Agent on behalf of the Lenders may exercise rights of the Administrative Agent and the Lenders under this Section 6.10 and the Administrative Agent shall not exercise such rights more often than two (2) times during any calendar year at Borrowers expense; providedfurther that when an Event of Default exists, the Administrative Agent or any Lender (or any of their respective representatives or independent contractors) may do any of the foregoing at the expense of Borrower at any time during normal business hours and upon reasonable advance notice.  The Administrative Agent and the Lenders shall give the Company the opportunity to participate in any discussions with the Companys independent public accountants.  Notwithstanding anything to the contrary in this Section 6.10, at all times during such visits and inspections, the Administrative Agent or any Lender (or their respective representatives or contractors) must comply with all applicable site regulations as the Company or its subsidiaries or any of their respective officers or employees may require by reasonable notice of the same.

 
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Section 6.11.  [Reserved].
 
Section 6.12.  Know Your Customer Checks.
 
(a)           If:
(i)       there is a Change in Law after the Closing Date.
 
(ii)       any change in the status of an Loan Party or the composition of the shareholders of Loan Party after the date of this Agreement; or
 
(iii)      a proposed assignment or transfer by a Lender of any of its rights and obligations under this Agreement to a party that is not a Lender prior to such assignment or transfer,
 
obliges the Administrative Agent or any Lender (or, in the case of clause (iii) of this Section 6.12(a), any prospective new Lender) to comply with know your customer or similar identification procedures in circumstances where the necessary information is not already available to it, each Loan Party shall promptly upon the request of the Administrative Agent supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Administrative Agent (for itself or on behalf of any Lender, or on behalf of any prospective new Lender) in order for the Administrative Agent, such Lender or, in the case of the event described in clause (iii) of this Section 6.12(a), any prospective new Lender to carry out and be reasonably satisfied it has complied with all necessary know your customer or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Loan Documents.
 
(b)           Following the giving of any notice pursuant to clause (c) of this Section 6.12, if the accession of such Additional Guarantor obliges the Administrative Agent or any Lender to comply with know your customer or similar identification procedures in circumstances where the necessary information is not already available to it, the Company shall promptly upon the request of the Administrative Agent supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Administrative Agent (for itself or on behalf of any Lender or on behalf of any prospective new Lender) in order for the Administrative Agent or such Lender or any prospective new Lender to carry out and be reasonably satisfied it has complied with all necessary know your customer or other similar checks under all applicable laws and regulations pursuant to the accession of such Subsidiary to this Agreement as an Additional Guarantor.
 
Section 6.13.     No Personal Liability.  No director, officer or employee of the Company or any other member of the Group shall be personally liable for any statement made by it in any certificate or other document required to be delivered to any Finance Party pursuant to any Loan Documents.

 
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Section 6.14.  Permanent Securities.
 
(a)           At any time and from time to time (but on not more than two occasions) during the period beginning on the 180th day after the Closing Date and ending on the first anniversary of the Closing Date, upon notice by the Joint Lead Arrangers to the Company stating that, in their opinion, market conditions are such that the conditions specified below can be satisfied (a Securities Notice), the Company shall (i) provide to the Joint Lead Arrangers as soon as reasonably practicable a complete printed preliminary offering memorandum usable in a customary high-yield road show relating to the issuance by Borrower of debt securities based upon the preliminary offering memorandum provided to the Joint Lead Arrangers by the Company on November 28, 2007 with appropriate updates (including, all financial statements and other data to be included therein (including all audited financial statements, all unaudited financial statements (each of which shall have undergone a SAS 100 review)) and all appropriate pro forma financial statements prepared in accordance with, or reconciled to, generally accepted accounting principles in the United States and prepared in accordance with Regulation S-X under the Securities Act (with such deviations therefrom as may be mutually agreed by Borrower and the Joint Lead Arranger), and substantially all other data (including selected financial data) that the SEC would require in a registered offering and (ii) execute an offering of Securities in a Rule 144A/Regulation S offering or other private placement (a Securities Offering) upon such terms and conditions (including currencies) as may be specified in the Securities Notice, it being understood that:
 
(x)           the Securities will have economic terms, including ranking, guarantees, interest rate, yields and redemption prices, that are customary for recently issued Rule 144A high yield debt securities of issuers of a similar type and are no less favorable to Borrower and/or Parent (as defined in the Commitment Papers) than those generally available in the high yield debt capital markets to issuers of securities having a creditworthiness comparable to Borrower and/or Parent (as defined in the Commitment Papers), and all other arrangements with respect to such Securities will be customary taking into account prevailing market conditions; provided that (i) the maturity date of the Securities shall not be less than 8 years after the Closing Date, (ii) all or any portion of the Securities may be denominated in U.S. dollars or Euros, at the election of the Joint Lead Arrangers and (iii) the guarantee structure will be consistent with that provided under this Agreement; and
 
(y)           the per annum yield (on a weighted average basis) shall not exceed 12.00%; provided that if any tranche of the Securities is rated Caa1 or lower by Moodys or CCC+ or lower by S&P, then the maximum per annum yield on such tranche shall be increased by 0.50%.
 
(b)           The Company shall cause its senior management personnel to participate in a customary road show for the sale of the Permanent Securities.
 
ARTICLE 7
 
EVENTS OF DEFAULT
 
Section 7.01.  Events of Default.  An Event of Default occurs if:
 
(a)           Non-Payment.  Any Loan Party fails to pay (i) when and as required to be paid herein, any amount of principal of any Loan, or (ii) within five (5) Business Days after the same becomes due, any interest on any Loan or any other amount payable hereunder or with respect to any other Loan Document; or

 
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(b)           Specific Covenants.  Borrower fails to perform or observe any term, covenant or agreement contained in Sections 5.01, 5.02, (solely with respect to the Company and Borrower), 5.06 - 5.09, 5.11, 5.14, 5.16, 5.19, 5.22 or Section 11.08; or
 
(c)           Other Defaults.  Any Loan Party fails to perform or observe any other covenant or agreement (not specified in Section 7.01(a) or (b) above) contained in any Loan Document on its part to be performed or observed and such failure continues for thirty (30) days, or solely with respect to a failure to comply with Section 6.01 or 6.02, ten (10) Business Days, after notice thereof by the Administrative Agent to the Company or Borrower; or
 
(d)           Representations and Warranties.  Any representation, warranty, certification or statement of fact made or deemed made by or on behalf of Borrower or any other Loan Party herein, in any other Loan Document, or in any document that is an exhibit to a Loan Document (or any certification by a Responsible Officer expressly contemplated by this Agreement) shall be incorrect or misleading in any material respect when made or deemed made; or
 
(e)           Cross-Default.  Any Loan Party or any Restricted Subsidiary (i) fails to make any payment beyond the applicable grace period with respect thereto, if any (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise) in respect of any Indebtedness (other than Indebtedness hereunder) having an aggregate principal amount of not less than the Threshold Amount, or (ii) fails to observe or perform any other agreement or condition relating to any such Indebtedness of not less than the Threshold Amount (any such Indebtedness, Threshold Indebtedness), or any other event occurs (other than, with respect to Indebtedness consisting of Swap Contracts, termination events or equivalent events pursuant to the terms of such Swap Contracts), the effect of which default or other event is to cause, or to permit the holder or holders of such Indebtedness (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause, with the giving of notice if required, such Indebtedness to become due or to be repurchased, pre-paid, defeased or redeemed (automatically or otherwise), or an offer to repurchase, prepay, defease or redeem such Indebtedness to be made, prior to its Stated Maturity; provided that this clause (e)(ii) shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness, if such sale or transfer is permitted hereunder and under the documents providing for such Indebtedness; provided further that such failure is unremedied and is not waived by the holders of such Indebtedness prior to any termination of the Commitments or acceleration of the Loans pursuant to Section 8.02; or
 
(f)           Insolvency Proceedings, Etc.  Any of the Company, Borrower or any Material Subsidiary to the fullest extent permitted under applicable mandatory pro-visions of law institutes or consents to the institution of any proceeding under any Debtor Relief Law or files for the opening of insolvency proceedings or a third person files for the opening of insolvency proceedings, or makes an assignment for the benefit of creditors; or applies for or consents to the appointment of any receiver, trustee (not being a custodian), custodian, conservator, liquidator (not being a bewindvoerder), rehabilitator, administrator, administrative receiver or similar officer for it or for all or any material part of its property under any applicable Debtor Relief Laws; or any receiver, trustee, custodian, conservator, liquidator, rehabilitator, administrator, administrative receiver or similar officer is appointed without the application or consent of such Person and the appointment continues undischarged or unstayed for sixty (60) calendar days; or any proceeding under any Debtor Relief Law relating to any such Person or to all or any material part of its property is instituted without the consent of such Person and continues undismissed or unstayed for sixty (60) calendar days, or an order for relief is entered in any such proceeding; or
 
(g)           Inability to Pay Debts; Attachment.  (i) Any of the Company, Borrower or any Material Subsidiary becomes unable or admits in writing its inability or fails generally to pay its debts in excess of the Threshold Amount as they become due, or (ii) any writ or warrant of attachment or execution or similar process is issued or levied against all or any material part of the property of Borrower and the Restricted Subsidiaries, taken as a whole, and is not released, vacated or fully bonded within sixty (60) days after its issue or levy, in each case, for the purposes of any subsidiary of the Company domiciled in the United Kingdom, ignoring the deeming provisions of Section 123(1)(a) of the Insolvency Act 1986; or

 
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(h)           Judgments.  There is entered against any Loan Party or any Restricted Subsidiary one or more final judgments or order for the payment of money in an aggregate amount exceeding the Threshold Amount (to the extent not covered by independent third-party insurance as to which the insurer has been notified of such judgment or order and has not denied coverage) and such judgments or orders shall not have been satisfied, vacated, discharged or stayed or bonded pending an appeal for a period of sixty (60) consecutive days; or
 
(i)           Invalidity of Guarantees.  Any material portion of the Guarantees of the Loans, at any time after its execution and delivery and for any reason other than as expressly permitted hereunder or thereunder (including as a result of a transaction permitted under Section 5.11 or 5.19) or as a result of acts or omissions by the Administrative Agent or Collateral Agent or any Lender or the satisfaction in full of all the Loan Party Obligations, ceases to be in full force and effect; or any Loan Party contests in writing the validity or enforceability of any provision of any Loan Document or the validity or priority of a Lien as required by the Security Documents on a material portion of the Collateral; or any Loan Party denies in writing that it has any or further liability or obligation under any Loan Document (other than as a result of repayment in full of the payment Loan Party Obligations and termination of the Aggregate Commitments), or purports in writing to revoke or rescind any Loan Document; or it becomes unlawful for any Loan Party to perform any of its payment Loan Party Obligations under the Loan Documents; or
 
(j)           Security Documents.  Any Security Document or the Intercreditor Agreement after delivery thereof pursuant to Section 4.01 or 5.17 shall for any reason (other than pursuant to the terms hereof or thereof or solely as a result of acts or omissions of the Administrative Agent or any Lender) ceases to create a valid and perfected Lien, with the priority required by the Security Documents and th Intercreditor Agreement on and security interest in any material portion of the Collateral, subject to Liens permitted under Section 5.14, except (i) to the extent that any such loss of perfection or priority results from the failure of the Administrative Agent or the Collateral Agent to (a) maintain possession of certificates actually delivered to it representing securities pledged under the Security Documents or (b) file Uniform Commercial Code continuation statements, (ii) as to Collateral consisting of Real Property to the extent that such losses are covered by a lenders title insurance policy and such insurer has not denied or failed to acknowledge coverage, or (iii) any of the Equity Interests of Borrower ceasing to be pledged pursuant to any Security Agreement free of Liens other than Liens created by such Security Agreement or any nonconsensual Liens arising solely by operation of Law; or
 
(k)           ERISA.  An ERISA Event or any similar event with respect to a Foreign Plan occurs which, together with all other ERISA Events (or similar events with respect to Foreign Plans) that have occurred, has resulted or could reasonably be expected to result in a Material Adverse Effect.
 
Notwithstanding the foregoing, Events of Default under Section 7.01(e) and (h) shall not apply with respect to Millennium Holdings LLC or any Person that is a subsidiary of Millennium Holdings LLC as of the Closing Date (collectively, the Millennium Holdings Group) if, at the time of determination, (x) the event that would otherwise give rise to such an Event of Default is excluded from the corresponding provision in all other Threshold Indebtedness or would otherwise not give rise to an event of default thereunder in accordance with the terms of such Threshold Indebtedness and (y) the Millennium Holdings Group, taken as a whole, is not a Material Subsidiary.

 
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Section 7.02.  Remedies.
 
(a)           If any Event of Default occurs and is continuing, the Administrative Agent, at the request of the Required Lenders, may declare the Loans to be terminated forthwith and the principal, premium, if any, interest and any other monetary obligations on all the then outstanding Loans to be due and payable immediately.  Upon the effectiveness of such declaration, the Loans will immediately terminate and such principal, premium, interest and other obligations will be due and payable immediately, without presentment, demand, protest or any other notice of any kind, all of which are expressly waived by Borrower.
 
(b)           Notwithstanding the foregoing, during the period from the Closing Date until the date that is 90 days after the Closing Date (the Clean-Up Period), a breach of any representation or warranty or a breach of any covenant or an Event of Default which arises solely with respect to Lyondell or any of its subsidiaries will be deemed not to be a breach of representation or warranty or a breach of covenant or an Event of Default (as the case may be) if, it would have been (if it were not for this provision) a breach of representation or warranty or a breach of covenant or an Event of Default only by reason of circumstances not known to the Company to exist on July 16, 2007 (or, if known, disclosed to the Administrative Agent on or prior to July 16, 2007) and relating  to Lyondell and its subsidiaries or any of them if and for so long as the circumstances giving rise to the relevant breach of representation or warranty or breach of covenant or Event of Default:
 
(i)       are not the result of any positive action taken by the Company or any of its subsidiaries (other than Lyondell and its subsidiaries);
 
(ii)       the Company notifies the Administrative Agent promptly upon becoming aware of the same; and
 
(iii)      reasonable efforts are being made to remedy the same;
 
provided that if the relevant circumstances are continuing at the end of the Clean-Up Period there shall be a breach of representation or warranty, breach of covenant or Event of Default, as the case may be.
 
Section 7.03.  Application of Funds on Enforcement.  After the exercise of remedies provided for in Section 7.02 (or after the Loans have automatically become immediately due and payable), any amounts received on account of the Loan Party Obligations shall be applied by the Administrative Agent in the following order (to the fullest extent permitted by mandatory provisions of applicable Law):
 
First, to payment of that portion of the payment Loan Party Obligations constituting fees, indemnities, expenses and other amounts (other than principal and interest, but including Attorney Costs payable under Section 11.05(a) and amounts payable under Sections 2.10 through 2.16) payable to the Administrative Agent or the Collateral Agent in its capacity as such;
 
Second, to payment of that portion of the payment Loan Party Obligations constituting fees, indemnities and other amounts (other than principal and interest) payable to the Lenders (including Attorney Costs payable under Section 11.05(a) and amounts payable under Sections 2.10 through 2.16), ratably among them in proportion to the amounts described in this clause Second payable to them;

 
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Third, to payment of that portion of the payment Loan Party Obligations constituting accrued and unpaid interest on the Loans, ratably among the Lenders in proportion to the respective amounts described in this clause Third payable to them;
 
Fourth, to payment of that portion of the payment Loan Party Obligations constituting unpaid principal of the Loans, ratably among the Lenders in proportion to the respective amounts described in this clause Fourth held by them;
 
Fifth, to the payment of all other payment Loan Party Obligations of Borrower that are due and payable to the Administrative Agent and the other Secured Parties on such date, ratably based upon the respective aggregate amounts of all such Loan Party Obligations owing to the Administrative Agent and the other Secured Parties on such date; and
 
Last, the balance, if any, after all of the payment Loan Party Obligations have been paid in full, to Borrower or as otherwise required by Law.
 
ARTICLE 8
 
[RESERVED]
 
ARTICLE 9
 
GUARANTEE
 
Section 9.01.  The Guarantee.
 
Each Guarantor hereby jointly and severally with the other Guarantors guarantees, as a primary obligor and not as a surety to each Secured Party and their respective successors and assigns, the prompt payment in full when due (whether at Stated Maturity, by required prepayment, declaration, demand, by acceleration or otherwise) of the principal of and interest (including any interest, fees, costs or charges that would accrue but for the provisions of (i) the Title 11 of the United States Code after any bankruptcy or insolvency petition under Title 11 of the United States Code and (ii) any other Debtor Relief Laws) on the Loans made by the Lenders to, and the Notes held by each Lender of, Borrower (other than such Guarantor), and all other Loan Party Obligations from time to time owing to the Secured Parties by any Loan Party under any Loan Document, in each case strictly in accordance with the terms thereof (such obligations being herein collectively called the Guaranteed Obligations).  The Guarantors hereby jointly and severally agree that if Borrower or other Guarantor(s) shall fail to pay in full when due (whether at Stated Maturity, by acceleration or otherwise) any of the Guaranteed Obligations, the Guarantors will promptly pay the same in cash, without any demand or notice whatsoever, and that in the case of any extension of time of payment or renewal of any of the Guaranteed Obligations, the same will be promptly paid in full when due (whether at extended maturity, by acceleration or otherwise) in accordance with the terms of such extension or renewal.
 
Section 9.02.  Obligations Unconditional.
 
The obligations of the Guarantors under Section 9.01 shall constitute a guaranty of payment and to the fullest extent permitted by applicable Law, are absolute, irrevocable and unconditional, joint and several, irrespective of the value, genuineness, validity, regularity or enforceability of the Guaranteed Obligations of Borrower under this Agreement, the Notes, if any, or any other agreement or instrument referred to herein or therein, or any substitution, release or exchange of any other guarantee of or security for any of the Guaranteed Obligations, and, irrespective of any other circumstance whatsoever that might otherwise constitute a legal or equitable discharge or defense of a surety or Guarantor (except for payment in full).  Without limiting the generality of the foregoing, it is agreed that the occurrence of any one or more of the following shall not alter or impair the liability of the Guarantors hereunder which shall remain absolute, irrevocable and unconditional under any and all circumstances as described above:
 
 
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(i)       at any time or from time to time, without notice to the Guarantors, the time for any performance of or compliance with any of the Guaranteed Obligations shall be extended, or such performance or compliance shall be waived;
 
(ii)       any of the acts mentioned in any of the provisions of this Agreement or the Notes, if any, or any other agreement or instrument referred to herein or therein shall be done or omitted;
 
(iii)      the maturity of any of the Guaranteed Obligations shall be accelerated, or any of the Guaranteed Obligations shall be amended in any respect, or any right under the Loan Documents or any other agreement or instrument referred to herein or therein shall be amended or waived in any respect or any other guarantee of any of the Guaranteed Obligations or any security therefor shall be released or exchanged in whole or in part or otherwise dealt with;
 
(iv)     any Lien or security interest granted to, or in favor of, any Lender or Agent as security for any of the Guaranteed Obligations shall fail to be perfected; or
 
(v)      the release of any other Guarantor pursuant to Section 9.09.
 
The Guarantors hereby expressly waive diligence, presentment, demand of payment, protest and all notices whatsoever, and any requirement that any Secured Party exhaust any right, power or remedy or proceed against Borrower under this Agreement or the Notes, if any, or any other agreement or instrument referred to herein or therein, or against any other Person under any other guarantee of, or security for, any of the Guaranteed Obligations.  The Guarantors waive any and all notice of the creation, renewal, extension, waiver, termination or accrual of any of the Guaranteed Obligations and notice of or proof of reliance by any Secured Party upon this Guarantee or acceptance of this Guarantee, and the Guaranteed Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred in reliance upon this Guarantee, and all dealings between Borrower and the Secured Parties shall likewise be conclusively presumed to have been had or consummated in reliance upon this Guarantee.  This Guarantee shall be construed as a continuing, absolute, irrevocable and unconditional guarantee of payment without regard to any right of offset with respect to the Guaranteed Obligations at any time or from time to time held by Secured Parties, and the obligations and liabilities of the Guarantors hereunder shall not be conditioned or contingent upon the pursuit by the Secured Parties or any other Person at any time of any right or remedy against Borrower or against any other Person which may be or become liable in respect of all or any part of the Guaranteed Obligations or against any collateral security or guarantee therefor or right of offset with respect thereto.  This Guarantee shall remain in full force and effect and be binding in accordance with and to the extent of its terms upon the Guarantors and the successors and assigns thereof, and shall inure to the benefit of the Lenders, and their respective successors and assigns, notwithstanding that from time to time during the term of this Agreement there may be no Guaranteed Obligations outstanding.

 
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Section 9.03.  Reinstatement.
 
The obligations of the Guarantors under this Article 9 shall be automatically reinstated if and to the extent that for any reason any payment by or on behalf of Borrower or other Loan Party in respect of the Guaranteed Obligations is rescinded or must be otherwise restored by any holder of any of the Guaranteed Obligations, whether as a result of any proceedings in bankruptcy or reorganization or otherwise.
 
Section 9.04.  Subrogation; Subordination.
 
Each Guarantor hereby agrees that until the payment and satisfaction in full in cash of all Guaranteed Obligations and the expiration and termination of the Commitments of the Lenders under this Agreement it shall waive any claim and shall not exercise any right or remedy, direct or indirect, arising by reason of any performance by it of its guarantee in Section 9.01, whether by subrogation or otherwise, against Borrower or any other Guarantor of any of the Guaranteed Obligations or any security for any of the Guaranteed Obligations.  Any Indebtedness of any Loan Party permitted pursuant to Section 5.08(c)(ii) or 5.08(c)(v) shall be subordinated to the Loan Party Obligations of such Loan Party in the manner set forth in the Intercompany Note evidencing such Indebtedness.
 
Section 9.05.  Remedies.
 
The Guarantors jointly and severally agree that, as between the Guarantors and the Lenders, the obligations of Borrower under this Agreement and the Notes, if any, may be declared to be forthwith due and payable as provided in Section 7.02 (and shall be deemed to have become automatically due and payable in the circumstances provided in Section 7.02) for purposes of Section 9.01, notwithstanding any stay, injunction or other prohibition preventing such declaration (or such obligations from becoming automatically due and payable) as against Borrower and that, in the event of such declaration (or such obligations being deemed to have become automatically due and payable), such obligations (whether or not due and payable by Borrower) shall forthwith become due and payable by the Guarantors for purposes of Section 9.01.
 
Section 9.06.  Instrument for the Payment of Money.
 
Each Guarantor hereby acknowledges that the guarantee in this Article 9 constitutes an instrument for the payment of money, and consents and agrees that any Lender or Agent, at its sole option, in the event of a dispute by such Guarantor in the payment of any moneys due hereunder, shall have the right to bring a motion-action under New York CPLR Section 3213.
 
Section 9.07.  Continuing Guarantee.
 
The guarantee in this Article 9 is a continuing guarantee of payment, and shall apply to all Guaranteed Obligations whenever arising.
 
Section 9.08.  General Limitation on Guarantee Obligations.
 
In any action or proceeding involving any state corporate limited partnership or limited liability company law, or any applicable state, federal or foreign bankruptcy, insolvency, reorganization or other Law affecting the rights of creditors generally, if the obligations of any Guarantor under Section 9.01 would otherwise be held or determined to be void, voidable, invalid or unenforceable, or subordinated to the claims of any other creditors, on account of the amount of its liability under Section 9.01, then, notwithstanding any other provision to the contrary, the amount of such liability shall, without any further action by such Guarantor, any Loan Party or any other Person, be automatically limited and reduced to the highest amount (after giving effect to the right of contribution established in Section 9.10) that is valid and enforceable and not subordinated to the claims of other creditors as determined in such action or proceeding.

 
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Section 9.09.  Release of Guarantors.
 
If, in compliance with the terms and provisions of the Loan Documents, all or substantially all of the Equity Interests or property of any Guarantor are sold or otherwise transferred (a Transferred Guarantor) to a Person or Persons, none of which is a Loan Party, such Transferred Guarantor shall, upon the consummation of such sale or transfer, be automatically released from its obligations under this Agreement (including under Section 10.05(b)) and its obligations to pledge and grant any Collateral owned by it pursuant to any Security Document and, in the case of a sale of all or substantially all of the Equity Interests of the Transferred Guarantor, the pledge of such Equity Interests to the Collateral Agent pursuant to the Security Documents shall be automatically released, and, so long as Borrower shall have provided the Agents such certifications or documents as any Agent shall reasonably request, the Collateral Agent shall take such actions as are necessary to effect each release described in this Section 9.09 in accordance with the relevant provisions of the Security Documents.
 
Section 9.10.  Right of Contribution.
 
Each Guarantor hereby agrees that to the extent that a Subsidiary Guarantor shall have paid more than its proportionate share of any payment made hereunder, such Subsidiary Guarantor shall be entitled to seek and receive contribution from and against any other Guarantor hereunder which has not paid its proportionate share of such payment.  Each Subsidiary Guarantors right of contribution shall be subject to the terms and conditions of Section 9.04.  The provisions of this Section 9.10 shall in no respect limit the obligations and liabilities of any Subsidiary Guarantor to the Administrative Agent and the Lenders, and each Subsidiary Guarantor shall remain liable to the Administrative Agent and the Lenders for the full amount guaranteed by such Subsidiary Guarantor hereunder.
 
Section 9.11.  Certain Dutch Matters.
 
(a)           Any obligation, guarantee or undertaking granted or assumed by a Person incorporated or organized under the laws of The Netherlands pursuant to this Agreement (including but not limited to this Article9) or any other Loan Document shall be deemed not to be undertaken or incurred by such Person to the extent that the same would constitute unlawful financial assistance within the meaning of Section 2:207c or 2:98c of the Dutch Civil Code or any other applicable financial assistance rules under any relevant jurisdiction (the Prohibition) and the provisions of this Agreement and the other Loan Documents shall be construed accordingly.  For the avoidance of doubt it is expressly acknowledged that the relevant Persons incorporated under the laws of The Netherlands will continue to guarantee and secure all such obligations which, if included, do not constitute a violation of the Prohibition.
 
(b)           Any amount which may be guaranteed by Basell Benelux B.V., Lyondell Chemie International B.V. or Lyondell Chemie Nederland B.V. shall not exceed the amount permitted to be guaranteed or otherwise incurred as Debt (as defined in the 2027 Notes) in accordance with the terms of the 2027 Notes after taking into account all other Debt of all Restricted Subsidiaries (as defined in the 2027 Notes), provided that such limitation on the amount guaranteed shall not operate so as to release Basell Benelux B.V., Lyondell Chemie International B.V. or Lyondell Chemie Nederland B.V. from their respective obligations under this Article 9 in excess of such amounts and further provided that upon the refinancing in full of the 2027 Notes, the limitations on guarantees which exist as a result of the provisions of the 2027 Notes shall be automatically removed from the date of such refinancing and, accordingly, this paragraph (b), restricting it as a Guarantor in this Agreement, shall cease to operate and have any force and effect from the date of such refinancing.  Additionally, the respective obligations of Basell Benelux B.V., Lyondell Chemie International B.V. and Lyondell Chemie Nederland B.V. under this Article 9 shall apply only insofar as required to guarantee the payment obligations of any Loan Party with respect to any proceeds of any Loan directly or indirectly made available by such Loan Party to Basell Benelux B.V., Lyondell Chemie International B.V. or Lyondell Chemie Nederland B.V. through intra-group loans or facilities and limited to the amount of such loans or facilities available to Basell Benelux B.V., Lyondell Chemie International B.V. or Lyondell Chemie Nederland B.V. as outstanding from time to time.
 
 
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Section 9.12.  Guarantee Limitations.
 
(a)           To the extent that the guarantee created hereunder is granted by a Guarantor incorporated in Germany as a limited liability company (Gesellschaftmit beschrnkter Haftung) (each a German GmbH Guarantor) or established in Germany as a limited partnership (Kommanditgesellschaft) with a limited liability company (Gesellschaft mit beschrnkter Haftung) as general partner (a German GmbH & Co. KG Guarantor and, together with any German GmbH Guarantor hereinafter referred to as a German Guarantor) and secures debt other than debt of such German Guarantor itself or any of its subsidiaries, the following shall apply:
 
(i)       each German Guarantor guarantees the payment of all and any amounts which correspond to funds that have been borrowed under this Agreement and have been on-lent to, or otherwise passed on to, the relevant German Guarantor or any of its subsidiaries, to the extent that any such amount is still outstanding at the time the relevant demand is made against such German Guarantor; and
 
(ii)      each German Guarantor further guarantees the payment of any amount in excess of the amounts payable by the relevant German Guarantor pursuant to paragraph (a)(i) of this Section 9.12, its relevant liability is however limited as follows:
 
(A)             each Secured Party shall not be entitled to enforce the guarantee in an amount exceeding the amounts payable under paragraph (a)(i) of this Section 9.12 to the extent that the German Guarantor is able to demonstrate that the further enforcement of the guarantee exceeding the amounts payable under paragraph (a)(i) of this Section 9.12 has the effect of:
 
 
(1)
reducing the relevant German Guarantors or, where the German Guarantor is a German GmbH & Co. KG Guarantor, its general partners net assets (Nettovermgen) (the Net Assets) to an amount less than its or, where the German Guarantor is a German GmbH & Co. KG Guarantor, its general partners stated share capital (Stammkapital); or
 
 
(2)
(if the Net Assets are already an amount less than the stated share capital) causing such amount to be further reduced,
 
and thereby affecting the assets required for the obligatory preservation of its stated share capital according to 30, 31 German GmbH-Act (GmbH-Gesetz) (the GmbH-Act).

 
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(B)           The value of the Net Assets shall be determined in accordance with GAAP consistently applied by the German Guarantor in preparing its unconsolidated balance sheets (Jahresabschluss according to 42 GmbH-Act, 242, 264 of the German Commercial Code (HGB)) in the previous years subject to applicable law, save that:
 
 
(1)
the amount of any increase of the stated share capital (Stammkapital) of the German Guarantor or, where the German Guarantor is a German GmbH & Co. KG Guarantor, its general partner, registered after the date of this Agreement without the prior written consent of the Administrative Agent shall be deducted from the relevant stated share capital; and
 
 
(2)
loans and other liabilities incurred in violation of the provisions of this Agreement shall be disregarded.
 
(C)           The limitations set out in paragraph (a)(ii) of this Section 9.12 shall only apply if and to the extent that within fifteen (15) Business Days following the demand against the relevant German Guarantor under the guarantee by the Administrative Agent, the managing director(s) on behalf of such German Guarantor have confirmed in writing to the Administrative Agent (x) to what extent the guarantee is an up-stream or cross-stream guarantee and (y) which amount of such cross-stream and/or upstream guarantee cannot be enforced (only if exceeding the amounts payable under paragraph (a)(i) of this Section 9.12) as it would cause the Net Assets of such Guarantor or, where the German Guarantor is a German GmbH & Co. KG Guarantor, its general partner to fall below its stated share capital (Stammkapital) or, if the Net Assets are already less than the stated share capital (Stammkapital) of such German Guarantor or, where the German Guarantor is a German GmbH & Co. KG Guarantor, its general partner, would cause such amount to be further reduced (the Management Determination).
 
(D)           If the Administrative Agent disagrees with the Management Determination, the Administrative Agent shall be entitled to enforce the guarantee up to an amount exceeding the amounts payable under paragraph (a)(i) of this Section 9.12 which is undisputed between itself and the relevant German Guarantor in accordance with the provisions of paragraph (a)(i) of this Section 9.12. In relation to the amount which is disputed, the Administrative Agent and such German Guarantor shall within 35 calendar days (or such longer period as has been agreed between the Company and the Administrative Agent for such purpose) from the date the Administrative Agent has contested the Management Determination request a determination by auditors of international standing and reputation of the amount of the available Net Assets (the Auditors Determination). The amount determined as the available Net Assets in the Auditors Determination shall be (except for manifest error) binding for all parties.  The costs of the Auditors Determination shall be borne by the Company.
 
(E)           The limitation set out in paragraph (a)[(ii)] of this Section 9.12 shall not apply if (x) the German Guarantor and/or, where the German Guarantor is a German GmbH & Co. KG Guarantor, its general partner has filed for insolvency or temporary insolvency proceedings have been commenced and/or (y) the Management Determination is not delivered within the time limit set out in this Section 9.12.
 
(F)           If:

 
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(1)
and to the extent the guarantee is enforced without regard to the limitation set forth in paragraph (a)(ii) of this Section 9.12 because the Management Determination was not delivered within the relevant time frame; or
 
 
(2)
the amount of the available Net Assets pursuant to the Auditors Determination is lower than the amount stated in the Management Determination,
 
the Lenders shall repay to the relevant German Guarantor upon demand of the relevant German Guarantor the amount exceeding any amount to be paid under paragraph (a)(i) of this Section 9.12 if and to the extent already paid to the Lenders which is necessary to maintain its stated share capital (Stammkapital), calculated as of the date the demand under the guarantee was made and in accordance with paragraphs (a)(ii) of this Section 9.12, provided such demand is in written form addressed to the Administrative Agent on behalf of the Lenders and is submitted within six months (Ausschlussfrist) after the date the guarantee is enforced without regard to the limitation set forth in paragraph (a)(ii)(A) of this Section 9.12. If pursuant to the Auditors Determination the amount of the available Net Assets is higher than set out in the Management Determination the relevant German Guarantor shall pay such amount to the extent not already paid to the Lenders within five (5) Business Days after receipt of the Auditors Determination.
 
(G)           If the German Guarantor intends to demonstrate that the enforcement of the guarantee in an amount exceeding any amount to be paid under paragraph (a)(i) of this Section 9.12 has led to one of the effects referred to in paragraph (a)(ii) of this Section 9.12, then the German Guarantor and, where the German Guarantor is a German GmbH & Co. KG Guarantor, also its general partner shall realize at market value any and all of its assets that are shown in its balance sheet with a book value (Buchwert) that is in the opinion of the Administrative Agent significantly lower than their market value if such assets are not necessary for the relevant German Guarantors or, where the German Guarantor is a German GmbH & Co. KG Guarantor, its general partners business (nicht betriebsnotwendig), to the extent necessary to satisfy the amounts requested under this paragraph (a)(ii).
 
(H)           The limitation set out in paragraph (a)(ii) of this Section 9.12 does not affect the right of the Lenders to claim again any outstanding amount at a later point in time if and to the extent that paragraph (a)(ii) of this Section 9.12 would allow this at that later point.
 
(iii)         Notwithstanding the foregoing the Administrative Agent and the Lenders waive their rights to enforce the guarantee as set out below to the extent that and as long as such enforcement would be in violation of the prohibition of an intervention threatening the existence of that German Guarantor (Versto gegen das Verbot des existenzvernichtenden Eingriffs).
 
The limitation and waiver of enforcement of the guarantee set out in sub-paragraph (iii) of this Section 9.12 shall only apply:
 
(A)           if and to the extent that within 15 Business Days following the demand against the relevant German Guarantor under the guarantee by the Administrative Agent, the managing directors on behalf of such German Guarantor have confirmed and proved in writing to the Administrative Agent to what extent the guarantee cannot be enforced as it would cause a violation of the prohibition of an intervention threatening the existence of that German Guarantor (Verstogegen das Verbot des existenzvernichtenden Eingriffs), (the Management Determination of an Intervention Threatening the Existence of the German Guarantor); and

 
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(B)           if the Administrative Agent disagrees with the Management Determination of an Intervention Threatening the Existence of the German Guarantor the proceedings set out in paragraph (a)(ii)(D) of this Section 9.12 shall apply mutatis mutandis.
 
This sub-paragraph (iii) shall apply mutatis mutandis if the guarantee is granted by a Guarantor incorporated as a limited liability partnership (GmbH & Co. KG) and secures debt other than debt of such Guarantor itself or any of its Subsidiaries.
 
(iv)          If the law is changed to the effect that Sections 30 German GmbH-Act is not applicable when a domination agreement (Beherrschungsvertrag) or a profit and loss pooling (Ergebnisabfhrungsvertrag) between the relevant German Guarantor and a borrower/guarantor (the Relevant Borrower/Guarantor) exists (directly, or indirectly through a chain of domination or profit and loss pooling agreements between the Relevant Borrower and its subsidiaries and the German Guarantor) then the limitations provided for in this Section 11.12 shall no longer apply to the extent that the Guarantee covers the obligations of the Relevant Borrower/Guarantor.
 
(b)           For the avoidance of doubt, nothing in this Agreement shall be interpreted as a restriction or limitation of (i) the enforcement of the guarantee to the extent such guarantee covering obligations owed by any of the respective German Guarantors direct or indirect subsidiaries or (ii) the enforcement of any claim of any Secured Party against Borrower (in such capacity) under this Agreement.
 
Section 9.13.  Guarantee Limitations in Respect of Millennium Chemicals Inc.
 
Any amount that may be guaranteed by Millennium Chemicals Inc or any of its subsidiaries, shall not exceed the amount permitted to be Incurred (as defined in the Millennium Indenture) as Funded Debt (as defined in the Millennium Indenture) as more fully set forth in Section 1009 of the Millennium Indenture; provided, however, that upon the refinancing in full of the Millennium Notes, this Section 9.13 shall cease to operate and have any force and effect as of the date of such refinancing.
 
Section 9.14.  Non-U.S. Guarantee Limitations.
 
This guarantee under this Agreement by any Loan Parties outside the United States does not apply to any liability to the extent that it would result in this guarantee constituting unlawful financial assistance within the meaning of Section 151 of the Companies Act 1985 or any equivalent and applicable provisions under the laws of the jurisdiction of incorporation of the relevant Loan Party and, with respect to any Loan Parties which accede to this Agreement by way of joinder after the Closing Date, is subject to any limitations set out in the joinder agreement in respect of this Agreement applicable to such Loan Parties.
 
Section 9.15.  Limitation on Guarantee by Additional Guarantors.

 
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(a)           The guarantee of any Person which becomes a Loan Party pursuant to an appropriate joinder agreement in respect of this Agreement that is not a Loan Party domiciled in either the Grand Duchy of Luxembourg or Germany is subject to any limitations relating to that additional Loan Party set out in any such joinder agreement, including (to the extent applicable) certain restrictions under the 2027 Notes and the Millennium Indenture.
 
(b)           The guarantee of any Person which becomes a Loan Party pursuant to an appropriate joinder agreement in respect of this Agreement that is a Loan Party domiciled in The Netherlands shall be subject to the limitations set out in paragraph (a) of Section 9.11 and (to the extent applicable) certain restrictions under the 2027 Notes, in each case, as set out in such joinder agreement in form and substance satisfactory to the Administrative Agent (acting reasonably).
 
ARTICLE 10
 
THE AGENTS
 
Section 10.01.  Appointment.
 
(a)           In order to expedite the transactions contemplated by this Agreement, each of the Finance Parties (other than the Administrative Agent) hereby appoints Merrill Lynch Capital Corporation to act as Administrative Agent and each of the Finance Parties (other than the Collateral Agent) hereby appoints Citibank, N.A. to act as Collateral Agent.  Each of the Lenders and each assignee of any such Lender hereby irrevocably authorizes each Agent to take such actions on behalf of such Lender or assignee and to exercise such powers as are specifically delegated to such Agent by the terms and provisions hereof and of the other Loan Documents, together with such actions and powers as are reasonably incidental thereto.  The Administrative Agent is hereby expressly authorized by the Lenders, without hereby limiting any implied authority, (i) to receive on behalf of the Lenders all payments of principal of and interest on the Loans, and all other amounts due to the Lenders hereunder, and promptly to distribute to each Lender its proper share of each payment so received; (ii) to give notice on behalf of each of the Lenders of any Event of Default specified in this Agreement of which the Administrative Agent has actual knowledge acquired in connection with the performance of its duties as Administrative Agent hereunder; and (iii) to distribute to each Lender copies of all notices, financial statements and other materials delivered by the Company or Borrower pursuant to this Agreement as received by the Administrative Agent.  Without limiting the generality of the foregoing, each of the Agents is hereby expressly authorized to execute any and all other documents (including the Security Documents (and releases thereof) and the Intercreditor Agreement) with respect to the Collateral and in the name of and on behalf of the Lenders and the other Secured Parties as their attorney-in-fact (and each Lender appoints Citibank, N.A. as Agent as its and their attorney-in-fact for such purpose and such Agent is hereby released from the restrictions imposed by Section 181 of the German Civil Code (BGB)), as contemplated by and in accordance with the provisions of this Agreement and the Security Documents.
 
Each Lender hereby irrevocably appoints, designates, authorizes and releases from the restrictions on self-dealing (18A of the German Civil Code) the Collateral Agent (the Restricted Collateral Agent) to execute on its behalf, on behalf of the other Secured Parties, and on behalf of the holders of the Equistar Notes and the trustee under the Equistar Notes, security agreements, pledge agreements, mortgages and/or other collateral documents (the Equistar Restricted Collateral Documents) and to take such action on its and their behalf under the provisions of this Agreement and the Equistar Restricted Collateral Documents and to exercise such powers and perform such duties as are expressly delegated to it by the terms of this Agreement or the Equistar Restricted Collateral Documents, together with such powers as are reasonably incidental thereto, and the Restricted Collateral Agent accepts such assignment.  In addition, each Lender hereby irrevocably appoints, designates, authorizes and releases from the restrictions on self-dealing (18A of the German Civil Code) the Restricted Collateral Agent to execute on its behalf, on behalf of the other Secured Parties, and on behalf of the Arco Notes Secured Parties, the Restricted Security Agreement (as defined in the Senior Secured Credit Facilities) and to take such action on its and their behalf under the provisions of this Agreement and the Restricted Security Agreement and to exercise such powers and perform such duties as are expressly delegated to it by the terms of this Agreement or the Restricted Security Agreement, together with such powers as are reasonably incidental thereto, and the Restricted Collateral Agent accepts such assignment.

 
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In the event that any party other than the Lenders and the Agents shall participate in all or any portion of the Collateral pursuant to any Security Document, all rights and remedies in respect of such Collateral shall be controlled by the Administrative Agent and the Collateral Agent as set forth in such Security Document.
 
(b)           Without limiting the provisions of this Article 10;
 
(i)                 each other Loan Party authorises and releases from the restrictions imposed by Section 181 of the German Civil Code each of the Administrative Agent or, as the case may be, the Collateral Agent and each of the Joint Lead Arrangers to agree, accept and sign on its behalf the terms of any reliance, release or engagement letter in relation to any Report or any other report or letter provided by any person in connection with the Transaction Documents or the transactions contemplated in them (including any net asset letter in connection with financial assistance procedures) and any replacement thereof); and
 
(ii)                 each Loan Party agrees to be bound by the terms of any reliance, release or engagement letter (in each case, in a form agreed by the Joint Lead Arrangers) in relation to any Report or any other report or letter provided by any person in connection with the Transaction Documents or the transactions contemplated in them (including any net asset letter in connection with financial assistance procedures and any replacement thereof).
 
(c)           Neither the Agents nor any of their respective directors, officers, employees or agents shall be liable as such for any action taken or omitted by any of them except for its or his own gross negligence or willful misconduct, or be responsible for any statement, warranty or representation herein or the contents of any document delivered in connection herewith, or be required to ascertain or to make any inquiry concerning the performance or observance by Borrower or any other Loan Party of any of the terms, conditions, covenants or agreements contained in any Loan Document.  The Agents shall not be responsible to the Lenders for the due execution, genuineness, validity, enforceability or effectiveness of this Agreement or any other Loan Documents or other instruments or agreements.  The Agents shall in all cases be fully protected in acting, or refraining from acting, in accordance with written instructions signed by the Required Lenders and, except as otherwise specifically provided herein, such instructions and any action or inaction pursuant thereto shall be binding on all the Lenders.  Notwithstanding the foregoing, in the case of any enforcement against any Collateral or exercise of any remedies with respect thereto pursuant to any Security Document, the Agents shall in all cases be fully protected in acting, or refraining from acting, in accordance with written instructions signed by the requisite secured parties specified therein (whether or not the Required Lenders shall have consented to such action or inaction) and such instructions and any action or inaction pursuant thereto shall be binding on all the Lenders.  Each Agent shall, in the absence of knowledge to the contrary, be entitled to rely on any instrument or document believed by it in good faith to be genuine and correct and to have been signed or sent by the proper Person or Persons.  Neither the Agents nor any of their respective directors, officers, employees or agents shall have any responsibility to Borrower or any other Loan Party or any other party hereto on account of the failure, delay in performance or breach by, or as a result of information provided by, any Lender of any of its obligations hereunder or to any Lender on account of the failure of or delay in performance or breach by any other Lender or Borrower or any other Loan Party of any of their respective obligations hereunder or under any other Loan Document or in connection herewith or therewith.  Each Agent may execute any and all duties hereunder by or through agents or employees and shall be entitled to rely upon the advice of legal counsel selected by it with respect to all matters arising hereunder and shall not be liable for any action taken or suffered in good faith by it in accordance with the advice of such counsel.

 
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Section 10.02.  Nature of Duties.  The Lenders hereby acknowledge that the Administrative Agent shall not be under any duty to take any discretionary action permitted to be taken by it pursuant to the provisions of this Agreement unless it shall be requested in writing to do so by the Required Lenders.  The Lenders further acknowledge and agree that so long as the Administrative Agent shall make any determination to be made by it hereunder or under any other Loan Document in good faith, the Administrative Agent shall have no liability in respect of such determination to any Person.  Notwithstanding any provision to the contrary elsewhere in this Agreement, the Administrative Agent shall not have any duties or responsibilities, except those expressly set forth herein, or any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into the Loan Documents or otherwise exist against the Administrative Agent.  Each Lender recognizes and agrees that, except for any functions or rights expressly specified herein, the Joint Lead Arrangers shall have no duties or responsibilities under this Agreement or any other Loan Document, or any fiduciary relationship with any Lender, and shall have no functions, responsibilities, duties, obligations or liabilities for acting as the Joint Lead Arrangers hereunder.
 
Section 10.03.  Resignation by the Agents.  Subject to the appointment and acceptance of a successor Administrative Agent as provided below, the Administrative Agent may resign at any time by notifying the Lenders and the Company.  Upon any such resignation, the Required Lenders shall have the right to appoint a successor with the consent of the Company (not to be unreasonably withheld or delayed).  If no successor shall have been so appointed by the Required Lenders and approved by the Company and shall have accepted such appointment within 45 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may, on behalf of the Lenders with the consent of the Company (not to be unreasonably withheld or delayed), appoint a successor Administrative Agent which shall be a bank with an office in New York, New York and an office in London, England (or a bank having an Affiliate with such an office) having a combined capital and surplus having a Dollar Equivalent that is not less than $500.0 million or an Affiliate of any such bank.  Upon the acceptance of any appointment as Administrative Agent hereunder by a successor bank, such successor shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder.  After the Administrative Agents resignation hereunder, the provisions of this Article and Section 11.05 shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as Agent.
 
Section 10.04.  The Administrative Agent in Its Individual Capacity.  With respect to the Loans made by it hereunder, the Administrative Agent in its individual capacity and not as Administrative Agent shall have the same rights and powers as any other Lender and may exercise the same as though it were not the Administrative Agent, and the Administrative Agent and its Affiliates may accept deposits from, lend money to and generally engage in any kind of business with Borrower, the Company or any of their respective subsidiaries or other Affiliates thereof as if it were not the Administrative Agent.

 
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Section 10.05.  Indemnification.  Each Lender agrees (a) to reimburse the Agents, on demand, in the amount of its pro rata share (based on its Commitments hereunder (or if such Commitments shall have expired or been terminated, in accordance with the respective principal amounts of its applicable outstanding Loans)) of any reasonable expenses incurred for the benefit of the Lenders by the Administrative Agent, including reasonable counsel fees and compensation of agents and employees paid for services rendered on behalf of the Lenders, which shall not have been reimbursed by Borrower and (b) to indemnify and hold harmless the Administrative Agent and any of its directors, officers, employees or agents, on demand, in the amount of such pro rata share, from and against any and all liabilities, Taxes, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted against it in its capacity as Administrative Agent or any of them in any way relating to or arising out of this Agreement or any other Loan Document or any action taken or omitted by it or any of them under this Agreement or any other Loan Document, to the extent the same shall not have been reimbursed by Borrower, provided that no Lender shall be liable to the Administrative Agent for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the gross negligence or willful misconduct of the Administrative Agent or any of its directors, officers, employees or agents.
 
Section 10.06.  Lack of Reliance on Agents.  Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent and any Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement.  Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent, any other Lender and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement or any other Loan Document, any related agreement or any document furnished hereunder or thereunder.
 
Section 10.07.  Collateral Agent under Italian Law.  The appointment of the Collateral Agent referred to under Section 10.01(a) above shall be regarded and construed, for the purposes of Italian law, as a mandato con rappresentanza, and accordingly the Collateral Agent shall act as the mandatario con rappresentanza of the Secured Parties and shall be fully entitled to, without limitation:
 
(a)           exercise in its name (in nome proprio) and in the name and on behalf (in nome e per conto) of the Secured Parties all rights, powers and discretion, execute all documents and take all actions which are expressed to be exercised, executed or taken by the Secured Parties under or in connection with any of the Security Documents governed by Italian law;
 
(b)           execute and perfect, in its name (in nome proprio) and in the name and on behalf (in nome e per conto) of the Secured Parties, any amendment agreement, deed of acknowledgement, supplemental deed, confirmation deed or any other document to be executed in connection with or under any Collateral Document governed by Italian law;
 
(c)           apply the proceeds of any enforcement and sale under the relevant Collateral Document governed by Italian law in accordance with the terms of the Intercreditor Agreement and the provisions of Italian law; and
 
(d)           take, in its name (in nome proprio) and in the name and on behalf (in nome e per conto) of the Secured Parties, any enforcement action in connection with any Collateral and in accordance with the enforcement procedures provided by Italian law and the provisions of the Security Documents governed by Italian law, provided that the Collateral Agent may delegate or authorise any Secured Party to take enforcement actions in compliance with the provisions of the other Loan Documents and the provisions of Italian law.

 
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Section 10.08.  Release from Restrictions of Self Dealing.  With regard to any appointment, power or authority, granted herein, each Secured Party releases the Collateral Agent from the restrictions of self-dealing as contained in Section 181 German Civil Code or any similar law in any other jurisdiction.

Section 10.09.  Perpetuity Period.  The perpetuity period for trusts in this Agreement is 80 years.

ARTICLE 11
 
MISCELLANEOUS
 
Section 11.01.  Notices.
 
(a)           Notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy, as follows:
 
(i)       if to:
 
(A)           Borrower, to it at LyondellBasell Finance Company, c/o Lyondell Chemical Company, 1221 McKinney, Suite 700, Houston, Texas 77010, attention: Gareth Bahlmann (fax: +1 713 652 4598, email: gareth.bahlmann@lyondell.com),
 
(B)           the Company, to it at Basell AF S.C.A., c/o Basell Finance Company B.V., Hoeksteen 66, 2132 MS Hoofddorp, The Netherlands, attention: General Counsel (fax: +31 20 446 8609), and
 
(C)           to any other Loan Party, to the address set forth in such Loan Partys Accession Letter,
 
with, in any case,  a copy to Skadden, Arps, Slate, Meagher & Flom (UK) LLP, 40 Bank Street, Canary Wharf, London  E14 5DS, attention Scott Simpson (fax: +44 20 7519 7070), email: ssimpson@skadden.com).
 
(ii)         if to the Administrative Agent, to Merrill Lynch Capital Corporation, 250 Vesey Street, 22nd Floor, New York, New York  10080, attention: Don Burkitt (fax: +212 449 7750), (e-mail: don_burkitt@ml.com).
 
(iii)         if to the Collateral Agent, to Citibank, N.A., 388 Greenwich Street, New York, New York 10013, attention: David Jaffe (fax: +1 212 816 2613), (e-mail: david.jaffe@citi.com).
 
 
(b)           Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communications pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices pursuant to Article 2 unless otherwise agreed by the Administrative Agent and the applicable Lender.  Each of the Administrative Agent, the Collateral Agent and Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided, further, that approval of such procedures may be limited to particular notices or communications.

 
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(c)           All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given o n the date of receipt if delivered by hand or overnight courier service, sent by telecopy or (to the extent permitted by clause (b) of 11.01(c)) electronic means or on the date five Business Days after dispatch by certified or registered mail if mailed, in each case delivered, sent or mailed (properly addressed) to such party as provided in this Section 11.01 or in accordance with the latest unrevoked direction from such party given in accordance with this Section 11.01.
 
(d)           Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other parties hereto.
 
Section 11.02.  Survival of Agreement.  All covenants, agreements, representations and warranties made by the Loan Parties herein, in the other Loan Documents and in the certificates or other instruments prepared or delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the Lenders and shall survive the making by the Lenders of the Loans and the execution and delivery of the Loan Documents, regardless of any investigation made by such Persons or on their behalf, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any Fee or any other amount payable under this Agreement or any other Loan Document is outstanding and unpaid and so long as the Commitments have not been terminated.  Without prejudice to the survival of any other agreements contained herein, indemnification and reimbursement obligations contained herein (including pursuant to Sections 2.11, 2.12, 2.13 and 11.05) shall survive the payment in full of the principal and interest hereunder and the termination of the Commitments or this Agreement.
 
Section 11.03.  Binding Effect.  This Agreement shall become effective when it shall have been executed by Borrower, the Company, each other Loan Party and the Administrative Agent and when the Administrative Agent shall have received copies hereof which, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of Borrower, the Company, each other Loan Party, the Administrative Agent and each Lender and their respective permitted successors and assigns.
 
Section 11.04.  Successors and Assigns.
 
(a)           The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that (i) no Loan Party may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by a Loan Party without such consent shall be null and void) and (ii) subject to clause 11.04(b), no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with this Section.  Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants (to the extent provided in clause (c) of Section 11.04) and, to the extent expressly contemplated hereby, the Related Parties of each of the Agents and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.
 
(b)           Subject to the conditions set forth in clause (b)(ii) of Section 11.04, any Lender may assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it) with the prior written consent of each Lender (such consent not to be unreasonably withheld, delayed or conditioned); provided that, for the twelve month period commencing on the Closing Date, the consent of Borrower (which consent shall not be unreasonably withheld) shall be required with respect to any assignment that would result in the Joint Lead Arrangers, in the aggregate, holding less than 50.1% of the aggregate principal amount of the outstanding Loans.
 
 
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(i)       Assignments shall be subject to the following additional conditions:
 
(A)           except in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund or an assignment of the entire remaining amount of the assigning Lenders Commitment or Loans, the amount of the commitment or principal amount of the Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Acceptance with respect to such assignment is delivered to the Administrative Agent) shall (1) in the case of Euro Loans that are Initial Loans, be an integral multiple of 5.0 million and, in the case of Euro Loans that are Extended Loans, not less than 1.0 million (or such lesser amount constituting all of such Lenders Euro Loans), and (2) in the case of Dollar Loans that are Initial Loans, be an integral multiple of $5.0 million and, in the case of Extended Loans that are Dollar Loans, not less than $1.0 million (or such lesser amount constituting all of such Lenders Dollar Loans), in each case unless each of the Company and the Administrative Agent otherwise consent; provided that no such consent of the Company shall be required if an Event of Default has occurred and is continuing or prior to the completion of the primary syndication of the Loans (as determined by the Joint Lead Arrangers);
 
(B)           each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lenders rights and obligations under this Agreement, except that, subject to the other terms and conditions of this Section 11.04, any Lenders shall have the right to assign different amounts of Dollar Loans and Euro Loans; and
 
(C)           the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Acceptance, together with a processing and recordation fee of $3,500.
 
(ii)       Subject to acceptance and recording thereof pursuant to Section 11.04(b)(iv), from and after the effective date specified in each Assignment and Acceptance the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Acceptance, have the rights and obligations of a Lender under this Agreement, and the assigning Lender hereunder shall, to the extent of the interest assigned by such Assignment and Acceptance, be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all of the assigning Lenders rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.11, 2.12, 2.13 and 11.05).  Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 11.04 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with Section 11.04(c).
 
(iii)      The Administrative Agent, acting for this purpose as a nonfiduciary agent of Borrower, shall maintain at one of its offices a copy of each Assignment and Acceptance delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal amount and currency of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the Register).  The entries in the Register shall be conclusive, and Borrower, the Agents and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary.  The Register shall be available for inspection by Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

 
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(iv)     Upon its receipt of a duly completed Assignment and Acceptance executed by an assigning Lender and an assignee, the processing and recordation fee referred to in Section 11.04(b) and any written consent to such assignment required by Section 11.04(b), the Administrative Agent acting for itself and, in any situation where the consent of the Company is not required, Borrower shall accept such Assignment and Acceptance and record the information contained therein in the Register.  No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.
 
(c)           Any Lender may, without the consent of the Company or the Administrative Agent, sell participations to one or more banks or other entities (a Participant) in all or a portion of such Lenders rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans owing to it); provided that (A) such Lenders obligations under this Agreement shall remain unchanged, (B) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (C) Borrower, the Agents and the Lenders shall continue to deal solely and directly with such Lender in connection with such Lenders rights and obligations under this Agreement.  Any agreement or instrument (oral or written) pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and the other Loan Documents and to approve any amendment, modification or waiver of any provision of this Agreement and the other Loan Documents; provided that (1) such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in the first proviso to Section 11.08(b) that affects such Participant and (2) no other agreement (oral or written) with respect to such participation which is inconsistent with the foregoing provisions of this sentence may exist between such Lender and such Participant.  Subject to Section 11.04(c)(i), Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.11, 2.12 and 2.13, to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to Section 11.04(b).  To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 11.06 as though it were a Lender, provided such Participant agrees to be subject to Section 2.14(c) as though it were a Lender.
 
(i)       A Participant shall not be entitled to receive any greater payment under Section 2.11, 2.12 or 2.13 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Companys prior written consent (which shall not be unreasonably withheld or delayed).  A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 2.13 to the extent such Participant fails to comply with Section 2.13(e) as though it were a Lender.
 
(d)           Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank, and this Section shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

 
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(e)           In case of a transfer by way of novation:
 
(i)       in accordance with Articles 1278 to 1281 of the French Civil Code, the transferring Lender maintains all its rights and privileges arising under any Security Document governed by French law and any guarantee under this Agreement for the benefit of the transferee; and
 
(ii)         each party to this Agreement (other than the transferring Lender and the transferee) irrevocably authorizes the Administrative Agent to execute any document evidencing such transfer on its behalf.
 
Section 11.05.  Expenses; Indemnity.
 
(a)           Borrower agrees (i) if the Closing Date occurs, to pay or reimburse the Administrative Agent, the Collateral Agent and the Joint Lead Arrangers for all reasonable invoiced out-of-pocket costs and expenses and any taxes (other than Taxes indemnification for which is governed by Section 2.13 hereof) incurred in connection with the preparation, negotiation, syndication and execution of this Agreement and the other Loan Documents, and any amendment, waiver, consent or other modification of the provisions hereof and thereof (whether or not the transactions contemplated thereby are consummated), and the consummation and administration of the transactions contemplated hereby and thereby, including all Attorney Costs, and (ii) to pay or reimburse the Administrative Agent, the Collateral Agent, the Joint Lead Arrangers and each Lender for all invoiced out-of-pocket costs and expenses incurred in connection with the enforcement (whether through negotiations, legal proceedings or otherwise) of any rights or remedies under this Agreement or the other Loan Documents (including all such costs and expenses incurred during any legal proceeding, including any proceeding under any Debtor Relief Law, and including all respective Attorney Costs of counsel to the Administrative Agent and the Collateral Agent).  The foregoing costs and expenses shall include all reasonable search, filing, recording and title insurance charges and fees related thereto, and other (reasonable, in the case of Section 11.05(a)(i)) out-of-pocket expenses incurred by any Agent.  The agreements in this Section 11.05(a) shall survive the termination of this Agreement and repayment of all other Loan Party Obligations.  All amounts due under this Section 11.05(a) shall be paid promptly after receipt by Borrower of an invoice relating thereto setting forth such expenses in reasonable detail.  If any Loan Party fails to pay when due any costs, expenses, taxes or other amounts payable by it hereunder or under any Loan Document, such amount may be paid on behalf of such Loan Party by the Administrative Agent in its sole discretion.
 
(b)           Whether or not the transactions contemplated hereby are consummated, Borrower shall indemnify and hold harmless each Joint Lead Arranger, Agent-Related Person, each Lender and their respective Affiliates, and directors, officers, partners, employees, counsel, agents, trustees, investment advisors and attorneys-in-fact of each of the foregoing (collectively, the Indemnitees) from and against any and all liabilities, obligations, losses, damages, penalties, claims, demands, actions, judgments, suits, costs, expenses and disbursements (including Attorney Costs but not including Taxes indemnification for which is governed by Section 2.13 hereof) of any kind or nature whatsoever which may at any time be imposed on, incurred by or asserted against any such Indemnitee in any way relating to or arising out of or in connection with (i) the execution, delivery, enforcement, performance or administration of any Loan Document or any other agreement, letter or instrument delivered in connection with the transactions contemplated thereby or the consummation of the transactions contemplated thereby, (ii) any Loan or the use or proposed use of the proceeds therefrom, or (iii) any actual or alleged presence or Release of Hazardous Materials on, at, under or from any property or facility currently or formerly owned, leased or operated by the Loan Parties or any Subsidiary, or any Environmental Liability related in any way to the Loan Parties or any Subsidiary, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory (including any investigation of, preparation for, or defense of any pending or threatened claim, investigation, litigation or proceeding) and regardless of whether any Indemnitee is a party thereto (all the foregoing, collectively, the Indemnified Liabilities), in all cases, whether or not caused by or arising, in whole or in part, out of the negligence of the Indemnitee; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such liabilities, obligations, losses, damages, penalties, claims, demands, actions, judgments, suits, costs, expenses or disbursements resulted from the gross negligence, bad faith or willful misconduct of such Indemnitee or of any affiliate, director, officer, partner, employee, agent or attorney-in-fact of such Indemnitee, as determined by the final judgment of a court of competent jurisdiction.  No Indemnitee shall be liable for any damages arising from the use by others of any information or other materials obtained through IntraLinks or other similar information transmission systems in connection with this Agreement, nor shall any Indemnitee or Borrower or any Subsidiary have any liability for any special, punitive, indirect or consequential damages relating to this Agreement or any other Loan Document or arising out of its activities in connection herewith or therewith (whether before or after the Closing Date).  In the case of an investigation, litigation or other proceeding to which the indemnity in this Section 11.05(b) applies, such indemnity shall be effective whether or not such investigation, litigation or proceeding is brought by any Loan Party, any Subsidiary of any Loan Party, any Loan Partys directors, stockholders or creditors or an Indemnitee or any other Person, whether or not any Indemnitee is otherwise a party thereto and whether or not any of the transactions contemplated hereunder or under any of the other Loan Documents are consummated.  All amounts due under this Section 11.05(b) shall be paid within ten (10) Business Days after demand therefor; provided, however, that such Indemnitee shall promptly refund such amount to the extent that there is a final judicial or arbitral determination that such Indemnitee was not entitled to indemnification rights with respect to such payment pursuant to the express terms of this Section 11.05(b).  The agreements in this Section 11.05(b) shall survive the resignation of the Administrative Agent or the Collateral Agent, the replacement of any Lender, the termination of this Agreement and the repayment, satisfaction or discharge of all the other Loan Party Obligations.  This Section 11.05(b) shall not apply with respect to any Taxes (including, without limitation, Indemnified Taxes or any Other Taxes indemnifiable under Section 2.13) other than Taxes that represent liabilities, obligations, losses, damages, etc. arising from any non-Tax claim.
 
 
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Section 11.06.  Right of Set-off.  In addition to any rights and remedies of the Lenders provided by Law, upon the occurrence and during the continuance of any Event of Default, each Lender and its Affiliates (the Administrative Agent and the Collateral Agent, in respect of any unpaid fees, costs and expenses payable hereunder) is authorized at any time and from time to time, without prior notice to the Company and Borrower, any such notice being waived by the Company and Borrower (on its own behalf and on behalf of each Loan Party and each of its subsidiaries) to the fullest extent permitted by applicable Law, to setoff and apply any and all deposits (general or special, time or demand, provisional or final) at any time held by, and other Indebtedness at any time owing by, such Lender and its Affiliates, the Administrative Agent or the Collateral Agent to or for the credit or the account of the respective Loan Parties and their subsidiaries against any and all Loan Party Obligations owing to such Lender and its Affiliates or the Collateral Agent hereunder or under any other Loan Document, now or hereafter existing, irrespective of whether or not such Agent or such Lender or Affiliate shall have made demand under this Agreement or any other Loan Document and although such Loan Party Obligations may be contingent or unmatured or denominated in a currency different from that of the applicable deposit or Indebtedness.  Each Lender agrees promptly to notify Borrower and the Administrative Agent after any such setoff and application made by such Lender; provided that the failure to give such notice shall not affect the validity of such setoff and application.  The rights of the Administrative Agent, the Collateral Agent and each Lender under this Section 10.06 are in addition to other rights and remedies (including other rights of setoff) that the Administrative Agent, the Collateral Agent and such Lender may have.

 
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Section 11.07.  Applicable Law.  THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (OTHER THAN AS EXPRESSLY SET FORTH IN OTHER LOAN DOCUMENTS) SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
 
Section 11.08.  Waivers; Amendments.
 
(a)           No failure or delay of the Administrative Agent or any Lender in exercising any right or power hereunder or under any Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power.  The rights and remedies of the Administrative Agent and the Lenders hereunder and under the other Loan Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise have.  No waiver of any provision of this Agreement or any other Loan Document or consent to any departure by Borrower, the Company or any other Loan Party therefrom shall in any event be effective unless the same shall be permitted by this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given.  No notice or demand on Borrower, the Company or any other Loan Party in any case shall entitle such Person to any other or further notice or demand in similar or other circumstances.
 
(b)           Neither this Agreement nor any other Loan Document nor any provision hereof or thereof may be waived, amended or modified except (i) as set forth in Section 11.08(c) or 11.08(d)(ii) or (ii)(A) in the case of this Agreement, pursuant to an agreement or agreements in writing entered into by Borrower and the Required Lenders, (B) in the case of any other Loan Document (other than any Security Document), pursuant to an agreement or agreements in writing entered into by each party thereto and consented to by the Required Lenders, and (C) in the case of any Security Document, pursuant to an agreement or agreements in writing entered into by the relevant Collateral Agent and consented to by the Required Lenders; provided, however, that no such agreement shall:
 
(1)           decrease or forgive the principal amount of, or extend the final maturity of, or decrease the rate of interest on, or change the currency of payment of, any Loan, without the prior written consent of each Lender directly affected thereby,
 
(2)           increase or extend the Commitment of any Lender or decrease the fees of any Lender without the prior written consent of such Lender (it being understood that waivers or modifications of conditions precedent, covenants or Defaults or Events of Default or mandatory prepayments (other than with respect to a Permanent Securities Prepayment Event) shall not constitute an increase of the Commitments of any Lender),
 
(3)           extend any date on which payment of interest on any Loan is due, without the prior written consent of each Lender adversely affected thereby,
 
(4)           amend or modify the provisions of Section 2.14(c) in a manner that would by its terms alter the pro rata sharing of payments required thereby, without the prior written consent of each Lender adversely affected thereby,

 
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(5)           amend or modify the provisions of this Section or the definition of the terms Required Lenders or any other provision hereof specifying the number or percentage of Lenders required to waive, amend or modify any rights hereunder or make any determination or grant any consent hereunder, without the prior written consent of each Lender adversely affected thereby,
 
(6)           amend, modify or waive any provision in the Exchange Notes that requires (or would, if any Exchange Notes were outstanding, require) the approval of all Holders of Exchange Notes, in each case without the consent of each Lender directly affected thereby,
 
(7)           restrict the right of any Lender to exchange Initial Loans for Extended Loans on the Initial Maturity Date, or Extended Loans for Exchange Notes, amend the rate of such exchange or amend the terms of the Exchange Notes in any manner that requires (or would, if the Exchange Notes were outstanding, require) the approval of all Holders of Exchange Notes, in each case without the consent of each Lender directly affected thereby,
 
(8)           release all or substantially all the Collateral or release any Loan Party from its obligations under the Security Documents (except pursuant to the terms thereof and of this Agreement), without the prior written consent of each Lender; or
 
(9)           other than as permitted by this Agreement, release any Guarantor from its obligations under this Agreement, or limit its liability in respect of thereof, without the prior written consent of each Lender,
 
provided, further, that no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent hereunder without the prior written consent of the Administrative Agent.
 
(c)           Without the consent of either Joint Lead Arranger or any Lender, the Loan Parties and the Administrative Agent and/or Collateral Agent may (in their respective sole discretion, or shall, to the extent required by any Loan Document) enter into any amendment, modification or waiver of any Loan Document, or enter into any new agreement or instrument, to effect the granting, perfection, protection, expansion or enhancement of any security interest in any Collateral or additional property to become Collateral for the benefit of the Secured Parties, or as required by local law to give effect to, or protect any security interest for the benefit of the Secured Parties, in any property or so that the security interests therein comply with applicable law.
 
(d)           Notwithstanding the foregoing, this Agreement may be amended by the Administrative Agent and Borrower to correct any typographical or similar error or cure ambiguities or other defects.
 
(e)           Each Lender shall be bound by any waiver, amendment or modification authorized by this Section 11.08 and any consent by any Lender pursuant to this Section 11.08 shall bind any assignee of such Lender.
 
Section 11.09.  Interest Rate Limitation.  Notwithstanding anything herein to the contrary, if at any time the applicable interest rate, together with all fees and charges that are treated as interest under applicable law (collectively, the Charges), as provided for herein or in any other document executed in connection herewith, or otherwise contracted for, charged, received, taken or reserved by any Lender, shall exceed the maximum lawful rate (the Maximum Rate) that may be contracted for, charged, taken, received or reserved by such Lender in accordance with applicable law, the rate of interest payable hereunder, together with all Charges payable to such Lender, shall be limited to the Maximum Rate, provided that such excess amount shall be paid to such Lender on subsequent payment dates to the extent not exceeding the legal limitation.

 
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Section 11.10.  Entire Agreement.  This Agreement, the other Loan Documents and the agreements regarding certain Fees referred to herein constitute the entire contract between the parties relative to the subject matter hereof.  Any previous agreement among or representations from the parties or their Affiliates with respect to the subject matter hereof is superseded by this Agreement and the other Loan Documents.  Notwithstanding the foregoing, the Fee Letter shall survive the execution and delivery of this Agreement and remain in full force and effect.  Nothing in this Agreement or in the other Loan Documents, expressed or implied, is intended to confer upon any party other than the parties hereto and thereto any rights, remedies, obligations or liabilities under or by reason of this Agreement or the other Loan Documents.
 
Section 11.11.  WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS.  EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 11.11.
 
Section 11.12.  Severability.  In the event any one or more of the provisions contained in this Agreement or in any other Loan Document should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected or impaired thereby.  The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.
 
Section 11.13.  Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall constitute an original but all of which, when taken together, shall constitute but one contract, and shall become effective as provided in Section 11.03.  Delivery of an executed counterpart to this Agreement by facsimile transmission shall be as effective as delivery of a manually signed original.
 
Section 11.14.  Headings.  Article and Section headings and the table of contents used herein are for convenience of reference only, are not part of this Agreement and are not to affect the construction of, or to be taken into consideration in interpreting, this Agreement.
 
Section 11.15.  Jurisdiction; Consent to Service of Process.
 
(a)           Each of Borrower, the Company and each other Loan Party and each Agent and Lender hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of any New York State court or federal court of the United States of America sitting in New York City, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or the other Loan Documents, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such federal court.  Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.  Nothing in this Agreement shall affect any right that any Lender may otherwise have to bring any action or proceeding relating to this Agreement or the other Loan Documents against Borrower, the Company or any other Loan Party or their properties in the courts of any jurisdiction.

 
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(b)           Each of Borrower, the Company and each other Loan Party and each Agent and Lender, hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or the other Loan Documents in any New York State or federal court.  Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.
 
(c)           Each of the Company and each other Loan Party other than U.S. Guarantors, hereby irrevocably and unconditionally appoints Borrower with an office on the date hereof at LyondellBasell Finance Company, c/o Corporation Service Company, 2711 Centerville Road, Suite 400, Wilmington, Delaware 19808 and its successors hereunder (the Process Agent), as its agent to receive on behalf of each of the Company and each other Loan Party other than U.S. Guarantors, and their property of all writs, claims, process, and summonses in any action or proceeding brought against it in the State of New York.  Such service may be made by mailing or delivering a copy of such process to the Company and each other Loan Party other than U.S. Guarantors, as the case may be, in care of the Process Agent at the address specified above for the Process Agent, and each of the Company and each other Loan Party other than U.S. Guarantors,  hereby irrevocably authorizes and directs the Process Agent to accept such service on its behalf.  Failure by the Process Agent to give notice to the Company or any other Loan Party other than U.S. Guarantors, as applicable, or failure of the Company, or any other Loan Party other than U.S. Guarantors, as applicable, to receive notice of such service of process shall not impair or affect the validity of such service on the Process Agent, the Company, or any other Loan Party other than U.S. Guarantors, or of any judgment based thereon.  Each of the Company and each other Loan Party other than U.S. Guarantors, covenants and agrees that it shall take any and all reasonable action, including the execution and filing of any and all documents, that may be necessary to continue the designation of the Process Agent above in full force and effect, and to cause the Process Agent to act as such.  Each of the Company and each other Loan Party other than U.S. Guarantors,  further covenants and agrees to maintain at all times an agent with offices in New York City to act as its Process Agent.  Nothing herein shall in any way be deemed to limit the ability to serve any such writs, process or summonses in any other manner permitted by applicable law.
 
Section 11.16.  Confidentiality.
 
(a)           Each of the Lenders and the Administrative Agent agrees that it shall maintain in confidence any information relating to Borrower, the Company, Lyondell, their subsidiaries furnished to it by or on behalf of Borrower, the Company or the other Loan Parties (other than information that (i) has become generally available to the public other than as a result of a disclosure by such party, (ii) has been independently developed by such Lender or the Administrative Agent without violating this Section 11.16 or (iii) was available to such Lender or the Administrative Agent from a third party having, to such Persons knowledge, no obligations of confidentiality to Borrower, the Company or any other Loan Party) and shall not reveal the same other than to its directors, trustees, officers, employees and advisors with a need to know or to any Person that approves or administers the Loans on behalf of such Lender (so long as each such Person shall have been instructed to keep the same confidential in accordance with this Section 11.16), except:  (A) to the extent necessary to comply with law or any legal process or the requirements of any Governmental Authority, the National Association of Insurance Commissioners or of any securities exchange on which securities of the disclosing party or any Affiliate of the disclosing party are listed or traded, (B) as part of normal reporting or review procedures to Governmental Authorities or the National Association of Insurance Commissioners, (C) to its parent companies, Affiliates or auditors (so long as each such Person shall have been instructed to keep the same confidential in accordance with this Section 11.16), (D) in order to enforce its rights under any Loan Document in a legal proceeding, (E) to any prospective assignee of, or prospective Participant in, any of its rights under this Agreement (so long as such Person shall have been instructed to keep the same confidential in accordance with this Section 11.16) and (F) to any direct or indirect contractual counterparty in any hedging obligation or such contractual counterpartys professional advisor, so long as, in the case of disclosure pursuant to clauses (E) and (F) above, such Person agrees to be bound by the provisions of this Section) 11.16.
 
(b)           Neither the Administrative Agent, any Lender, any of their respective affiliates nor any Loan Party provide accounting, tax or legal advice.
 
Section 11.17.  Conversion of Currencies.
 
(a)           If, for the purpose of obtaining judgment in any court, it is necessary to convert a sum owing hereunder in one currency into another currency, each party hereto agrees, to the fullest extent that it may effectively do so, that the rate of exchange used shall be that at which in accordance with normal banking procedures in the relevant jurisdiction the first currency could be purchased with such other currency on the Business Day immediately preceding the day on which final judgment is given.
 
(b)           The obligations of Borrower in respect of any sum due to any party hereto or any holder of the obligations owing hereunder (the Applicable Creditor) shall, notwithstanding any judgment in a currency (the Judgment Currency) other than the currency in which such sum is stated to be due hereunder (the Agreement Currency), be discharged only to the extent that, on the Business Day following receipt by the Applicable Creditor of any sum adjudged to be so due in the Judgment Currency, the Applicable Creditor may in accordance with normal banking procedures in the relevant jurisdiction purchase the Agreement Currency with the Judgment Currency; if the amount of the Agreement Currency so purchased is less than the sum originally due to the Applicable Creditor in the Agreement Currency, Borrower agrees, as a separate obligation and notwithstanding any such judgment, to indemnify the Applicable Creditor against such loss.  The obligations of Borrower contained in this Section 11.17 shall survive the termination of this Agreement and the payment of all other amounts owing hereunder.
 
Section 11.18.  No Advisory or Fiduciary Responsibility.  In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document), each Loan Party acknowledges and agrees that:  (i) (A) the arranging and other services regarding this Agreement provided by the Agents and the Joint Lead Arrangers are arms-length commercial transactions between the Loan Parties and their respective Affiliates, on the one hand, and the Administrative Agent and the Joint Lead Arrangers, on the other hand, (B) each Loan Party has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate and (C) each Loan Party is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents; (ii) (A) each Agent and each Joint Lead Arranger is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for the Loan Parties or any of their respective Affiliates, or any other Person and (B) neither the Administrative Agent nor any Joint Lead Arranger has any obligation to any of the Loan Parties or any of their respective Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; and (iii) the Administrative Agent and the Joint Lead Arrangers and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of each Loan Party and their respective Affiliates, and no Agent or Joint Lead Arranger has any obligation to disclose any of such interests to the Loan Parties or their respective Affiliates.  To the fullest extent permitted by law, each Loan Party hereby waives and releases any claims that it may have against the Agents and the Joint Lead Arrangers with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.
 
 
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Section 11.19.  Patriot Act Notice.  Each Lender and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies Borrower that, pursuant to the requirements of the Patriot Act, it is required to obtain, verify and record information that identifies Borrower, which information includes the name and address of Borrower and other information that will allow such Lender or the Administrative Agent, as applicable, to identify such Borrower in accordance with the Patriot Act.
 
Section 11.20.  Joint Lead Arrangers Bookrunners and Global Coordinators
 
. None of the Persons identified on the facing page or signature pages of this Agreement as a Joint Lead Arranger, "Bookrunner or Transaction Coordinator shall have any right, power, obligation, liability, responsibility or duty under this Agreement or in connection with any Loan Document or the transactions contemplated thereby.  Without limiting the foregoing, none of the Persons so identified shall have or be deemed to have any fiduciary relationship with any Secured Party.  Each Secured Party acknowledges that it has not relied, and will not rely, on any of the Persons so identified in deciding to enter into the Loan Documents or in taking or not taking action hereunder or thereunder and waives to the fullest extent permitted by law all claims it may have against the Persons so identified under or in connection with the Loan Documents and the transactions contemplated thereby.
 
Section 11.21.  Collateral and Guarantee Matters.
 
(a)           Subject to the Intercreditor Agreement, Liens on the Collateral will be automatically and unconditionally released:
 
(1)           upon an Asset Sale which, at the time the Collateral is transferred, is made in accordance with the provisions of Section 5.11;
 
(2)           in accordance with the Security Documents and the Intercreditor Agreement (as in effect on the Closing Date or as amended, supplemented or otherwise modified after the Closing Date to the extent such amendment, supplement or modification is permitted underthis Agreement) upon the occurrence of a securities enforcement sale;
 
(3)           if the Collateral is an asset of a Restricted Subsidiary of the Company (or a subsidiary of such Restricted Subsidiary) that is to be designated as an Unrestricted Subsidiary, upon designation of the Restricted Subsidiary of the Company as an Unrestricted Subsidiary in compliance with the terms of this Agreement;
 
(4)           upon the full and final payment by or on behalf of Borrower under this Agreement and the Loans;
 
(5)           if the Collateral is shares of a subsidiary of the Company, upon a consolidation, merger or sale, conveyance or transfer of all or substantially all of the assets of such subsidiary in accordance with the terms of this Agreement; or

 
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(6)           to the extent the Collateral is released from the Liens securing the Senior Secured Credit Facilities and is not otherwise securing Indebtedness outstanding under any Refinancing except for inventory and/or accounts receivables which secure Asset Backed Credit Facilities or a Qualified Securitization Transaction permitted by this Agreement.
 
to the extent the Collateral is released from the Liens securing the Senior Secured Credit Facilities and is not otherwise securing Indebtedness outstanding under any Refinancing except for inventory and/or accounts receivables which secure Asset Backed Credit Facilities or a Qualified Securitization Transaction permitted by this Agreement.
 
 
(b)           (i)              In this Section 11.21(b):
 
(A)           Collateral Agent Claim shall mean any amount which a Loan Party owes to the Collateral Agent under this Clause; and
 
(B)           Secured Party Claim shall mean any amount which a Loan Party owes to a Secured Party under or in connection with the Loan Documents.
 
(ii)         Unless expressly provided to the contrary in any Loan Document, the Collateral Agent holds:
 
(A)           any security created by a Collateral Document governed by Luxembourg law;
 
(B)           the benefit of any Collateral Agent Claims; and
 
(C)           any proceeds of security,
 
 
for the benefit, and as the property, of the Secured Parties and so that they are not available to the personal creditors of the Collateral Agent.
 
(iii)         The Collateral Agent will separately identify in its records the property rights referred to in paragraph (ii) above.
 
(iv)         Paragraphs (ii) to (iii) above do not apply to any security created by a Collateral Document governed by Dutch law.
 
(v)           Each Loan Party must pay the Collateral Agent, as an independent and separate creditor, an amount equal to each Secured Party Claim on its due date.
 
(vi)         The Collateral Agent may enforce performance of any Collateral Agent Claim in its own name as an independent and separate right.  This includes any suit, execution, enforcement of security, recovery of guarantees and applications for and voting in respect of any kind of insolvency proceeding.
 
(vii)          Each Secured Party must, at the request of the Collateral Agent, perform any act required in connection with the enforcement of any Collateral Agent Claim.  This includes joining in any proceedings as co-claimant with the Collateral Agent.

 
-128-
 

(viii)        Unless the Collateral Agent fails to enforce a Collateral Agent Claim within a reasonable time after its due date, a Secured Party may not take any action to enforce the corresponding Secured Party Claim unless it is requested to do so by the Collateral Agent.
 
(ix)          Discharge by a Loan Party of a Secured Party Claim will discharge the corresponding Collateral Agent Claim in the same amount.
 
(x)           Discharge by a Loan Party of a Collateral Agent Claim will discharge the corresponding Secured Party Claim in the same amount.
 
(xi)          The aggregate amount of the Collateral Agent Claims will never exceed the aggregate amount of Secured Party Claims.
 
(xii)         A defect affecting a Collateral Agent Claim against a Loan Party will not affect any Secured Party Claim.
 
(xiii)        A defect affecting a Collateral Agent Claim against a Loan Party will not affect any Callateral Agent Claim.
 
(xiv)        Each Collateral Agent Claim is created on the understanding that and provided that the Collateral Agent will:
 
(A)           share the benefit, including in particular the proceeds of the Collateral Agent Claim, with the other Secured Parties; and
 
(B)           pay those proceeds to the Secured Parties,
 
in accordance with the Intercreditor Agreement.
 
(xv)         Each Party agrees that the Collateral Agent:
 
(A)           will be the joint and several creditor (together with the relevant Secured Party) of each and every obligation of each Loan Party towards each Secured Party under this Agreement; and
 
(B)           will have its own independent right to demand performance by each Loan Party of those obligations.
 
(xvi)        Discharge by a Loan Party of any obligation owed to the Collateral Agent or another Secured Party shall, to the same extent, discharge the corresponding obligation owing to the other.
 
(xvii)       Without limiting or affecting the Collateral Agent's rights against each Secured Party (whether under this paragraph or under any other provision of the Loan Documents), the Collateral Agent agrees with each other Secured Party (on a several and divided basis) that, subject to the paragraph below, it will not exercise its rights as a joint and several creditor with a Loan Party except in accordance with the Intercreditor Agreement.

 
-129-
 

(xviii)      Nothing in this paragraph (b) shall in any way limit the Collateral Agent's right to act in the protection or preservation of rights under or to enforce any Collateral Document as contemplated by this Agreement and/or the relevant Collateral Document (or to do any act reasonably incidental to any of the above).

 
-130-
 

IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this Agreement to be duly executed and delivered as of the date first written above.
 
 
LYONDELLBASELL FINANCE COMPANY,
as Borrower
     
     
 
By:
 /s/ Bruce Dresbach 
   
Name:  Bruce Dresbach
   
Title:    Authorized Representative
 
[Signature Page Bridge Agreement]
 
 
 
 
 
 
BASELL AF S.C.A.,
as the Company
     
     
 
By:
 /s/ Bruce Dresbach 
   
Name:  Bruce Dresbach
   
Title:    Authorized Representative
 
[Signature Page Bridge Agreement]
 
 
 
 
 
 
GUARANTORS
 
BASELL ASIA PACIFIC LIMITED
BASELL BAYREUTH CHEMIE GMBH
BASELL CANADA INC.
BASELL EUROPE HOLDINGS B.V.
BASELL FINANCE & TRADING COMPANY B.V.
BASELL FINANCE COMPANY B.V.
BASELL FINANCE USA INC.
BASELL FUNDING S.A.R.L.
BASELL GERMANY HOLDINGS GMBH
BASELL HOLDINGS B.V.
BASELL INTERNATIONAL HOLDINGS B.V.
BASELL POLYOLEFINE GMBH
LBI ACQUISITION LLC
LBIH LLC
LYONDELLBASELL FINANCE COMPANY
LYONDELLBASELL NETHERLANDS HOLDINGS B.V.,
as Guarantors
     
     
 
By:
 /s/ Bruce Dresbach 
   
Name:
 Bruce Dresbach 
   
Title:
Authorized Representative
 
[Signature Page Bridge Agreement]
 
 
 
 
 
 
BASELL NORTH AMERICA INC.
BASELL POLYOLEFINS UK LIMITED
BASELL SALES & MARKETING COMPANY B.V.
BASELL UK HOLDINGS LIMITED
BASELL USA INC.
NELL ACQUISITION (US) LLC,
as Guarantors
     
     
 
By:
 /s/ Francesco Svelto 
   
Name:  Francesco Svelto
   
Title:    Authorized Representative
 
 
 
 
 
LYONDELL LP4 INC.
LYONDELL (PELICAN) PETROCHEMICAL L.P.1, INC.
LYONDELL PETROCHEMICAL L.P. INC.
LYONDELL REFINING COMPANY LLC
LYONDELL REFINING I LLC,
as Guarantors
     
     
 
By:
 /s/ Gerald A. O'Brien 
   
Name:  Gerald A. O'Brien
   
Title:    Authorized Representative
   
 
[Signature Page Bridge Agreement]
 
 
 
 
 
 
EQUISTAR CHEMICALS, LP
HOUSTON REFINING LP
LYONDELL CHEMICAL COMPANY
LYONDELL CHEMICALNEDERLAND, LTD.
LYONDELL CHEMICAL PRODUCTS EUROPE LLC
LYONDELL CHEMICAL TECHNOLOGY, L.P.
LYONDELL CHEMICAL TECHNOLOGY 1 INC.
LYONDELL CHEMICAL TECHNOLOGY MANAGEMENT, INC.
LYONDELL CHIMIE FRANCE LLC
LYONDELL-EQUISTAR HOLDINGS PARTNERS
LYONDELL EUROPE HOLDINGS INC.
LYONDELL HOUSTON REFINERY INC.
LYONDELL LP3 GP, LLC
LYONDELL LP3 PARTNERS, LP
MILLENNIUM AMERICA HOLDINGS INC.
MILLENNIUM AMERICA INC.
MILLENNIUM CHEMICALS INC.
MILLENNIUM PETROCHEMICALS INC.
MILLENNIUM PETROCHEMICALS GP LLC
MILLENNIUM PETROCHEMICALS PARTNERS, LP
MILLENNIUM SPECIALTY CHEMICALS INC.
MILLENNIUM US OP CO LLC
MILLENNIUM WORLDWIDE HOLDINGS I INC.
as Guarantors
     
     
 
By:
 /s/ Karen A. Twitchell 
   
Name:  Karen A. Twitchell
   
Title:    Authorized Representative
   
   
 
[Signature Page Bridge Agreement]
 
 
 
 
 
 
GOLDMAN SACHS CREDIT PARTNERS L.P.,
as Joint Lead Arranger and Lender
     
     
 
By:
 /s/ Michael Marsh 
   
Name:  Michael Marsh
   
Title:    Vice President
     
     
 
[Signature Page Bridge Agreement]

 
 
 
 
 
CITIGROUP GLOBAL MARKETS IN.,
as Joint Lead Arranger
     
     
 
By:
 /s/ Edward Crook 
   
Name:  Edward Crook
   
Title:    Managing Director
     
 
[Signature Page Bridge Agreement]
 
 
 
 
 
 
 
ABN AMRO INCORPORATED,
 
as Joint Lead Arranger
     
     
 
By:
 /s/ David Kanter 
   
Name:  David Kanter
   
Title:    Managing Director
 
[Signature Page Bridge Agreement]
 
 
 
 
 
 
UBS SECURITIES LLC,
 
as Joint Lead Arranger
     
     
 
By:
 /s/ Mary E. Evans 
   
Name:  Mary E. Evans
   
Title:    Associate Director
     
     
 
By:
 /s/ Irja R. Otsa 
   
Name:  Irja R. Otsa
   
Title:    Associate Director
 
[Signature Page Bridge Agreement]
 
 
 
 
 
 
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, as Joint Lead Arranger and Transaction Coordinator
     
     
 
By:
 /s/ Anand Melvani 
   
Name:  Anand Melvani
   
Title:    Managing Director
 
[Signature Page Bridge Agreement]
 
 
 
 
 
 
MERRILL LYNCH CAPITAL CORPORATION,
 
as Administrative Agent and Lender
     
     
 
By:
 /s/ Anand Melvani 
   
Name:  Anand Melvani
   
Title:    VP
 
[Signature Page Bridge Agreement]
 
 
 
 
 
 
CITIBANK, N.A., as Collateral Agent and Lender
     
     
 
By:
 /s/ Edward Crook 
   
Name:  Edward Crook
   
Title:    Vice President
 
[Signature Page Bridge Agreement]
 
 
 
 
 
 
ABN AMRO BANK, N.V.,
 
as Lender
     
     
 
By:
 /s/ Erwin deJong 
   
Name:  Erwin deJong
   
Title:    Executive Director
     
     
 
By:
 /s/ Marko Kremer 
   
Name:  Marko Kremer
   
Title:    Assistant Director
 
[Signature Page Bridge Agreement]
 
 
 
 

 
UBS LOAN FINANCE LLC,
 
as Lender
     
     
 
By:
 /s/ Mary E. Evans 
   
Name:  Mary E. Evans
   
Title:    Associate Director
     
     
 
By:
 /s/ Irja R. Otsa 
   
Name:  Irja R. Otsa
   
Title:    Associate Director
 
 


[Signature Page Bridge Agreement]
 

 
 
 

 
SCHEDULE 1.01(c)
 
 
GUARANTORS1
 
1. 
Basell Asia Pacific Limited
2. 
Basell Bayreuth Chemie GmbH
3. 
Basell Canada Inc.
4. 
Basell Europe Holdings B.V.
5. 
Basell Finance & Trading Company B.V.
6. 
Basell Finance Company B.V.
7. 
Basell Finance USA Inc.*
8. 
Basell Funding S.ár.l.
9. 
Basell Germany Holdings GmbH
10. 
Basell Holdings B.V.
11. 
Basell International Holdings B.V.
12. 
Basell North America Inc.*
13. 
Basell Polyolefine GmbH
14. 
Basell Polyolefins UK Limited
15. 
Basell Sales & Marketing Company B.V.
16. 
Basell UK Holdings Limited
17. 
Basell USA Inc.*
18. 
Equistar Chemicals, LP
19. 
Houston Refining LP
20. 
LBI Acquisition LLC*
21. 
LBIH LLC*
22. 
Lyondell Chemical Company (formerly BIL Acquisition Holdings Limited)*
23. 
Lyondell Chemical Nederland, Ltd.*
24. 
Lyondell Chemical Products Europe LLC*
25. 
Lyondell Chemical Technology 1 Inc.*
26. 
Lyondell Chemical Technology Management, Inc.*
27. 
Lyondell Chemical Technology, L.P.*
28. 
Lyondell Chimie France LLC*
29. 
Lyondell Equistar Holdings Partners*
30. 
Lyondell Europe Holdings Inc.*
31. 
Lyondell Houston Refinery Inc.*
32. 
Lyondell LP3 GP, LLC*
33. 
Lyondell LP3 Partners, LP*
34. 
Lyondell LP4 Inc.*
35. 
Lyondell (Pelican) Petrochemical L.P.1, Inc.*
36. 
Lyondell Petrochemical L.P. Inc.*
37. 
Lyondell Refining Company LLC*
38. 
Lyondell Refining I LLC*
39. 
LyondellBasell Finance Company*
40. 
LyondellBasell Industries AF S.C.A.*
41. 
LyondellBasell Netherlands Holdings B.V.*
42. 
Millennium America Holdings Inc.*
43. 
Millennium America Inc.*
44. 
Millennium Chemicals Inc. *
45. 
Millennium Petrochemicals GP LLC*
46. 
Millennium Petrochemicals Inc.*
47. 
Millennium Petrochemicals Partners, LP*
48. 
Millennium Specialty Chemicals Inc.*
49. 
Millennium US Op Co, LLC*
50. 
Millennium Worldwide Holdings I Inc.*
51. 
Nell Acquisition (US) LLC*


 
 
1 Entities marked with an asterisk  are U.S. entities.
 

 
 
 
 
 
 
SCHEDULE 1.01(f)
 
 
MORTGAGED PROPERTIES
 
 
Real Property - Domestic
 
Entity of Record
Address
Lyondell Chemical Company
Bayport Choate Plant, 10801 Choate Road, Pasadena, Texas 77507
Lyondell Chemical Company
Channelview Chemical Complex (South) 2502 Sheldon Road, Channelview, Texas 77530
Equistar Chemicals, LP
Bayport Underwood Plant, 5761 Underwood Drive, Pasadena, Texas 77507
Equistar Chemicals, LP
Equistar Chemicals (North) 8280 Sheldon Road, Channelview, Texas 77530
Equistar Chemicals, LP
12 miles south of Alvin on FM 2917, Alvin, Texas 77512
Equistar Chemicals, LP
2 Miles West of FM 2917 on FM 2004, Alvin, Texas 77501
Equistar Chemicals, LP
3400 Anamosa Road, Clinton, Iowa 52732
Equistar Chemicals, LP
1501 McKinzie Road, Corpus Christi, Texas 78410
Equistar Chemicals, LP
1515 Miller Cut-Off Road, La Porte, Texas 77571
Equistar Chemicals, LP
US Highway 60, 13 miles south of Bay City, Bay City, Texas 77414
Equistar Chemicals, LP
8805 N. Tabler Road, Morris, Illinois 60450
Equistar Chemicals, LP
Old Bloomington Highway, Victoria, Texas 77902
Equistar Chemicals, LP
11530 Northlake Drive, Cincinnati, Ohio 45249
Houston Refining LP
12000 Lawndale, Houston, Texas 77017
Basell USA Inc.
Jackson Plant, 1035 Bendix Drive, Jackson, Madison County, TN 38301
Basell USA Inc.
Bayport Plant, 12001 Bay Area Blvd., Pasadena, TX 77507
Basell USA Inc.
Lake Charles Plant, 14101 Highway 108 South, Westlake, Louisiana 70669
Basell USA Inc.
Section 23, Township 10 South, Range 12 West, Vinton, Calcasieu Parish, Louisiana
Basell USA Inc.
340 Meadow Road Edison, NJ 08817
 
Real Property - International
 
Basell Polyolefins UK Limited
Mount Farm Industrial Estate on the North East Side of Saxon Street, Bletchley, UK
Basell Polyolefins UK Limited
Land and Buildings Lying to the South of Manchester Road, Carrington, UK
Basell Polyolefine GmbH
Brühler Str. 60, 50389 Wesseling, Germany
Basell Bayreuth Chemie GmbH
Bindlacher Str., Bayreuth, Germany
 


 

 EX-4.4 4 lyo10k-032808ex44.htm INDENTURE DATED AS OF AUGUST 10, 2005 AMONG NELL AF S.A.R., THE GUARANTORS NAMED THEREIN, THE BANK OF NEW YORK, AS TRUSTEE, REGISTRAR, PAYING AGENT, TRANSFER AGENT AND LISTING AGENT, ABN AMRO BANK N.V., AS SECURITY AGENT, AND AIB/BNY FUND MANAGEMENT lyo10k-022808ex44.htm
EXHIBIT 4.4




EXECUTION COPY









NELL AF S.À.R.L.,
THE GUARANTORS NAMED HEREIN,

THE BANK OF NEW YORK,
as Trustee, Registrar, Paying Agent, Transfer Agent and Listing Agent

ABN AMRO BANK N.V.,
as Security Agent
and
AIB/BNY Fund Management (Ireland) Limited,
as Irish Paying Agent


_________________________________

INDENTURE
Dated as of August 10, 2005
_________________________________

$615,000,000 8-3/8% Senior Notes due 2015

€500,000,000 8-3/8% Senior Notes due 2015










TABLE OF CONTENTS

Page
ARTICLE ONE

DEFINITIONS

SECTION
1.01
DEFINITIONS
1

ARTICLE TWO

THE NOTES

SECTION
2.01
FORM AND DATING
27
SECTION
2.02
EXECUTION AND AUTHENTICATION; AGGREGATE PRINCIPAL AMOUNT
28
SECTION
2.03
REGISTRAR AND PAYING AGENT
29
SECTION
2.04
PAYING AGENT TO HOLD ASSETS IN TRUST
30
SECTION
2.05
HOLDER LISTS
30
SECTION
2.06
TRANSFER AND EXCHANGE
30
SECTION
2.07
REPLACEMENT NOTES
31
SECTION
2.08
OUTSTANDING NOTES
31
SECTION
2.09
TREASURY NOTES
31
SECTION
2.10
[INTENTIONALLY OMITTED]
32
SECTION
2.11
CANCELLATION
32
SECTION
2.12
DEFAULTED INTEREST
32
SECTION
2.13
CUSIP NUMBERS
32
SECTION
2.14
DEPOSIT OF MONEYS
32
SECTION
2.15
BOOK-ENTRY PROVISIONS FOR GLOBAL SECURITIES
32
SECTION
2.16
TRANSFER AND EXCHANGE OF SECURITIES
33
SECTION
2.17
SPECIAL TRANSFER PROVISIONS
38
SECTION
2.18
ISSUANCE OF ADDITIONAL NOTES
38

ARTICLE THREE

REDEMPTION

SECTION
3.01
NOTICES TO TRUSTEE
38
SECTION
3.02
SELECTION OF NOTES TO BE REDEEMED
39
SECTION
3.03
NOTICE OF REDEMPTION
39
SECTION
3.04
EFFECT OF NOTICE OF REDEMPTION
40
SECTION
3.05
DEPOSIT OF REDEMPTION PRICE
40
SECTION
3.06
NOTES REDEEMED IN PART
40
SECTION
3.07
REDEMPTION FOR TAXATION REASONS
40

ARTICLE FOUR

COVENANTS

SECTION
4.01
PAYMENT OF NOTES
41
SECTION
4.02
MAINTENANCE OF OFFICE OR AGENCY
41
SECTION
4.03
LIMITATION ON RESTRICTED PAYMENTS
41
SECTION
4.04
CORPORATE EXISTENCE
42
SECTION
4.05
PAYMENT OF TAXES AND OTHER CLAIMS
42
SECTION
4.06
MAINTENANCE OF PROPERTIES AND INSURANCE
43
SECTION
4.07
COMPLIANCE CERTIFICATE; NOTICE OF DEFAULT
43
SECTION
4.08
COMPLIANCE WITH LAWS
43
SECTION
4.09
REPORTS TO HOLDERS
43
SECTION
4.10
WAIVER OF STAY, EXTENSION OR USURY LAWS
45
SECTION
4.11
LIMITATIONS ON TRANSACTIONS WITH AFFILIATES
45
SECTION
4.12
LIMITATION ON INCURRENCE OF ADDITIONAL INDEBTEDNESS
46
SECTION
4.13
LIMITATION ON DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES
46
SECTION
4.14
CHANGE OF CONTROL
47
SECTION
4.15
LIMITATION ON ASSET SALES
49
SECTION
4.16
PROHIBITION ON INCURRENCE OF SENIOR SUBORDINATED DEBT
52
SECTION
4.17
LIMITATION ON PREFERRED STOCK OF RESTRICTED SUBSIDIARIES
52
SECTION
4.18
LIMITATION ON LIENS
52
SECTION
4.19
ADDITIONAL SUBSIDIARY GUARANTORS
52
SECTION
4.20
CONDUCT OF BUSINESS
53
SECTION
4.21
CAPITAL STOCK OF SUBSIDIARIES
53
SECTION
4.22
WITHHOLDING TAXES
53
SECTION
4.23
IMPAIRMENT OF SECURITY INTEREST
55

ARTICLE FIVE

SUCCESSOR CORPORATION

SECTION
5.01
MERGER, CONSOLIDATION AND SALE OF ASSETS
56
SECTION
5.02
SUCCESSOR CORPORATION SUBSTITUTED
57

ARTICLE SIX

DEFAULT AND REMEDIES

SECTION
6.01
EVENTS OF DEFAULT
57
SECTION
6.02
ACCELERATION
58
SECTION
6.03
OTHER REMEDIES
58
SECTION
6.04
WAIVER OF PAST DEFAULTS
59
SECTION
6.05
CONTROL BY MAJORITY
59
SECTION
6.06
LIMITATION ON SUITS
59
SECTION
6.07
RIGHTS OF HOLDERS TO RECEIVE PAYMENT
59
SECTION
6.08
COLLECTION SUIT BY TRUSTEE
59
SECTION
6.09
TRUSTEE MAY FILE PROOFS OF CLAIM
60
SECTION
6.10
PRIORITIES
60
SECTION
6.11
UNDERTAKING FOR COSTS
60
SECTION
6.12
EXPENSES AND SERVICES AFTER AN EVENT OF DEFAULT
60

ARTICLE SEVEN

TRUSTEE

SECTION
7.01
DUTIES OF TRUSTEE
61
SECTION
7.02
RIGHTS OF TRUSTEE
62
SECTION
7.03
INDIVIDUAL RIGHTS OF TRUSTEE
63
SECTION
7.04
TRUSTEE'S DISCLAIMER
64
SECTION
7.05
NOTICE OF DEFAULT
64
SECTION
7.06
[INTENTIONALLY OMITTED]
64
SECTION
7.07
COMPENSATION AND INDEMNITY
64
SECTION
7.08
REPLACEMENT OF TRUSTEE
65
SECTION
7.09
SUCCESSOR TRUSTEE BY MERGER, ETC
65
SECTION
7.10
ELIGIBILITY; DISQUALIFICATION
66
SECTION
7.11
[INTENTIONALLY OMITTED]
66
SECTION
7.12
APPOINTMENT OF CO-TRUSTEE
66
SECTION
7.13
COLLATERAL
67

ARTICLE EIGHT

DISCHARGE OF INDENTURE; DEFEASANCE

SECTION
8.01
TERMINATION OF THE COMPANY'S OBLIGATIONS
67
SECTION
8.02
ACKNOWLEDGMENT OF DISCHARGE BY TRUSTEE
69
SECTION
8.03
APPLICATION OF TRUST MONEY
69
SECTION
8.04
REPAYMENT TO THE COMPANY
69
SECTION
8.05
REINSTATEMENT
70

ARTICLE NINE

AMENDMENTS, SUPPLEMENTS AND WAIVERS

SECTION
9.01
WITHOUT CONSENT OF HOLDERS
70
SECTION
9.02
WITH CONSENT OF HOLDERS
71
SECTION
9.03
[INTENTIONALLY OMITTED]
71
SECTION
9.04
REVOCATION AND EFFECT OF CONSENTS
72
SECTION
9.05
NOTATION ON OR EXCHANGE OF NOTES
72
SECTION
9.06
TRUSTEE TO SIGN AMENDMENTS, ETC
72

ARTICLE TEN

[INTENTIONALLY OMITTED]

ARTICLE ELEVEN

GUARANTEE OF NOTES

SECTION
11.01
UNCONDITIONAL GUARANTEE
72
SECTION
11.02
LIMITATIONS ON GUARANTEES
73
SECTION
11.03
EXECUTION AND DELIVERY OF ADDITIONAL GUARANTEES
73
SECTION
11.04
RELEASE OF A GUARANTOR
74
SECTION
11.05
WAIVER OF SUBROGATION
74
SECTION
11.06
IMMEDIATE PAYMENT
75
SECTION
11.07
NO SET-OFF
75
SECTION
11.08
OBLIGATIONS ABSOLUTE
75
SECTION
11.09
OBLIGATIONS CONTINUING
75
SECTION
11.10
OBLIGATIONS NOT REDUCED
75
SECTION
11.11
OBLIGATIONS REINSTATED
75
SECTION
11.12
OBLIGATIONS NOT AFFECTED
75
SECTION
11.13
WAIVER
76
SECTION
11.14
NO OBLIGATION TO TAKE ACTION AGAINST THE COMPANY
76
SECTION
11.15
DEALING WITH THE COMPANY AND OTHERS
76
SECTION
11.16
DEFAULT AND ENFORCEMENT
77
SECTION
11.17
AMENDMENT, ETC
77
SECTION
11.18
ACKNOWLEDGMENT
77
SECTION
11.19
COSTS AND EXPENSES
77
SECTION
11.20
NO WAIVER; CUMULATIVE REMEDIES
77
SECTION
11.21
GUARANTEE IN ADDITION TO OTHER OBLIGATIONS
77
SECTION
11.22
SEVERABILITY
77
SECTION
11.23
SUCCESSORS AND ASSIGNS
77
SECTION
11.24
RIGHT OF TRUSTEE TO HOLD DESIGNATED SENIOR DEBT
79
SECTION
11.25
NO SUSPENSION OF REMEDIES
79
SECTION
11.26
NO FIDUCIARY DUTY OF TRUSTEE TO HOLDERS OF DESIGNATED SENIOR DEBT
79

ARTICLE TWELVE

SUBORDINATION OF GUARANTEE

SECTION
12.01
AGREEMENT TO SUBORDINATE GUARANTEES
  
SECTION
12.02
OBLIGATIONS OF THE GUARANTORS UNCONDITIONAL
  
SECTION
12.03
INTENTIONALLY OMITTED
  
SECTION
12.04
APPLICATION BY TRUSTEE OF ASSETS DEPOSITED WITH IT
  
SECTION
12.05
HOLDERS AUTHORIZE TRUSTEE TO EFFECTUATE SUBORDINATION OF GUARANTEE
  

ARTICLE THIRTEEN

COLLATERAL SECURITY DOCUMENTS AND THE SECURITY AGENT

SECTION
13.01
COLLATERAL AND SECURITY DOCUMENTS
79
SECTION
13.02
SUITS TO PROTECT THE COLLATERAL
80
SECTION
13.03
RESIGNATION AND REPLACEMENT OF SECURITY AGENT
80
SECTION
13.04
[INTENTIONALLY OMITTED]
81
SECTION
13.05
RELEASE OF THE LIEN ON THE COLLATERAL
81
SECTION
13.06
[INTENTIONALLY OMITTED]
81
SECTION
13.07
CONFLICTS
81

ARTICLE FOURTEEN

MISCELLANEOUS

SECTION
14.01
[INTENTIONALLY OMITTED]
81
SECTION
14.02
NOTICES
81
SECTION
14.03
[INTENTIONALLY OMITTED]
82
SECTION
14.04
CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT
82
SECTION
14.05
STATEMENTS REQUIRED IN CERTIFICATE OR OPINION
82
SECTION
14.06
RULES BY TRUSTEE, PAYING AGENT, REGISTRAR
83
SECTION
14.07
LEGAL HOLIDAYS
83
SECTION
14.08
GOVERNING LAW
83
SECTION
14.09
NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS
83
SECTION
14.10
NO RECOURSE AGAINST OTHERS
83
SECTION
14.11
SUCCESSORS
83
SECTION
14.12
AGENT FOR SERVICE; SUBMISSION TO JURISDICTION; WAIVER OF IMMUNITY
83
SECTION
14.13
DUPLICATE ORIGINALS
84
SECTION
14.14
SEVERABILITY
84
SECTION
14.15
INDEPENDENCE OF COVENANTS
84




Page
Exhibits

Exhibit A-1
Form of Restricted Dollar Note
Exhibit A-2
Form of Restricted Euro Note
Exhibit A-3
Form of Unrestricted Dollar Note
Exhibit A-4
Form of Unrestricted Euro Note
Exhibit B
Form of Legend for Global Security
Exhibit C-1
Form of Transfer Certificate - Restricted Global Security to Regulation S Global Security
Exhibit C-2
Form of Transfer Certificate - Restricted Global Security to Unrestricted Global Security
Exhibit C-3
Form of Transfer Certificate - Regulation S Global Security to Restricted Global Security
Exhibit D
Form of Guarantee


INDENTURE, dated as of August 10, 2005, among NELL AF S.À.R.L., a Luxembourg entity (the "Company"), each of the Guarantors named herein, as guarantors, The Bank of New York, a national banking association, as Trustee, Registrar, Paying Agent, Transfer Agent and Listing Agent, ABN AMRO Bank N.V., as security agent (the "Security Agent"), and AIB/BNY Fund Management (Ireland) Limited, as Irish Paying Agent.
 
The Company has duly authorized the creation of an issue of Dollar denominated 8-3/8% Senior Notes due 2015 (the "Dollar Notes") and euro denominated 8-3/8% Senior Notes due 2015 (the "Euro Notes"). All things necessary to make the Notes, when duly issued and executed by the Company and authenticated and delivered here-under, the valid and binding obligations of the Company and to make this Indenture a valid and binding agreement of the Company have been done.
 
All things necessary to make the Guarantees the valid and binding obligations of each Guarantor party hereto and to make this Indenture a valid and binding agreement of each Guarantor party hereto have been done.
 
Each party hereto agrees as follows for the benefit of the other parties and for the equal and ratable benefit of the Holders of the Notes:
 
ARTICLE ONE
 
DEFINITIONS
 
Section 1.01                                 Definitions.
 
"Acquired Indebtedness" means Indebtedness of a Person or any of its Subsidiaries existing at the time such Person becomes a Restricted Subsidiary of the Company or at the time it merges or consolidates with the Company or any of its Restricted Subsidiaries or assumed in connection with the acquisition of assets from such Person and in each case not incurred by such Person in connection with, or in anticipation or contemplation of, such Person becoming a Restricted Subsidiary of the Company or such acquisition, merger or consolidation, except for Indebtedness of a Person or any of its Subsidiaries that is repaid at the time such Person becomes a Restricted Subsidiary of the Company or at the time it merges or consolidates with the Company or any of its Restricted Subsidiaries.
 
"Acquisition" means the acquisition of Basell B.V. and Basell Finance USA, Inc. by Nell Acquisition (US) LLC, Nell Acquisition S.à.r.l. and Nell Bidco B.V., affiliates of the Company.
 
"actual knowledge" means, with respect to the Trustee, knowledge (actual or otherwise) of the existence of facts that would impose an obligation on it to make any payment or prohibit it from making any payment unless a Responsible Officer of the Trustee has received one Business Day's written notice that such payments are required or prohibited by the Intercreditor Agreement or this Indenture.
 
"Additional Dollar Notes" means Dollar Notes (other than the Initial Dollar Notes and other than issuances under Section 2.07 or 2.16) issued under this Indenture from time to time in accordance with Sections 2.01, 2.02, 2.18 and 4.12.
 
"Additional Euro Notes" means Euro Notes (other than the Initial Euro Notes and other than issuances under Section 2.07 or 2.16) issued under this Indenture from time to time in accordance with Sections 2.01, 2.02, 2.18 and 4.12.
 
"Additional Notes" means the Additional Dollar Notes (if any) and the Additional Euro Notes (if any).
 
"Affiliate" means, with respect to any specified Person, any other Person who directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, such specified Person. The term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative of the foregoing; provided, however, that none of the Initial Purchasers or their Affiliates shall be deemed to be an Affiliate of the Company.
 


"Affiliate Transaction" has the meaning provided in Section 4.11(a).
 
"Agent" means any Registrar, Paying Agent, Security Agent or Co-Registrar, including any permitted successors or assigns thereto.
 
"Agent Member" means any member of, or participant in, the Depositary.
 
"Applicable Premium" means with respect to any Euro Note on any redemption date, the excess (to the ex-tent positive) of:
 
(1)            the present value at such redemption date of (i) the redemption price of such Euro Note at August 15, 2010 (such redemption price (expressed in percentage of principal amount) being set forth in the table below under this section (excluding accrued and unpaid interest)), plus (ii) all required interest payments due on such Euro Note to and including August 15, 2010 (including accrued but unpaid interest), computed upon the redemption date using a discount rate equal to the Bund Rate at such redemption date plus 50 basis points; over
 
(2)            the outstanding principal amount of such Euro Note,
 
and, with respect of any Dollar Note on any redemption date, the excess (to the extent positive) of:
 
(1)            the present value at such redemption date of (i) the redemption price of such Dollar Note at August 15, 2010 (such redemption price (expressed in percentage of principal amount) being set forth in the table below under this section (excluding accrued but unpaid interest)), plus (ii) all required interest payments due on such Dollar Note to and including August 15, 2010 (including accrued but unpaid interest), computed upon the redemption date using a discount rate equal to the Treasury Rate at such redemption date plus 50 basis points; over
 
(2)            the outstanding principal amount of such Dollar Note
 
in each case, as calculated by the Company or on behalf of the Company by such Person as the Company shall designate.
 
Year
  
Percentage
2010
  
104.250%
2011
  
102.833%
2012
  
101.417%
2013 and thereafter
  
100.000%

 
"Applicable Procedures" has the meaning provided in Section 2.16(a)(ii).
 
"Asset Acquisition" means (a) an Investment by the Company or any Restricted Subsidiary of the Company in any other Person pursuant to which such Person shall become a Restricted Subsidiary of the Company or of any Restricted Subsidiary of the Company, or shall be merged with or into the Company or any Restricted Subsidiary of the Company, or (b) the acquisition by the Company or any Restricted Subsidiary of the Company of the as-sets of any Person (other than a Restricted Subsidiary of the Company) which constitute all or substantially all of the assets of such Person or comprises any division or line of business of such Person or any other properties or assets of such Person other than in the ordinary course of business.
 
"Asset Sale" means any direct or indirect sale, issuance, conveyance, transfer, lease (other than operating leases entered into in the ordinary course of business), assignment or other transfer for value by the Company or any of its Restricted Subsidiaries (including any Sale and Leaseback Transaction) to any Person other than the Company or a Restricted Subsidiary of the Company of (a) any Capital Stock of any Restricted
 


Subsidiary of the Company (other than to qualifying directors or nominal shareholders if required by applicable law or other similar legal requirements); or (b) any other property or assets of the Company or any Restricted Subsidiary of the Company other than in the ordinary course of business; provided,however, that Asset Sales shall not include (i) a transaction or series of related transactions for which the Company or its Restricted Subsidiaries receive Fair Market Value for the property or assets and the aggregate consideration is less than €10 million, (ii) sales of accounts receivable and related assets (including contract rights) of the type specified in the definition of "Qualified Securitization Transaction" to a Securitization Entity for the Fair Market Value thereof, (iii) sales or grants of licenses to use the patents, trade secrets, know-how and other intellectual property of the Company or any of its Restricted Subsidiaries to the extent that such license does not prohibit the Company or any of its Restricted Subsidiaries from using the technologies licensed (other than pursuant to exclusivity or non-competition arrangements negotiated on an arm's length basis) or require the Company or any of its Restricted Subsidiaries to pay any fees for any such use, (iv) the sale, lease, conveyance, disposition or other transfer (A) of all or substantially all of the assets of the Company as permitted under Section 5.01, (B) of any Capital Stock or other ownership interest in or assets or property, including Indebtedness, of an Unrestricted Subsidiary or a Person which is not a Subsidiary, (C) pursuant to any foreclosure of assets or other remedy provided by applicable law to a creditor of the Company or any Subsidiary of the Company with a Lien on such assets, which Lien is permitted under this Indenture; provided that such foreclosure or other remedy is conducted in a commercially reasonable manner or in accordance with any bankruptcy law, (D) involving only cash or Cash Equivalents or inventory in the ordinary course of business or obsolete or worn out property or property that is no longer useful in the conduct of the business of the Company or its Restricted Subsidiaries (in the reasonable and good faith judgment of the Board of Directors of the Company) in the ordinary course of business consistent with past practices of the Company or such Restricted Subsidiaries or (E) including only the lease or sub-lease of any real or personal property in the ordinary course of business, (v) the consummation of any transaction in accordance with the terms of Sections 4.03 and 5.01 and (vi) Permitted Investments.
 
"Australian Credit Facilities" means:
 
(1)            the Facility Agreement dated October 26, 2001 by and among Basell Australia Pty Ltd as borrower and Australia and New Zealand Banking Group Ltd as lenders party thereto, together with the documents related thereto (including any term loans and revolving loans thereunder, and any guarantees and security documents), as amended, extended, renewed, restated, supplemented or otherwise modified (in whole or in part, and without limitation as to amount, terms, conditions, covenants and other provisions) from time to time, and
 
(2)            any such agreements, instruments or guarantees governing Indebtedness incurred to Refinance any Indebtedness or commitments referred to in (1) whether by the same or any other lender or group of lenders.
 
"Bankruptcy Law" means Title 11, United States Code or any similar federal, state or foreign law for the relief of debtors.
 
"Basell Parent Company" means any entity of which the Company is a direct or indirect Wholly Owned Subsidiary (other than shares held by qualifying directors or nominal shareholders if required by applicable law or otherwise due to similar legal requirements).
 
"Blavatnik Group" shall mean, collectively:
 
(1)            Mr. Leonard Blavatnik, his spouse, direct descendants, siblings, parents, children of siblings, or grandchildren, grand nieces and grand nephews, any other members of the immediate Blavatnik family, or
 
(2)            any trust or any other entity directly or indirectly controlled by, or for the benefit of, one or more members of the Blavatnik family described above, or
 


(3)            any trust (a "Blavatnik Charitable Trust"):
 
(a)            for the benefit of a charity created by any member of the Blavatnik family de-scribed above, or
 
(b)            to which any such member of the Blavatnik family is a substantial donor or grantor, or
 
(4)            the estate, executor, administrator, committee of beneficiaries of any member of the Blavatnik Group listed in sub-clause (1) and (2);
 
provided that, in the case of paragraphs (3)(a) and (3)(b) of this definition, a member of the Blavatnik Group de-scribed in clauses (l) or (2) of this definition maintains control thereof.
 
For purposes of this definition only, "control" of a Blavatnik Charitable Trust means the possession of the power to direct or cause the direction of management and policies of such Blavatnik Charitable Trust in respect of the issued share capital of the Company owned by such Blavatnik Charitable Trust.
 
"Board of Directors" means, as to any Person, the board of directors (or similar governing body) of such Person or any duly authorized committee thereof.
 
"Board Resolution" means, with respect to any Person, a copy of a resolution certified by the Secretary or an Assistant Secretary of such Person (or another person duly authorized to so act by the Board of Directors) to have been duly adopted by the Board of Directors of such Person and to be in full force and effect on the date of such certification, and delivered to the Trustee.
 
"Bund Rate" means the yield to maturity at the time of computation of direct obligations of the Federal Re-public of Germany (Bunds or Bundesanleihen) with a constant maturity (as officially compiled and published in the most recent financial statistics that have become publicly available at least two Business Days (but not more than five Business Days) prior to the redemption date (or, if such financial statistics are not so published or available, any publicly available source of similar market data selected by the Issuer in good faith)) most nearly equal to the period from the redemption date to August 15, 2010; provided, however, that if the period from the redemption date to August 15, 2010 is not equal to the constant maturity of a direct obligation of the Federal Republic of Germany for which a weekly average yield is given, the Bund Rate shall be obtained by linear interpolation (calculated to the nearest one-twelfth of a year) from the weekly average yields of direct obligations of the Federal Republic of Germany for which such yields are given, except that if the period from such redemption date to August 15, 2010 is less than one year, the weekly average yield on actually traded direct obligations of the Federal Republic of Germany adjusted to a constant maturity of one year shall be used.
 
"Business Day" means a day that is not a Saturday or Sunday or a day on which banking institutions in New York, New York or London, U.K. are not required to be open.
 
"Capital Stock" means (i) with respect to any Person that is a corporation, any and all shares, interests, participations or other equivalents (however designated and whether or not voting) of corporate stock, including each class of Common Stock and Preferred Stock of such Person and (ii) with respect to any Person that is not a corporation, any and all partnership, membership or other equity interests of such Person.
 
"Capitalized Lease Obligation" means, as to any Person, the obligations of such Person under a lease that are required to be classified and accounted for as capital lease obligations under GAAP and, for purposes of this definition, the amount of such obligations at any date shall be the capitalized amount of such obligations at such date, determined in accordance with GAAP.
 


"Cash Equivalents" means
 
(i)            a marketable obligation, maturing within two years after issuance thereof, issued or guaranteed by the United States of America, Australia, Switzerland or any state which was a member state of the European Union on December 31, 2003, or an instrumentality or agency thereof,
 
(ii)            a certificate of deposit or banker's acceptance, maturing within one year after issuance thereof, issued by any lender under the Credit Facilities, or a U.S. national or state bank or trust company or a European, Canadian, Australian, Swiss or Japanese bank, in each case having capital, surplus and undivided profits of at least $100,000,000 and whose long-term unsecured debt has a rating of "A" or better by S&P or A2 or better by Moody's or the equivalent rating by any other nationally recognized rating agency,
 
(iii)            open market commercial paper, maturing within 365 days after issuance thereof; which has a rating of Al or better by S&P or P1 or better by Moody's or the equivalent rating by any other nationally recognized rating agency,
 
(iv)            repurchase agreements and reverse repurchase agreements with a term not in excess of one year with any financial institution which has been elected as a primary government securities dealer by the Federal Reserve Board or whose securities are rated AA- or better by S&P or Aa3 or better by Moody's or the equivalent rating by any other nationally recognized rating agency relating to marketable direct obligations issued or unconditionally guaranteed by the United States of America or any agency or instrumentality thereof and backed by the full faith and credit of the United States of America,
 
(v)            "Money Market" preferred stock maturing within six months after issuance thereof or municipal bonds issued by a corporation organized under the laws of any state of the United States, Australia, Switzerland or any state which was a member state of the European Union on December 31, 2003, which has a rating of "A" or better by S&P or Moody's or the equivalent rating by any other nationally recognized rating agency,
 
(vi)            tax exempt floating rate option tender bonds backed by letters of credit issued by a national or state bank whose long-term unsecured debt has a rating of AA or better by S&P or Aa2 or better by Moody's or the equivalent rating by any other nationally recognized rating agency, and
 
(vii)            shares of any money market mutual fund rated at least AAA or the equivalent thereof by S&P or at least Aaa or the equivalent thereof by Moody's or any other mutual fund holding assets consisting (except for de minimis amounts) of the type specified in clauses (i) through (vi) above.
 
"Change of Control" means the occurrence of any of the following:
 
(1)            Sponsor ceases to hold legally and beneficially:
 
(a)            issued share capital having the right to cast at least 51% (or, following a Listing, at least 35%) of the votes capable of being cast in general meetings of the Company; or
 
(b)            before a Listing, the right to determine the composition of the majority of the Board of Directors or equivalent body of the Company;
 
(2)            following a Listing, any Person or group of Persons acting in concert (other than Sponsor) owns, directly or indirectly, a greater percentage of the issued share capital or issued share capital with voting rights of the Company than the Sponsor or, at any time, otherwise acquires control of the Company; or
 
(3)            the Company ceases to hold, whether directly or indirectly, all of the issued share capital of Basell B.V. or Nell Bidco B.V. (or, in the alternative, if Nell Bidco B.V. and Basell B.V. merge, the surviving entity of such merger);
 


(4)            the replacement of a majority of the Board of Directors of the Company over a two-year period from the directors who constituted the Board of Directors of the Company at the beginning of such period, and such replacement shall not have been approved by a vote of at least a majority of the Board of Directors of the Company, then still in office who either were members of such Board of Directors at the beginning of such period or whose election as a member of such Board of Directors was previously so approved; or
 
(5)            the adoption by the stockholders of the Company of a plan or proposal for the liquidation or dissolution of the Company, other than a transaction complying with Article Five.
 
"Change of Control Date" has the meaning provided in Section 4.14(c)
 
"Change of Control Offer" has the meaning provided in Section 4.14(a).
 
"Change of Control Payment Date" has the meaning provided in Section 4.14(c)(2).
 
"Clearstream" shall mean Clearstream Banking S.A.
 
"Collateral" means the High Yield Proceeds Loan and the Nell Pledged Shares.
 
"Commission" or "SEC" means the Securities and Exchange Commission.
 
"Commodity Agreement" means any commodity futures contract, commodity option or other similar agreement or arrangement entered into by the Company or any of its Restricted Subsidiaries.
 
"Common Depositary" means The Bank of New York, as common depositary for Euroclear and depositary for the Euro Denominated Securities, together with its successors in such capacity.
 
"Common Stock" of any Person means any and all shares, interests or other participations in, and other equivalents (however designated and whether voting or non-voting) of such Person's common stock, whether out-standing on the Issue Date or issued after the Issue Date, and includes, without limitation, all series and classes of such common stock.
 
"Company" means the party named as such in this Indenture until a successor replaces it pursuant to this Indenture and thereafter means such successor.
 
"Company Order" means any written order signed in the name of the Company by one of its Officers.
 
"Consolidated EBITDA" means, with respect to any Person, for any period, the sum (without duplication) of
 
(1)            Consolidated Net Income,
 
(2)            to the extent Consolidated Net Income has been reduced thereby,
 
(a)            after-tax items classified as extraordinary losses to the extent not excluded in determining Consolidated Net Income,
 
(b)            all income taxes of such Person and its Restricted Subsidiaries paid or accrued in accordance with GAAP for such period (other than income taxes attributable to extraordinary gains or losses),
 
(c)            Consolidated Interest Expense,
 
(d)            Consolidated Non-cash Charges, and -6-
 


(e) the amount of net loss resulting from the payment of any premiums or similar amounts that are required to be paid under the express terms of the instrument(s) governing any Indebtedness of the Company upon the repayment or other extinguishment of such Indebtedness by the Company in accordance with the express terms of such Indebtedness,
 
all as determined on a consolidated basis for such Person and its Restricted Subsidiaries in accordance with GAAP.
 
"Consolidated Fixed Charge Coverage Ratio" means, with respect to any Person, the ratio of Consolidated EBITDA of such Person during the four full fiscal quarters ended either March 31, 2005 or, if later, the last quarter of which shall be the most recent quarter for which financial statements are available pursuant to Section 4.09 (the "Four Quarter Period") ending on or prior to the date of the transaction giving rise to the need to calculate the Consolidated Fixed Charge Coverage Ratio (the "Transaction Date") to Consolidated Fixed Charges of such Person for the Four Quarter Period.
 
In addition to the foregoing, for purposes of this definition, "Consolidated EBITDA" and "Consolidated Fixed Charges" shall be calculated after giving effect on a pro forma basis for the period of such calculation to (i) the incurrence or repayment or other reduction or discharge of any Indebtedness of such Person or any of its Restricted Subsidiaries (and the application of the proceeds thereof) giving rise to the need to make such calculation and any incurrence or repayment of other Indebtedness (and the application of the proceeds thereof), other than the incurrence or repayment of Indebtedness in the ordinary course of business for working capital purposes pursuant to working capital facilities, occurring during the Four Quarter Period or at any time subsequent to the last day of the Four Quarter Period and prior to the Transaction Date, as if such incurrence or repayment, as the case may be (and the application of the proceeds thereof), occurred on the first day of the Four Quarter Period and (ii) any Asset Sales or Asset Acquisitions (including any Asset Acquisition giving rise to the need to make such calculation) occurring during the Four Quarter Period or at any time subsequent to the last day of the Four Quarter Period and on or prior to the Transaction Date, as if such Asset Sale or Asset Acquisition (including the incurrence, assumption or liability for any such Acquired Indebtedness) occurred on the first day of the Four Quarter Period. If such Person or any of its Restricted Subsidiaries directly or indirectly guarantees Indebtedness of a Person other than the Company or a Restricted Subsidiary of the Company, the preceding sentence shall give effect to the incurrence of such guaranteed Indebtedness as if such Person or any Restricted Subsidiary of such Person had directly incurred or otherwise assumed such guaranteed Indebtedness. Furthermore, in calculating "Consolidated Fixed Charges" for purposes of determining the denominator (but not the numerator) of this "Consolidated Fixed Charge Coverage Ratio," (1) interest on outstanding Indebtedness determined on a fluctuating basis as of the Transaction Date and which will continue to be so determined thereafter shall be deemed to have accrued at a fixed rate per annum equal to the rate of interest on such Indebtedness in effect on the Transaction Date; (2) if interest on any Indebtedness actually incurred on the Transaction Date may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate, or other rates, then the interest rate in effect on the Transaction Date will be deemed to have been in effect during the Four Quarter Period; and (3) notwithstanding clause (1) above, interest on Indebtedness determined on a fluctuating basis, to the extent such interest is covered by agreements relating to Interest Swap Obligations, shall be deemed to accrue at the rate per annum resulting after giving effect to the operation of such agreements.
 
"Consolidated Fixed Charges" means, with respect to any Person for any period, the sum, without duplication, of (i) Consolidated Interest Expense, plus (ii) the product of (x) the amount of all dividend payments on any series of Preferred Stock of such Person and its Restricted Subsidiaries (other than dividends paid in Qualified Capital Stock and other than dividends paid to such Person or to a Restricted Subsidiary of such Person) paid, accrued or scheduled to be paid or accrued during such period times (y) a fraction, the numerator of which is one and the de-nominator of which is one minus the then current effective consolidated national, state and local tax rate of such Person, expressed as a decimal.
 
"Consolidated Interest Expense" means, with respect to any Person for any period, the sum of, without duplication: (i) the aggregate of the interest expense of such Person and its Restricted Subsidiaries for such period determined on a consolidated basis in accordance with GAAP, including without limitation, (a) any amortization of debt discount and amortization or write-off of deferred financing costs, (b) the net
 


costs under Interest Swap Obligations, (c) all Capitalized interest and (d) the interest portion of any deferred payment obligation; but excluding, in each case, any amortization of fees incurred in connection with the Senior Secured Credit Facilities, the Interim Loan, any Qualified Securitization Transaction or the issuance of the Notes; and (ii) the interest component of Capitalized Lease Obligations paid, accrued and/or scheduled to be paid or accrued by such Person and its Restricted Subsidiaries during such period as determined on a consolidated basis in accordance with GAAP.
 
"Consolidated Net Income" means, with respect to any Person, for any period, the sum of: (x) the aggregate net income (or loss) of such Person and its Restricted Subsidiaries for such period on a consolidated basis, determined in accordance with GAAP plus (y) cash dividends or distributions paid to such Person or a Restricted Subsidiary of such Person by any other Person (the "Payor") other than a Restricted Subsidiary of the referent Person, to the extent not otherwise included in Consolidated Net Income, which have been derived from operating cash flow of the Payor; provided that there shall be excluded therefrom (a) after-tax gains from Asset Sales or abandonments or reserves relating thereto, (b) after-tax items classified as extraordinary or nonrecurring gains (including, for the avoidance of doubt and irrespective of its classification, the effect of bad will (or negative goodwill) arising as a result of the Acquisition) and any gains or losses on the disposal or reversal of impairment losses on assets, (c) the net income of any Person acquired in a "pooling of interests" transaction accrued prior to the date it becomes a Restricted Subsidiary of the Person or is merged or consolidated with the Person or any Restricted Subsidiary of the Person, (d) the net income (but not loss) of any Restricted Subsidiary of the Person to the extent that the declaration of dividends or similar distributions by that Restricted Subsidiary of that income is restricted; provided,however, that the net income of Restricted Subsidiaries shall only be excluded in any calculation of Consolidated Net Income of the Company as a result of application of this clause (d) if the restriction on dividends or similar distributions results from consensual restrictions other than any restriction contained in [clauses (2), (4), (5), (11), (16), (17) and (18) of Section 4.13], (e) the net income or loss of any Person, other than a Restricted Subsidiary of the Person, except to the extent of cash dividends or distributions paid to the Person or to a Restricted Subsidiary of the Person by such Person (net of associated tax), (f) any restoration to income of any contingency reserve, except to the extent that provision for such reserve was made out of Consolidated Net Income accrued at any time following the Issue Date, (g) income or loss attributable to discontinued operations (including, without limitation, operations disposed of during such period whether or not such operations were classified as discontinued), (h) in the case of a successor to the Person by consolidation or merger or as a transferee of the referent Person's assets, any earnings of the successor corporation prior to such consolidation, merger or transfer of assets and all dividends received by the Company as described in clause (iv) of the second paragraph of the definition of "Indebtedness" to the extent the Company is obligated to apply such dividends in the repayment of such Indebtedness.
 
"Consolidated Non-cash Charges" means, with respect to any Person, for any period, the aggregate depreciation, amortization and other non-cash expenses of such Person and its Restricted Subsidiaries reducing Consolidated Net Income of such Person and its Restricted Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP (excluding any such charges constituting an extraordinary item or loss or any such charge which requires an accrual of or a reserve for cash charges for any future period).
 
"Corporate Trust Office" means the principal office of the Trustee at which at any time its corporate trust business shall be administered, or such other address as the Trustee may designate from time to time by notice to the Holders and the Company, or the principal corporate trust office of any successor Trustee (or such other address as a successor Trustee may designate from time to time by notice to the Holders and the Company).
 
"Covenant Defeasance" has the meaning provided in Section 8.01.
 
"Credit Facilities" means:
 
(1)            the Senior Secured Credit Facilities,
 
(2)            any credit agreement (and related document) or similar instrument, including any similar credit support agreements or guarantees, governing other revolving credit, working capital
 


or term Indebtedness incurred from time to time, other than the Australian Credit Facilities and the Hong Kong Facility, and
 
(3)            any such agreements, instruments or guarantees governing Indebtedness incurred to Refinance any Indebtedness or commitments referred to in (1) and (2) whether by the same or any other lender or group of lenders.
 
"Currency Agreement" means any foreign exchange contract, currency swap agreement or other similar agreement or arrangement.
 
"Custodian" means any receiver, trustee, assignee, liquidator, sequestrator or similar official under any Bankruptcy Law.
 
"Default" means an event or condition the occurrence of which is, or with the lapse of time or the giving of notice or both would be, an Event of Default.
 
"Depositary" means DTC or the Common Depositary, as the case may be.
 
"Designated Senior Debt" means Senior Debt and Hedging Debt, each as defined in the Intercreditor Agreement.
 
"Discharged" means that the Company shall be deemed to have paid and discharged the entire Indebtedness represented by, and obligations under, the Notes and to have satisfied all the obligations under this Indenture relating to the Notes (and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging the same upon compliance by the Company with the provisions of Article Eight), except (i) the rights of the Holders of Notes to receive, from the trust fund described in Article Eight, payment of the principal of and the interest on such Notes when such payments are due, (ii) the Company's obligations with respect to the Notes under Sections 2.03 through 2.07, 7.07 and 7.08 and (iii) the rights, powers, trusts, duties and immunities of the Trustee hereunder.
 
"Disqualified Capital Stock" means that portion of any Capital Stock which, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event, matures or is mandatorily redeemable (other than redeemable only for Capital Stock of such Person that is not itself Disqualified Capital Stock), pursuant to a sinking fund obligation or otherwise, or is redeemable at the sole option of the holder thereof on or prior to the final maturity date of the Notes; provided,however, that any Capital Stock that would not constitute Disqualified Capital Stock but for provisions thereof giving holders thereof the right to require such Person to purchase or redeem such Capital Stock upon the occurrence of a "change of control" occurring prior to the first anniversary of the final maturity of the Notes shall not constitute Disqualified Capital Stock if:
 
(1)            the "change of control" provisions applicable to such Capital Stock are not more favor-able to the holders of such Capital Stock than the terms applicable to the Notes pursuant to Section 4.14; and
 
(2)            any such requirement only becomes operative after compliance with such terms applicable to the Notes, including the purchase of any notes tendered pursuant thereto.
 
Notwithstanding the preceding sentence, only the portion of such Capital Stock which so matures or is mandatorily redeemable or is so convertible or exchangeable prior to the first anniversary of the final maturity of the Notes shall be so deemed Disqualified Capital Stock. The amount of any Disqualified Capital Stock that does not have a fixed redemption, repayment or repurchase price shall be calculated in accordance with the terms of such Disqualified Capital Stock as if such Disqualified Capital Stock were redeemed, repaid or repurchased on any date on which the amount of such Disqualified Capital Stock is to be determined pursuant to the indenture; provided,however, that if such Disqualified Stock could not be required to be redeemed, repaid or repurchased at the time of such determination, the redemption, repayment or repurchase price shall be the book value of such Disqualified Capital Stock as reflected in the most recent financial statements of such Person.
 
"Dollar" or "1" means the lawful currency of the United States of America.
 


"Dollar Paying Agent" means an office or agency of the Company where Dollar Notes may be presented for payment.
 
"Dollar Denominated Global Security" means a Global Security denominated in Dollars.
 
"Dollar Registrar" means an office or agency of the Company where Dollar Notes may be presented for registration of transfer or exchange.
 
"DTC" means the Depository Trust Company, its nominees and successors.
 
"Enforcement Sale" means (1) any sale or disposition of collateral pursuant to enforcement action taken by the Security Agent in accordance with the provisions of the Intercreditor Agreement, including on behalf of the Designated Senior Debt incurred under the Senior Secured Credit Facilities, to the extent such sale or disposition is effected in compliance with the provisions of the Intercreditor Agreement, or (2) any sale or disposition of collateral pursuant to the enforcement of security in favor of other Designated Senior Debt which complies with the terms of an intercreditor agreement (or if there is no such intercreditor agreement, would substantially comply with the requirements of clause (1) hereof).
 
"Equity Offering" means any sale of Qualified Capital Stock of the Company or any capital contribution to the equity of the Company.
 
"euro" or "€" means the currency introduced at the start of the third stage of economic and monetary union pursuant to the Treaty of Rome establishing the European Community, as amended by the Treaty on European Union, signed at Maastricht on February 7, 1992.
 
"euro Equivalent" means with respect to any monetary amount in a currency other than euro, at any time for the determination thereof, the amount of euro obtained by converting such foreign currency involved in such computation into euro at the spot rate for the purchase of euro with the applicable foreign currency as published under "Currency Rates" in the section of the Financial Times entitled "Currencies, Bonds & Interest Rates" on the date two business days prior to such determination.
 
"Euro Denominated Global Security" means a Global Security denominated in euro. "Euroclear" means Euroclear Bank S.A./N.V., as operator of the Euroclear System.
 
"Euro Obligations" means non-callable government obligations of any member nation of the European Union whose official currency is the euro, rated AAA or better by S&P and Aaa or better by Moody's.
 
"Euro Paying Agent" means an office or agency of the Company where Euro Notes may be presented for payment, which shall initially be The Bank of New York.
 
"Euro Registrar" means an office or agency of the Company where Euro Notes may be presented for registration of transfer or exchange, which shall initially be The Bank of New York.
 
"Event of Default" has the meaning provided in Section 6.01.
 
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or any successor statute or statutes thereto.
 
"Fair Market Value" means, with respect to any asset or property, the price which could be negotiated in an arm's-length, free market transaction, for cash, between a willing seller and a willing and able buyer, neither of whom is under undue pressure or compulsion to complete the transaction. Fair Market Value (i) with respect to a determination of value in excess of €5 million shall be determined by disinterested members of the Board of Directors of the Company acting reasonably and in good faith and shall be evidenced by a Board Resolution delivered to the Trustee or (ii) in all other cases, by an Officer's Certificate delivered to the Trustee.
 


"Foreign Subsidiary" means any Subsidiary of the Company organized under the laws of, and conducting a substantial portion of its business in, any jurisdiction other than the United States of America or any state thereof or the District of Columbia.
 
"Funds" means the aggregate amount of U.S. Legal Tender and/or U.S. Government Obligations (in the case of Dollar Notes) and euro and/or Euro Obligations (in the case of the Euro Notes) deposited with the Trustee pursuant to Article Eight.
 
"GAAP" means International Financial Reporting Standards as in effect on the Issue Date as adopted by the Company, except as otherwise set forth in Section 4.09. All ratios and calculations based on GAAP contained in this Indenture shall be computed in conformity with GAAP unless this Indenture otherwise provides.
 
"Global Security" means a Regulation S Global Security (or Unrestricted Global Security) or a Restricted Global Security.
 
"Guarantee" means the guarantee by a Guarantor of the obligations of the Company under this Indenture and the Notes contemplated by Article Eleven of this Indenture.
 
"Guarantor" means (i) each of the Company's Restricted Subsidiaries that executes this Indenture as a Guarantor and (ii) each of the Company's Restricted Subsidiaries that in the future executes a guarantee substantially in the form of Exhibit D whereby such Restricted Subsidiary agrees to be bound by the terms of this Indenture as a Guarantor; provided that any Person constituting a Guarantor as described above shall cease to constitute a Guarantor when its respective Guarantee is released in accordance with the terms of this Indenture.
 
"High Yield Proceeds Loan" means the loan dated as of the Issue Date between the Company, as lender, and Nell Bidco B.V., as borrower, of the gross proceeds of the Notes pursuant to the high yield proceeds loan agreement.
 
"Holder" or "Noteholder" means the Person in whose name a Note is registered on the Registrar's books.
 
"Holding Company" shall mean, in relation to a company, corporation or other legal entity, any other company, corporation or other legal entity in respect of which the former company, corporation or other legal entity is a Subsidiary.
 
"Hong Kong Facility" means:
 
(1)            the Short Term Credit Facility Letter dated April 24, 2003 by and among Basell China Limited as borrower and Citibank, N.A. Hong Kong Branch as lenders party thereto and the Facility Letter dated March 4, 2004 by and among Basell Asia Pacific Limited as borrower and ABN AMRO Bank N. V. as lenders party thereto, in each case together with the documents related thereto (including any term loans and revolving loans thereunder, and any guarantees and security documents), as amended, extended, renewed, restated, supplemented or otherwise modified (in whole or in part, and without limitation as to amount, terms, conditions, covenants and other provisions) from time to time, and
 
(2)            any such agreements, instruments or guarantees governing Indebtedness incurred to Refinance any Indebtedness or commitments referred to in (1) whether by the same or any other lender or group of lenders.
 
"Indebtedness" means with respect to any Person, without duplication, (i) all Obligations of such Person for borrowed money, (ii) all Obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (iii) all Capitalized Lease Obligations of such Person, (iv) all Obligations of such Person issued or assumed as the deferred purchase price of property that is due more than six months after taking delivery of such property, all conditional sale obligations and all Obligations under any title retention agreement (but excluding trade accounts payable and other accrued liabilities arising in the ordinary course of business that are not overdue by 90 days or more or are being contested in good faith by appropriate proceedings promptly instituted and diligently conducted),
 


(v) all Obligations for the reimbursement of any obligor on any letter of credit, banker's acceptance or similar credit transaction, (vi) guarantees in respect of Indebtedness referred to in clauses (i) through (v) above and clause (viii) below, (vii) all Obligations of any other Person of the type referred to in clauses (i) through (vi) which are secured by any lien on any property or asset of such Person, the amount of such Obligation being deemed to be the lesser of the Fair Market Value of such property or asset or the amount of the Obligation so secured, (viii) all Obligations under Currency Agreements and Interest Swap Agreements of such Person, (ix) all Receivables Financings, and (x) all Disqualified Capital Stock issued by such Person with the amount of Indebtedness represented by such Disqualified Capital Stock being equal to the greater of its voluntary or involuntary liquidation preference and its maximum fixed repurchase price, but excluding accrued dividends, if any. For purposes hereof, the "maximum fixed repurchase price" of any Disqualified Capital Stock which does not have a fixed repurchase price shall be calculated in accordance with the terms of such Disqualified Capital Stock as if such Disqualified Capital Stock were purchased on any date on which Indebtedness shall be required to be determined pursuant to this Indenture, and if such price is based upon, or measured by, the Fair Market Value of such Disqualified Capital Stock, such Fair Market Value shall be determined reasonably and in good faith by the Board of Directors of the issuer of such Disqualified Capital Stock.
 
Notwithstanding the foregoing, "Indebtedness" shall not include (i) advances paid by customers in the ordinary course of business for services or products to be provided or delivered in the future, (ii) deferred taxes, (iii) unsecured indebtedness of the Company and/or its Restricted Subsidiaries incurred to finance insurance premiums in a principal amount not in excess of the insurance premiums to be paid by the Company and/or its Restricted Subsidiaries for a three year period beginning on the date of any incurrence of such indebtedness or (iv) Indebtedness owed or incurred by Basell Holdings Middle East GmbH ("BHME") pursuant to the Saudi Arabia Riyals 75 million credit facility agreement between BHME and Saudi British Bank dated October 1, 2001 (but only to the ex-tent that (a) the creditors under that agreement have no recourse to the Company other than BHME; and (b) the re-course those creditors have to BHME is limited to the proceeds (if any) of dividends received by BHME in respect of BHME's investment in Saudi Polyolefins Company) as well as any future arrangement(s) under a similar structure.
 
"Indenture" means this Indenture, as amended or supplemented from time to time in accordance with the terms hereof.
 
"Independent Financial Advisor" means a firm which, in the judgment of the Board of Directors of the Company, is independent and qualified to perform the task for which it is to be engaged.
 
"Initial Dollar Notes" means the $615,000,000 in aggregate principal amount of 8-3/8% Senior Notes due 2015 of the Company denominated in dollars that are issued on the Issue Date.
 
"Initial Euro Notes" means the €500,000,000 in aggregate principal amount of 8-3/8% Senior Notes due 2015 of the Company denominated in euro that are issued on the Issue Date.
 
"Initial Guarantors" means Nell Funding S.à.r.l., Nell Bidco B.V., Nell US Acquisition S.à.r.l., Nell Acquisition (US) LLC, Basell Finance USA, Inc., Basell North America Inc. and Basell USA Inc.
 
"Initial Notes" means the Initial Dollar Notes and the Initial Euro Notes.
 
"Initial Public Equity Offering" means a firm commitment underwritten offering of shares of Capital Stock of the applicable Person (1) registered on Form F-1 under the Securities Act or any similar offering in other jurisdictions or (2) listed on an internationally recognized exchange or traded on an internationally recognized market.
 
"Initial Purchasers" means Merrill Lynch International, Credit Suisse First Boston (Europe) Limited, ABN AMRO Bank N.V. and Deutsche Bank AG London.
 
"Intercreditor Agreement" means the Intercreditor Agreement dated August 1, 2005, by and among the Company, the original obligors, the senior agent, the security agent, the interim facility agent, the issuing
 


bank, and the other parties thereto, as amended, extended, renewed, restated, supplemented or otherwise modified (in whole or in part, and without limitation as to amount, terms, conditions, covenants and other provisions) from time to time.
 
"Interest Payment Date" means, with respect to each Note, the stated maturity of an installment of interest on the Notes specified therein.
 
"Interest Swap Obligations" means the obligations of any Person pursuant to any arrangement with any other Person, whereby, directly or indirectly, such Person is entitled to receive from time to time periodic payments calculated by applying either a floating or a fixed rate of interest on a stated notional amount in exchange for payments made by such other Person calculated by applying a fixed or a floating rate of interest on the same notional amount and shall include, without limitation, interest rate swaps, caps, floors, collars and similar agreements.
 
"Interim Loan" means the Senior Subordinated Second Lien Loan Agreement dated August 1, 2005, by and among Nell Hideo B.V., as borrower, the Company, as a parent guarantor, the lenders party thereto, the administrative agent, and the collateral agent, together with the documents related thereto (including any term loans and revolving loans thereunder, and any guarantees and security documents), as amended, extended, renewed, restated, supplemented or otherwise modified (in whole or in part, and without limitation as to amount, terms, conditions, covenants and other provisions) from time to time.
 
"Investment" means, with respect to any Person, any direct or indirect loan or other extension of credit (including, without limitation, a guarantee) or capital contribution to (by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others), or any purchase or acquisition by such Person of any Capital Stock, bonds, notes, debentures or other securities or evidences of Indebtedness issued by, any other Person. "Investment" excludes extensions of trade credit by the Company and its Restricted Subsidiaries on commercially reasonable terms in accordance with normal trade practices of the Company or such Restricted Subsidiary, as the case may be. For the purposes of Section 4.03, (i) "Investment" shall include and be valued at the Fair Market Value of the net assets of any Restricted Subsidiary of the Company at the time that such Restricted Subsidiary is designated an Unrestricted Subsidiary and shall exclude the Fair Market Value of the net assess of any Unrestricted Subsidiary at the time that such Unrestricted Subsidiary is designated a Restricted Subsidiary of the Company and (ii) the amount of any Investment in any Person is the original cost of such Investment plus the cost of all additional Investments therein by the Company or any of its Restricted Subsidiaries, without any adjustments for increases or decreases in value, or write-ups, write-downs or write-offs with respect to such Investment, reduced by the payment of dividends or distributions in connection with such Investment or any other amounts received in respect of such Investment; provided that no such payment of dividends or distributions or receipt of any such other amounts shall reduce the amount of any Investment if such payment of dividends or distributions or receipt of any such amounts would be included in Consolidated Net Income. If the Company or any Restricted Subsidiary of the Company sells or otherwise disposes of any Common Stock of any direct or indirect Restricted Subsidiary of the Company such that, after giving effect to any such sale or disposition, the Company no longer owns, directly or indirectly, greater than 50% of the outstanding Common Stock of such Restricted Subsidiary, the Company shall be deemed to have made an Investment on the date of any such sale or disposition equal to the Fair Market Value of the Common Stock of such Restricted Subsidiary not sold or disposed of.
 
"Issue Date" means the date on which Notes are first issued under this Indenture.
 
"Legal Defeasance" has the meaning provided in Section 8.01.
 
"Lien" means any lien, mortgage, deed of trust, pledge, security interest, charge or encumbrance of any kind (including any conditional sale or other title retention agreement, any lease in the nature thereof and any agreement to give any security interest), but not including any interests in accounts receivable and related assets conveyed by the Company or any of its Subsidiaries in connection with any Qualified Securitization Transaction.
 
"Listing" shall mean a listing of all or any part of the share capital of the Company or any of its Subsidiaries or any Holding Company of the Company or any of its Subsidiaries (excluding Access Industries, Inc., the Sponsor (to the extent not a subsidiary of the Company) and any such Holding Company
 


of the Company or any of its Subsidiaries, but in each case only if a majority of the investments of such company are not constituted by the Company or any of its Subsidiaries) on any investment exchange or any other sale or issue by way of flotation or public offering or any equivalent circumstances in relation to the Company or any of its Subsidiaries or any Holding Company of the Company or any of its Subsidiaries (excluding Access Industries, Inc., the Sponsor (to the extent not a subsidiary of the Company) and any such Holding Company of the Company or any of its Subsidiaries, but in each case only if a majority of the investments of such company are not constituted by the Company or any of its Subsidiaries) in any jurisdiction or country.
 
"Management Agreement" means the Management Agreement dated as of August 1, 2005, among the Company, Nell Acquisition S.à.r.l., Nell Funding S.à.r.l., Nell Bidco, B.V., Nell (US) Acquisition S.à.r.l., Nell Acquisition (US) LLC and AI Petrochemicals LLC, as amended from time to time.
 
"Maturity Date" means August 15, 2015.
 
"Moody's" means Moody's Investor Service, Inc. and its successors.
 
"Nell Pledged Shares" has the meaning given to it in Section 13.01(a).
 
"Net Cash Proceeds" means, with respect to any Asset Sale, the proceeds in the form of cash or Cash Equivalents including payments in respect of deferred payment obligations when received in the form of cash or Cash Equivalents (other than the portion of any such deferred payment constituting interest) received by the Company or any of its Restricted Subsidiaries from such Asset Sale net of
 
(1)            all out-of-pocket expenses and fees relating to such Asset Sale (including, without limitation, legal, accounting and investment banking fees and sales commissions),
 
(2)            taxes paid or payable after taking into account any reduction in consolidated tax liability due to available tax credits or deductions and any tax sharing arrangements,
 
(3)            repayment of Indebtedness that is required to be repaid in connection with such Asset Sale,
 
(4)            all distributions and other payments required to be made to minority interest holders in Subsidiaries or joint ventures as a result of such Asset Sale or to any other Person (other than the Company or a Restricted Subsidiary of the Company) owning a beneficial interest in the assets disposed of in such Asset Sale;
 
(5)            the decrease in proceeds from Qualified Securitization Transactions which results from such Asset Sale and
 
(6)            appropriate amounts to be provided by the Company or any Restricted Subsidiary of the Company, as a reserve, in accordance with GAAP, against any liabilities associated with such Asset Sale and retained by, the Company or any Restricted Subsidiary of the Company, after such Asset Sale, including pension and other post-employment benefit liabilities, liabilities related to environmental matters and liabilities under any indemnification obligations associated with such Asset Sale.
 
"Net Proceeds Offer" has the meaning provided in Section 4.15(d).
 
"Net Proceeds Offer Amount" has the meaning provided in Section 4.15(d).
 
"Net Proceeds Offer Payment Date" has the meaning provided in Section 4.15(d).
 
"Net Proceeds Offer Trigger Date" has the meaning provided in Section 4.15(d).
 
"Notes" means, the Dollar Notes (including, without limitation, any Additional Dollar Notes) and the Euro Notes (including, without limitation, any Additional Euro Notes). The Dollar Notes and the Euro
 


Notes are separate series of Notes but shall be treated as a single class of securities under this Indenture, except as set forth herein. For purposes of this Indenture, all references to Notes to be issued or authenticated upon transfer, replacement or ex-change shall be deemed to refer to Notes of the appropriate series.
 
"Obligations" means all obligations for principal, premium, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness.
 
"Offering Memorandum" means that certain offering memorandum relating to the offering of the Notes, dated as of August 4, 2005.
 
"Officer" means, with respect to any Person, the Chairman of the Board, the Chief Executive Officer, the President, any Vice President, the Chief Financial Officer, the Treasurer, the Assistant Treasurer, the Financial Di-rector, or the Secretary or the Assistant Secretary of such Person (or, with respect to a Person that is a limited partnership, the General Partner of such Person), member of the Board of Directors (in the case of any entity organized under the laws of the Netherlands), or any other officer designated by the Board of Directors serving in a similar capacity.
 
"Officer's Certificate" means, with respect to any Person, a certificate signed by an Officer of such Person and otherwise complying with the requirements of Sections 14.04 and 14.05, as they relate to the making of an Officer's Certificate, and delivered to the Trustee or the Security Agent, as the case may be.
 
"Opinion of Counsel" means a written opinion from legal counsel who is reasonably acceptable to the Trustee complying with the requirements of Sections 14.04 and 14.05, as they relate to the giving of an Opinion of Counsel, and delivered to the Trustee or the Security Agent, as the case may be. Counsel giving any Opinion of Counsel shall be entitled to rely on an Officer's Certificate as to any factual matters relevant to such opinion.
 
"Parent" means, Nell Acquisition S.à.r.l., a société à responsabilité limitée incorporated under the laws of the Grand Duchy of Luxembourg.
 
"Pari Passu Indebtedness" means, in the case of the Notes, any Indebtedness of the Company that ranks equally in right of payment with the Notes and, in the case of the Guarantees, any Indebtedness of the applicable Guarantor that ranks equally in right of payment to the Guarantee of such Guarantor.
 
"Participants" means (i) with respect to the Dollar Notes, institutions that have accounts with DTC or its nominee and (ii) with respect to the Euro Notes, institutions that have accounts with Euroclear or their respective nominees.
 
"Paying Agent" means any Person (other than the Company and any of its Affiliates) authorized by the Company to pay the principal of (and premium, if any) or interest on any notes on behalf of the Company and per-form all the other obligations and duties of a "Paying Agent" described herein, including the Irish Paying Agent and, with respect to the Euro Notes, the Euro Paying Agent and, with respect to the Dollar Notes, the Dollar Paying Agent.
 
"Permitted Business" means any business which is the same, similar or related to the businesses in which the Company and its Restricted Subsidiaries were engaged on the Issue Date, except to the extent that after engaging in any new business, the Company and its Restricted Subsidiaries, taken as a whole, remain substantially engaged in similar lines of business as were conducted by them on the Issue Date.
 
"Permitted Indebtedness" means:
 
(i)            Indebtedness under the Notes, this Indenture and the Guarantees;
 
(ii)            Indebtedness incurred pursuant to the Credit Facilities in an aggregate principal amount not exceeding €1.95 billion at any one time outstanding less the amount of any payments
 


made by the Company under the Credit Facilities with the Net Cash Proceeds of any Asset Sale (which are accompanied by a corresponding permanent commitment reduction) pursuant to Section 4.15(b);
 
(iii) other Indebtedness of the Company and its Restricted Subsidiaries outstanding on the Is-sue Date reduced by the amount of any prepayments with Net Cash Proceeds of any Asset Sale (which are accompanied by a corresponding permanent commitment reduction) pursuant to Section 4.15(b);
 
(iv)            (a)            Interest Swap Obligations of the Company relating to:
 
(1)            Indebtedness of the Company or any of its Restricted Subsidiaries or
 
(2)            Indebtedness that the Company or any of its Restricted Subsidiaries reasonably intends to incur within six months and
 
(b)            Interest Swap Obligations of any Restricted Subsidiary of the Company relating to:
 
(1)            Indebtedness of such Restricted Subsidiary or
 
(2)            Indebtedness that such Restricted Subsidiary reasonably intends to incur within six months.
 
Any such Interest Swap Obligations shall constitute "Permitted Indebtedness" only if they are entered into to protect the Company and its Restricted Subsidiaries from fluctuations in interest rates on Indebtedness permitted under this Indenture to the extent the notional principal amount of such Interest Swap Obligations, when incurred, does not exceed the principal amount of the Indebtedness to which such Interest Swap Obligations relate;
 
(v)            Indebtedness under Commodity Agreements and Currency Agreements entered into in the ordinary course of business and not for speculative purposes; provided that in the case of Currency Agreements which relate to Indebtedness, such Currency Agreements do not increase the Indebtedness of the Company and its Restricted Subsidiaries outstanding other than as a result of fluctuations in foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;
 
(vi)            Indebtedness of a Restricted Subsidiary of the Company to the Company or to a Restricted Subsidiary of the Company for so long as such Indebtedness is held by the Company or a Restricted Subsidiary of the Company, in each case subject to no Lien held by a person other than the Company or a Restricted Subsidiary of the Company (other than the pledge of intercompany notes or receivables under the Credit Facilities); provided that if as of any date any person other than the Company or a Restricted Subsidiary of the Company owns or holds any such Indebtedness or holds a Lien in respect of such Indebtedness (other than the pledge of intercompany notes or receivables under the Credit Facilities), such date shall be deemed the incurrence of Indebtedness not constituting Permitted Indebtedness under this clause by the issuer of such Indebtedness;
 
(vii)            Indebtedness of the Company to a Restricted Subsidiary of the Company for so long as such Indebtedness is held by a Restricted Subsidiary of the Company, in each case subject to no Lien (other than Liens securing intercompany notes or receivables pledged under the Credit Facilities); provided that (a) any Indebtedness of the Company to any Restricted Subsidiary of the Company (other than pursuant to notes or receivables pledged under the Credit Facilities) is unsecured and subordinated, pursuant to a writ-ten agreement, to the Company's obligations under this Indenture and the Notes and (b) if as of any date any person other than a Restricted Subsidiary of the Company owns or holds any such Indebtedness or any person holds a Lien in respect of such Indebtedness (other than pledges securing the Credit Facilities), such date shall be deemed the incurrence of Indebtedness under this clause not constituting Permitted Indebtedness by the Company;
 


(viii)            Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds, overdrafts, pooling arrangements and money market lines in the ordinary course of business; provided,however, that any such Indebtedness that arises is extinguished within six business days of incurrence;
 
(ix)            Indebtedness of the Company or any of its Restricted Subsidiaries represented by letters of credit for the account of the Company or such Restricted Subsidiary, as the case may be, in order to pro-vide security for workers' compensation claims, payment obligations in connection with self-insurance or similar requirements in the ordinary course of business;
 
(x)            Refinancing Indebtedness;
 
(xi)            Indebtedness arising from agreements of the Company or a Subsidiary providing for indemnification, adjustment of purchase price, earn out or similar obligations, in each case, incurred in connection with the disposition of any business, assets or subsidiary, other than guarantees of Indebtedness incurred by any person acquiring all or any portion of such business, assets or subsidiary for the purpose of financing such acquisition; provided that the maximum aggregate liability in respect of all such Indebtedness shall at no time exceed the gross proceeds actually received by the Company and the Subsidiary in connection with such disposition;
 
(xii)            Obligations in respect of bankers' acceptances, bid, judgment, appeal, performance bonds and completion guarantees, surety, letters of credit and similar bonds or guarantees provided by the Company or any subsidiary in the ordinary course of business;
 
 (xiii) Guarantees by the Company or a Restricted Subsidiary of the Company of Indebtedness incurred by the Company or a Restricted Subsidiary of the Company so long as the incurrence of such Indebtedness by the Company or any such Restricted Subsidiary is otherwise permitted by the terms of the indenture;
 
(xiv)            Indebtedness of the Company or any Subsidiary incurred in the ordinary course of business not to exceed €50 million at any one time outstanding
 
(a)            representing Capitalized Lease Obligations or
 
(b)            constituting Indebtedness incurred to finance the acquisition of property or as-sets of the Company or any Restricted Subsidiary of the Company acquired in the ordinary course of business; provided,however, that such Indebtedness shall not exceed the cost of such property or assets and shall not be secured by any property or assets of the Company or any Restricted Subsidiary of the Company other than the property and assets so acquired;
 
(xv)            the incurrence by a Securitization Entity of Indebtedness in a Qualified Securitization Transaction that is not recourse to the Company or any Subsidiary of the Company (except for Standard Securitization Undertakings);
 
(xvi)            Indebtedness of the Company or a Restricted Subsidiary of the Company to any of its subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company or such Restricted Subsidiary from any such subsidiary which assets are subsequently conveyed by the Company or such Restricted Subsidiary to a Securitization Entity in a Qualified Securitization Transaction; and
 
(xvii)            Guarantees by the Company or a Restricted Subsidiary of the Company of Indebtedness incurred by Qualified Joint Ventures which, in the case of Indebtedness of Qualified Joint Ventures that is not Qualified Development Agency Debt, may not exceed €75 million in the aggregate at any one time out-standing;
 


(xviii)                       Indebtedness incurred pursuant to (a) the Australian Credit Facilities in an aggregate principal amount not exceeding A$80 million at any one time outstanding; and (b) the Hong Kong Facility in an aggregate principal amount not exceeding €30 million at any one time outstanding.
 
(xix)            Indebtedness of a person existing at the time that person becomes a Restricted Subsidiary of the Company or assumed in connection with an Asset Acquisition by the Company or a Restricted Subsidiary of the Company and not incurred in connection with or in anticipation of, such person becoming a Restricted Subsidiary; provided that the holders of any such Indebtedness do not, at any time, have direct or indirect recourse to any property or assets of the Company or any Restricted Subsidiary other than the property or assets of such acquired person; provided,further, that on the date of such acquisition and after giving pro forma effect thereto, either (1) the Company would have been able to incur at least €1.00 of additional Indebtedness pursuant to Section 4.12(a), or (2) the Consolidated Fixed Charge Coverage Ratio would be greater than or equal to the Consolidated Fixed Charge Coverage Ratio immediately prior to giving fro forma effect to such acquisition;
 
(xx)            additional Indebtedness of the Company and its Restricted Subsidiaries in an aggregate principal amount not to exceed €50 million at any one time outstanding.
 
For purposes of determining compliance with Section 4.12, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Indebtedness described in clauses (i) through (xx) above, or is entitled to be incurred pursuant to the first paragraph of Section 4.12, the Company shall be permitted to classify such item of Indebtedness on the date of its incurrence and, except with respect to Indebtedness incurred under clause (ii) or (xviii) above, reclassify such item of Indebtedness, in each case in any manner that complies with Section 4.12. Notwithstanding the foregoing, Indebtedness under Credit Facilities, the Australian Credit Facilities and the Hong Kong Facility outstanding on the Issue Date up to the maximum amounts permitted under clause (ii) or (xviii) above, as applicable shall be deemed to have been incurred pursuant to clause (ii) or (xviii) above, as applicable, and guarantees by the Company or any Restricted Subsidiaries of Indebtedness incurred by Qualified Joint Ventures shall be deemed to have been incurred pursuant to clause (xvii) above.
 
"Permitted Investments" means:
 
(i)            Investments by the Company or any Restricted Subsidiary of the Company in any Person that is or shall become immediately after such Investment a Restricted Subsidiary of the Company or that shall merge or consolidate into the Company or a Restricted Subsidiary of the Company;
 
(ii)            Investments in the Company by any Restricted Subsidiary of the Company; provided that any Indebtedness evidencing such Investment is unsecured and subordinated (other than pursuant to inter-company notes or receivables pledged under the Credit Facilities), pursuant to a written agreement, to the Company's obligations under the Notes and this Indenture;
 
(iii)            Investments in cash and Cash Equivalents;
 
(iv)            loans and advances to employees and officers of the Company and its Subsidiaries in the ordinary course of business or as required by applicable law or for travel, relocation and related expenses;
 
(v)            Investments in Unrestricted Subsidiaries or joint ventures not to exceed €100 million,
 
(a)            the aggregate net after-tax amount returned in cash on or with respect to any In-vestments made in Unrestricted Subsidiaries and joint ventures whether through interest payments, principal payments, dividends or other distributions or payments on account of such Investment,
 
(b)            the net after-tax cash proceeds received by the Company or any Restricted Subsidiary of the Company from the disposition of all or any portion of such Investments (other than to a Restricted Subsidiary of the Company),
 
(c)            upon redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary of the Company, the Fair Market Value of such Subsidiary, and
 
(d)            Investments in Specified Joint Ventures Capital Stock in an amount not to exceed €45 million;
 
provided,however, that the net after-tax amount has not been included in Consolidated Net Income for the purpose of the calculation in Section 4.03(iii)(x);
 
(vi)            Investments in securities received pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of any debtors of the Company or its Restricted Subsidiaries or received in settlement of debts created in the ordinary course of business and owing to the Company or a Restricted Subsidiary of the Company or in satisfaction of judgments;
 
(vii)            Investments made by the Company or its Restricted Subsidiaries as a result of consideration received in connection with an Asset Sale made in compliance with Section 4.15;
 
(viii)            Investments existing on the Issue Date;
 
(ix)            any Investment by the Company or a Wholly Owned Subsidiary of the Company in a Securitization Entity or any Investment by a Securitization Entity in any other Person in connection with a Qualified Securitization Transaction; provided that any Investment in a Securitization Entity is in the form of a purchase money note or an equity interest;
 
(x)            payments to any Basell Parent Company for the purposes described in clause (5) of the second paragraph of Section 4.03 which, when aggregated with the payment made under such clause, shall not exceed €1.5 million in any fiscal year;
 
(xi)            any Indebtedness of the Company to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which as-sets are subsequently conveyed by the Company to a Securitization Entity in a Qualified Securitization Transaction;
 
(xii)            Investments through the licensing of polyolefins or advanced polyolefins process technology in a Person that is or shall be as a result of such Investment a Qualified Joint Venture;
 
(xiii)            Guarantees of Indebtedness of Qualified Joint Ventures to the extent such guarantees are permitted by Section 4.12;
 
(xiv)            purchase of shares of Shell and BASF required to satisfy Basell B.V.'s obligations under its stock option plans as such plans were in effect on the Issue Date; and
 
(xv)            additional Investments in an aggregate amount not exceeding € 50 million at any one time outstanding.
 
"Permitted Liens" means the following types of Liens:
 
(1)            Liens existing on the Issue Date (including the extension, re-issuance or renewal of such Liens);
 
(2)            Liens securing Indebtedness under Credit Facilities, the Australian Credit Facilities and the Hong Kong Facility permitted to be incurred pursuant to, and in an amount no greater than that specified in, clause (ii) and clause (xviii) of the definition of "Permitted Indebtedness";
 


(3)            Liens on any property or assets of a Restricted Subsidiary of the Company that is not a guarantor of the Company, a Restricted Subsidiary of the Company that is a guarantor or any Wholly Owned Restricted Subsidiary of the Company;
 
(4)            Liens securing any Capitalized Lease Obligation and Liens to secure Indebtedness (including Capitalized Lease Obligations) permitted by clause (xiv)(b) of the definition of "Permitted Indebtedness" covering only the property or assets acquired with such Indebtedness;
 
(5)            Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into by the Company or any Restricted Subsidiary of the Company in the ordinary course of business;
 
(6)            statutory Liens of landlords and carriers, warehousemen, mechanics, suppliers, material-men, repairmen, employees, pension plan administrators or other like Liens arising in the ordinary course of business of the Company or any Restricted Subsidiary of the Company and with respect to amounts not yet subject to penalties for non-payment or being contested in good faith by appropriate proceedings or Liens arising solely by virtue of any statutory or common law provisions relating to attorney's liens or bankers' liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a creditor depositary institution;
 
(7)            Liens for taxes, assessments, government charges or claims that are extinguished within 60 days of notice of their existence, are not yet subject to penalties for non-payment or that are being con-tested in good faith by appropriate proceedings;
 
(8)            Liens incurred or deposits made to secure the performance of tenders, bids or trade or government contracts, or to secure leases, statutory or regulatory obligations, surety, judgment or appeal bonds, completion guarantee, surety, letters of credit, performance bonds, guarantees or other obligations of a like nature incurred in the ordinary course of business (other than obligations for the payment of borrowed money);
 
(9)            zoning restrictions, minor survey exceptions, minor encumbrances, easements, licenses, reservations of, or rights of others for, licenses reservations, title defects, rights of others for rights-of-way, utilities, sewers, electrical lines, telephone lines, telegraph wires, restrictions, encroachments and other similar charges, encumbrances or title defects or zoning or other restrictions as to the use of real property or Liens incurred in the ordinary course of business that do not in the aggregate materially interfere with in any material respect the ordinary conduct of the business of the Company and its Restricted Subsidiaries on the properties subject thereto, taken as a whole;
 
(10)            Liens arising by reason of any judgment, decree or order of any court so long as such lien is adequately bonded and any appropriate legal proceedings that may have been duly initiated for the re-view of such judgment, decree or order shall not have been finally terminated or the period within which such proceedings may be initiated shall not have expired;
 
(11)            Liens on property of, or on shares of Capital Stock or Indebtedness of, any Person existing at the time such property or Person is acquired by, merged with or into or consolidated with, the Company or any Restricted Subsidiary of the Company; provided that such Liens (a) do not extend to or cover any property or assets of the Company or any Restricted Subsidiary of the Company other than the property or assets acquired (other than assets and property affixed or appurtenant thereto) or than those of the Person merged into or consolidated with the Company or Restricted Subsidiary of the Company and (b) were created prior to, and not in connection with or in contemplation of, such acquisition, merger or consolidation;
 
(12)            Liens securing the obligations of the Company or any Restricted Subsidiary of the Company under Interest Swap Obligations, Commodity Agreements or Currency Agreements permitted under clauses (iv) and (v) of the definition of "Permitted Indebtedness" or any collateral for the Indebtedness to which such Interest Swap Obligations, Commodity Agreements or Currency Agreements relate;
 


(13)            Liens incurred or deposits made in the ordinary course of business in connection with workers' compensation, unemployment insurance and other types of social security or other insurance (including unemployment insurance);
 
(14)            Liens made to secure obligations arising from statutory, regulatory, contractual, or warranty requirements of the Company or any Restricted Subsidiary of the Company in the ordinary course of business, including rights of offset and set-off;
 
(15)            any extension, renewal or replacement, in whole or in part, of any Lien described in the foregoing clauses (1) through (14); provided that any such extension, renewal or replacement shall be no more restrictive in any material respect than the Lien so extended, renewed or replaced and shall not extend to any additional property or assets;
 
(16)            Liens securing Indebtedness incurred to refinance, refund, extend, renew or replace Indebtedness that has been secured by a Lien permitted by this Indenture; provided that (a) such new Lien shall be limited to all or part of the same property and assets that secured or, under the written agreements pursuant to which the original Lien arose, could secure the original Lien plus improvements and accessions to, such property or proceeds or distributions thereof); and (b) the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of (i) the outstanding principal amount or, if greater, committed amount of the Indebtedness at the time the original Lien became a Permitted Lien and (ii) an amount necessary to pay any fees and expenses, including premiums, related to such refinancing, re-funding, extension, renewal or replacement;
 
(17)            Liens in favor of the Company or any Restricted Subsidiary of the Company;
 
(18)            Liens securing Indebtedness incurred to finance the construction, purchase or lease of, or repairs, improvements or additions to, property, plant or equipment of such Person;
 
(19)            Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods;
 
(20)            any interest or title of a lessor in the property subject to any lease other than a Capitalized Lease Obligations;
 
(21)            Liens upon specific items of inventory or other goods and proceeds of any Person securing such Person's obligations in respect of banker's acceptances issues or credit for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;
 
(22)            Liens granted to the Trustee for its compensation and indemnities pursuant to this Indenture;
 
(23)            lease or subleases or licenses or sublicenses of real property granted in the ordinary course of business to others that do not materially interfere with the ordinary course of business of the Company and the Restricted Subsidiaries of the Company;
 
(24)            Liens incurred in the ordinary course of business of the Company or any Restricted Subsidiary of the Company with respect to obligations that do not exceed €25 million at any one time out-standing; and
 
(25)            Liens on receivables and assets related thereto incurred in connection with a Qualified Securitization Transaction.
 
"Person" means an individual, partnership, corporation, unincorporated organization, trust or joint venture, or a governmental agency or political subdivision thereof.
 


"Physical Notes" shall have the meaning provided in Section 2.01(c).
 
"Preferred Stock" of any Person means any Capital Stock of such Person that has preferential rights to any other Capital Stock of such Person with respect to dividends or redemptions or upon liquidation.
 
"principal" of any Indebtedness (including the Notes) means the principal amount of such Indebtedness plus the premium, if any, on such Indebtedness.
 
"Private Placement Legend" means the legend initially set forth on the Notes in the form set forth on Exhibit A-1 and Exhibit A-2.
 
"Public Indebtedness" means any indebtedness consisting of bonds, debentures, notes or other similar debt securities issued in (a) a public offering registered under the Securities Act, (b) listed on a recognized securities ex-change or (c) a private placement to institutional investors that is underwritten for resale in accordance with Rule 144A or Regulation S, whether or not it includes registration rights entitling the holders of such debt securities to registration thereof with the U.S. Securities Exchange Commission for public resale.
 
"Purchase Agreement" means the Purchase Agreement, dated August 4, 2005, relating to the issue and sale of the Initial Notes to be issued on the Issue Date.
 
"Qualified Capital Stock" means any Capital Stock that is not Disqualified Capital Stock.
 
"Qualified Development Agency Debt" means Indebtedness which (i) has a Weighted Average Life to Maturity at least 6 months longer than the Notes, (ii) bears interest at a rate lower than the lowest rate on the Senior Secured Credit Facilities at the date such Indebtedness is incurred, and (iii) is issued by, or guaranteed by, a state development bank or like governmental agency or organization.
 
"Qualified Institutional Buyer" or "QIB" has the meaning specified in Rule 144A.
 
Following the Initial Public Equity Offering of a Basell Parent Company, references in the foregoing definition of the "Company" shall be deemed also to refer to such Basell Parent Company.
 
"Qualified Joint Venture" means (1) any Person that is not a Subsidiary of the Company or any of its Restricted Subsidiaries that the Company or any of its Restricted Subsidiaries has a direct or indirect ownership interest in that is engaged in a Permitted Business or (2) any entity through which the Company has an ownership interest as described in clause (1), in the case of (1) and (2), for which the Sponsor does not hold an ownership interest (other than through its ownership interest in the Company).
 
"Qualified Securitization Transaction" means any transaction or series of transactions that may be entered into by the Company or any of its Subsidiaries pursuant to which the Company or any of its Subsidiaries may sell, convey or otherwise transfer pursuant to customary terms to
 
(1)            a Securitization Entity or to the Company which subsequently transfers to a Securitization Entity (in the case of a transfer by the Company or any of its Subsidiaries) and
 
(2)            any other Person (in the case of transfer by a Securitization Entity), or may grant a security interest in any accounts receivable (whether now existing or arising or acquired in the future) of the Company or any of its Subsidiaries, and any assets related thereto including, without limitation, all collateral securing such accounts receivable, all contracts and contract rights and all guarantees or other obligations in respect of such accounts receivable, proceeds of such accounts receivable and other assets (including contract rights) which are customarily transferred or in respect of which security interests are customarily granted in connection with asset securitization transactions involving accounts receivable.
 
Following the Initial Public Equity Offering of a Basell Parent Company, references in the foregoing definition to the "Company" shall be deemed also to refer to such Basell Parent Company.
 


"Receivables Financings" means factoring, securitizations of receivables or any other receivables financing (including, without limitation, through the sale of receivables in a factoring arrangement or through the sale of receivables to lenders or to special purpose entities formed to borrow from such lenders against such receivables), whether or not recourse to the Company or any of its Restricted Subsidiaries; provided,however, that such factoring, securitization or financing would be treated as indebtedness under GAAP.
 
"Record Date" means with respect to each Note, each applicable record date specified therein.
 
"Redemption Date" means, with respect to any Dollar Note and/or Euro Note, as the case may be, the Maturity Date of such Note or the earlier date on which such Note is to be redeemed by the Company pursuant to paragraph 5 of the Dollar Notes with respect to a Dollar Note and paragraph 5 of the Euro Notes with respect to a Euro Note.
 
"Redemption Price" has the meaning provided in Section 3.03. "Reference Date" has the meaning provided in Section 4.03.
 
"Refinance" means, in respect of any security or Indebtedness, to refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or to issue a security or Indebtedness in exchange or replacement for, such security or Indebtedness in whole or in part. "Refinanced" and "Refinancing" shall have correlative meanings.
 
"Refinancing Indebtedness" means any Refinancing by the Company or any Restricted Subsidiary of the Company of Indebtedness incurred in accordance with the Fixed Charge Coverage Ratio test set forth in Section 4.12 or Indebtedness described in clauses (i), (iii), (x) or (xix) of the definition of "Permitted Indebtedness," in each case that does not (1) result in an increase in the aggregate principal amount of Indebtedness of such Person as of the date of such proposed Refinancing (plus the amount of any premium required to be paid under the terms of the instrument governing such Indebtedness and plus the amount of reasonable expenses and fees incurred by the Company in connection with such Refinancing) or (2) create Indebtedness with (A) a Weighted Average Life to Maturity that is less than the Weighted Average Life to Maturity of the Indebtedness being Refinanced or (B) a final maturity earlier than the final maturity of the Indebtedness being Refinanced; provided that if such Indebtedness being Refinanced (i) is Indebtedness solely of the Company, then such Refinancing Indebtedness shall be Indebtedness solely of the Company or (ii) is subordinate or junior to the Notes, then such Refinancing Indebtedness shall be subordinate to the Notes at least to the same extent and in the same manner as the Indebtedness being Refinanced.
 
"Registrar" has the meaning provided in Section 2.03. "Regulation S" means Regulation S under the Securities Act.
 
"Regulation S Global Dollar Denominated Global Security" means a Regulation S Global Security de-nominated in Dollars.
 
"Regulation S Global Security" has the meaning provided in Section 2.01(b)(i).
 
"Replacement Assets" has the meaning provided in Section 4.15(b).
 
"Requisite Guarantors" has the meaning provided in Section 4.19(a).
 
"Responsible Officer" means any officer within the Corporate Trust Administration group of the Trustee (or any successor group of the Trustee) or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject.
 
"Restricted Dollar Denominated Global Security" means a Restricted Global Security representing Dollar
 


"Restricted Euro Denominated Global Securities" means a Restricted Global Security representing Euro
 
"Restricted Global Security" has the meaning provided in Section 2.01(a)(i).
 
"Restricted Payment" means to
 
(1)            declare or pay any dividend or make any distribution, other than dividends or distributions payable in Qualified Capital Stock of the Company and dividends or distributions payable solely to the Company or a Restricted Subsidiary of the Company, and other than pro rata dividends or other distributions made by a Subsidiary that is not a Wholly Owned Subsidiary to minority shareholders (or owners of an equivalent interest in the case of a Subsidiary that is an entity other than a corporation), on or in respect of shares of the Company's Capital Stock to holders of such Capital Stock,
 
(2)            purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any warrants, rights or options to purchase or acquire shares of any class of such Capital Stock,
 
(3)            make any principal payment on, purchase, defease, redeem, prepay, decrease or otherwise acquire or retire for value, prior to any scheduled final maturity, scheduled repayment or scheduled sinking fund payment, any Indebtedness of the Company that is subordinate or junior in right of payment to the Notes (other than the purchase, repurchase or other acquisition of Indebtedness of the Company that is sub-ordinate or junior in right of payment to the Notes purchased in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case, due within one year of the date of such purchase, repurchase or other acquisition) or
 
(4)            make any Investment other than Permitted Investments.
 
"Restricted Security" means a Note that constitutes a "restricted security" within the meaning of Rule 144(a)(3) under the Securities Act; provided,however, that the Trustee shall be entitled to request and conclusively rely on an Opinion of Counsel with respect to whether any Note constitutes a Restricted Security.
 
"Restricted Subsidiary" of any Person means any Subsidiary of such Person which at the time of determination is not an Unrestricted Subsidiary.
 
"Rule 144A" means Rule 144A under the Securities Act.
 
"Sale and Leaseback Transaction" means any direct or indirect arrangement with any Person or to which any such Person is a party, providing for the leasing to the Company or a Restricted Subsidiary of the Company of any property, whether owned by the Company or any Restricted Subsidiary of the Company on the Issue Date or later acquired, which has been or is to be sold or transferred by the Company or such Restricted Subsidiary to such Person or to any other Person from whom funds have been or are to be advanced by such Person on the security of such property.
 
"Securities Act" means the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder.
 
"Securitization Entity" means an entity to which the Company or any subsidiary of the Company transfers accounts receivable or equipment and related assets which engages in no activities other than in connection with the financing of accounts receivable or equipment and which is designated by the Board of Directors of the Company (as provided below) as a Securitization Entity (a) no portion of the Indebtedness or any other Obligations (contingent or otherwise) of which (i) is guaranteed by the Company or any subsidiary of the Company (other than the Securitization Entity), excluding guarantees of Obligations (other than the principal of, and interest on, Indebtedness) pursuant to Standard Securitization Undertakings, (ii) is recourse to or obligates the Company or any subsidiary of the Company (other than the Securitization Entity) in any
 


way other than pursuant to Standard Securitization Under-takings or (iii) subjects any property or asset of the Company or any subsidiary of the Company (other than the Securitization Entity), directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than pursuant to Standard Securitization Undertakings and other than any interest in the accounts receivable or equipment and related assets being financed (whether in the form of an equity interest in such assets or subordinated indebtedness payable primarily from such financed assets) retained or acquired by the Company or any subsidiary of the Company, (b) with which neither the Company nor any subsidiary of the Company has any material contract, agreement, arrangement or understanding other than on terms no less favorable to the Company or such subsidiary than those that might be obtained at the time from persons that are not Affiliates of the Company, other than fees payable in the ordinary course of business in connection with servicing receivables of such entity (other than Standard Securitization Undertakings), and (c) to which neither the Company nor any subsidiary of the Company has any obligation to maintain or preserve such entity's financial condition or cause such entity to achieve certain levels of operating results (other than Standard Securitization Undertakings). Any such designation by the Board of Directors of the Company shall be evidenced to the Trustee by filing with the Trustee a certified copy of the resolution of the Board of Directors of the Company giving effect to such designation and an Officer's certificate certifying that such designation complied with the foregoing conditions. Following the Initial Public Equity Offering of a Basell Parent Company, references in the foregoing definition to the "Company" shall be deemed also to refer to such Basell Parent Company.
 
"Security Documents" has the meaning given to it in Section 13.01(a).
 
"Senior Secured Credit Facilities" means the Senior Facility Agreement dated August 1, 2005 by and among the Company, Merrill Lynch International and Credit Suisse London Branch as Mandated Lead Arrangers and Bookrunners, and ABN AMRO Bank N.V. acting as Agent, Security Agent, and Issuing Bank, together with the documents related thereto (including any term loans and revolving loans in connection therewith or which may be split out or refinanced by any separate facility agreement, and any guarantees and security documents), as amended, extended, renewed, restated, supplemented or otherwise modified (in whole or in part, and without limitation as to amount, terms, conditions, covenants and other provisions) from time to time.
 
"Significant Subsidiary" means any Restricted Subsidiary of the Company which, at the date of determination, is a "Significant Subsidiary" as such term is defined in Regulation S-X under the Exchange Act.
 
"S&P" means Standard & Poor's, a division of The McGraw-Hill Companies, Inc. and its successors.
 
"Specified Joint Ventures" means Basell Advanced Polyolefins (Thailand) Co. Ltd., Saudi Polyolefins Company and Basell Orlen Polyolefins Sp. Z.O.O.
 
"Sponsor" shall mean,
 
(a)            the Blavatnik Group; and/or
 
(b)            other funds, limited partnerships or companies managed or controlled by Mr. Leonard Blavatnik including, without limitation, AI Petrochemicals for so long as so managed or controlled.
 
"Standard Securitization Undertakings" means representations, warranties, undertakings, covenants and indemnities entered into by the Company or any Subsidiary of the Company which are reasonably customary in an accounts receivable Securitization transaction. Following the Initial Public Equity Offering of a Basell Parent Company, references in the foregoing definition to the "Company" shall be deemed also to refer to such Basell Parent Company.
 
"Subordinated Indebtedness" means Indebtedness of the Company or any Guarantor which is expressly subordinated in right of payment to the Notes or the Guarantee of such Guarantor, as the case may be.
 
"Subsidiary" means with respect to any Person, (1) a corporation a majority of whose Voting Stock is at the time, directly or indirectly, owned by such Person, by one or more Subsidiaries of such Person or by such Person and one or more Subsidiaries thereof; and (2) any other Person (other than a corporation), including, without limitation, a partnership, limited liability company, business trust or joint venture, in which such Person, one or more Subsidiaries thereof or such Person and one or more Subsidiaries thereof, directly or indirectly, at the date of determination thereof, has at least majority ownership interest entitled to vote in the election of directors, managers or trustees thereof (or other Person performing similar functions).
 
"Supplemental Interest" has the meaning provided in Section 4.19(c).
 
"Surviving Entity" has the meaning provided in Section 5.01(a)(i).
 
"Treasury Rate" means the yield to maturity at the time of computation of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) which has become publicly available at least two Business Days (but not more than five Business Days) prior to the redemption date (or, if such statistical release is not so published or available, any publicly available source of similar market date selected by the Company in good faith)) most nearly equal to the period from the redemption date to August 15, 2010; provided,however, that if the period from the redemption date to August 15, 2010 is not equal to the constant maturity of a United States Treasury security for which a weekly average yield is given, the Treasury Rate shall be obtained by linear interpolation (calculated to the nearest one-twelfth of a year) from the weekly average yields of United States Treasury securities for which such yields are given, except that if the period from the redemption date to August 15, 2010 is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year shall be used.
 
"Trust Officer" means any officer or assistant officer of the Trustee assigned by the Trustee to administer its corporate trust matters or, in the case of a successor trustee, an officer assigned to the department, division or group performing the corporate trust work of such successor.
 
"Trustee" means the party named as such in this Indenture until a successor replaces it in accordance with the provisions of this Indenture and thereafter means such successor.
 
"Unrestricted Dollar Denominated Global Security" means an Unrestricted Global Security denominated in Dollars.
 
"Unrestricted Euro Denominated Global Security" means an Unrestricted Global Security denominated in euro.
 
"Unrestricted Global Security" means one or more securities in definitive, fully registered form without interest coupons, with the legend provided in Exhibit B hereto, without the Private Placement Legend.
 
"Unrestricted Notes" means Notes that are not Restricted Securities.
 
"Unrestricted Subsidiary" of any Person means (i) any Subsidiary of such Person that at the time of determination shall be or continue to be designated an Unrestricted Subsidiary, and (ii) any Subsidiary of an Unrestricted Subsidiary. The Board of Directors of the Company may designate any Subsidiary (including any newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary if (a) such Subsidiary does not own any Capital Stock of, or does not own or hold any Lien on any property of, the Company or any other Subsidiary of the Company that is not a Subsidiary of the Subsidiary to be so designated, (b) such designation complies with Section 4.03 and (c) each Subsidiary to be designated as an Unrestricted Subsidiary and each of its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness under which the lender has recourse to any of the assets of the Company or any of its Restricted Subsidiaries. The Board of Directors of the Company may designate any Unrestricted Subsidiary to be a Restricted Subsidiary only if (x) immediately after giving effect to such designation, the Company is able to incur at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) in compliance with Section 4.12 and (y) immediately before and immediately after giving effect to such designation, no default or Event of Default shall have occurred and be continuing. Any such designation by the Board of Directors of the Company shall be evidenced to the Trustee by promptly filing with the Trustee a copy of the Board Resolution approving the designation and an Officer's Certificate certifying that the designation complied with this Indenture.
 


"U.S. Government Obligations" means direct obligations (or certificates representing an ownership interest in such obligations) of the United States of America (including any agency or instrumentality thereof) for the payment of which the full faith and credit of the United States of America is pledged and which are not callable or redeemable at the issuer's option.
 
"U.S. Legal Tender" means such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts.
 
"Voting Stock" means any class or classes of Capital Stock pursuant to which the holders thereof have the general voting power under ordinary circumstances to elect at least a majority of the board of directors, managers or trustees (or Persons performing similar functions) of any Person (irrespective of whether or not, at the time, stock of any other class or classes shall have, or might have, voting power by reason of the happening of any contingency).
 
"Weighted Average Life to Maturity" means, when applied to any Indebtedness at any date, the number of years obtained by dividing (a) the then outstanding aggregate principal amount of such Indebtedness by (b) the sum of the total of the products obtained by multiplying (i) the amount of each then remaining installment, sinking fund, serial maturity or other required payment of principal, including payment at final maturity, in respect thereof; by (ii) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment.
 
"Wholly Owned Subsidiary" of any Person means any Subsidiary of such Person to the extent all of the outstanding Capital Stock or other ownership interests of which (other than in the case of a Foreign Subsidiary, directors' qualifying shares or an immaterial amount of shares owned by other Persons pursuant to applicable law are owned by such Person or any Wholly Owned Subsidiary of such Person).
 
"Wholly Owned Restricted Subsidiary" means a Restricted Subsidiary that is a Wholly Owned Subsidiary.
 
ARTICLE TWO
 
THE NOTES
 
Section 2.01                                 Form and Dating. Restricted Securities (including the Initial Notes) and the certificate of authentication relating thereto shall be substantially in the form of Exhibit A-1 (in the case of Dollar Notes) and Exhibit A-2 (in the case of Euro Notes). Unrestricted Notes and the certificate of authentication relating thereto shall be substantially in the form of Exhibit A-3 (in the case of Dollar Notes) and Exhibit A-4 (in the case of Euro Notes). The Notes may have notations, legends or endorsements required by law, stock exchange rule or usage. Notes that are Restricted Securities (including the Initial Notes) shall bear the Private Placement Legend. Each Note shall be dated the date of issuance and shall show the date of its authentication.
 
The terms and provisions contained in the Notes annexed hereto as Exhibit A, shall constitute, and are hereby expressly made, a part of this Indenture and, to the extent applicable, the Company, the Guarantors, the Trustee, the Security Agent and AIBIBNY Fund Management (Ireland) Limited, as Irish Paying Agent, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby.
 
(a)            Restricted Global Securities.
 
(i)            Notes that are Restricted Securities shall be issued in the form of one or more global securities (each, a "Restricted Global Security") in definitive, fully registered form without interest coupons, with the legend provided for in Exhibit B, except as otherwise permitted herein.
 
(ii)            Each Restricted Dollar Denominated Global Security shall be registered in the name of DTC or its nominee and deposited with a custodian for DTC, duly executed by the Company and authenticated by the Trustee as hereinafter provided. The aggregate principal amount of a Restricted Dollar De-nominated Global Security may from time to time be increased or decreased by adjustments made on the records of the custodian for DTC, in connection with a
 


corresponding decrease or increase in the aggregate principal amount of a Regulation S Dollar Denominated Global Security or an Unrestricted Dollar De-nominated Global Security, as hereinafter provided.
 
(iii)            Each Restricted Euro Denominated Global Security shall be registered in the name of the Common Depositary or its nominee and deposited with the Common Depositary, on behalf of Euroclear and Clearstream, duly executed by the Company and authenticated by the Trustee as hereinafter provided for credit to the account of Euroclear and/or Clearstream. The aggregate principal amount of a Restricted Euro Denominated Global Security may from time to time be increased or decreased by adjustments made on the records of the Common Depositary, in connection with a corresponding decrease or increase in the aggregate principal amount of an Unrestricted Euro Denominated Global Security, as hereinafter provided.
 
(b)            Regulation S Global Securities.
 
(i)            Notes offered and sold in offshore transactions in reliance on Regulation S shall be issued in the form of one or more Restricted Global Securities (the "Regulation S Global Security") deposited with the custodian for the Depositary, and registered in the name of the Depositary or its nominee for the accounts of the Euroclear System, as operated by Euroclear Bank S.A./N.V. and Clearstream, duly executed by the Company and authenticated by the Trustee as hereinafter provided. During or prior to the end of the 40-day restricted period within the meaning of Regulation S, beneficial interests in the Regulation S Global Security may only be held through Euroclear and Clearstream. Any resale or transfer of beneficial interests in the Regulation S Global Security shall be made only pursuant to Rule 144A or Regulation S or another exemption from the Registration requirements of the Securities Act, after delivery to the Company by the transferor, if required by the Company, of the opinions, certification or other information described in Section 2.17. The aggregate principal amount of the Regulation S Global Security as may from time to time be increased or decreased by adjustments made in the records of the custodian for the Depositary or its nominee, as herein provided.
 
(c)            Physical Notes. Notes issued in exchange for interests in a Global Note pursuant to Section 2.15 may be issued in the form of permanent certificated Notes in registered form in substantially the form set forth in Exhibit A-1, A-2, A-3 or A-4, as applicable (the "Physical Notes"), and, as long as it is a requirement under Dutch law that the Company only attracts funds from professional market parties within the meaning of the Exemption Regulation under the Dutch Act on the Supervision of the Credit System 1992, each Physical Note will contain the following legend:
 
THIS NOTE (OR ANY INTEREST HEREIN) MAY NOT BE SOLD, TRANSFERRED OR DELIVERED TO INDIVIDUALS OR LEGAL ENTITIES WHO ARE ESTABLISHED, DOMICILED OR HAVE THEIR RESIDENCE IN THE NETHERLANDS ("DUTCH RESIDENTS") OTHER THAN TO PROFESSIONAL MARKET PARTIES WITHIN THE MEANING OF THE EXEMPTION REGULATION UNDER THE DUTCH ACT ON THE SUPERVISION OF CREDIT INSTITUTIONS 1992 THAT AC-QUIRE SUCH NOTES (OR ANY INTEREST HEREIN) FOR THEIR OWN ACCOUNT OR FOR THE ACCOUNT OF ANOTHER PMP ("PMPs"). EACH DUTCH RESIDENT, BY PURCHASING THIS NOTE (OR ANY INTEREST HEREIN), WILL BE DEEMED TO HAVE REPRESENTED AND AGREED FOR THE BENEFIT OF THE COMPANY (1) THAT IT IS SUCH A PMP AND IS ACQUIRING THIS NOTE FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF ANOTHER PMP, (2) THAT SUCH NOTE (OR ANY INTEREST HEREIN) MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED TO DUTCH RESIDENTS OTHER THAN TO A PMP AND (3) THAT SUCH HOLDER WILL PROVIDE NOTICE OF THE TRANSFER RESTRICTIONS DESCRIBED HEREIN TO ANY SUBSEQUENT TRANSFEREE.
 
Section 2.02                                 Execution and Authentication; Aggregate Principal Amount. A duly authorized Officer of the Company shall execute the Notes for the Company by manual or facsimile signature.
 
If an Officer whose signature is on a Note was an Officer at the time of such execution but no longer holds that office or position at the time the Trustee authenticates the Note, the Note shall nevertheless be valid.
 
A Note shall not be valid until an authorized signatory of the Trustee or an authentication agent manually signs the certificate of authentication on the Note. The signature of such representative of the Trustee shall be conclusive evidence that the Note has been authenticated under this Indenture.
 
On the Issue Date, upon Company Order the Trustee or an authentication agent (which, in the case of the Initial Euro Notes, shall be the Registrar) shall authenticate and deliver (i) Dollar Notes for original issue in an aggregate principal amount not to exceed $615,000,000 and (ii) Euro Notes for original issue in an aggregate principal amount not to exceed €500,000,000. Additional Notes may be issued in accordance with Sections 2.01 and 2.18. Any such Company Order may specify the amount and series of the Notes to be authenticated and the date on which the original issue of Notes is to be authenticated, whether such Notes are Unrestricted Notes and whether (subject to Section 2.01) the Notes are to be issued as Physical Notes or Global Notes and such other information as the Trustee may reasonably request and, in the case of an issuance of Additional Notes pursuant to Section 2.18 after the Issue Date, shall certify that such issuance will not be prohibited by Section 4.12.
 
Notwithstanding the foregoing, except as provided in Section 9.02, all noteholders in respect of Notes is-sued under this Indenture shall vote and consent together on all matters (as to which any of such noteholders in respect of Notes may vote or consent) as one class and no series of noteholders in respect of of Notes will have the right to vote or consent as a separate class on any matter. For purposes of voting (or any other matter requiring a determination based on a percentage of principal amount of Notes outstanding), the aggregate principal amount of outstanding Euro Notes will be calculated using the noon buying rate in The City of New York for cable transfers in euro as certified for customs purposes by the Federal Reserve Bank of New York of $1.2337 per euro on August 3, 2005.
 
The Trustee may appoint an authenticating agent reasonably acceptable to the Company to authenticate Notes. Unless otherwise provided in the appointment, an authenticating agent may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as an Agent to deal with the Company and Affiliates of the Company. The Euro Paying Agent is initially appointed as authentication agent for the Euro Notes.
 
The Dollar Notes shall be issuable in fully registered form only, without coupons, in denominations of $75,000 and integral multiples of $1,000 in excess thereof. The Euro Notes shall be issuable in fully registered form only, without coupons, in denominations of €50,000 and integral multiples of €1,000 in excess thereof.
 
Section 2.03                                 Registrar and Paying Agent. The Company shall maintain an office or agency, where (a) Notes may be presented or surrendered for registration of transfer or for exchange ("Registrar"), (b) Notes may be presented or surrendered for payment and (c) notices and demands to or upon the Company in respect of the Notes and this Indenture may be served. The Paying Agent shall not be the Company or an Affiliate of the Company. The Registrar shall keep a register of the Notes and of their transfer and exchange. The Company, upon notice to the Trustee, may have one or more co-Registrars and one or more additional paying agents reasonably acceptable to the Trustee. The terms "Paying Agent" and "Transfer Agent" include any additional paying agent or transfer agent, as applicable, and the term "Registrar" includes any co-registrar. The Company may change the Paying Agent or Registrar without notice to any Holder.
 
The Company shall enter into an appropriate agency agreement with any Agent not a party to this Indenture, which agreement shall implement the provisions of this Indenture that relate to such Agent. The Company shall notify the Trustee, in advance, of the name and address of any such Agent. If the Company fails to maintain a Registrar or Paying Agent, or fails to give the foregoing notice, the Trustee shall act as such and shall be entitled to appropriate compensation therefor pursuant to Section 7.07.
 
The Company initially appoints the Trustee as Registrar and Paying Agent for the Dollar Notes, and initially appoints The Bank of New York as Paying Agent for the Euro Notes and as Registrar for the Euro Notes, in each case until such time as such entity has resigned or a successor has been appointed.
 
So long as the Notes are listed on the Irish Stock Exchange and its rules so require, a paying agent and transfer agent (the "Irish Paying Agent") will be maintained in Ireland at all times that payments are
 


required to be made in respect of the Notes. The Company initially appoints AIB/BNY Fund Management (Ireland) Limited, who accepts such appointment, as Irish Transfer Agent.
 
The Company may change any Registrar, Paying Agent or Irish Transfer Agent upon written notice to such Registrar, Paying Agent or Irish Transfer Agent and to the Trustee; provided,however, that no such removal shall become effective until acceptance of an appointment by a successor as agreed by the Company and such successor Registrar, Paying Agent or Irish Transfer Agent. The Registrar, Paying Agent or Irish Transfer Agent may resign without reason by providing 30 days' written notice to the Company and the Trustee.
 
Except as specifically provided in this Indenture, any Registrar, Paying Agent or Irish Transfer Agent will act solely as agent of the Company and will not assume any obligation or relationship of agency or trust to or with the Holders; provided that, at any time after an Event of Default in respect of the Notes has occurred or the Notes have accelerated, any Registrar, Paying Agent or Irish Transfer Agent shall, upon receipt of notice from the Trustee (a copy of which shall have been sent to the Company), act as agent of the Trustee in relation to payments to be made by or on behalf of the Trustee hereunder and (i) hold the Notes and all sums, documents and records held by them in respect of the Notes on behalf of the Trustee; or (ii) deliver the Notes and all sums, documents and records held by them in respect of the Notes to the Trustee or as the Trustee shall direct in such notice; and provided, further, that such notice shall be deemed not to apply to any documents or records which any agent is obliged by any law or regulation not to release.
 
Section 2.04                                 Paying Agent To Hold Assets in Trust. The Company shall require each Paying Agent other than the Trustee to agree in writing that each Paying Agent shall hold in trust for the benefit of the Holders or the Trustee all assets held by the Paying Agent for the payment of principal of, premium, if any, or interest on, the Notes (whether such assets have been distributed to it by the Company or any other obligor on the Notes), and shall notify the Trustee of any default by the Company (or any other obligor on the Notes) in making any such payment; provided,however, that this Section 2.04 shall not impose any fiduciary or other duties upon such agent in respect of the Holders. The Company at any time may require a Paying Agent to distribute all assets held by it to the Trustee and account for any assets disbursed and the Trustee may at any time during the continuance of any payment De-fault, upon written request to a Paying Agent, require such Paying Agent to distribute all assets held by it to the Trustee and to account for any assets distributed. Upon distribution to the Trustee of all assets that shall have been delivered by the Company to the Paying Agent and the completion of any accounting required to be made here-under, the Paying Agent shall have no further liability for such assets. None of the Company or any of its Subsidiaries may act as Paying Agent.
 
Section 2.05 Holder Lists. The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of the Holders. If the Trustee is not the Registrar, the Company shall furnish to the Trustee five (5) Business Days before each Interest Payment Date and at such other times as the Trustee may request in writing a list as of the applicable Record Date and in such form as the Trustee may reasonably require of the names and addresses of the Holders, which list may be conclusively relied upon by the Trustee.
 
Section 2.06                                 Transfer and Exchange. Subject to Sections 2.15 and 2.16, when Notes are presented to the Registrar or a co-Registrar with a request to register the transfer of such Notes or to exchange such Notes for an equal principal amount of Notes of other authorized denominations (but of the same series), the Registrar or co-Registrar shall register the transfer or make the exchange as requested if its requirements for such transaction are met; provided,however, that the Notes presented or surrendered for transfer or exchange shall be duly endorsed or accompanied by a written instrument of transfer in form satisfactory to the Company and the Registrar or co-Registrar, duly executed by the Holder thereof or his attorney duly authorized in writing. To permit registrations of transfers and exchanges, the Company shall execute and the Trustee shall authenticate Notes at the Registrar's or co-Registrar's written request. No service charge shall be made for any registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith. The Registrar or co-Registrar shall not be required to register the transfer of or exchange of any Note (i) during a period beginning at the opening of business 15 days before the mailing of a notice of redemption pursuant to Section
 


3.03 and paragraph 5 of the Notes and ending at the close of business on the day of such mailing and (ii) selected for redemption in whole or in part pursuant to Article Three, except the unredeemed portion of any Note being redeemed in part.
 
Prior to the due presentation for registration of transfer of any Note, the Company, the Guarantors, the Trustee, the Paying Agent, and the Registrar may deem and treat the Person in whose name a Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and interest, if any, on such Note and for all other purposes whatsoever, whether or not such Note is overdue, and none of the Company, any Guarantor, the Trustee, the Paying Agent, or the Registrar shall be affected by notice to the contrary.
 
Any Holder of a beneficial interest in a Global Security shall, by acceptance of such beneficial interest, agree that transfers of beneficial interests in such Global Security may be effected only through a book entry system maintained by the Holder of such Global Security (or its agent), and that ownership of a beneficial interest in the Note shall be required to be reflected in a book entry system.
 
Section 2.07                                 Replacement Notes. If a mutilated Note is surrendered to the Registrar or if the Holder of a Note claims that the Note has been lost, destroyed or wrongfully taken, the Company shall issue and the Trustee shall authenticate a replacement Note of the same series and each of the Guarantors shall execute a Guarantee thereon if the Trustee's requirements are met. If required by the Trustee or the Company, such Holder must provide an indemnity bond or other indemnity, sufficient in the judgment of the Company, the Guarantors and the Trustee, to protect the Company, the Guarantors, the Trustee or any Agent from any loss which any of them may suffer if a Note is replaced. The Company and the Trustee may charge such Holder for their reasonable out-of-pocket expenses in replacing a Note, including fees and expenses of counsel. Every replacement Note shall constitute an additional obligation of the Company and every replacement Guarantee shall constitute an additional obligation of the Guarantors.
 
Section 2.08                                 Outstanding Notes. Notes outstanding at any time are all the Notes that have been authenticated by the Trustee or an authentication agent except those cancelled by it or a Registrar, those delivered to it or a Registrar for cancellation and those described in this Section as not outstanding. Subject to Section 2.09, a Note does not cease to be outstanding because the Company or any of its Affiliates holds the Note.
 
If a Note is replaced pursuant to Section 2.07 (other than a mutilated Note surrendered for replacement), it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Note is held by a bona fide purchaser. A mutilated Note ceases to be outstanding upon surrender of such Note and replacement thereof pursuant to Section 2.07.
 
If on a Redemption Date or the Maturity Date the Paying Agent holds U.S. Legal Tender, U.S. Government Obligations, or a combination thereof (in the case of Dollar Notes) or euro, Euro Obligations, or a combination thereof (in the case of Euro Notes) sufficient to pay all of the principal, premium, if any, and interest due on the Notes payable on that date and is not prohibited from paying such money to the Holders thereof pursuant to the terms of this Indenture or the Intercreditor Agreement, then on and after that date such Notes cease to be outstanding and interest on them ceases to accrue.
 
If on any date which is no earlier than 60 days prior to a Redemption Date, the Company has irrevocably deposited in trust with the Trustee U.S. Legal Tender, U.S. Government Obligations or a combination thereof (in the case of Dollar Notes) or euro, Euro Obligations or a combination thereof (in the case of Euro Notes) in an amount sufficient to pay all of the principal, premium, if any, and interest due on the Notes payable on such Redemption Date, together with irrevocable instructions from the Company directing the Trustee to apply such funds to the payment thereof on such Redemption Date pursuant to the terms of this Indenture, then and after the date of such de-posit such Notes shall be deemed to be not outstanding for purposes of determining whether the Holders of the required aggregate principal amount of Notes have concurred in any direction, waiver, consent or notice which re-quires the consent of at least a majority in aggregate principal amount of Notes then outstanding.
 
Section 2.09                                 Treasury Notes. In determining whether the Holders of the required aggregate principal amount of Notes have concurred in any direction, waiver, consent or notice, Notes owned by the Company or an Affiliate shall be considered as though they are not outstanding, except that for the purposes
 


of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Notes which the Trustee actually knows are so owned shall be so considered. The Company shall notify the Trustee, in writing, when it or any of its Affiliates repurchases or otherwise acquires Notes, of the aggregate principal amount of such Notes so repurchased or otherwise acquired.
 
Section 2.10                                 [Intentionally Omitted].
 
Section 2.11                                 Cancellation. The Company at any time may deliver Notes to the Trustee for cancellation. The Registrar and the Paying Agent shall forward to the Trustee any Notes surrendered to them for transfer, exchange or payment. The Trustee, or at the direction of the Trustee, the Registrar or the Paying Agent, and no one else, shall cancel and shall dispose all cancelled Securities in accordance with its customary procedures. Subject to Section 2.07, the Company may not issue new Notes to replace Notes that the Company has paid or delivered to the Trustee for cancellation. Notes redeemed shall be cancelled. However, if the Company shall acquire any of the Notes, such acquisition shall not operate as a redemption or satisfaction of the Indebtedness represented by such Notes unless and until the same are surrendered to the Trustee for cancellation pursuant to this Section 2.11.
 
Section 2.12                                 Defaulted Interest. The Company will pay interest on overdue principal from time to time on demand at the rate of interest then borne by the Dollar Notes or Euro Notes, as applicable. The Company shall, to the extent lawful, pay interest on overdue installments of interest (without regard to any applicable grace periods) from time to time on demand at the rate of interest then borne by the Dollar Notes or Euro Notes, as applicable. Interest on the Notes will be computed on the basis of a 360-day year comprized of twelve 30-day months.
 
If the Company defaults in a payment of interest on the Notes, it shall pay the defaulted interest, plus (to the extent lawful) any interest payable on the defaulted interest to the Persons who are Holders on a subsequent special record date, which date shall be the fifteenth day next preceding the date fixed by the Company for the payment of defaulted interest or the next succeeding Business Day if such date is not a Business Day. At least 15 days before the subsequent special record date, the Company shall mail to each Holder, with a copy to the Trustee, a notice that states the subsequent special record date, the payment date and the amount of defaulted interest, and interest payable on such defaulted interest, if any, to be paid.
 
Notwithstanding the foregoing, any interest which is paid prior to the expiration of the 30-day period set forth in Section 6.01(a) shall be paid to Holders as of the regular record date for the Interest Payment Date for which interest has not been paid.
 
Section 2.13                                 CUSIP Numbers. The Company in issuing the Notes may use one or more "CUSIP" and/or "ISIN" numbers, and if so notified, the Trustee shall use the CUSIP and/or ISIN numbers in notices of redemption or exchange as a convenience to Holders; provided,however, that no representation is hereby deemed to be made by the Trustee as to the correctness or accuracy of the CUSIP or ISIN numbers printed in the notice or on the Notes, and that reliance may be placed only on the other identification numbers printed on the Notes. The Company shall promptly notify the Trustee of any change in the CUSIP or ISIN number.
 
Section 2.14                                 Deposit of Moneys. Prior to 10:00 a.m. London time on each Interest Payment Date, Maturity Date, Redemption Date, Change of Control Payment Date, and Net Proceeds Offer Payment Date, the Company shall have deposited with the Paying Agent in immediately available funds money sufficient to make cash payments, if any, due on such Interest Payment Date, Maturity Date, Redemption Date, Change of Control Payment Date, and Net Proceeds Offer Payment Date, as the case may be, subject to actual receipt by the Paying Agent, the Paying Agent shall remit payment to the Holders on such Interest Payment Date, Maturity Date, Redemption Date, Change of Control Payment Date, and Net Proceeds Offer Payment Date, as the case may be.
 
Section 2.15                                 Book-Entry Provisions for Global Securities. Except as indicated below in this Section 2.15, the Notes shall be represented only by Global Securities. The Global Securities shall be deposited with a Depositary for such Notes or its custodian (and shall be registered in the name of Cede & Co.). The Depositary for the Dollar Notes shall be DTC unless the Company appoints a successor Depositary by delivery of a Company Order to the Trustee specifying such successor Depositary. The Depositary for the
 


Euro Notes shall be The Bank of New York, London Branch, through its nominee, The Bank of New York (Nominees) Limited, unless, with the approval of Euroclear and Clearstream, the Company appoints a successor Depositary (which shall be a Common Depositary of Euroclear and Clearstream) by delivery of a Company Order to the Trustee specifying such successor Depositary.
 
All payments on a Dollar Denominated Global Security will be made to DTC or its nominee, as the case may be, as the registered owner and Holder of such Dollar Denominated Global Security. All payments on a Euro Denominated Global Security will be made to the order of the Common Depositary or its nominee, as the case may be, as the registered holder of such Euro Denominated Global Security. In each case, the Company will be fully discharged by payment to or to the order of such Depositary from any responsibility or liability in respect of each amount so paid. Upon receipt of any such payment in respect of a Dollar Denominated Global Security, DTC will credit Participants' accounts with payments in amounts proportionate to their respective beneficial interests in the principal amount of such Dollar Denominated Global Security as shown on the records of DTC. The Common Depositary will instruct the Euro Paying Agent to make payments in respect of the Euro Notes to Euroclear and Clear-stream in amounts proportionate to their respective beneficial interests in the principal amount of each Euro De-nominated Global Security, and Euroclear and Clearstream will credit Participants' accounts with payments in amounts proportionate to their respective beneficial interests in the principal amount of such Global Security as shown on the records of Euroclear.
 
Unless and until it is exchanged in whole or in part for Physical Notes, in accordance with this Section 2.15, a Global Security may not be transferred except as a whole by the relevant Depositary or nominee thereof to another nominee of the Depositary or to a successor of Depositary or a nominee of such successor.
 
Owners of beneficial interests in Global Securities shall be entitled or required, as the case may be, but only under the circumstances described in this Section 2.15, to receive physical delivery of Physical Notes.
 
Interests in a Global Security shall be exchangeable or transferable, as the case may be, for Physical Notes if (i) in the case of a Dollar Denominated Global Security, DTC notifies the Company that it is unwilling or unable to continue as Depositary for such Dollar Denominated Global Security, or DTC ceases to be a "Clearing Agency" registered under the United States Securities Exchange Act of 1934, and a successor depositary is not appointed by the Company, (ii) in the case of a Euro Denominated Global Security, Euroclear and Clearstream notify the Company that they are unwilling or unable to continue as clearing agencies for such Euro Denominated Global Security, and a successor depositary is not appointed by the Company, (iii) in the case of a Euro Denominated Global Security, the Common Depositary notifies the Company that it is unwilling or unable to continue as Depositary for such Euro Denominated Global Security, and a successor Common Depositary is not appointed by the Company within one hundred twenty (120) days or (iv) an Event of Default has occurred and is continuing with respect thereto and the owner of a beneficial interest therein requests such exchange or transfer. Upon the occurrence of any of the events described in the preceding sentence, the Company shall cause the appropriate Physical Notes to be delivered to the owners of beneficial interests in the Global Securities or the Participants in DTC or Euroclear and Clearstream through which such owners hold their beneficial interest. Physical Notes shall be exchangeable or transferable for interests in other Physical Notes as described herein.
 
Section 2.16                                 Transfer and Exchange of Securities.
 
(a)            Transfer and Exchange of Dollar Denominated Global Securities. Notwithstanding any provisions of this Indenture or the Notes, transfers of a Dollar Denominated Global Security, in whole or in part, transfers and exchanges of interests therein of the kinds described in clauses (ii), (iii) and (iv) below and exchange of interests in Dollar Denominated Global Securities or of other dollar denominated securities as described in clause (v) below, shall be made only in accordance with this Section 2.16(a). Transfers and exchanges subject to this Section 2.16 shall also be subject to the other provisions of this Indenture that are not inconsistent with this Section 2.16.
 
(i)            General. A Dollar Denominated Global Security may not be transferred, in whole or in part, to any Person other than DTC or a nominee thereof or a successor to DTC or its nominee, and no such transfer to any such other Person may be registered; provided that this clause (i) shall not prohibit any transfer of a dollar denominated security that is issued in exchange for a Dollar Denominated Global Security but is not itself a Dollar Denominated Global Security. No transfer of a Dollar Note of any series to any Person shall be effective under this Indenture or the Dollar Notes of such series unless and until such Dollar Note has been registered in the name of such Person. Nothing in this Section 2.16(a)(i) shall prohibit or render ineffective any transfer of a beneficial interest in a Dollar Denominated Global Security effected in accordance with the other provisions of this Section 2.16(a).
 
(ii)            Restricted Global Security to Regulation S Global Security. If the Holder of a beneficial interest in a Restricted Dollar Denominated Global Security of any series wishes at any time to transfer such interest to a Person who wishes to take delivery thereof in the form of a beneficial interest in a Regulation S Dollar Denominated Global Security of such series, such transfer may be effected, subject to the rules and procedures of DTC, Euroclear and Clearstream, in each case to the extent applicable (the "Applicable Procedures"), only in accordance with this Section 2.16(a)(ii). Upon receipt by the Dollar Registrar of (A) written instructions given in accordance with the Applicable Procedures from an Agent Member directing the Dollar Registrar, to credit or cause to be credited to a specified Agent Member's account a beneficial interest in a Regulation S Dollar Denominated Global Security in a principal amount equal to that of the beneficial interest in a Restricted Dollar Denominated Global Security to be so transferred; (B) a writ-ten order given in accordance with the Applicable Procedures containing information regarding the account of the Agent Member (and, if applicable, the Euroclear or Clearstream account, as the case may be) to be credited with, and the account of the Agent Member to be debited for, such beneficial interest and (C) a certificate in substantially the form set forth in Exhibit C-1 given by the Holder of such beneficial interest, the principal amount of a Restricted Dollar Denominated Global Security shall be reduced, and the principal amount of a Regulation S Dollar Denominated Global Security shall be increased, by the principal amount of the beneficial interest in a Restricted Dollar Denominated Global Security to be so transferred, in each case by means of an appropriate adjustment on the records of the Dollar Registrar, and the Dollar Registrar shall instruct DTC or its authorized representative to make a corresponding adjustment to its records and to credit or cause to be credited to the account of the Person specified in such instructions (which shall be the Agent Member for Euroclear or Clearstream or both, as the case may be) a beneficial interest in a Regulation S Dollar Denominated Global Security having a principal amount equal to the amount so transferred.
 
(iii)            Restricted Dollar Denominated Global Security to Unrestricted Dollar DenominatedGlobal Security. If the Holder of a beneficial interest in a Restricted Dollar Denominated Global Security of any series wishes at any time to transfer such interest to a Person who wishes to take delivery thereof in the form of a beneficial interest in an Unrestricted Dollar Denominated Global Security of such series, such transfer may be effected, subject to the Applicable Procedures, only in accordance with this Section 2.16(a)(iii). Upon receipt by the Dollar Registrar, of (A) written instructions given in accordance with the Applicable Procedures from an Agent Member directing the Dollar Registrar to credit or cause to be credited to a specified Agent Member's account a beneficial interest in an Unrestricted Dollar Denominated Global Security in a principal amount equal to that of the beneficial interest in a Restricted Dollar Denominated Global Security to be so transferred, (B) a written order given in accordance with the Applicable Procedures containing information regarding the account of the Agent Member (and, if applicable, the Euroclear or Clearstream account, as the case may be) to be credited with, and the account of the Agent Member to be debited for, such beneficial interest and (C) a certificate in substantially the form set forth in Exhibit C-2 given by the Holder of such beneficial interest and, with respect to a transfer of a beneficial interest, either a Regulation S Dollar Denominated Global Security or an Unrestricted Dollar Denominated Global Security, the principal amount of the Restricted Dollar Denominated Global Security shall be reduced, and the principal amount of an Unrestricted Dollar Denominated Global Security shall be increased, by the principal amount of the beneficial interest in a Restricted Global Dollar Denominated Security to be so transferred, in each case by means of an appropriate adjustment on the records of the Dollar Registrar and the Dollar Registrar shall instruct DTC or its authorized representative to make a corresponding adjustment to its records and to credit or cause to be credited to the account of the Person specified in such instructions (which shall be the Agent Member for Euroclear or Clearstream or both, as the case may be) a beneficial interest in an Unrestricted Dollar Denominated Global Security having a principal amount equal to the amount so transferred.
 
(iv)            Regulation S Dollar Denominated Global Security or Unrestricted Dollar DenominatedGlobal Security to Restricted Dollar Denominated Global Security. If the Holder of a beneficial interest in a Regulation S Dollar Denominated Global Security of any series or an Unrestricted Dollar Denominated Global Security of any series wishes at any time to transfer such interest to a Person who wishes to take de-livery thereof in the form of a beneficial interest in a Restricted Dollar Denominated Global Security of such series, such transfer may be effected, subject to the Applicable Procedures, only in accordance with this Section 2.16(a)(iv). Upon receipt by the Dollar Registrar of (A) written instructions given in accordance with the Applicable Procedures from an Agent Member directing the Dollar Registrar to credit or cause to be credited to a specified Agent Member's account a beneficial interest in a Restricted Dollar De-nominated Global Security in a principal amount equal to that of the beneficial interest in a Regulation S Dollar Denominated Global Security or an Unrestricted Dollar Denominated Global Security to be so transferred, (B) a written order given in accordance with the Applicable Procedures containing information regarding the account of the Agent Member to be credited with, and the account of the Agent Member (and, if applicable, the Euroclear or Clearstream account, as the case may be) to be debited for, such beneficial interest and (C) with respect to a transfer of a beneficial interest in a Regulation S Dollar Denominated Global Security (but not an Unrestricted Dollar Denominated Global Security) to a Person whom the transferor reasonably believes is a "qualified institutional buyer" within the meaning of Rule 144A under the Securities Act, a certificate in substantially the form set forth in Exhibit C-3 given by the Holder of such beneficial interest, and with respect to a transfer of a beneficial interest, either a Regulation S Dollar De-nominated Global Security or an Unrestricted Dollar Denominated Security, the principal amount of a Restricted Dollar Denominated Global Security shall be increased, and the principal amount of a Regulation S Dollar Denominated Global Security or an Unrestricted Dollar Denominated Global Security shall be reduced, by the principal amount of the beneficial interest in a Restricted Dollar Denominated Global Security to be so transferred, in each case by means of an appropriate adjustment on the records of the Dollar Registrar and the Dollar Registrar shall instruct DTC or its authorized representative to make a corresponding adjustment to its records and to credit or cause to be credited to the account of the Person specified in such instructions (which shall be the Agent Member for Euroclear or Clearstream or both, as the case may be) a beneficial interest in the Restricted Dollar Denominated Global Security having a principal amount equal to the amount so transferred.
 
(v)            Exchanges of Dollar Denominated Global Security for Dollar-Denominated Non-GlobalSecurity. In the event that a Dollar Denominated Global Security or any portion thereof is exchanged for dollar denominated securities other than Dollar Denominated Global Securities, such other dollar denominated securities may in turn be exchanged (on transfer or otherwise) for Notes that are not Dollar Denominated Global Securities or for beneficial interests in a Dollar Denominated Global Security (if any is then outstanding) only in accordance with such procedures, which shall be substantially consistent with the pro-visions of clauses (i) through (iv) above and (vi) below (including the certification requirements intended to insure that transfers and exchanges of beneficial interests in a Dollar Denominated Global Security comply with Rule 144A, Rule 144 or Regulation S, as the case may be) and any Applicable Procedures, as may be from time to time adopted by the Company and the Trustee.
 
(vi)            Beneficial Interest in Regulation S Dollar Denominated Global Security to be HeldThrough Euroclear or Clearstream. Until the termination of the applicable restricted period under Regulation S with respect thereto, interests in a Regulation S Global Security may be held only through Agent Members acting for and on behalf of Euroclear and Clearstream, provided that this clause (vi) shall not prohibit any transfer in accordance with Section 2.16(a)(iv).
 
(b)            Transfer and Exchange of Euro Denominated Global Securities. Notwithstanding any provisions of this Indenture or the Euro Notes, transfers of a Euro Denominated Global Security, in whole or in part, shall be made only in accordance with this Section 2.16(b). Transfers and exchanges subject to this Section 2.16 shall also be subject to the other provisions of this Indenture that are not inconsistent with this Section 2.16.
 
(i)            General. A Euro Denominated Global Security may not be transferred, in whole or in part, to any Person other than the Common Depositary or a nominee thereof or a successor Common Depositary or its nominee, and no such transfer to any such other Person may be registered; provided that this clause (i) shall not prohibit any transfer of a euro denominated security that is issued in exchange for a Euro Denominated Global Security but is not itself a Euro Denominated Global Security. No transfer of a Euro Denominated Security to any Person shall be effective under this Indenture or the Euro Denominated Securities unless and until such Euro Denominated Security has been registered in the name of such Person. Nothing in this Section 2.16(b)(i) shall prohibit or render ineffective any transfer of a beneficial interest in a Euro Denominated Global Security effected in accordance with the other provisions of this Section 2.16(b).
 
(ii)            Restricted Euro Denominated Global Security to Unrestricted Euro Denominated GlobalSecurity. If the Holder of a beneficial interest in a Restricted Euro Denominated Global Security wishes at any time to transfer such interest to a Person who wishes to take delivery thereof in the form of a beneficial interest in an Unrestricted Euro Denominated Global Security, such transfer may be effected, subject to the Applicable Procedures, only in accordance with this Section 2.16(b)(ii). Upon receipt by the Euro Registrar of (A) written instructions given in accordance with the Applicable Procedures from Euroclear or Clearstream directing the Euro Registrar to credit or cause to be credited to Euroclear or Clearstream's ac-count a beneficial interest in an Unrestricted Euro Denominated Global Security in a principal amount equal to that of the beneficial interest in a Restricted Euro Denominated Global Security to be so transferred, (B) a written order given in accordance with the Applicable Procedures containing information regarding the account of Euroclear or Clearstream to be credited with, and the account of Euroclear or Clear-stream to be debited for, such beneficial interest and (C) a certificate in substantially the form set forth in Exhibit C-2 given by the Holder of such beneficial interest, the principal amount of the Restricted Euro Denominated Global Security shall be reduced, and the principal amount of an Unrestricted Euro Denominated Global Security shall be increased, by the principal amount of the beneficial interest in a Restricted Euro Denominated Global Security to be so transferred, in each case by means of an appropriate adjustment on the records of the Euro Registrar and the Euro Registrar shall instruct the Common Depositary or its authorized representative to make a corresponding adjustment to its records and to credit or cause to be credited to the account of the Person specified in such instructions (which shall be the Agent Member for Euroclear or Clearstream or both, as the case may be) a beneficial interest in a Unrestricted Euro Denominated Global Security having a principal amount equal to the amount so transferred.
 
(iii)            Exchanges of Euro Denominated Global Security for Euro Denominated Non-Global Security. In the event that a Euro Denominated Global Security or any portion thereof is exchanged for euro denominated securities other than Euro Denominated Global Securities, such other euro denominated securities may in turn be exchanged (on transfer or otherwise) for Notes that are not Euro Denominated Global Securities or for beneficial interests in a Euro Denominated Global Security (if any is then Outstanding) only in accordance with such procedures, which shall be substantially consistent with the provisions of clauses (i) through (ii) above and (iv) below (including the certification requirements intended to insure that transfers and exchanges of beneficial interests in a Euro Denominated Global Security comply with Rule 144A, Rule 144 or Regulation S, as the case may be) and any Applicable Procedures, as may be from time to time adopted by the Company and the Trustee.
 
(iv)            Interest in Euro Denominated Global Security to be Held Through Euroclear or Clear-stream. Interests in a Euro Denominated Global Security may be held only through Agent Members acting for and on behalf of Euroclear or Clearstream.
 
(c)            Global Securities. The provisions of clauses (i), (ii), (iii), and (iv) below shall apply only to Global Securities;
 
(i)            General. Each Global Security authenticated under this Indenture shall be registered in the name of the appropriate Depositary or a nominee thereof and delivered to such Depositary or a nominee thereof or custodian therefor.
 
(ii)            Transfer to Persons Other than Depositary. Notwithstanding any other provision in this Indenture or the Notes, no Global Security may be exchanged in whole or in part for Notes registered, and no transfer of a Global Security in whole or in part may be registered, in the name of any person other than the appropriate Depositary or a nominee thereof unless (A) in the case of a Dollar Denominated Global Security, DTC notifies the Company that it is unwilling or unable to continue as Depositary for such Global Security, or DTC ceases to be a Clearing Agency registered under the United States Securities Exchange Act of 1934, and a successor to DTC is not appointed by the Company, (B) in the case of a Euro Denominated Global Security, Euroclear and Clearstream notify the Company that they are unwilling or unable to continue as clearing agencies for such Euro Denominated Global Security, and successor clearing agencies are not appointed by the Company, (C) in the case of a Euro Denominated Global Security, the Common Depositary notifies the Company that it is unwilling or unable to continue as Depositary for such Euro De-nominated Global Security, and a successor Common Depositary is not appointed by the Company within one hundred twenty (120) days or (D) in the case of any Global Security, an Event of Default has occurred and is continuing with respect thereto and the owner of a beneficial interest therein requests such exchange or transfer. Any Global Security exchanged pursuant to clause (A), (B) or (C) above shall be so exchanged in whole and not in part and any Global Security exchanged pursuant to clause (D) above may be ex-changed in whole or from time to time in part as directed by DTC or Euroclear and Clearstream, as the case may be. Any Security issued in exchange for a Global Security or any portion thereof shall be a Global Security, provided that any such Security so issued that is registered in the name of a Person other than the appropriate Depositary or a nominee thereof shall not be a Global Security.
 
(iii)            Global Security to Physical Note. Physical Notes issued in exchange for a Global Security or any portion thereof pursuant to clause (ii) above shall be issued in definitive, fully registered form without interest coupons, shall be of the same series and shall have an aggregate principal amount equal to that of such Global Security or portion thereof to be so exchanged, shall be registered in such names and be in such authorized denominations as the appropriate Depositary shall designate and shall bear any legends required hereunder. Any Global Security to be exchanged in whole shall be surrendered by the appropriate Depositary to the appropriate Registrar. With regard to any Global Security to be exchanged in part, either such Global Security shall be so surrendered for exchange or, in the case of a Dollar Denominated Global Security, if Cede & Co. is acting as custodian for DTC or its nominee with respect to such Global Security or, in the case of a Euro Denominated Global Security, if the Common Depositary is acting as Depositary for Euroclear and Clearstream, the principal amount thereof shall be reduced, by an amount equal to the portion thereof to be so exchanged, by means of an appropriate adjustment made on the records of DTC or of the Common Depositary. Upon any such surrender or adjustment, the Trustee shall authenticate and de-liver the Security issuable on such exchange to or upon the order of the appropriate Depositary or an authorized representative thereof.
 
(iv)            In the event of the occurrence of any of the events specified in clause (ii) above, the Company will promptly make available to the Trustee a reasonable supply of Physical Notes in definitive, fully registered form, without interest coupons.
 
(v)            No Rights of Agent Members in Global Security. No Agent Member of any Depositary nor any other Persons on whose behalf Agent Members may act (including Euroclear and Clearstream and account Holders and Participants therein) shall have any rights under this Indenture with respect to any Global Security, or under any Global Security, and each Depositary or its nominee, as the case may be, may be treated by the Company, the Trustee, any Registrar, Paying Agent or Transfer Agent, and any agent of the Company or the Trustee as the absolute owner and Holder of such Global Security for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee, any Registrar, Paying Agent or Transfer Agent, or any agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the applicable Depositary or such nominee, as the case may be, or impair, as between DTC, Euroclear and Clearstream, their respective Agent Members and any other person on whose behalf an Agent Member may act, the operation of customary practices of such Persons governing the exercise of the rights of a Holder of any Note.
 
(vi)            Notwithstanding anything to the contrary in this Indenture, all Global Securities shall be governed by the relevant Applicable Procedures.
 
Section 2.17                                 Special Transfer Provisions.
 
(a)            Other Transfers. If a Holder proposes to transfer an Initial Note pursuant to any exemption from the registration requirements of the Securities Act other than as described in Section 2.16, the Registrar shall only register such transfer or exchange if such transferor delivers to the Company, Registrar and the Trustee an Opinion of Counsel satisfactory to the Company, the Registrar and the Trustee that such transfer is in compliance with the Securities Act and the terms of this Indenture; provided that the Company may, based upon the opinion of its counsel, instruct the Registrar by a Company Order not to register such transfer in any case where the proposed transferee is not a QIB or a non-U.S. Person.
 
(b)            General. By its acceptance of any Note bearing legends, each Holder of such a Note acknowledges the restrictions on transfer of such Security set forth in this Indenture and in the legends and agrees that it will transfer such Security only as provided in this Indenture.
 
(c)            Transfer Restrictions under Dutch Law. Notes (including rights representing an interest in a Global Security) may not be offered, sold, transferred or delivered at any time by anyone, directly or indirectly, to individuals or legal entities who or which are established, domiciled or have their residence in The Netherlands ("Dutch Residents") other than to professional market parties within the meaning of the Exemption Regulation under the Dutch Act on the Supervision of Credit Institutions 1992 ("PMPs") acquiring the Notes for their own ac-count. Dutch Residents, by purchasing Notes (or any interest herein) may not be offered, sold, pledged or otherwise transferred to Dutch residents other than to a PMP acquiring for its own account or for the account of another PMP and (ii) they will provide notice of this transfer restriction to any subsequent transferee.
 
The Registrar shall retain copies of all letters, notices and other written communications received pursuant to Section 2.15, 2.16 or this Section 2.17 for a period of two years, after which time such letters, notices and other written communications shall at the written request of the Company be delivered to the Company. The Company shall have the right to inspect and make copies of all such letters, notices or other written communications during normal office hours upon the giving of reasonable prior written notice to the Registrar.
 
Section 2.18                                 Issuance of Additional Notes. The Company shall be entitled to issue Additional Notes of either series under this Indenture which shall have substantially identical terms as the Initial Notes of such series, other than with respect to the date of issuance, issue price and amount of interest payable on the first Interest Payment Date applicable thereto; provided that such issuance is not prohibited by Section 4.12.
 
With respect to any Additional Notes, the Company shall set forth in a resolution of its Board of Directors (or a duly appointed committee thereof) and in an Officer's Certificate, a copy of each of which shall be delivered to the Trustee, the following information:
 
(1)            the series of and aggregate principal amount of such Additional Notes to be authenticated and delivered pursuant to this Indenture;
 
(2)            the issue price and the issue date of such Additional Notes and the amount of interest payable on the first Interest Payment Date applicable thereto; and
 
(3)            whether such Additional Notes shall be Restricted Securities or Unrestricted Notes.
 
ARTICLE THREE
 
REDEMPTION
 
Section 3.01                                 Notices to Trustee. If the Company elects to redeem Dollar Notes pursuant to paragraph 5 of the Dollar Notes or the Euro Notes pursuant to paragraph 5 of the Euro Notes it shall notify the Trustee and the Paying Agent in writing of the Redemption Date and the aggregate principal amount of the Notes of such series to be redeemed. Such notice must be given at least 30 days prior to the Redemption Date, but shall not be given more than 60 days before such Redemption Date. Any such notice may be cancelled at any time prior to notice of such redemption being mailed to any Holder and shall thereby be void and of no effect.
 
Section 3.02                                 Selection of Notes To Be Redeemed. If less than all of the Dollar Notes and/or Euro Notes, as the case may be, are to be redeemed at any time, selection of such Notes of the appropriate series for redemption will be made by the Trustee in compliance with the requirements of the principal national securities ex-change, if any, on which such Notes are listed or, if such Notes are not listed on a national securities exchange, on a pro rata basis, by lot or by such method as the Trustee shall deem fair and appropriate; provided,however, that no Notes of a principal amount of $1,000 or €1,000, as the case may be, or less shall be redeemed in part; provided that no Notes shall be redeemed in part if the resulting Note would have a minimum denomination that is less than $75,000 or €50,000, as the case may be.
 
Section 3.03                                 Notice of Redemption. At least 30 days but not more than 60 days before a Redemption Date, the Company shall mail or cause to be mailed a notice of redemption by first- class mail to each Holder whose Notes are to be redeemed at its registered address, with a copy to the Trustee, except that redemption notices may be mailed more than 60 days prior to a redemption date if the notice is issued in connection with a defeasance of the notes or a satisfaction and discharge of this Indenture, in each case in accordance with this Indenture. At the Company's request, the Trustee shall give the notice of redemption in the Company's name and at the Company's expense; provided,however, that the Company shall deliver to the Trustee, at least 40 days prior to the Redemption Date (which may be waived by the Trustee), an Officer's Certificate requesting that the Trustee give such notice and shall provide the Trustee with the information required and within the time periods specified by this section. Each notice for redemption shall identify the Notes of the appropriate series to be redeemed and shall state:
 
(1)            the Redemption Date;
 
(2)            the redemption price and the amount of accrued interest, if any, to be paid (the "Redemption Price");
 
(3)            the paragraph of the Dollar Notes and/or the Euro Notes, as the case may be, pursuant to which the Notes of such series are being redeemed;
 
(4)            the name and address of the Paying Agent;
 
(5)            that Notes called for redemption must be surrendered to the Paying Agent to collect the Redemption Price;
 
(6)            that, unless the Company defaults in making the redemption payment, interest, if any, on Notes called for redemption shall cease to accrue on and after the Redemption Date and the only remaining right of the Holders of such Notes is to receive payment of the Redemption Price upon surrender to the Paying Agent of the Notes redeemed;
 
(7)            that, if any Note is being redeemed in part, the portion of the principal amount of such Note to be redeemed;
 
(8)            that, if less than all the Notes of a series of Notes are to be redeemed, the identification of the particular Notes and the aggregate principal amount (or portion thereof) of such Notes to be redeemed, to be redeemed and the aggregate principal amount of Notes to be outstanding after such partial redemption; and
 
(9)            whether the redemption is conditioned on any events and what such conditions are.
 
If one or more conditions specified with respect to a redemption are not satisfied or waived, the Redemption Date shall be deemed not to have occurred for all purposes of this Indenture and the Company shall give notice of such non-occurrence to the Holders of the applicable Notes and to the Trustee.
 


The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such rule, laws and regulations are applicable in connection with the purchase of Notes.
 
Section 3.04                                 Effect of Notice of Redemption. Once notice of redemption is mailed in accordance with Section 3.03, Notes called for redemption become due and payable on the Redemption Date and at the Redemption Price. Upon surrender to the Paying Agent, such Notes called for redemption shall be paid at the Redemption Price, but installments of interest, the maturity of which is on or prior to the Redemption Date, shall be payable to Holders of record at the close of business on the relevant record dates referred to in the Notes. Interest shall accrue on or after the Redemption Date and shall be payable only if the Company defaults in payment of the Redemption Price.
 
Section 3.05 Deposit of Redemption Price. On or before the Redemption Date, the Company shall de-posit with the Paying Agent U.S. Legal Tender (in the case of Dollar Notes) and/or euro (in the case of Euro Notes) sufficient to pay the Redemption Price of all Notes of the applicable series to be redeemed on that date. The Paying Agent shall promptly return to the Company any U.S. Legal Tender (in the case of Dollar Notes) and/or euro (in the case of Euro Notes) so deposited that is not required for that purpose, except with respect to monies owed as obligations to the Trustee pursuant to Article Seven.
 
Unless the Company fails to comply with the preceding paragraph and defaults in the payment of such Redemption Price, interest on the Notes to be redeemed will cease to accrue on and after the applicable Redemption Date, whether or not such Notes are presented for payment.
 
Section 3.06                                 Notes Redeemed in Part. Upon surrender of a Note that is to be redeemed in part, the Company shall execute and the Trustee shall authenticate for the Holder a new Note or Notes at the Company's expense of the appropriate series equal in principal amount to the unredeemed portion of the Note surrendered.
 
Section 3.07                                 Redemption for Taxation Reasons. The Company may redeem any Notes in whole, but not in part, at any time upon giving not less than 30 nor more than 60 days' notice to the holders of the notes (which notice shall be irrevocable) at a redemption price equal to 100% of the principal amount thereof, together with accrued and unpaid interest, if any, to the date fixed for redemption (a "Tax Redemption Date") (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date) and all Additional Amounts, if any, then due and which will become due on the Tax Redemption Date as a result of the redemption or otherwise, if any, if the Company determines in good faith that, as a result of:
 
(1)            any change in, or amendment to, the law or treaties (or any regulations or rulings promulgated thereunder) of a Relevant Taxing Jurisdiction affecting taxation; or
 
(2)            any change in governmental position regarding the application, administration or interpretation of such laws, treaties, regulations or rulings (including a holding, judgment or order by a court of competent jurisdiction)
 
(each of the foregoing in clauses (1) and (2), a "Change in Tax Law"), it or any Guarantor not organized in one of the states of the United States (a "Non-U.S. Note Guarantor"), with respect to its Guarantee, is, or on the next interest payment date in respect of the Notes would be, required to pay any Additional Amounts, and such obligation cannot be avoided by taking reasonable measures available to the Company or such Non-U.S. Note Guarantor (including, for the avoidance of doubt, the appointment of a new Paying Agent or, where such payment would be reasonable, the payment through the Company or another guarantor). In the case of the Company and the Guarantors, the Change in Tax Law must be announced on or after the date of the Offering Memorandum. In the case of an Additional Guarantor, or any successor of any Person specified in the preceding sentence, the Change in Tax Law must be announced on or after the date that such Person became a Guarantor or such a successor. Notice of redemption for taxation reasons shall be published in accordance with the procedures described in Sections 3.02 and 3.03. Not-withstanding the foregoing, no such notice of redemption shall be given (a) earlier than 90 days prior to or later than 270 days after the earliest date on which the Payor would be obliged to make such payment of Additional Amounts and (b) unless at the time such notice is given, such obligation to pay such Additional Amounts remains in effect. Prior to the publication or mailing of any notice of redemption of any Notes pursuant to the foregoing, the Company shall
 


deliver to the Trustee (a) an Officer's Certificate stating that it is entitled to effect such redemption and setting forth a statement of facts showing that the conditions precedent to its right so to redeem have been satisfied and (b) an Opinion of Counsel to the effect that the Company or a Non-U.S. Guarantor has been or will become obligated to pay Additional Amounts as a result of a Change in Tax Law.
 
ARTICLE FOUR
 
COVENANTS
 
Section 4.01                                 Payment of Notes. The Company shall pay the principal of and interest on the Notes on the dates and in the manner provided in the Notes. An installment of principal of or interest on the Notes shall be considered paid on the date it is due if the Trustee or Paying Agent holds on that date U.S. Legal Tender (in the case of Dollar Notes) and/or euro (in the case of Euro Notes) designated for and sufficient to pay the installment. Interest on the Notes will be computed on the basis of a 360-day year comprized of twelve 30-day months.
 
Notwithstanding anything to the contrary contained in this Indenture, the Company may, to the extent it is required to do so by law, deduct or withhold income or other similar taxes imposed by the United States of America from principal, premium or interest payments hereunder.
 
Section 4.02                                 Maintenance of Office or Agency. The Company shall maintain the office or agency required under Section 2.03. The Company shall give prior notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the address of the Trustee set forth in Section 14.02.
 
Section 4.03                                 Limitation on Restricted Payments. The Company shall not, and shall not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, make any Restricted Payment if at the time of such Restricted Payment or immediately after giving effect thereto, (i) a Default or an Event of Default shall have occurred and be continuing, (ii) the Company is not able to incur at least €1.00 of additional Indebtedness other than Permitted Indebtedness in compliance with Section 4.12, or (iii) the aggregate amount of Restricted Payments made after the Issue Date, including, the Fair Market Value as determined reasonably and in good faith by the Board of Directors of the Company of non-cash amounts constituting Restricted Payments) shall exceed the sum of: (x) 50% of the cumulative Consolidated Net Income (or if cumulative Consolidated Net Income shall be a loss, minus 100% of such loss) of the Company earned from July 1, 2005 through the last day of the last full fiscal quarter immediately preceding the date the Restricted Payment occurs (the "Reference Date") (treating such period as a single accounting period); provided,however, that for purposes of this sub-clause (iii)(x) only, to the extent any amounts that would constitute net income but which have been used to make a Permitted Investment described in clause (v) of the definition thereof, such amounts shall be excluded from Consolidated Net Income; plus (y) 100% of the aggregate net cash proceeds received by the Company from any Person (other than a Subsidiary of the Company) from the issuance and sale subsequent to the Issue Date and on or prior to the Reference Date of Qualified Capital Stock of the Company or debt securities of the Company that are convertible into or exchangeable for Qualified Capital Stock of the Company, but only when and to the extent such debt securities are converted into or exchanged for Qualified Capital Stock of the Company; plus (z) without duplication of any amounts included in clause (iii)(y) above, 100% of the aggregate net cash proceeds of any equity contribution received by the Company from a holder of the Company's Capital Stock.
 
Notwithstanding the foregoing, the provisions set forth in the immediately preceding paragraph shall not prohibit: (1) the payment of any dividend within 60 days after the date of declaration of such dividend if the dividend would have been permitted on the date of declaration; (2) any Restricted Payments, either (i) solely in ex-change for shares of Qualified Capital Stock of the Company or (ii) if no Default or Event of Default shall have occurred and be continuing, through the application of net cash proceeds of a substantially concurrent Equity Offering (other than to a Subsidiary of the Company) or capital contribution received by the Company; (3) the acquisition or repayment of any Indebtedness of the Company that is subordinate or junior in right of payment to the Notes either (i) solely in exchange for shares of Qualified Capital Stock of the Company, or (ii) if no Default or Event of Default shall have occurred and be continuing, through the application of net cash proceeds of (A) a substantially concurrent
 
Equity Offering or (B) incurrence for cash of Refinancing Indebtedness, (in the case of (A) or (B), other than to a Subsidiary of the Company); (4) beginning on the fifth anniversary of the Issue Date, so long as no Default or Event of Default shall have occurred and be continuing, repurchases by the Company of, or dividends to Parent to permit repurchases by Parent of, Common Stock of the Company or Parent from employees, former employees, directors or former directors of the Company or any of its subsidiaries (or permitted transferees of such persons) or their authorized representatives upon the death, disability or termination of employment of such employees or directors, in an aggregate amount for all periods not to exceed 2.0% of the share capital of the Company from time to time at Fair Market Value at the date of such repurchase; (5) payments to Parent for legal, audit, tax and other expenses directly relating to the administration of Parent, including customary compensation payable to the Parent's directors and employees, not to exceed €1.5 million in any fiscal year; (6) so long as no Default or Event of Default shall have occurred and be continuing (A) ongoing service fees paid to AI Petrochemicals LLC or its designees in an aggregate annual amount of €2.5 million (or in an aggregate annual amount of €5 million in the event the Company's Consolidated EBITDA for the four quarter period ending immediately prior to such payment is in excess of €800 million (after adjustment for such payments)) and (B), advisory and monitoring fees paid to AI Petrochemicals LLC or its designee in an amount equal to 0.5% of the gross transaction value of each qualified transaction as described in the Management Agreement; provided that the minimum advisory and monitoring fees per transaction shall be €250,000 and the maximum advisory and monitoring fee per transaction shall be €5 million; and (C) commercially reasonable expenses incurred by and paid to AI Petrochemical LLC or its affiliates not to exceed a cumulative amount of €1 million in any twelve months pursuant to the Management Agreement; (7) cash payments in lieu of issuing fractional shares pursuant to the exercise or conversion of any exercisable or convertible securities; (8) payments or distributions to dissenting shareholders pursuant to applicable law in connection with or in contemplation of a merger, consolidation or transfer of assets that complies with Article Five; (9) payments of dividends on Disqualified Capital Stock issued in accordance with Section 4.12; (10) directors' fees (including non-executive directors of the Company) in an amount not to exceed €1 million per year; and (11) additional Restricted Payments in an aggregate amount not to exceed €l 0 million since the Issue Date.
 
In determining the aggregate amount of Restricted Payments made subsequent to the Issue Date in accordance with clause (iii) of the first paragraph of this Section 4.03, cash amounts expended pursuant to clauses (1), (2)(ii), (3)(ii)(A), (4) and (11) of the second paragraph of this Section 4.03 shall be included in such calculation.
 
Not later than the date of making any Restricted Payment pursuant to clause (iii) of the first paragraph of this Section 4.03 or clause (11) of the second paragraph of this Section 4.03, the Company shall deliver to the Trustee an Officer's Certificate stating that such Restricted Payment complies with this Indenture and setting forth in reasonable detail the basis upon which the required calculations were computed, which calculations may be based upon the Company's quarterly financial statements last provided to the Trustee pursuant to Section 4.09.
 
Section 4.04                                 Corporate Existence. Except as otherwise permitted by Article Five, the Company shall do or cause to be done all things reasonably necessary to preserve and keep in full force and effect its corporate or other existence and the corporate or other existence of each of its Restricted Subsidiaries in accordance with the respective organizational documents of each such Restricted Subsidiary and the material rights (charter and statutory) and franchises of the Company and each such Restricted Subsidiary; except for such noncompliances as are not in the aggregate reasonably likely to have a material adverse effect on the financial condition or results of operations of the Company and its Restricted Subsidiaries taken as a whole.
 
Section 4.05                                 Payment of Taxes and Other Claims. The Company shall pay or discharge or cause to be paid or discharged, before the same shall become delinquent, (i) all material taxes, assessments and governmental charges (including withholding taxes and any penalties, interest and additions to taxes) levied or imposed upon it or any of its Restricted Subsidiaries or properties of it or any of its Restricted Subsidiaries and (ii) all material lawful claims for labor, materials, supplies and services that, if unpaid, might by law become a Lien upon the property of it or any of its Restricted Subsidiaries; except for such noncompliances as are not in the aggregate reasonably likely to have a material adverse effect on the financial condition or results of operations of the Company and its Restricted Subsidiaries as a whole; provided,however, that there shall not be required to be paid or discharged any such tax, assessment or charge, the amount, applicability or validity of which is being contested in good faith by appropriate proceedings and for which adequate provision has been made or where the failure to effect such payment or discharge is not adverse in any material respect to the Holders.
 
Section 4.06                                 Maintenance of Properties and Insurance.
 
(a)            The Company shall, and shall cause each of its Restricted Subsidiaries to, make all reasonable efforts to maintain its material properties in normal condition (subject to ordinary wear and tear) and make all reasonably necessary repairs, renewals or replacements thereto as in the judgment of the Company may be reasonably necessary to the conduct of the business of the Company and its Restricted Subsidiaries; except for such noncompliances as are not in the aggregate reasonably likely to have a material adverse effect on the financial condition or results of operations of the Company and its Restricted Subsidiaries taken as a whole.
 
(b)            The Company shall provide or cause to be provided, for itself and each of its Restricted Subsidiaries, insurance (including appropriate self- insurance) against loss or damage of the kinds that, in the reasonable, good faith opinion of the Company, are reasonably adequate and appropriate for the conduct of the business of the Company and such Restricted Subsidiaries.
 
Section 4.07                                 Compliance Certificate; Notice of Default.
 
(a)            The Company shall deliver to the Trustee, within 120 days after the end of each of the Company's fiscal years commencing with the fiscal year ending December 31, 2005, an Officer's Certificate stating that a re-view of its activities and the activities of its Restricted Subsidiaries during the preceding fiscal year has been made under the supervision of the signing officers with a view to determining whether it has kept, observed, performed and fulfilled its obligations under this Indenture and further stating, as to each such officer signing such certificate, that to the best of his knowledge having made all due inquiries at the date of such certificate there is no Default or Event of Default that has occurred and is continuing or, if such signers do know of such Default or Event of Default, the certificate shall describe the Default or Event of Default and its status with particularity. The Officer's Certificate shall also notify the Trustee should the Company elect to change the manner in which it fixes its fiscal year end.
 
(b)            So long as any of the Notes are outstanding (i) if any Default or Event of Default has occurred and is continuing or (ii) if any Holder seeks to exercise any remedy hereunder with respect to a claimed Default under this Indenture or the Notes, the Company shall deliver to the Trustee as soon as practicable by registered or certified mail or by telegram, telex or facsimile transmission followed by hard copy by registered or certified mail an Officer's Certificate specifying such event, notice or other action.
 
Section 4.08                                 Compliance with Laws. The Company shall comply, and shall cause each of its Restricted Subsidiaries to comply, with all applicable statutes, rules, regulations, orders and restrictions of the United States of America, all states and municipalities thereof, and of any governmental department, commission, board, regulatory authority, bureau, agency and instrumentality of the foregoing, in respect of the conduct of their respective businesses and the ownership of their respective properties, except for such noncompliances as are not in the aggregate reasonably likely to have a material adverse effect on the financial condition or results of operations of the Company and its Restricted Subsidiaries taken as a whole.
 
Section 4.09                                 Reports to Holders. For so long as any notes are outstanding, the Company shall provide
 
to the Trustee in electronic form the following reports:
 
(1)            within 120 days after the end of the Company's fiscal year beginning with the first fiscal year ending after the Issue Date, annual reports containing, to the extent applicable with a level of detail that is comparable in all material respect to the Offering Memorandum, the following information: (a) audited consolidated balance sheets of the Company as of the end of the two most recent fiscal years and audited consolidated income statements and statements of cash flow of the Company (or Basell B.V.) for the two most recent fiscal years, in each case that includes historical information for Basell B.V., including (i) complete footnotes to such financial statements and (ii) footnote or other disclosure showing total assets, revenues and EBITDA, as of or for each of the relevant periods in such report, in each case, for the Guarantors on a consolidated basis indicating amounts that would be eliminated in the consolidated ac-counts of the Company, and the report of the independent auditors on the financial statements; (b) proforma income statement and balance sheet information of the Company, together with explanatory foot-notes, for any acquisitions, dispositions or recapitalizations, which would constitute a significant business combination in accordance with Rule 11-01(b) of Article 11 of Regulation S-X promulgated by the SEC as in effect on the Issue Date, that have occurred since the beginning of the most recently completed fiscal year (provided that an acquisition, disposition or recapitalization that has occurred less than 71 calendar days prior to the date such report is to be provided, such acquisition, disposition or recapitalization shall be included in the report for the next fiscal quarter); (c) to the extent relating to annual periods, an operating and financial review of the audited financial statements, including a discussion of the results of operations, financial condition, and liquidity and capital resources of the Company, and a discussion of material commitments and contingencies and critical accounting policies; (d) a description of the business, management and shareholders of the Company, all material affiliate transactions and a description of all material debt instruments; and (e) a description of material risk factors and material recent developments;
 
(2)            within 60 days following the end of the first three fiscal quarters in each fiscal year of the Company beginning with the quarter ended June 30, 2005 (75 days following the end of the quarters ended June 30 and September 30, 2005) all quarterly financial statements of the Company (or, with respect to any fiscal quarter ending prior to the Issue Date, quarterly financial statements of Basell B.V.) (including, in the case of the financial statements for the fiscal quarter ended June 30, 2005, a balance sheet and income statement as of and for the quarter ended June 30, 2005 prepared on a proforma basis for the Transactions comparable to the presentation in the Offering Memorandum) containing the following information: (a) an unaudited condensed consolidated balance sheet as of the end of such quarter and unaudited condensed statements of income and cash flow for the most recent quarter year-to-date period ending on the unaudited condensed balance sheet date, and the comparable prior year period, together with condensed footnote disclosure; (b) proforma income statement and balance sheet information of the Company, together with explanatory footnotes, for any acquisitions, dispositions or recapitalizations occurring after the Issue Date, which would constitute a significant business combination in accordance with Rule 11-01(b) of Article 11 of Regulation S-X promulgated by the SEC as in effect on the Issue Date, that have occurred since the be-ginning of the most recently completed fiscal year (provided that an acquisition, disposition or recapitalization that has occurred less than 71 calendar days prior to the date such report is to be provided, such acquisition, disposition or recapitalization shall be included in the report for the next fiscal quarter or the current fiscal year, whichever occurs first); (c) an operating and financial review of the unaudited financial statements, including a discussion of the results of operations, financial condition, and liquidity and capital re-sources of the Company, and a discussion of material commitments and contingencies and critical accounting policies; and (d) material recent developments; and
 
(3)            promptly after the occurrence of any material acquisition, disposition or restructuring of the Company and its Restricted Subsidiaries, taken as a whole, or any senior executive officer changes at the Company or change in auditors of the Company or any other material event of the Company and its Restricted Subsidiaries, taken as a whole, that the Company or any of its Restricted Subsidiaries announces publicly, a report containing a description of such event.
 
All financial statements and proforma financial information shall be prepared in accordance with GAAP as in effect on the date of such report or financial statement (or otherwise on the basis of GAAP as then in effect) and on a consistent basis for the periods presented; provided,however, that the reports set forth in clauses (1), (2) and (3) above may, in the event of a change in applicable GAAP, present earlier periods on a basis that applied to such periods. Except as provided for above, no report need include separate financial statements or information for the Company, any Guarantors or non-Guarantor Subsidiaries of the Company or any disclosure with respect to the results of operations or any other financial or statistical disclosure not of a type included in the Offering Memorandum.
 
At any time that any of the Company's Subsidiaries are Unrestricted Subsidiaries and any such Unrestricted Subsidiary or group of Unrestricted Subsidiaries, if taken together as one Subsidiary, constitutes a Significant Subsidiary of the Company, then the annual and quarterly financial information required by clauses (1) and (2) above shall include a reasonably detailed presentation, either on the face of the financial statements or in the footnotes thereto, of the financial condition and results of operations of the Company and its Restricted Subsidiaries separate from the financial condition and results of operations of the Unrestricted Subsidiaries of the Company.
 
Substantially concurrent with the issuance to the Trustee of the reports specified in (1), (2) and (3) above, the Company shall also (i) post copies of such reports on such website as may be then maintained by the Company or (ii) otherwise provide substantially comparable public availability of such reports. In the event that the Company becomes subject to the reporting requirements of Section 13(a) or 15(d) of the Exchange Act, or elects to comply with such provisions, the Company shall, for so long as it continues to file the reports required by Section 13(a) with the SEC, make available to the Trustee the annual reports, information, documents and other reports that the Company is, or would be, required to file with the SEC pursuant to such Section 13(a) or 15(d). Upon complying with the foregoing requirement, the Company shall be deemed to have complied with the provisions contained in the pre-ceding three paragraphs.
 
In addition, so long as the notes remain outstanding and during any period during which the Company is not subject to Section 13 or 15(d) of the Exchange Act nor exempt therefrom pursuant to Rule 12g3-2(b), the Company shall furnish to the Holders and, upon their request, prospective purchasers of the Notes, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.
 
For so long as the Notes are listed on the Irish Stock Exchange and to the extent that the rules of the Irish Stock Exchange require, the above information shall also be made available in Dublin, Ireland through the offices of the Paying Agent in Ireland.
 
Section 4.10                                 Waiver of Stay, Extension or Usury Laws. The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law or any usury law or other law that would prohibit or forgive the Company from paying all or any portion of the principal of, premium or interest on the Notes as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the obligations or the performance of this Indenture; and (to the extent that it may lawfully do so) the Company hereby expressly waives all benefit or advantage of any such law, and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.
 
Section 4.11                                 Limitations on Transactions with Affiliates.
 
(a)            The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, enter into any transaction or series of related transactions with, or for the benefit of, any of its Affiliates (each an "Affiliate Transaction"), other than (x) Affiliate Transactions permitted under paragraph (b) below and (y) Affiliate Transactions on terms that are no less favorable to the Company or the relevant Restricted Subsidiary than those terms that might reasonably have been obtained in a comparable transaction at such time on an arm's-length basis by the Company or the relevant Restricted Subsidiary and an unrelated Person. The disinterested members of the Board of Directors of the Company and the Board of Directors of the relevant Restricted Subsidiary must approve each Affiliate Transaction to which they are a party that involves aggregate payments or other property with a Fair Market Value in excess of €5.0 million. This approval must be evidenced by a Board Resolution that states that the applicable Board of Directors has determined that the transaction complies with the foregoing provisions. If the Company or any Restricted Subsidiary of the Company enters into an Affiliate Transaction that involves an aggregate Fair Market Value of more than €25.0 million, then prior to the consummation of the Affiliate Transaction, the parties to such Affiliate Transaction must obtain a favorable opinion as to the fairness of such transaction or series of related transactions to the Company or the relevant Restricted Subsidiary, as the case may be, from a financial point of view, from an Independent Financial Advisor and file the same with the Trustee.
 
(b)            The restrictions set forth in clause (a) shall not apply to (i) reasonable fees and compensation paid to and employee benefits arrangements, customary insurance and indemnity provided on behalf of, officers, directors, managers, employees or consultants of the Company or any Restricted Subsidiary of the Company as deter-mined in good faith by the Company's Board of Directors or senior management; (ii) transactions exclusively between or among the Company and any of its Restricted Subsidiaries or exclusively between or among such Restricted Subsidiaries, provided such transactions are not otherwise prohibited by this Indenture; (iii) any agreement as in effect as of the Issue Date or any amendment or renewal thereto or any transaction contemplated thereby or in any replacement agreement thereto so long as any such amendment or renewal or replacement agreement is not more disadvantageous to the Holders (as determined by the Board of Directors of the Company in their reasonable and good faith judgment) in any material respect than the original agreement; (iv) Permitted Investments and Restricted Payments made in compliance with Section 4.03; (v) transactions between or among any of the Company, any of its Subsidiaries and any Securitization Entity in connection with a Qualified Securitization Transaction, in each case provided that such transactions are not otherwise prohibited by this Indenture; (vi) transactions with distributors or other purchases or sales of goods or services, in each case in the ordinary course of business and other-wise in compliance with the terms of this Indenture which when taken together are fair to the Company or the Restricted Subsidiaries of the Company as applicable, in the reasonable determination of the Board of Directors of the Company or the senior management thereof, or are on terms at least as favorable as might reasonably have been obtained at such time from an unaffiliated party; (vii) transactions with Qualified Joint Ventures entered into in the ordinary course of business and in a manner consistent with past practice; and (viii) the issuance or sale of any of the Company's Capital Stock (other than Disqualified Capital Stock) or capital contributions received by the Company.
 
Section 4.12 Limitation on Incurrence of Additional Indebtedness. The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume, guarantee, acquire, be-come liable, contingently or otherwise, with respect to, or otherwise become responsible for payment of (collectively, "incur") any Indebtedness (other than Permitted Indebtedness); provided,however, if no Default or Event of Default shall have occurred and be continuing at the time of or as a consequence of the incurrence of any such Indebtedness, the Company and its Restricted Subsidiaries which are Guarantors may incur Indebtedness (including Acquired Indebtedness) if on the date of the incurrence of such Indebtedness, after giving effect to the incurrence thereof, the Consolidated Fixed Charge Coverage Ratio of the Company is greater than 2.0 to 1.0.
 
Notwithstanding any other provision of this Indenture, Public Indebtedness may only be incurred by the Company and the Guarantors.
 
For purposes of determining compliance with any restriction on the incurrence of Indebtedness in euro where Indebtedness is denominated in a different currency, the amount of such Indebtedness shall be the euro Equivalent determined on the date of such determination, provided that if any such Indebtedness denominated in a different currency is subject to a Currency Agreement (with respect to euro) covering principal amounts payable on such Indebtedness, the amount of such Indebtedness expressed in euro shall be adjusted to take into account the effect of such agreement. The principal amount of any Refinancing Indebtedness incurred in the same currency as the Indebtedness being refinanced shall be the euro Equivalent of the Indebtedness refinanced determined on the date such Indebtedness being refinanced was initially incurred. Notwithstanding any other provision of this Section 4.12, for purposes of determining compliance with Section 4.12, increases in Indebtedness solely due to fluctuations in the exchange rates of currencies shall not be deemed to exceed the maximum amount that the Company or a Restricted Subsidiary of the Company may incur under Section 4.12.
 
For purposes of determining any particular amount of Indebtedness under Section 4.12: (i) obligations with respect to letters of credit, guarantees or Liens, in each case supporting Indebtedness otherwise included in the de-termination of such particular amount, shall not be included; (ii) any Liens granted pursuant to the equal and ratable provisions referred to in Section 4.18 shall not be treated as Indebtedness; and (iii) accrual of interest, accrual of dividends, the accretion of accreted value, the obligation to pay commitment fees and the payment of interest in the form of additional Indebtedness shall not be treated as Indebtedness.
 
Section 4.13                                 Limitation on Dividend and Other Payment Restrictions Affecting Subsidiaries. The Company will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or permit to exist or become effective any consensual encumbrance or restriction on the ability of any Restricted Subsidiary of the Company to (a) pay dividends or make any other distributions on or in respect of its Capital Stock; (b) make loans or advances or to pay any Indebtedness or other obligation owed to the Company or any other Restricted Subsidiary of the Company; or (c) transfer any of its property or assets to the Company or any other Restricted Subsidiary of the Company, except for such encumbrances or restrictions existing under or by reason of: (1) applicable law, rules, regulations and/or orders; (2) this Indenture (including, without limitation, any Liens permitted hereunder); (3) customary non-assignment provisions of any contract or any lease governing a leasehold interest of the Company or any Restricted Subsidiary of the Company; (4) any agreements existing at the time of any merger or consolidation with any Person, or the acquisition of any Person or the properties or assets of such Person (including agreements governing Acquired Indebtedness), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person or the properties or assets of the Person merged or consolidated with or so acquired or any Subsidiary of such Person; (5) agreements existing on the Issue Date to the extent and in the manner such agreements are in effect on such date and any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings thereof, provided that such amendments, modifications, restatements, increases, supplements, refundings, replacements or refinancings are no more restrictive (as determined by the Board of Directors of the Company in their reasonable and good faith judgment) in any material respect, taken as a whole, with respect to such dividend and other payment restrictions than those contained in such agreements or instruments as in effect on the Issue Date; (6) restrictions imposed by any agreement to sell assets or Capital Stock permitted under this Indenture to any Person pending the closing of such sale; (7) any agreement or instrument governing Capital Stock of any Person that is acquired; (8) Indebtedness or other contractual requirements of a Securitization Entity in connection with a Qualified Securitization Transaction; provided that such restrictions apply only to such Securitization Entity; (9) Liens incurred in accordance with the covenant described under Section 4.18; (10) restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business; (11) the Senior Secured Credit Facilities; provided that the provisions relating to such encumbrances or restrictions contained in such Senior Se-cured Credit Facilities are no less favorable to the Company in any material respects than the provisions relating to such encumbrances or restrictions contained in the Senior Secured Credit Facilities as in effect on the Issue Date; (12) customary restrictions in Capitalized Lease Obligations, security agreements or mortgages securing Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent such restrictions restrict the transfer of the property subject to such Capitalized Lease Obligations, security agreements or mortgages; (13) customary provisions in joint venture agreements and other similar agreements (in each case relating solely to the respective joint venture or similar entity or the equity interests therein) entered into in the ordinary course of business; (14) customary provisions in Interest Swap Obligations, Commodity Agreements and Currency Agreements permitted under this Indenture and entered into in the ordinary course of business; (15) contracts entered into in the ordinary course of business, not relating to Indebtedness, and that do not, individually or in the aggregate, detract from the value of property or assets of the Company or any Restricted Subsidiary of the Company in any manner material to the Company or any Restricted Subsidiary; (16) encumbrances or restrictions imposed by indentures or other similar instruments governing other Indebtedness Incurred by the Company or any Restricted Subsidiary of the Company (and if such Indebtedness is guaranteed, by the guarantors of such Indebtedness) ranking equally with the Notes (or any Guarantee), provided that the encumbrances or restrictions imposed by such other indentures or instruments are not materially more restrictive taken as a whole than the encumbrances or restrictions imposed by this Indenture; (17) encumbrances or restrictions imposed by Credit Facilities (other than the Senior Secured Credit Facilities), the Australian Credit Facilities and the Hong Kong Facility; provided that the provisions relating to such encumbrances or restrictions contained in such Credit Facilities are no less favorable to the Company in any material respects (as determined by the Board of Directors of the Company in their reasonable and good faith judgment) than the provisions relating to such encumbrances or restrictions contained in such Credit Facilities, the Australian Credit Facilities and the Hong Kong Facility, in each case, as in effect on the Issue Date; and (18) an agreement governing Indebtedness incurred to Refinance the Indebtedness issued, assumed or incurred pursuant to an agreement referred to in clause (2), (4) or (5) above or Refinancings thereof; provided,however, that the provisions relating to such encumbrance or restriction contained in any such Indebtedness are no less favorable to the Company in any material respect as determined by the Board of Directors of the Company in their reasonable and good faith judgment than the provisions relating to such encumbrance or restriction contained in agreements referred to in such clause (2), (4) or (5) above or Refinancings thereof.
 
Section 4.14                                 Change of Control.
 
(a)            Upon the occurrence of a Change of Control, each Holder will have the right to require that the Company repurchase all or a portion (equal to $75,000 or €50,000, as the case may be, or an integral multiple of $1,000 or €1,000, as the case may be, in excess thereof) of such Holder's Notes pursuant to the offer described be-low (the "Change of Control Offer"), at a purchase price in cash equal to 101% of the principal amount thereof plus accrued and unpaid interest, if any, to the date of repurchase.
 
(b)            Prior to the mailing of the notice referred to below, but in any event within 30 days following any Change of Control, the Company covenants to (i) repay in full and terminate all commitments under Indebtedness under the Credit Facilities and all other Designated Senior Debt the terms of which require repayment upon a Change of Control, (ii) offer to repay in full and terminate all commitments under all Indebtedness under the Credit Facilities and all other such Designated Senior Debt, if required under the terms of the Credit Facilities or such Designated Senior Debt, and to repay the Indebtedness owed to each lender which has accepted such offer or (iii) obtain the requisite consents under the Credit Facilities and all other Designated Senior Debt to permit the repurchase of the Notes as provided below. The Company shall first comply with the covenant in the immediately preceding sentence before it shall be required to repurchase Notes pursuant to the provisions described below. The Company's failure to comply with the covenant described in the immediately preceding sentence shall be governed by clause (3), and not clause (2), of Section 6.01.
 
(c)            Within 30 days following the date on which a Change of Control occurs (the "Change of Control Date"), the Company shall mail a notice to each Holder of Notes and the Trustee, which notice shall govern the terms of the Change of Control Offer. The notice to the Holders shall contain all instructions and materials necessary to enable such Holders to tender Notes pursuant to the Change of Control Offer. Such notice shall state:
 
(1)            that the Change of Control Offer is being made pursuant to Section 4.14 of this Indenture and that all Notes validly tendered and not withdrawn will be accepted for payment;
 
(2)            the purchase price (including the amount of accrued interest, if any) and the purchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed, other than as may be required by law) (the "Change of Control Payment Date");
 
(3)            that any Note not tendered will continue to accrue interest;
 
(4)            that, unless the Company defaults in making payment therefor, any Note accepted for payment pursuant to the Change of Control Offer shall cease to accrue interest after the Change of Control Payment Date;
 
(5)            that Holders electing to have a Note purchased pursuant to a Change of Control Offer will be required to surrender the Note, with the form entitled "Option of Holder to Elect Purchase" on the reverse of the Note completed, to the Paying Agent and Registrar for the Notes at the address specified in the notice prior to the close of business on the third Business Day prior to the Change of Control Payment Date;
 
(6)            that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than the second Business Day prior to the Change of Control Payment Date, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Notes the Holder delivered for purchase and a statement that such Holder is withdrawing his election to have such Note purchased;
 
(7)            that Holders whose Notes are purchased only in part will be issued new Notes of an appropriate series in a principal amount equal to the unpurchased portion of the Notes surrendered; provided,however, that each such new Note shall be in the same currency as the tendered Note and in a principal amount of $75,000 or €50,000, as the case may be, or an integral multiple of $1,000 or €1,000, as the case may be, in excess thereof; and
 
(8)            the circumstances and relevant facts regarding such Change of Control.
 
(d)            On or before the Change of Control Payment Date, the Company shall, to the extent lawful, (i) accept for payment Notes or portions thereof (in a principal amount of $75,000 or €50,000, as the case may be, or an integral multiple of $1,000 or €1,000, as the case may be, in excess thereof) validly tendered pursuant to the Change of Control Offer, (ii) deposit with the Paying Agent in accordance with Section 2.14 U.S. Legal Tender and/or euro sufficient to pay the purchase price plus accrued and unpaid interest, if any, of all Notes or portions thereof so tendered; and (iii) deliver or cause to be delivered to the Trustee Notes so accepted together with an Officer's Certificate stating the aggregate principal amount of Notes or portions thereof being purchased by the Company. Upon receipt by the Paying Agent of the monies specified in clause (ii) above and a copy of the Officer's Certificate specified in clause (iii) above, the Paying Agent shall promptly mail to the Holders of Notes so accepted payment in an amount equal to the purchase price plus accrued and unpaid interest, if any, out of the funds deposited with the Paying Agent in accordance with the preceding sentence. The Trustee shall promptly authenticate and mail or cause to be transferred by book-entry to each such Holder a new Note equal in principal amount to any unpurchased portion of the Notes surrendered, if any; provided that each such new Note shall be in the same currency as the tendered Note and in a principal amount of $75,000 or €50,000, as the case may be, or an integral multiple of $1,000 or €1,000, as the case may be, in excess thereof. Upon the payment of the purchase price for the Notes accepted for purchase, the Trustee shall return the Notes purchased to the Company for cancellation. Any monies remaining after the purchase of Notes pursuant to a Change of Control Offer shall be returned within three Business Days by the Trustee to the Company except with respect to monies owed as obligations to the Trustee pursuant to Article Seven. For purposes of this Section 4.14, the Trustee shall act as the Paying Agent for the Dollar Notes and the Euro Paying Agent shall act as Paying Agent for the Euro Notes.
 
(e)            The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such rule, laws and regulations are applicable in connection with the purchase of the Notes pursuant to a Change of Control Offer. To the extent the provisions of any securities laws and regulations conflict with the provisions of this Indenture relating to a Change of Control Offer, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations relating to such Change of Control Offer by virtue thereof.
 
(f)            The Company will not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Indenture with respect to a Change of Control Offer made by the Company and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer.
 
Section 4.15                                 Limitation on Asset Sales.
 
(a)            The Company will not, and will not permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless:
 
(i)            the Company or the applicable Restricted Subsidiary receives consideration at the time of such Asset Sale at least equal to the Fair Market Value of the assets sold or otherwise disposed of as deter-mined in good faith by the Company's Board of Directors;
 
(ii)            at least 75% of the consideration received by the Company or the applicable Restricted Subsidiary from such Asset Sale shall be in the form of cash or Cash Equivalents, and is received at the time of the Asset Sale (which shall be deemed to include other consideration converted to cash or Cash Equivalents within 90 days of such Asset Sale). For the purposes of this provision, the amount of any liabilities shown on the most recent applicable balance sheet of the Company or the applicable Restricted Subsidiary, other than liabilities that are by their terms subordinated to the Notes, that are assumed by the transferee of any such assets will be deemed to be cash for purposes of this provision; and
 
(iii)            upon the consummation of an Asset Sale, the Company shall apply, or cause such applicable Restricted Subsidiary to apply, the Net Cash Proceeds relating to such Asset Sale within 415 days of having received the Net Cash Proceeds.
 
(b)            Additionally, the Company may only apply the Net Cash Proceeds either (i) to prepay any Designated Senior Debt or Indebtedness of a Restricted Subsidiary of the Company that is not a Guarantor and, in the case of any such Indebtedness under any revolving credit facility, effect a permanent reduction in the availability under such revolving credit facility, and/or (ii) to make an investment in or expenditures for properties and assets (including Capital Stock of any entity) that will be used in a Permitted Business ("Replacement Assets") and/or (iv) make an acquisition of (A) assets of any Person or division or (B) Capital Stock of a Person that as a result of such acquisition becomes a Restricted Subsidiary of the Company, in either case, conducting a Permitted Business ("RelatedBusinesses").
 
(c)            Pending the final application of any such Net Cash Proceeds, the Company or any Restricted Subsidiary of the Company may temporarily reduce revolving credit borrowings or otherwise invest such Net Cash Proceeds in any manner that is not prohibited by the terms of this Indenture.
 
(d)            On the 366th day after an Asset Sale or any earlier date, if any, on which the Board of Directors of the Company or of the applicable Restricted Subsidiary determines not to apply the Net Cash Proceeds in accordance with the provisions of Section 4.15(b) (each, a "Net Proceeds Offer Trigger Date"), such aggregate amount of Net Cash Proceeds which have not been applied or contractually committed to be applied (and to the extent not subsequently applied, the Net Proceeds Offer Trigger Date related thereto shall be deemed to be the date of termination of such contractual commitment or any earlier date, if any, on which the Board of Directors of the Company or the board of the applicable Restricted Subsidiary determines not to apply the Net Cash Proceeds in accordance with such contractual commitment) on or before such Net Proceeds Offer Trigger Date as permitted by the provisions of Section 4.15(b) (the "Net Proceeds Offer Amount") shall be applied by the Company or such Restricted Subsidiary to make an offer to purchase (or repay, prepay or redeem, as the case may be) (the "Net Proceeds Offer") on a date (the "Net Proceeds Offer Payment Date") that is not less than 30 nor more than 45 days following the applicable Net Proceeds Offer Trigger Date, from all Holders and all holders of Indebtedness that is equal in right of payment with the Notes and contains provisions requiring that an offer to purchase such other Indebtedness be made with the proceeds of the Asset Sale, on a pro rata basis, the maximum principal amount of Notes and other Indebtedness that may be purchased with the Net Proceeds Offer Amount. Notwithstanding the foregoing, the obligation to make a Net Proceeds Offer shall be suspended until such time as the aggregate amount of the Net Proceeds Offer Amount is equal to or exceeds €20 million. The offer price in any Net Proceeds Offer will be equal to 100% of the principal value of the Notes to be purchased, plus any accrued and unpaid interest to the date of purchase. The following events will be deemed to constitute an Asset Sale and the Net Cash Proceeds for such Asset Sale must be applied in accordance with this Section 4.15: (i) in the event any non-cash consideration received by the Company or any Restricted Subsidiary of the Company in connection with any Asset Sale is converted into or sold or otherwise disposed of for cash (other than interest received with respect to any such non-cash consideration), or (ii) in the event of the transfer of substantially all (but not all) of the property and assets of the Company and its Restricted Subsidiaries as an entirety to a Person in a transaction permitted under Section 5.01 and as a result thereof the Company is no longer an obligor on the Notes, the successor corporation shall be deemed to have sold the properties and assets of the Company and its Restricted Subsidiaries not so transferred for purposes of this Section 4.15, and shall comply with the provisions of this Section 4.15 with respect to such deemed sale as if it were an Asset Sale. In addition, the Fair Market Value of such properties and assets of the Company or its Restricted Subsidiaries deemed to be sold shall be deemed to be Net Cash Proceeds for purposes of this Section 4.15.
 
(e)            Notwithstanding the preceding paragraphs, the Company and its Restricted Subsidiaries may con-summate an Asset Sale without complying with such paragraphs to the extent (i) the consideration for such Asset Sale constitutes Replacement Assets or Related Businesses and (ii) such Asset Sale is for Fair Market Value; provided,however, that any consideration that does not constitute Replacement Assets or Related Businesses that is received by the Company or any of its Restricted Subsidiaries in connection with any Asset Sale permitted under this paragraph shall constitute Net Cash Proceeds and will be subject to the provisions described in the preceding paragraphs.
 
(f)            Each notice of a Net Proceeds Offer pursuant to this Section 4.15 shall be mailed by the Company to Holders of Notes not more than 30 days following the Net Proceeds Offer Trigger Date, with a copy to the Trustee. The notice shall contain all instructions and materials necessary to enable such Holders to tender Notes pursuant to the Net Proceeds Offer and shall state the following terms:
 
(1)            that the Net Proceeds Offer is being made pursuant to Section 4.15 of this Indenture, that all Notes tendered will be accepted for payment; provided,however, that if the aggregate principal amount of Notes tendered in a Net Proceeds Offer plus accrued interest at the expiration of such offer exceeds the aggregate amount of the Net Proceeds Offer, the Company shall select the Notes to be purchased on a pro rata basis (with such adjustments as may be deemed appropriate by the Company so that no Note of less than $75,000 or €50,000, as the case may be, shall remain outstanding thereafter) and that the Net Proceeds Offer shall remain open for a period of 20 Business Days or such longer periods as may be required by law;
 
(2)            the purchase price (including the amount of accrued interest) and the Net Proceeds Offer Payment Date (which shall be not less than 30 nor more than 45 days following the applicable Net Proceeds Offer Trigger Date and which shall be at least five Business Days after the Trustee receives notice thereof from the Company);
 
(3)            that any Note not tendered will continue to accrue interest;
 
(4)            that, unless the Company defaults in making payment therefor, any Note accepted for payment pursuant to the Net Proceeds Offer shall cease to accrue interest after the Net Proceeds Offer Payment Date;
 
(5)            that Holders electing to have a Note purchased pursuant to a Net Proceeds Offer will be required to surrender the Note, with the form entitled "Option of Holder to Elect Purchase" on the reverse of the Note completed, to the Paying Agent at the address specified in the notice prior to the close of business on the third Business Day prior to the Net Proceeds Offer Payment Date;
 
(6)            that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than the second Business Day prior to the Net Proceeds Offer Payment Date, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Notes the holder delivered for purchase and a statement that such Holder is withdrawing his election to have such Note purchased; and
 
(7)            that Holders whose Notes are purchased only in part will be issued new Notes of the appropriate series in a principal amount equal to the unpurchased portion of the Note surrendered; provided,however, that each such new Note shall be in the same currency as the tendered Note and in a principal amount of $75,000 or €50,000, as the case may be, or an integral multiple of $1,000 or €1,000, as the case may be, in excess thereof.
 
On or before the Net Proceeds Offer Payment Date, the Company shall (i) accept for payment Notes or portions thereof (in a principal amount of $75,000 or €50,000, as the case may be, or an integral multiple of $1,000 or F1,000, as the case may be, in excess thereof) validly tendered pursuant to the Net Proceeds Offer, (ii) deposit with the Paying Agent, in accordance with Section 2.14, U.S. Legal Tender (in the case of Dollar Notes) and/or euro (in the case of Euro Notes) sufficient to pay the purchase price plus accrued and unpaid interest, if any, of all Notes to be purchased and (iii) deliver to the Trustee Notes so accepted together with an Officer's Certificate stating the Notes or portions thereof being purchased by the Company. Upon receipt by the Paying Agent of the monies specified in clause (ii) above and a copy of the Officer's Certificate specified in clause (iii) above, the Paying Agent shall promptly mail to the Holders of Notes so accepted payment in an amount equal to the purchase price plus accrued and unpaid interest, if any, out of the funds deposited with the Paying Agent in accordance with the preceding sentence. The Trustee shall promptly authenticate and mail or cause to be transferred by book-entry to such Holders new Notes equal in principal amount to any unpurchased portion of the Notes surrendered; provided that each such new Note shall be in the same currency as the surrendered Note and in a principal amount of $75,000 or €50,000, as the case may be, or an integral multiple of $1,000 or €1,000, as the case may be, in excess thereof. Upon the payment of the purchase price for the Notes accepted for purchase, the Trustee shall return the Notes purchased to the Company for cancellation. Any monies remaining after the purchase of Notes pursuant to a Net Proceeds Offer shall be returned within three Business Days by the Trustee to the Company except with respect to monies owed as obligations to the Trustee pursuant to Article Seven. For purposes of this Section 4.15, the Trustee shall act as the Paying Agent for the Dollar Notes and the Euro Paying Agent shall act as the Paying Agent for the Euro Notes.
 
To the extent the amount of Notes tendered pursuant to any Net Proceeds Offer is less than the amount of Net Cash Proceeds subject to such Net Proceeds Offer, the Company may use any remaining portion of such Net Cash Proceeds not required to fund the repurchase of tendered Notes for general corporate purposes and such Net Proceeds Offer Amount shall be reset to zero.
 
The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such rule, laws and regulations are applicable in connection with the repurchase of Notes pursuant to a Net Proceeds Offer. To the extent the provisions of any
 


securities laws or regulations conflict with the provisions of this Indenture relating to a Net Proceeds Offer, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations relating to such Net Proceeds Offer by virtue thereof.
 
Section 4.16                                 Prohibition on Incurrence of Senior Subordinated Debt. Other than as permitted pursuant to the Intercreditor Agreement, the Company will not permit any Subsidiary Guarantor to incur or suffer to exist Indebtedness that is senior in right of payment to the Guarantee of such Guarantor and subordinate in right of payment to any other Indebtedness of such Guarantor.
 
For purposes of the foregoing the phrase "subordinate in right of payment" means debt subordination only and not lien subordination, and accordingly, (i) unsecured indebtedness shall not be deemed to be subordinated in right of payment to secured indebtedness merely by virtue of the fact that it is unsecured and (ii) junior liens, second liens and other contractual arrangements that provide for priorities among holders of the same or different issues of indebtedness with respect to any collateral or the proceeds of collateral shall not constitute subordination in right of payment.
 
Section 4.17                                 Limitation on Preferred Stock of Restricted Subsidiaries. The Company will not permit any of its Restricted Subsidiaries to issue any Preferred Stock (other than to the Company or to another Restricted Subsidiary of the Company) or permit any Person (other than the Company or a Restricted Subsidiary of the Company) to own any Preferred Stock of any Restricted Subsidiary of the Company; provided,however, that any Person that is not a Restricted Subsidiary of the Company may issue Preferred Stock to equity holders of such Person in exchange for equity interests if after such issuance such Person becomes a Restricted Subsidiary of the Company.
 
Section 4.18                                 Limitation on Liens. The Company shall not, and shall not permit any of its Restricted Subsidiaries to create, incur, or otherwise cause or suffer to exist or become effective any Liens of any kind upon any property or assets of the Company or any Restricted Subsidiary of the Company, now owned or hereafter acquired, which secures Pari Passu Indebtedness or Indebtedness subordinated to the Notes other than Permitted Liens, unless such Indebtedness is incurred in accordance with this Indenture and (i) if such Lien secures Pari Passu Indebtedness of the Company, then the Notes are secured on an equal and ratable basis with the obligations so secured until such time as such obligation is no longer secured by a Lien or (ii) if such Lien secures Indebtedness which is subordinated to the Notes, any such Lien shall be subordinated to a Lien granted to the Holders in the same collateral as that securing such Lien to the same extent as such subordinated Indebtedness is subordinated to the Notes and until such time as such obligation is no longer secured by a Lien.
 
Section 4.19                                 Additional Subsidiary Guarantors.
 
(a)            The Company shall cause (i) each Restricted Subsidiary of the Company that, after the Issue Date, guarantees the Senior Secured Credit Facilities (or any facility refinancing or replacing such facilities) or (ii) each Restricted Subsidiary of the Company that, after the Issuer Date, guarantees any Public Indebtedness of the Company or any other Restricted Subsidiary of the Company to execute and deliver to the Trustee a supplemental indenture pursuant to which such Restricted Subsidiary shall guarantee payment of the notes on the same terms and subject to the same conditions and limitations as those set forth in this Indenture (each such guarantee of the notes, an "Additional Guarantee");provided that the Company shall use its commercially reasonable efforts to cause Restricted Subsidiaries of the Company that account for, in the aggregate, greater than 50% of the Consolidated EBITDA of the Company for the year ended December 31, 2004 (the "Requisite Guarantors") to issue Guarantees in accordance with this Indenture not later than the date that is 180 days after the Issue Date (the "Subsequent Guarantee Date").
 
(b)            Notwithstanding the foregoing, the Company shall not be obligated to cause any such Restricted Subsidiary to Guarantee the Notes to the extent that such Guarantee would reasonably be expected to give rise to or result in:
 
(1)            any violation of applicable law, rule, regulation or order that cannot be avoided or other-wise prevented through measures reasonably available to the Company or such Restricted Subsidiary; or
 


(2)            any liability for the officers, directors or shareholders of such Restricted Subsidiary.
 
(c)            In the event that the Company fails for any reason to cause the Requisite Guarantors to issue such Guarantees on or prior to the Subsequent Guarantee Date, the Company shall pay supplemental interest on each subsequent interest payment date of the Notes to each Holder of Euro Notes or Dollar Notes, as the case may be, in an amount equal to 0.25% per annum of the aggregate principal amount of Notes held by such Holder from the Subsequent Guarantee Date through the earlier of (i) the date on which the Requisite Guarantors issue such Guarantees, (ii) the date on which the Requisite Guarantors who then Guarantee the Senior Secured Credit Facilities and Public Indebtedness, if any, issue such Guarantees and (iii) the date on which there are either no Guarantors of the Senior Secured Credit Facilities or all Guarantors at the Senior Secured Credit Facilities Guarantee the Notes ("Supplemental Interest").
 
(d)            Any such failure to procure such Guarantees in accordance with this Section 4.19 shall not constitute a Default or Event of Default under this Indenture.
 
(e)            Notwithstanding the foregoing and the other provisions of this Indenture, any Additional Guarantee by a Restricted Subsidiary of the Company of the Notes shall provide by its terms that it shall be automatically and unconditionally released and discharged in the circumstances described in Section 11.04. Any Additional Guarantee shall be considered a Guarantee under this Indenture.
 
Section 4.20                                 Conduct of Business. None of the Company or any of its Restricted Subsidiaries (other than a Securitization Entity) shall engage in any businesses other than a Permitted Business.
 
Section 4.21                                 Capital Stock of Subsidiaries. No Restricted Subsidiary of the Company shall issue any Capital Stock (or any direct or indirect rights, options or warrants to acquire such Capital Stock) to any Person other than the Company or a Wholly Owned Restricted Subsidiary of the Company except (a) to qualifying directors or nominal shareholders if required by applicable law or other similar legal requirements and (b) the issuance and sale of Capital Stock of a Restricted Subsidiary of the Company in a transaction permitted under Section 4.15.
 
Section 4.22                                 Withholding Taxes. All payments made by the Company or any Guarantor or a successor of any of the foregoing (each, a "Payor") on the Notes or the Guarantees, as applicable, shall be made free and clear of and without withholding or deduction for, or on account of, any present and future taxes, levies, imposts, deductions, charges, duties and withholdings and any charges of a similar nature (including interest, penalties and other liabilities with respect thereto) ("Taxes") unless the withholding or deduction of such taxes is then required by law. If any deduction or withholding for, or on account of, any taxes imposed or levied by or on behalf of:
 
(1)            the jurisdiction of organization or formation of the Company, any Non-U.S. Note Guarantor or any political subdivision or governmental authority thereof or therein having power to tax;
 
(2)            any jurisdiction from or through which payment on the Notes or any such Guarantee is made, or any political subdivision or governmental authority thereof or therein having the power to tax; or
 
(3)            any other jurisdiction in which the Payor is organized or otherwise considered to be a resident for tax purposes, has an office or conducts business for tax purposes, or any political subdivision or governmental authority thereof or therein having the power to tax
 
(each of clauses (1), (2) and (3), a "Relevant Taxing Jurisdiction"), shall at any time be required from any payments made with respect to the Notes or any such Guarantee, including payments of principal, redemption price, interest or premium, if any, the Payor shall pay (together with such payments) such additional amounts (the "AdditionalAmounts") as may be necessary in order that the net amounts received in respect of such payments by the Holders or the Trustee, as the case may be, after such withholding or deduction (including any such deduction or withholding from such Additional Amounts), shall not be less than the amounts which would have been received in respect of such payments on the Notes or any such Guarantee in the absence of such withholding or deduction; provided, how-ever, that no such Additional Amounts shall be payable for or on account of:
 
(1)            any Taxes that would not have been so imposed but for the existence of any present or former connection between the relevant Holder (or between a fiduciary, settlor, beneficiary, member or shareholder of, or possessor of power over the relevant Holder, if the relevant Holder is an estate, nominee, trust, partnership, limited liability company or corporation) and the Relevant Taxing Jurisdiction (including being a citizen or resident or national of, or carrying on a business or maintaining a branch, agency or permanent establishment in, or being physically present in, the Relevant Taxing Jurisdiction) but excluding, in each case, any connection arising from the acquisition, ownership or holding of such Note or the receipt of any payment in respect thereof;
 
(2)            any Tax that is imposed or withheld by reason of the failure by the Holder or the beneficial owner of the Note, to the extent it may lawfully do so, to comply with a reasonable written request of the Payor addressed to the Holder, after reasonable notice, to provide certification, information, documents or other evidence concerning the nationality, residence or identity of the Holder or such beneficial owner or to make any declaration or similar claim or satisfy any other reporting requirement relating to such matters, which is required by a statute, treaty, regulation or administrative practice of the Relevant Taxing Jurisdiction as a precondition to exemption from all or part of such Tax;
 
(3)            any estate, inheritance, gift, or similar tax, assessment or other governmental charge;
 
(4)            any Taxes that are required to be deducted or withheld on a payment to an individual pursuant to the European Council Directive 2003/48/EC (the "Directive") or to a residual entity as defined in article 4(2) of the Directive or any law implementing or complying with, or introduced in order to conform to, such Directive;
 
(5)            any Taxes imposed in connection with a Note presented for payment by or on behalf of a Holder or beneficial owner who would have been able to avoid such Tax by presenting the relevant Note to, or otherwise accepting payment from, another Paying Agent in a member state of the European Union; or
 
(6)            any combination of the above.
 
Such Additional Amounts shall also not be payable (a) if the payment could have been made without such deduction or withholding if the beneficiary of the payment had presented the Note for payment (where presentation is required) within 60 days after the relevant payment was first made available for payment to the Holder or (b) where, had the beneficial owner of the Note been the Holder, such beneficial owner would not have been entitled to payment of Additional Amounts by reason of any of clauses (1) to (6) inclusive above (but only if there is no material cost or expense associated with transferring such Note to such beneficial owner and no restriction on such transfer that is outside the control of such beneficial owner).
 
The Payor shall (i) make any required withholding or deduction and (ii) remit the full amount deducted or withheld to the Relevant Taxing Jurisdiction in accordance with applicable law. The Payor shall use all reasonable efforts to obtain certified copies of tax receipts or other documentation reasonably satisfactory to the Trustee evidencing the payment of any Taxes so deducted or withheld from each Relevant Taxing Jurisdiction imposing such Taxes and shall provide such certified copies to the Trustee. Such copies shall be made available to the Holders upon request and shall be made available at the offices of the Paying Agent during normal office hours if the Notes are then listed on the Irish Stock Exchange. The Payor shall attach to each certified copy a certificate stating (x) that the amount of withholding Taxes evidenced by the certified copy was paid in connection with payments in respect of the principal amount of Notes then outstanding and (y) the amount of such withholding Taxes paid per $1,000 or €1,000 principal amount of the Notes.
 
If any Payor shall be obligated to pay Additional Amounts under or with respect to any payment made on the Notes or any Guarantee, at least 30 days prior to the date of such payment, the Payor shall deliver to the Trustee an Officer's Certificate stating the fact that Additional Amounts shall be payable and the amount so payable and such other information necessary to enable the Paying Agent to pay Additional Amounts to Holders on the relevant payment date (unless such obligation to pay Additional Amounts arises
 


less than 45 days prior to the relevant payment date, in which case the Payor may deliver such Officer's Certificate as promptly as practicable after the date that is 30 days prior to the payment date).
 
The Company and any Guarantors, jointly and severally, shall indemnify and hold harmless each eligible Holder of Notes and, upon written request of any eligible Holder of Notes, reimburse such Holder for the amount of (i) any Taxes levied or imposed on and paid by such Holder as a result of payments made under or with respect to the Notes held by such Holder; and (ii) any Taxes levied or imposed with respect to any reimbursement under the foregoing clause (i) or this clause (ii), so that the net amount received by such Holder after such reimbursement shall not be less than the net amount such Holder would have received if the Taxes giving rise to the reimbursement de-scribed in clauses (i) and/or (ii) had not been imposed, provided, however, that the indemnification obligation provided for in this paragraph shall not extend to Taxes imposed for which the eligible Holder of Notes would not have been eligible to receive payment of Additional Amounts hereunder.
 
Wherever in this Indenture, the Notes or any Guarantee there are mentioned, in any context:
 
(1)            the payment of principal,
 
(2)            purchase prices in connection with a purchase of Notes,
 
(3)            interest, or
 
(4)            any other amount payable on or with respect to any of the Notes or any Guarantee,
 
such reference shall be deemed to include payment of Additional Amounts as described under this Section 4.22 to the extent that, in such context, Additional Amounts are, were or would be payable in respect thereof.
 
The Company or any Guarantor shall pay any present or future stamp, court or documentary Taxes, or any other excise, property or similar Taxes, charges or levies that arise in any Relevant Taxing Jurisdiction from the execution, delivery, registration or enforcement of any Notes, this Indenture, the security documents or any other document or instrument in relation thereto, and the Company or any Guarantor agrees to jointly and severally indemnify and hold harmless the Holders for any such Taxes paid by such holders. The foregoing obligations of this paragraph shall survive any termination, defeasance or discharge of this Indenture and shall apply mutatismutandis to any jurisdiction in which any successor to the Company or any Guarantor is organized or any political subdivision or taxing authority or agency thereof or therein.
 
Section 4.23                                 Impairment of Security Interest. The Company shall not, and shall not permit any Restricted Subsidiary of the Company to, take or omit to take any action that would have the result of materially impairing the security interest with respect to the Collateral (it being understood, subject to the proviso below, that the incurrence of Permitted Liens relating to Collateral securing the Notes or indebtedness under Credit Facilities incurred in compliance with clause (ii) of the definition of "Permitted Indebtedness" (a "Permitted Collateral Lien") shall under no circumstances be deemed to materially impair the security interest with respect to the Collateral) for the benefit of the Trustee and the Holders, and the Company shall not, and shall not permit any Restricted Subsidiary of the Company to, grant to any Person other than the Trustee and the Security Agent, for the benefit of the Trustee or the Security Agent, as the case may be, and the Holders and the other beneficiaries described in the Security Documents, any interest whatsoever in any of the Collateral, except that the Company and its Restricted Subsidiaries may incur Permitted Collateral Liens and the Collateral may be discharged and released in accordance with this Indenture and the Intercreditor Agreement; provided, however, that, except with respect to any discharge or release in accordance with this Indenture or the Intercreditor Agreement, the incurrence of Permitted Collateral Liens or any action expressly permitted by this Indenture, the Security Documents may not be amended, extended, renewed, restated, supplemented or otherwise modified or replaced, unless contemporaneously with any such action, the Company delivers to the Trustee, either (1) a solvency opinion, in form and substance reasonably satisfactory to the Trustee from an Independent Financial Advisor confirming the solvency of the Company and its Restricted Subsidiaries, taken as a whole, after giving effect to any transactions related to such amendment, extension, renewal, restatement, supplement, modification or replacement, or (2) an Opinion of Counsel, in form and substance reasonably satisfactory to the Trustee, confirming that, after giving effect to any transactions related to such amendment, extension, renewal,
 


restatement, supplement, modification or replacement, the Lien or Liens created under the Security Documents, so amended, extended, renewed, restated, supplemented, modified or replaced are valid Liens not otherwise subject to any limitation, imperfection or new hardening period, in equity or at law, that such Lien or Liens were not otherwise subject to immediately prior to such amendment, extension, renewal, restatement, supplement, modification or replacement. In the event that the Company complies with the requirements of this Section 4.23, the Trustee or the Security Agent, as the case may be, shall (subject to customary protections and indemnifications) consent to such amendments without the need for instructions from the holders.
 
ARTICLE FIVE
 
SUCCESSOR CORPORATION
 
Section 5.1                       Merger, Consolidation and Sale of Assets.
 
(a)            The Company shall not, in a single transaction or a series of related transactions, consolidate or merge with or into any Person, or sell, transfer or otherwise dispose of (or permit any Restricted Subsidiary of the Company to sell, assign, transfer, lease, convey or otherwise dispose of) all or substantially all of the Company's assets (determined on a consolidated basis for the Company and its Restricted Subsidiaries), unless:
 
(i)            either (1) the Company shall be the surviving or continuing entity or (2) the Person (if other than the Company) formed by such consolidation or merger shall be an entity organized and validly existing under the laws of the United States, any State thereof, the District of Columbia or any state which was a member state of the European Union on December 31, 2003 (the "Surviving Entity");
 
(ii)            the Surviving Entity, if any, expressly assumes, by supplemental indenture (in form and substance reasonably satisfactory to the Trustee), all rights and obligations of the Company under the Notes and this Indenture;
 
(iii)            immediately after giving effect to such transaction including the assumption of the Notes, the Company or the Surviving Entity shall be able to incur at least €1.00 of additional Indebtedness (other than Permitted Indebtedness) pursuant to Section 4.12;
 
(iv)            immediately before and after giving effect to such transaction, including the assumption of the Notes, no Default or Event of Default occurred or exists; and
 
(v)            the Company or the Surviving Entity shall have delivered to the Trustee an Officer's Certificate and an Opinion of Counsel stating that all conditions precedent in this Indenture relating to such transaction have been satisfied, it being understood that such Opinion of Counsel may rely as to certain matters of fact on such Officer's Certificate.
 
(b)            Each Guarantor (other than any Guarantor whose Guarantee is to be released in accordance with the terms of the Guarantee and this Indenture in connection with any transaction complying with the provisions of Section 4.15) will not, and the Company will not cause or permit any Guarantor to, consolidate with or merge with or into any Person other than the Company or any other Guarantor unless: (i) the entity formed by or surviving any such consolidation or merger (if other than the Guarantor) or to which such sale, lease, conveyance or other disposition shall have been made assumes by supplemental indenture all of the obligations of the Guarantor on its Guarantee; (ii) immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing; and (iii) immediately after giving effect to such transaction and the use of any net proceeds therefrom on a pro forma basis, either (A) the Company could satisfy the provisions of Section 5.01(a)(iii) or (B) the Consolidated Fixed Charge Coverage Ratio would be greater than or equal to the Consolidated Fixed Charge Coverage Ratio immediately prior to such transaction. Any merger or consolidation of a Guarantor with and into the Company (with the Company being the surviving entity) or another Guarantor need not comply with Section 5.01(a).
 
(c)            Notwithstanding anything in this Section 5.01 to the contrary, (i) the Company (A) may merge with an Affiliate that has no material assets or liabilities and that is incorporated or organized solely for the purpose the Company in any state of the United States, the District of Columbia or any state which was a member state of the European Union on December 31, 2003 and (B) may otherwise convert its legal form under the laws of its jurisdiction of organization, in each case, without complying with Section 5.01(a)(iii) and (ii) any transaction characterized as a merger under applicable law where each of the constituent entities survives, shall not be treated as a merger for purposes of this Section 5.01, but shall instead be treated as (x) an Asset Sale, if the result of such transaction is the transfer of assets by the Company or a Restricted Subsidiary, or (y) an Investment, if the result of such transaction is the acquisition of assets by the Company or a Restricted Subsidiary.
 
Section 5.02                                 Successor Corporation Substituted. Upon any consolidation, combination or merger, or any transfer of all or substantially all of the assets of the Company in accordance with Section 5.01 in which the Company is not the Surviving Entity, the successor Person formed by such consolidation or into which the Company is merged or to which such conveyance, lease or transfer is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture and the Notes with the same effect as if such Surviving Entity had been named as such.
 
ARTICLE SIX
 
DEFAULT AND REMEDIES
 
Section 6.01                                 Events of Default. Each of the following shall be an "Event of Default":
 
(1)            the failure to pay interest on any Notes when the same becomes due and payable and such Default continues for a period of 30 days (whether or not such payment shall be prohibited by the subordination provisions described under Article Ten);
 
(2)            the failure to pay principal on any Notes, when such principal becomes due and payable, at maturity, upon redemption or otherwise (including the failure to make a payment when due to purchase the Notes tendered pursuant to a Change of Control Offer or a Net Proceeds Offer) (whether or not such payment shall be prohibited by the subordination provisions described under Article Ten);
 
(3)            the failure of the Company or any Guarantor to comply with any covenant or agreement contained in this Indenture, which default continues for a period of 60 days after the Company receives a written notice specifying the default (and demanding that such default be remedied) from the Trustee or the Holders of at least 25% of the outstanding principal amount of the Notes (including any Additional Notes subsequently issued under this Indenture) (except in the case of a default with respect to Section 5.01, which will constitute an Event of Default with such notice requirement but without such passage of time requirement);
 
(4)            the occurrence of any default under any agreement governing Indebtedness of the Company or any of its Restricted Subsidiaries, if that default: (A) is caused by the failure to pay at final maturity the principal amount of any Indebtedness after giving effect to any applicable grace periods and any ex-tensions of time for payment of such Indebtedness; or (B) results in the acceleration of the final stated maturity of any such Indebtedness, and in each case if the aggregate principal amount of such Indebtedness unpaid or accelerated aggregates €20.0 million or more and has not been discharged in full or such acceleration has not been rescinded or annulled within 30 days of such final maturity or acceleration;
 
(5)            the failure of the Company or any of the Guarantors to pay or otherwise discharge or stay one or more judgments in an aggregate amount exceeding €30.0 million (which are not covered by indemnities or third party insurance as to which the Person giving such indemnity or such insurer has not disclaimed coverage) for a period of 60 continuous days after such judgments become final and non-appealable;
 
(6)            the Company or any Restricted Subsidiary which is also a Significant Subsidiary (A) commences a voluntary case or proceeding under any Bankruptcy Law with respect to itself, (B) consents to the entry of a judgment, decree or order for relief against it in an involuntary case or
 


proceeding under any Bankruptcy Law, (C) consents to the appointment of a custodian of it or for substantially all of its property, (D) consents to or acquiesces in the institution of a bankruptcy or an insolvency proceeding against it or (E) makes a general assignment for the benefit of its creditors;
 
(7)            a court of competent jurisdiction enters a judgment, decree or order for relief in respect of the Company or any Restricted Subsidiary which is also a Significant Subsidiary in an involuntary case or proceeding under any Bankruptcy Law, which shall (A) approve as properly filed a petition seeking reorganization, arrangement, adjustment or composition in respect of the Company or any Significant Subsidiary, (B) appoint a custodian of the Company or any Significant Subsidiary or for substantially all of its property or (C) order the winding-up or liquidation of its affairs; and such judgment, decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or
 
(8)            the failure of any Guarantee of any Significant Subsidiary of the Company to be in full force and effect (other than as provided in accordance with the terms of such Guarantee and this Indenture) or any of the Guarantors denies its liability under its Guarantee.
 
Section 6.02                                 Acceleration.
 
(a)            If an Event of Default of the type described in Section 6.01(6) or (7) occurs with respect to the Company and is continuing, then all unpaid principal of, and premium, if any, and accrued and unpaid interest on all of the outstanding Notes (including any Additional Notes subsequently issued under this Indenture) will become immediately due and payable without further action or notice. If any other Event of Default occurs and is continuing, then the Trustee or the Holders of at least 25% in principal amount of outstanding Notes (including any Additional Notes subsequently issued under this Indenture) may declare the principal of and accrued interest on all the Notes to be due and payable by notice in writing to the Company and the Trustee, which notice must also specify that it is a "notice of acceleration."
 
(b)            At any time after a declaration of acceleration with respect to the Notes as described in Section 6.02(a), the Holders of a majority in principal amount of the Notes (including any Additional Notes) may rescind and cancel such declaration and its consequences:
 
(1)            if the rescission would not conflict with any judgment or decree;
 
(2)            if all existing Events of Default have been cured or waived except nonpayment of principal or interest that has become due solely because of the acceleration; and
 
(3)            to the extent the payment of such interest is lawful, interest on overdue installments of interest and overdue principal, which has become due otherwise than by such declaration of acceleration, has been paid;
 
(4)            if the Company has paid the Trustee its compensation and reimbursed the Trustee for its properly incurred expenses, disbursements and advances; or
 
(5)            in the event of the cure or waiver of an Event of Default of the type described in Section 6.01(6) or (7), the Trustee shall have received an Officer's Certificate and an Opinion of Counsel that such Event of Default has been cured or waived.
 
No such rescission shall affect any subsequent Default or impair any right consequent thereto.
 
Section 6.03                                 Other Remedies. If an Event of Default occurs and is continuing, the Trustee may, or with respect to the Collateral or otherwise in accordance with this Indenture may direct the Security Agent to, pursue any available remedy by proceeding at law or in equity to collect the payment of principal of, premium, if any, or accrued and unpaid interest on the Notes or to enforce the performance of any provision of the Notes or this Indenture.
 


The Trustee may, or may direct the Security Agent to, maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Note-holder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. No remedy is exclusive of any other remedy. All available remedies are cumulative to the extent permitted by law.
 
Section 6.04                                 Waiver of Past Defaults. Subject to Sections 6.07 and 9.02, the Holders of a majority in aggregate principal amount of the Notes (including the aggregate principal amount of any Additional Notes subsequently issued under this Indenture) by notice to the Trustee may waive any existing Default or Event of Default hereunder and its consequences, except a Default in the payment of the principal of or interest on any Note as specified in clauses (1) and (2) of Section 6.01.
 
Section 6.05                                 Control by Majority. Subject to Section 2.09, the Holders of a majority in aggregate principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power or may exercise any of the Trustee's powers. Subject to the provisions of Section 7.01 and 7.02, the Trustee shall be under no obligation to exercise any of its rights or powers under this Indenture at the request, order or direction of any of the holders, unless such holders have offered to the Trustee an indemnity and/or security to its satisfaction. The Trustee may withhold from holders of the Notes notice of any continuing Default or Event of Default (except a De-fault or Event of Default relating to the payment of principal, premium or interest) if it determines that withholding notice is in their interest.
 
Prior to taking any action hereunder, the Trustee shall be entitled to indemnification by the Holders satisfactory to it in its sole discretion against all losses and expenses caused by taking or not taking such action
 
Section 6.06                                 Limitation on Suits.  A Holder may not pursue any remedy with respect to this Indenture or the Notes unless:
 
(1)            the Holder gives to the Trustee notice of a continuing Event of Default;
 
(2)            Holders of at least 25% in aggregate principal amount of the then outstanding Notes make a written request to the Trustee to pursue the remedy;
 
(3)            such Holders offer to the Trustee indemnity and/or security against any loss, liability or expense to be incurred in compliance with such request which is satisfactory to the Trustee;
 
(4)            the Trustee does not comply with the request within 45 days after receipt of the request and the offer of satisfactory indemnity and/or security; and
 
(5)            during such 45-day period the Holders of a majority in aggregate principal amount of the then outstanding Notes do not give the Trustee a direction which, in the opinion of the Trustee, is inconsistent with the request.
 
A Holder may not use this Indenture to prejudice the rights of another Holder or to obtain a preference or priority over such other Holder.
 
Section 6.07                                 Rights of Holders To Receive Payment. Notwithstanding any other provision of this In-denture, the right of any Holder to receive payment of principal of, premium and interest on a Note, on or after the respective due dates expressed in such Note, or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder.
 
Section 6.08                                 Collection Suit by Trustee. If an Event of Default in payment of principal or interest specified in clause (1) or (2) of Section 6.01 occurs and is continuing, the Trustee may, or may direct the Security Agent to, recover judgment in its own name and as trustee of an express trust against the Company or any other obligor on the Notes for the whole amount of principal and accrued interest remaining unpaid, together with interest on overdue principal and, to the extent that payment of such interest is lawful,
 


interest on overdue installments of interest at the rate set forth in the Notes and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.
 
Section 6.09                                 Trustee May File Proofs of Claim. The Trustee may, or may direct the Security Agent to, file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for properly incurred compensation, expenses, taxes, disbursements and advances of the Trustee, its agents and counsel) and the Holders allowed in any judicial proceedings relating to the Company or any other obligor upon the Notes, any of their respective creditors or any of their respective property, and shall be entitled and empowered to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same, and any custodian in any such judicial proceedings is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for properly incurred compensation, expenses, taxes, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07. The Company's payment obligations under this Section 6.09 shall be secured in accordance with the provisions of Section 7.07. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.
 
Section 6.10                                 Priorities. Subject at all times to the Intercreditor Agreement, if the Trustee procures the collection of any money or property pursuant to this Article Six, it shall pay out the money in the following order:
 
First: to the Trustee, its agents and attorneys for amounts due under Sections 6.09 and 7.07;
 
Second: if the Holders are forced to proceed against the Company directly without the Trustee, to Holders for their collection costs;
 
Third: to Holders for amounts due and unpaid on the Notes for principal, premium, if any, and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal, premium, if any, and interest, respectively; and
 
Fourth: to the Company or any other obligor on the Notes, as their interests may appear, or as a court of competent jurisdiction may direct.
 
The Trustee, upon prior notice to the Company, may fix a record date and payment date for any payment to Holders pursuant to this Section 6.10.
 
Section 6.11                                 Undertaking for Costs. In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys' fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.06 or 6.07.
 
Section 6.12 Expenses and Services After an Event of Default. When the Trustee incurs expenses or renders services after the occurrence of an Event of Default described in this Article Six, the expenses and compensation for services are intended to constitute expenses of administration under any bankruptcy law.
 


ARTICLE SEVEN
 
TRUSTEE
 
Section 7.01                                 Duties of Trustee.
 
(a)            If a Default or an Event of Default has occurred and is continuing of which the Trustee has actual knowledge, the Trustee shall exercise such rights and powers vested in it by this Indenture subject to such rights or powers being qualified, limited or otherwise affected by the provisions of the Intercreditor Agreement and use the same degree of care and skill in its exercise thereof as a prudent Person would exercise or use under the circumstances in the conduct of its own affairs.
 
(b)            Except during the continuance of a Default or an Event of Default of which the Trustee has actual knowledge:
 
(1)            The Trustee need perform only those duties as are specifically set forth in this Indenture and no duties, covenants, responsibilities or obligations shall be implied in this Indenture that are adverse to the Trustee; provided that, to the extent that the duties of the Trustee under this Indenture and the Notes may be qualified, limited or otherwise affected by the Intercreditor Agreement, the Trustee shall be required to perform those duties only as so qualified, limited or affected and shall be held harmless and shall not incur any liabilities to any person of any kind for so acting.
 
(2)            In the absence of bad faith on its part, the Trustee may rely absolutely, without further inquiry, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates (including Officer's Certificates) or opinions (including Opinions of Counsel) furnished to the Trustee even if such certificates contain a monetary limit and conforming to the requirements of this Indenture. However, as to any certificates or opinions which are required by any provision of this Indenture to be de-livered or provided to the Trustee, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture but need not confirm or investigate the accuracy or mathematical calculations or other facts stated therein or sufficiency or otherwise verify the contents thereof.
 
(c)            Notwithstanding anything to the contrary herein contained, the Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:
 
(1)            This paragraph does not limit the effect of paragraph (b) of this Section 7.01.
 
(2)            The Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts.
 
(3)            The Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.02, 6.04 or 6.05.
 
(d) No provision of this Indenture shall require the Trustee to expend or risk its own funds or other-wise incur any financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers if it shall have reasonable grounds for believing that immediate repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.
 
(e)            Whether or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b), (c) and (d) of this Section 7.01.
 
(f)            The Trustee shall not be liable for interest on any money or assets received by it except as the Trustee may agree with the Company. Assets held in trust by the Trustee need not be segregated from other assets except to the extent required by law.
 


Section 7.02                                 Rights of Trustee. Subject to Section 7.01:
 
(a)            In the absence of bad faith, negligence or willful misconduct on the part of the Trustee, the Trustee may conclusively rely and shall be fully protected in acting or refraining from acting upon any document believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in the document, including without limitation if such document contains a cap on liability or other monetary limit.
 
(b)            Before the Trustee acts or refrains from acting, it may consult with counsel and may re-quire an Officer's Certificate or an Opinion of Counsel or both, which shall conform to Sections 14.04 and 14.05. The Trustee shall not be liable for and shall be fully protected in respect of any action it takes or omits to take in good faith in reliance on such Officer's Certificate, or an Opinion of Counsel or advice of counsel.
 
(c)            The Trustee shall not be liable for any action that it takes or omits to take in good faith that it reasonably believes to be authorized or within its rights or powers conferred upon it by this Indenture or the Intercreditor Agreement.
 
(d)            The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate (including any Officer's Certificate), statement, instrument, opinion (including any Opinion of Counsel), notice, request, direction, consent, order, bond, debenture, or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled, upon reasonable notice to the Company and/or the Guarantor, to examine the books, re-cords, and premises of the Company and/or the Guarantor, personally or by agent or attorney at the sole cost of the Company.
 
(e)            The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request, order or direction of any of the Holders of the Notes pursuant to the pro-visions of this Indenture, unless such Holders shall have offered to the Trustee security or indemnity to its satisfaction against the costs, expenses and liabilities which may be incurred by it in compliance with such request, order or direction.
 
(f)            The Trustee may consult with counsel of its selection, and the advice or opinion of counsel with respect to legal matters relating to this Indenture and the Notes shall be full and complete authorization and protection from liability with respect to any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel.
 
(g)            The Trustee shall not be required to give any bond or surety in respect of the performance of its powers and duties hereunder.
 
(h)            The permissive rights of the Trustee to do things enumerated in this Indenture shall not be construed as a duty and, in any event, the Trustee will not be answerable other than in respect of negligence or willful misconduct.
 
(i)            The Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, attorneys or independent contractors and the Trustee will not be responsible for any misconduct or negligence on the part of any agent, attorney or independent con-tractor appointed with due care by it hereunder.
 
(j)            The Trustee shall not be deemed to have notice of any Default or Event of Default unless the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a de-fault is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Notes and this Indenture.
 


(k)            The Trustee may assume without inquiry, in the absence of actual knowledge, that the Company and any Guarantor is each duly complying with its obligations contained in this Indenture required to be performed and observed by it, and that no Default or Event of Default or other event which would require repayment of the Notes has occurred.
 
(1)            The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder and under the Intercreditor Agreement, and with respect to the Collateral, the Security Agent, and to each agent (including The Bank of New York and AIB/BNY Fund Management (Ireland) Limited), Custodian and other Person employed to act hereunder. Each Paying Agent, Transfer Agent, Registrar and the Security Agent shall not be liable for acting in good faith on instructions believed by it to be genuine and from the proper party.
 
(m)            The Trustee may request that the Company deliver an incumbency certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture, which incumbency certificate may be signed by any Person authorized to sign an incumbency certificate, including any Person as so authorized in any such certificate previously delivered and not superseded.
 
(n)            Except with respect to Section 4.01, the Trustee shall have no duty to inquire as to the performance of the Company or any Guarantor with respect to the covenants contained in Article Four. Delivery of reports, information and documents to the Trustee under Section 4.09 is for informational purposes only and the Trustee's receipt of the foregoing shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company's compliance with any of their covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officer's Certificates).
 
(o)            The Trustee shall not have any obligation or duty to monitor, determine or inquire as to compliance, and shall not be responsible or liable for compliance with restrictions on transfer, exchange, redemption, purchase or repurchase, as applicable, of minimum denominations imposed under this Indenture or under applicable law or regulation with respect to any transfer, exchange, redemption, purchase or repurchase, as applicable, of any interest in any Notes.
 
(p)            The Trustee will not be liable to any person if prevented or delayed in performing any of its obligations or discretionary functions under this Indenture by reason of:
 
(i)            any present or future law applicable to it, by any governmental or regulatory authority; or
 
(ii)            or arising out of, or caused by, directly or indirectly without limitation, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God; it being understood that the Trustee shall use reasonable best efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances;
 
(q)            If any Guarantor is substituted to make payments on behalf of the Company pursuant to Article Eleven, the Company shall promptly notify the Trustee of such substitution.
 
Section 7.03                                 Individual Rights of Trustee. The Trustee in its individual or any other capacity may be-come the owner or pledgee of Notes and may otherwise deal with the Company, any Restricted or Unrestricted Subsidiary, or their respective Affiliates, with the same rights it would have if it were not Trustee. Any Agent, Registrar or Custodian may do the same with like rights. However, the Trustee must comply with Section 7.10.
 


Section 7.04 Trustee's Disclaimer. The Trustee makes no representation as to the validity or adequacy of this Indenture or the Notes, and it shall not be accountable for the Company's use of the proceeds from the Notes, and it shall not be responsible for any statement of the Company in this Indenture or the Notes other than the certificate of authentication.
 
Section 7.05 Notice of Default. If a Default or an Event of Default occurs and is continuing and if the Trustee has actual knowledge of such Default or Event of Default, the Trustee shall mail to each Noteholder notice of the uncured Default or Event of Default on the later of (i) 60 days after such Default or Event of Default occurs or (ii) 10 days after the Trustee has actual knowledge of such Default or Event of Default. Except in the case of a De-fault or an Event of Default in the payment of interest or principal of, premium or interest on, any Note, including an accelerated payment and the failure to make payment on the Change of Control Payment Date pursuant to a Change of Control Offer or on a Net Proceeds Offer Payment Date pursuant to a Net Proceeds Offer and, except in the case of a failure to comply with Article Five, the Trustee may withhold the notice if and so long as its Responsible Officer(s) in good faith determines that withholding the notice is in the interest of the Holders. The Trustee shall not be deemed to have knowledge of a Default or Event of Default other than any Default or Event of Default of which a Trust Officer shall have received written notification or the Trustee shall have obtained actual knowledge. During the existence of an Event of Default, the Trustee will exercise such rights and powers vested in it by this Indenture, and use the same degree of care and skill in its exercise as a prudent Person would exercise or use under the circumstances in the conduct of his own affairs, subject to such rights or powers being qualified, limited or otherwise affected by the provisions of the Intercreditor Agreement.
 
Section 7.06                                 [Intentionally Omitted].
 
Section 7.07                                 Compensation and Indemnity. The Company, failing which the Guarantors jointly and severally, shall pay to the Trustee from time to time, and the Trustee shall be entitled to, such compensation as may be agreed upon by the Company and the Trustee. The Trustee's compensation shall not be limited by any law on compensation of a trustee of an express trust. The Company, failing which the Guarantors jointly and severally, shall reimburse the Trustee promptly upon request for all properly incurred out-of-pocket expenses, disbursements and advances incurred or made by it in connection with the performance of its duties and the discharge of its obligations under this Indenture. Such expenses shall include the properly incurred fees and expenses of the Trustee's agents and counsel.
 
The Company, failing which the Guarantors jointly and severally, shall indemnify the Trustee and its agents, employees, officers, stockholders and directors for, and hold them harmless against, any loss, liability or expense including taxes (other than taxes based on the income of the Trustee) and properly incurred attorneys' fees and expenses incurred by them except for such actions to the extent caused by any negligence, bad faith or willful misconduct on their part, arising out of or in connection with the acceptance or administration of this trust including properly incurred costs and expenses of defending themselves against or investigating any claim (whether asserted by the Company, and Holder or any other Person) or liability in connection with the exercise or performance of any of the Trustee's rights, powers or duties hereunder. The Trustee shall notify the Company promptly of any claim asserted against the Trustee or any of its agents, employees, officers, stockholders and directors for which it may seek indemnity. Failure by the Company to so notify the Trustee shall not relieve the Company of its obligations hereunder. The Company shall defend the claim and the Trustee shall cooperate in the defense at the Company's expense. The Trustee and its agents, employees, officers, stockholders and directors subject to the claim may have separate counsel and the Company shall pay the properly incurred fees and expenses of such counsel; provided,however, that the Company will not be required to pay such fees and expenses if it assumes the Trustee's defense and there is no conflict of interest between the Company and the Trustee and its agents, employees, officers, stock-holders and directors subject to the claim in connection with such defense as determined by the Trustee; provided,further, that, unless the Company otherwise agrees in writing, the Company shall not be liable to pay the fees and expenses of more than one counsel at any given time located within one particular jurisdiction. The Company need not pay for any settlement made without its written consent which consent shall not be unreasonably withheld. The Company need not reimburse any expense or indemnify against any loss or liability to the extent incurred by the Trustee through its negligence, bad faith or willful misconduct.
 


To secure the Company's and the Guarantor's payment obligations in this Section 7.07, the Trustee and the Agents, the Security Agent, the Registrar and the Custodian shall have a lien prior to the Notes on all assets or money held or collected by the Trustee, in its capacity as Trustee, except assets or money held in trust to pay principal of or interest on particular Notes.
 
When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(6) or (7) occurs, such expenses (including the properly incurred charges and expenses of its counsel) and the compensation for such services are intended to constitute expenses of administration and shall be paid to the extent allowed under any Bankruptcy Law.
 
The provisions of this Section shall survive the termination of this Indenture, any rejection or termination of this Indenture under any Bankruptcy Law or the resignation or removal of the Trustee.
 
Section 7.08                                 Replacement of Trustee. The Trustee may resign at any time for any reason or no reason by so notifying the Company in writing at least 30 days in advance. The Holders of a majority in principal amount of the outstanding Notes may remove the Trustee by so notifying the Company and the Trustee and may appoint a successor Trustee with the Company's consent. A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only with the successor Trustee's acceptance of appointment as provided in this Section. The Company may remove the Trustee if:
 
(1)            the Trustee fails to comply with Section 7.10;
 
(2)            the Trustee is adjudged bankrupt or insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law;
 
(3)            a receiver or other public officer takes charge of the Trustee or its property; or
 
(4)            the Trustee becomes incapable of acting.
 
If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Company shall notify each Holder of such event and shall promptly appoint a successor Trustee. Within one year after the successor Trustee takes office, the Holders of a majority in principal amount of the Notes may appoint a successor Trustee to replace the successor Trustee appointed by the Company.
 
A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Promptly after that, the retiring Trustee shall transfer all property held by it as Trustee to the successor Trustee, subject to the lien provided in Section 7.07 being paid, the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. A successor Trustee shall mail notice of its succession to each Holder.
 
If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company or the Holders of at least 10% in aggregate principal amount of the outstanding Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee.
 
If the Trustee fails to comply with Section 7.10, any Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.
 
Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the Company's obligations under Section 7.07 shall continue for the benefit of the retiring Trustee.
 
Section 7.09                                 Successor Trustee by Merger, Etc. If the Trustee consolidates with, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the resulting, surviving or transferee corporation without any further act shall, if such resulting, surviving or transferee corporation is other-wise eligible hereunder, be the successor Trustee; provided,however, that such corporation shall be otherwise qualified and eligible under this Article Seven.
 


Section 7.10                                 Eligibility; Disqualification. The Trustee (or in the case of a corporation included in a bank holding company system, the related bank holding company) shall at all times have a combined capital and surplus of at least $100,000,000 as set forth in its most recent published annual report of condition.
 
Section 7.11                                 [Intentionally Omitted].
 
Section 7.12                                 Appointment of Co-Trustee.
 
(a)            It is intended that this Indenture shall result in no violation of any law of any jurisdiction denying or restricting the right of banking corporations or associations to transact business as trustee in such jurisdiction. It is recognized that in case of litigation under this Indenture, and in particular in case of the enforcement thereof on default, or in the case the Trustee deems that by reason of any present or future law of any jurisdiction it may not exercise any of the powers, rights or remedies herein granted to the Trustee as herein granted or hold title to the properties, in trust, or take any action which may be desirable or necessary in connection therewith, it may be necessary that the Trustee appoint an individual or institution as a separate or co-trustee. The following provisions of this Section 7.12 are adopted to these ends.
 
(b)            In the event that the Trustee appoints an additional individual or institution as a separate or co-trustee, each and every remedy, power, right, claim, demand, cause of action, immunity, estate, title, interest and lien expressed or intended by this Indenture to be exercised or vested in or conveyed to the Trustee with respect thereto shall be exercisable by and vest in such separate or co-trustee but only to the extent necessary to enable such separate or co-trustee to exercise such powers, rights and remedies, and only to the extent that the Trustee by the laws of any jurisdiction is incapable of exercising such powers, rights and remedies, and every covenant and obligation necessary to the exercise thereof by such separate or co-trustee shall run to and be enforceable by either of them.
 
(c)            Should any instrument in writing from the Company be required by the separate or co-trustee so appointed by the Trustee for more fully and certainly vesting in and confirming to him or it such properties, rights, powers, trusts, duties and obligations, any and all such instruments in writing shall, on request, be executed, acknowledged and delivered by the Company; provided that if an Event of Default shall have occurred and be continuing, if the Company does not execute any such instrument within 15 days after request therefor, the Trustee shall be empowered as an attorney-in-fact for the Company to execute any such instrument in the Company's name and stead. In case any separate or co-trustee or a successor to either shall become incapable of acting, resign or be re-moved, all the estates, properties, rights, powers, trusts, duties and obligations of such separate or co-trustee, so far as permitted by law, shall vest in and be exercised by the Trustee until the appointment of a new trustee or successor to such separate or co-trustee.
 
(d)            Each separate trustee and co-trustee shall, to the extent permitted by law, be appointed and act subject to the following provisions and conditions:
 
(i)            all rights and powers, conferred or imposed upon the Trustee shall be conferred or imposed upon and may be exercised or performed by such separate trustee or co-trustee; and
 
(ii)            no trustee hereunder shall be liable by reason of any act or omission of any other trustee hereunder.
 
(e) Any notice, request or other writing given to the Trustee shall be deemed to have been given to each of the then separate trustees and co-trustees, as effectively as if given to each of them. Every instrument appointing any separate trustee or co-trustee shall refer to this Indenture and the conditions of this Article Seven.
 
(f)            Any separate trustee or co-trustee may at any time appoint the Trustee as its agent or attorney-in-fact with full power and authority, to the extent not prohibited by law, to do any lawful act under or in respect of this Indenture on its behalf and in its name. If any separate trustee or co-trustee shall become incapable of acting, re-signed or be removed, all of its estates, properties, rights, remedies and trusts shall vest in and be exercised by the Trustee, to the extent permitted by law, without the appointment of a new trustee or successor.
 


Section 7.13                                 Collateral.
 
(a)            At any time that the Collateral granted pursuant to the Security Documents has become enforce-able and the Holders have given a direction to the Trustee to enforce such Collateral, the Trustee is not required to give any direction to the Security Agent with respect thereto unless it has been indemnified in accordance with Section 7.07 where the Trustee has grounds to believe it would incur any liability. In any event, in connection with any enforcement of such Collateral, the Trustee is not responsible for:
 
(1)            any failure of the Security Agent to enforce such security within a reasonable time or at all;
 
(2)            any failure of the Security Agent to pay over the proceeds of enforcement of the Collateral
 
(3)            any failure of the Security Agent to realize such security for the best price obtainable;
 
(4)            monitoring the activities of the Security Agent in relation to such enforcement;
 
(5)            taking any enforcement action itself in relation to such Collateral;
 
(6)            agreeing to any proposed course of action by the Security Agent which could result in the Trustee incurring any liability for its own account; or
 
(7)            paying any fees, costs or expenses of the Security Agent.
 
(b)            Anything in this Indenture to the contrary notwithstanding, in no event shall the Trustee be liable for special, indirect, or consequential loss or damage of any kind whatsoever (including but not limited to loss of business, goodwill, opportunity or profits), even if the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.
 
(c)            Each Holder by accepting a Note authorizes and directs on his or her own behalf the Trustee to enter into and to take such actions and to make such acknowledgements as are set forth in this Indenture and the Inter-creditor Agreement or other documents entered into in connection therewith.
 
(d)            The Trustee shall not be responsible for the legality, validity, effectiveness, suitability, adequacy or enforceability of any of the Security Documents or any obligation or rights created or purported to be created thereby or pursuant thereto or any security or the priority thereof constituted or purported to be constituted thereby or pursuant thereto, nor shall it be responsible or liable to any person because of any invalidity of any provision of such documents or the unenforceability thereof, whether arising from statute, law or decision of any court. The Trustee shall be under no obligation to monitor or supervise the functions of the Security Agent under the Security Documents and shall be entitled to assume that the Security Agent is properly performing its functions and obligations thereunder and the Trustee shall not be responsible for any diminution in the value of or loss occasioned to the assets subject thereto by reason of the act or omission by the Security Agent in relation to its functions thereunder. The Trustee shall have no responsibility whatsoever to the Company, any Guarantor or any Holder regarding any deficiency which might arise because the Trustee is subject to any tax in respect of the Security Documents, the Col-lateral created thereby or any part thereof or any income therefrom or any proceeds thereof.
 
ARTICLE EIGHT
 
DISCHARGE OF INDENTURE; DEFEASANCE
 
Section 8.01                                 Termination of the Company's Obligations. As to either series of Notes this Indenture will be Discharged and will cease to be of further effect and the obligations of the Company and the Guarantors under the Notes of such series and the Guarantees and this Indenture shall terminate with respect to such series (except that the obligations under Sections 2.03 through 2.07, 7.01, 7.02, 7.07 and 7.08 and the rights, powers, trusts, duties and immunities of the Trustee hereunder shall survive the effect of this Article
 


Eight) when (a) either (i) all existing Notes with respect to such series, theretofore authenticated and delivered (except lost, stolen or destroyed Notes which have been replaced or paid and Notes for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust) have been delivered to the Trustee for cancellation or (ii) all Notes of such series not theretofore delivered to the Trustee for cancellation have become due and payable or will become due and payable within one year (including by way of irrevocable instructions delivered by the Company to the Trustee to effect the redemption of the Notes), and the Company has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust solely for the benefit of the Holders of such Notes, cash in U.S. dollars, U.S. Government Obligations in the case of Dollar Notes and/or euro or Euro Obligations in the case of Euro Notes or a combination thereof, in amounts as will be sufficient without consideration of any reinvestment of interest to pay and discharge the entire Indebtedness on the Notes not theretofore delivered to the Trustee for cancellation, for principal of, premium, if any, and interest on the Notes to the date of deposit together with irrevocable instructions from the Company directing the Trustee to apply such Funds to the payment thereof at maturity or redemption, as the case may be; (b) the Company has paid all other sums payable under this Indenture by the Company with respect to the Notes of such series; and (c) the Company has delivered to the Trustee an Officer's Certificate and an Opinion of Counsel stating that all conditions precedent under this Indenture relating to the satisfaction and discharge of this Indenture with respect to the Notes of such series have been complied with. All funds that remain unclaimed for one year will be paid to the Company and there-after Holders must look to the Company for payment as general creditors.
 
In addition, at the Company's option, either (a) the Company shall be deemed to have been Discharged from any and all obligations with respect to the Notes and the Guarantees ("Legal Defeasance") after the applicable conditions set forth below have been satisfied (except for the obligations of the Company under Sections 2.03, 2.04, 2.06, 2.07, 7.01, 7.02, 7.07 and this Section 8.01) or (b) the Company and its Restricted Subsidiaries shall cease to be under any obligation to comply with any term, provision or condition set forth in Sections 4.03, 4.09 and 4.11 through 4.23 and Section 5.01 and thereafter any omission to comply with such obligations shall not constitute a Default or Event of Default with respect to the Notes ("Covenant Defeasance") after the applicable conditions set forth below have been satisfied:
 
(1)            the Company must irrevocably deposit with the Trustee in trust, for the benefit of the Holders (i) with respect to Dollar Notes, cash in U.S. Dollars or non-callable U.S. government obligations and (ii) with respect to Euro Notes, euro or Euro Obligations, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of, premium, if any, and interest on the Notes on the stated date for payment thereof or on an applicable redemption date;
 
(2)            in the case of Legal Defeasance, the Company shall have delivered to the Trustee an Opinion of Counsel in the United States of America reasonably acceptable to the Trustee confirming that
 
(i)            the Company has received from, or there has been published by, the Internal Revenue Service a ruling, or
 
(ii)            since the Issue Date, there has been a change in the applicable United States federal income tax law,
 
in either case, to the effect that, and based thereon such Opinion of Counsel shall confirm that, the Holders of the outstanding Notes will not recognize income, gain or loss for United States federal income tax purposes as a result of such Legal Defeasance and will be subject to United States federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred; provided, however, such Opinion of Counsel shall not be required if all the Notes will become due and payable on the Maturity Date within one year or are to be called for redemption within one year under arrangements satisfactory to the Trustee;
 
(3)            in the case of Covenant Defeasance, the Company shall have delivered to the Trustee an Opinion of Counsel in the United States of America reasonably acceptable to the Trustee confirming that the
 


Holders of the outstanding Notes will not recognize income, gain or loss for United States federal in-come tax purposes as a result of such Covenant Defeasance and will be subject to United States federal in-come tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;
 
(4)            no Event of Default or Default shall have occurred and be continuing on the date of such deposit (other than any Default arising from the substantially contemporaneous incurrence of Indebtedness to fund the deposit described above in clause (1)) or insofar as Events of Default of the type described in Section 6.01(6) or (7) are concerned, at any time in the period ending on the 91st day after the date of de-posit;
 
(5)            such Legal Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under this Indenture (other than any Default arising from the substantially contemporaneous incurrence of Indebtedness to fund the deposit described above in clause (1)) or any other material agreement or instrument to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound;
 
(6)            the Company shall have delivered to the Trustee an Officer's Certificate stating that the deposit was not made by the Company with the intent of preferring the Holders of the Notes over any other creditors of the Company or with the intent of defeating, hindering, delaying or defrauding any other creditors of the Company or others;
 
(7)            the Company shall have delivered to the Trustee an Officer's Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for or relating to the Legal Defeasance or the Covenant Defeasance have been complied with;
 
(8)            the Company shall have delivered to the Trustee an Opinion of Counsel, to the effect that either (i) the Company has assigned all its ownership interest in the trust funds to the Trustee or (ii) the Trustee has a valid perfected security interest in the trust funds; and
 
(9)            the Company delivers to the Trustee all other documents or other information that the Trustee may reasonably require in connection with either defeasance option.
 
Section 8.02                                 Acknowledgment of Discharge by Trustee. Subject to Section 8.05, after (i) the conditions of Section 8.01, have been satisfied and (ii) the Company has delivered to the Trustee an Opinion of Counsel, stating that all conditions precedent referred to in clause (i) above relating to the satisfaction and discharge of this Indenture have been complied with, the Trustee upon written request of the Company shall acknowledge in writing the discharge of the Company's obligations under this Indenture except for those surviving obligations specified in this Article Eight.
 
Section 8.03                                 Application of Trust Money. The Trustee shall hold in trust Funds deposited with it pursuant to Section 8.01. It shall apply the Funds through the Paying Agent and in accordance with this Indenture to the payment of all the principal of, or premium, if any, and interest on the Notes.
 
Section 8.04                                 Repayment to the Company. The Trustee and the Paying Agent shall promptly pay to the Company any Funds held by them for the payment of all the principal of, or premium, if any, and interest that re-mains unclaimed for one year; provided,however, that the Trustee or such Paying Agent may, at the expense of the Company, cause to be published once in a newspaper of general circulation in the City of New York or mailed to each Holder, notice that such Funds remain unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication or mailing, any unclaimed balance of such Funds then remaining will be repaid to the Company. After payment to the Company, Holders entitled to the Funds must look to the Company for payment as general unsecured creditors unless an applicable abandoned property law designates another Person and all liability of the Trustee and Paying Agent with respect to such Funds shall cease. The Company and the Guarantors jointly and severally shall indemnify the Trustee to its satisfaction against any liabilities including any tax, fee or other charge imposed or assessed against such Funds or the principal and interest received on such Funds.
 

 


Section 8.05                                 Reinstatement. If the Trustee or Paying Agent is unable to apply any Funds by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, re-straining or otherwise prohibiting such application, the Company's obligations under this Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.01 until such time as the Trustee or Paying Agent is permitted to apply all such Funds in accordance with Section 8.01; provided,however, that if the Company has made any payment of principal, or premium, if any, and interest on any Notes because of the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Notes to receive such payment from Funds held by the Trustee or Paying Agent.
 
ARTICLE NINE
 
AMENDMENTS, SUPPLEMENTS AND WAIVERS
 
Section 9.01                                 Without Consent of Holders. The Company, when authorized by a Board Resolution, the Guarantors and the Trustee, together, may amend or supplement this Indenture, the Notes, the Guarantees, the Inter-creditor Agreement or the Security Documents by written agreement without the consent of any Holders to:
 
(1)            to cure any ambiguity, omission, defect or inconsistency;
 
(2)            provide for the assumption of the Company's or any Guarantor's obligations to Holders of Notes in the case of a merger or consolidation or sale of all or substantially all of the Company's assets;
 
(3)            provide for uncertificated Notes in addition to or in place of certificated Notes;
 
(4)            to add any person as a Guarantor of the Notes or secure the Notes or the Guarantees or to provide for the release of any Guarantor of the Notes or any security for the benefit of the Notes or the Guarantees in accordance with this Indenture;
 
(5)            to conform the text of this Indenture, the Notes, the Guarantees, the Intercreditor Agreement or the Security Documents to any provision of the "Description of Notes" in the Offering Memorandum to the extent such provision of the "Description of Notes" in the Offering Memorandum was intended to be a verbatim recitation of a provision of this Indenture, the Notes, the Guarantees, the Intercreditor Agreement or the Security Documents;
 
(6)            to evidence and provide the acceptance of the appointment of a successor Trustee, Registrar, Paying Agent, Transfer Agent, Listing Agent or Security Agent under this Indenture;
 
(7)            to provide for the issuance of Additional Notes under this Indenture in accordance with the limitations set forth in this Indenture;
 
(8)            to mortgage, pledge, hypothecate or grant a security interest in favor of the Security Agent or Trustee, as the case may be, (i) for the benefit of the Holders of the Notes, as additional security for the payment and performance of the Company's or any Guarantor's obligations under the Notes and this Indenture or (ii) for the benefit of the holders of Designated Senior Debt or parties to Credit Facilities, the Australian Credit Facilities and the Hong Kong Facility, in each case in any property, or assets, pursuant to this Indenture or otherwise and not prohibited under this Indenture;
 
(9)            to the extent necessary to provide for the granting of a security interest for the benefit of any person, provided that the granting of such security interest is not prohibited under this Indenture;
 
(10)            to comply with the rules of any applicable securities depositary;
 
(11)            to amend the Intercreditor Agreement in accordance with clause 37 thereof, or
 

 


(12)            to make any change that would provide any additional benefit or rights to the Holders or that does not adversely affect in any material respect the legal rights of any Noteholders hereunder; provided,however, that the Company has delivered to the Trustee an Opinion of Counsel and an Officer's Certificate, each stating that such amendment or supplement complies with the provisions of this Section 9.01.
 
Section 9.02                                 With Consent of Holders. Subject to Section 6.07, the Company, when authorized by a Board Resolution, the Guarantors and the Trustee, together, with the written consent (including any electronic communication thereof by a Depositary) of the Holder or Holders of at least a majority in principal amount of the then outstanding Notes (including the aggregate principal amount of any Additional Notes subsequently issued under this Indenture) of each series affected thereby (voting as a separate class) may make all other modifications, waivers and amendments of this Indenture, the Notes, the Guarantees, the Intercreditor Agreement or the Security Documents, except that, without the consent of Holders owning 90% of the aggregate principal amount of the Notes then out-standing of a series affected, no amendment and waiver may, directly or indirectly:
 
(1)            reduce the amount of such Notes whose Holders must consent to an amendment;
 
(2)            reduce the rate of or change the time for payment of interest, including defaulted interest, on such Notes;
 
(3)            reduce the principal of or change the fixed maturity of such Notes, or change the date on which such Notes may be subject to redemption or repurchase, or reduce the redemption or repurchase price thereof for such Notes;
 
(4)            make such Notes payable in money other than that stated in the Notes and this Indenture;
 
(5)            make any change in provisions of this Indenture or the Notes relating to the rights of each Holder of such Notes to receive payment of principal of and interest on the Notes or permitting Holders of a majority in principal amount of such Notes to waive Defaults or Events of Default;
 
(6)            amend, change or modify any provision of this Indenture that would amend, change or modify in any material respect the obligation of the Company to make and complete a Change of Control Offer in the event of a Change of Control that has occurred or make and complete a Net Proceeds Offer with respect to any Asset Sale that has been consummated;
 
(7)            modify or change any provision of this Indenture affecting the subordination or ranking of such Notes or any Guarantee in a manner which adversely affects the Holders; or
 
(8)            release any Guarantor from any of its obligations under its Guarantee or this Indenture otherwise than in accordance with the terms of this Indenture.
 
Notwithstanding any provision to the contrary, if any amendment, waiver or other modification will only effect the Dollar Notes or the Euro Notes, only the consent of the holders of at least a majority in principal amount of the Dollar Notes or the Euro Notes, as the case may be, shall be required.
 
It shall not be necessary for the consent of the Holders under this Section 9.02 to approve the particular form of any proposed amendment, supplement or waiver, but it shall be sufficient if such consent approves the sub-stance thereof.
 
After an amendment, supplement or waiver under this Section 9.02 becomes effective (as provided in Section 9.04), the Company shall mail to the Holders affected thereby a notice briefly describing the amendment, supplement or waiver. Any failure of the Company to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture.
 
Section 9.03                                 [Intentionally Omitted].
 


Section 9.04                                 Revocation and Effect of Consents. Until an amendment, waiver or supplement becomes effective in accordance with this Indenture, a consent to it by a Holder is a continuing consent by the Holder and every subsequent Holder of a Note or portion of a Note that evidences the same debt as the consenting Holder's Note, even if notation of the consent is not made on any Note. Subject to the following paragraph, any such Holder or subsequent Holder may revoke the consent as to his Note or portion of his Note by notice to the Trustee or the Company received before the date on which the Trustee receives an Officer's Certificate certifying that the Holders of the requisite principal amount of Notes have consented (and not theretofore revoked such consent) to the amendment, supplement or waiver (at which time such amendment, supplement or waiver shall become effective).
 
The Company may, but shall not be obligated to, fix such record date as it may select for the purpose of determining the Holders entitled to consent to any amendment, supplement or waiver. If a record date is fixed, then notwithstanding the last sentence of the immediately preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies), and only those Persons, shall be entitled to revoke any consent previously given, whether or not such Persons continue to be Holders after such record date. No such consent shall be valid or effective for more than 120 days after such record date.
 
After an amendment, supplement or waiver becomes effective, it shall bind every Holder, unless it makes a change described in any of clauses (1) through (8) of Section 9.02, in which case, the amendment, supplement or waiver shall bind only each Holder of a Note who has consented to it and every subsequent Holder of a Note or portion of a Note that evidences the same debt as a consenting Holder's Note; provided,however, that any such waiver shall not impair or affect the right of any Holder to receive payment of principal of and interest on a Note without the consent of such Holder.
 
Section 9.05 Notation on or Exchange of Notes. If an amendment, supplement or waiver changes the terms of a Note, the Trustee may require the Holder of the Note to deliver it to the Trustee. The Trustee may place an appropriate notation on the Note about the changed terms and return it to the Holder. Alternatively, if the Company or the Trustee so determines, the Company in exchange for the Note shall issue and the Trustee shall authenticate a new Note that reflects the changed terms.
 
Section 9.06                                 Trustee To Sign Amendments, Etc. The Trustee shall execute any amendment, supplement or waiver authorized pursuant to and adopted in accordance with this Article Nine; provided,however, that the Trustee may, but shall not be obligated to, execute any such amendment, supplement or waiver which affects the Trustee's own rights, duties, liabilities or immunities under this Indenture. The Trustee shall be entitled to receive, and shall be fully protected in relying upon, an Opinion of Counsel and an Officer's Certificate each stating that the execution of any amendment, supplement or waiver authorized pursuant to this Article Nine is authorized or permitted by this Indenture. Such Opinion of Counsel shall not be an expense of the Trustee.
 
ARTICLE TEN
 
[INTENTIONALLY OMITTED]
 
ARTICLE ELEVEN
 
GUARANTEE OF NOTES
 
Section 11.01                                 Unconditional Guarantee. Subject to the provisions of Articles Eleven and Twelve and the Intercreditor Agreement, each of the Guarantors hereby, jointly and severally, unconditionally and irrevocably guarantees, on a senior subordinated basis (such guarantees to be referred to herein as the "Guarantee") to each Holder of a Note (including any Additional Notes upon issuance in accordance with Section 2.18) authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforce-ability of this Indenture, the Notes or the Obligations of the Company or any other Guarantors to the Holders or the Trustee hereunder or thereunder, that: (a) the principal of, premium, if any, and interest on the Notes (and any interest accrued pursuant to Section 2.12 or Supplemental Interest accrued pursuant to Section 4.19(c) payable thereon) shall be duly and punctually paid in full when due, whether at maturity, upon redemption at the option of Holders pursuant to the provisions of the Notes relating thereto, by acceleration or otherwise, and interest on the overdue
 


principal and (to the extent permitted by law) interest, if any, on the Notes and all other obligations of the Company or the Guarantors to the Holders or the Trustee hereunder or thereunder (including amounts due the Trustee under Section 7.07) and all other payment obligations shall be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, the same shall be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at maturity, by acceleration or otherwise. Failing payment when due of any amount so guaranteed, or failing performance of any other obligation of the Company to the Holders under this In-denture or under the Notes, for whatever reason, each Guarantor shall be obligated to pay, or to perform or cause the performance of, the same immediately. An Event of Default under this Indenture or the Notes shall constitute an event of default under this Guarantee, and shall entitle the Holders of Notes to accelerate the obligations of the Guarantors hereunder in the same manner and to the same extent as the Obligations of the Company subject to the Intercreditor Agreement.
 
Each of the Guarantors hereby agrees that its obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes or any other Obligations with respect to any provisions hereof or thereof, any release of any other Guarantor, the recovery of any judgment against the Company, any action to en-force the same, whether or not a Guarantee is affixed to any particular Note, or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a Guarantor. Each of the Guarantors hereby waives the benefit of diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest, notice and all demands whatsoever and covenants that its Guarantee shall not be discharged except by complete performance of the obligations contained in the Notes, this Indenture and this Guarantee. This Guarantee is a guarantee of payment and not of collection. If any Holder or the Trustee is required by any court or otherwise to return to the Company or to any Guarantor, or any custodian, trustee, liquidator or other similar official acting in relation to the Company or such Guarantor, any amount paid by the Company or such Guarantor to the Trustee or such Holder, this Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect. Each Guarantor further agrees that, as between it, on the one hand, and the Holders of Notes and the Trustee, on the other hand, (a) subject to Articles Eleven and Twelve and the Intercreditor Agreement, the maturity of the obligations guaranteed hereby may be accelerated as provided in Article Six for the purposes of this Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (b) in the event of any acceleration of such obligations as provided in Article Six , such obligations (whether or not due and payable) shall forthwith become due and payable by the Guarantors for the purpose of this Guarantee.
 
Each Guarantor that makes a payment or distribution under its Guarantee shall be entitled to a contribution from each other Guarantor in an amount pro rata, based on the net assets of each Guarantor, determined in accordance with GAAP.
 
Section 11.02                                 Limitations on Guarantees. The obligations of each Guarantor under its Guarantee are limited to the maximum amount which, after giving effect to all other contingent and fixed liabilities of such Guarantor and after giving effect to any collections from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under its Guarantee or pursuant to its contribution obligations under this Indenture, will result in the obligations of such Guarantor under the Guarantee not constituting a fraudulent conveyance or fraudulent transfer under applicable law.
 
Section 11.03                                 Execution and Delivery of Additional Guarantees. Each Restricted Subsidiary that after the date hereof executes a Guarantee, substantially in the form of Exhibit D hereto, shall thereupon become a Guarantor for all purposes hereunder. Such Guarantee shall be executed on behalf of each Guarantor by either manual or facsimile signature of a duly authorized Officer of each Guarantor and written notice thereof shall be provided to the Trustee upon execution.
 
Each of the Guarantors hereby agrees that its Guarantee set forth in Section 11.01 shall remain in full force and effect until released in accordance with Section 11.04.
 


If an Officer of a Guarantor whose signature is on this Indenture or a Guarantee no longer holds that office at the time the Trustee authenticates the Note on which such Guarantee is endorsed or at any time thereafter, such Guarantor's Guarantee of such Note shall be valid nevertheless.
 
Section 11.04                                 Release of a Guarantor.
 
(a)            The obligations of any Guarantor under its Guarantee of the Notes will be automatically and unconditionally released and discharged when any of the following occurs:
 
(1)            upon the full and final payment and performance of all obligations of the Company under this Indenture and the Notes;
 
(2)            any issuance, sale, exchange, transfer or other disposition (including, without limitation, by way of merger, consolidation or otherwise), directly or indirectly, of Capital Stock of such Guarantor (or any parent of such Guarantor) to any Person that is not a Restricted Subsidiary of the Company that results in such Guarantor ceasing to be a Subsidiary of the Company; provided that such issuance, sale, exchange, transfer or other disposition is made in accordance with the provisions of this Indenture;
 
(3)            a sale of all the Capital Stock of the applicable Guarantor (or any parent of such Guarantor) pursuant to an Enforcement Sale in accordance with the Intercreditor Agreement;
 
(4)            so long as no Default or Event of Default has occurred and is continuing such Guarantor is unconditionally released and discharged from its liability with respect to Indebtedness (a) in connection with which such Guarantee was executed pursuant to Section 4.19 and (b) under the Senior Secured Credit Facilities, if such Guarantor is a Guarantor as of the date hereof or a Requisite Guarantor;
 
(5)            the designation of such Guarantor as an Unrestricted Subsidiary in accordance with the provisions of this Indenture; or
 
(6)            the occurrence of Legal Defeasance or Covenant Defeasance in accordance with this In-denture; or
 
(7)            in the event that the continued obligation of such Guarantor under its Guarantee or the continued existence of such Guarantee will result in a violation of applicable law that cannot be avoided or other-wise prevented through measures reasonably available to the Company or such Guarantor; provided that all Guarantees, if any, of the Senior Secured Credit Facilities by such Guarantor are also released.
 
(b)            In connection with any transaction set forth in Section 11.04(a) above, the Trustee shall receive an Officer's Certificate and an Opinion of Counsel certifying as to the compliance with this Section 11.04; provided,however, that the legal counsel delivering such Opinion of Counsel may rely as to matters of fact on one or more Officer's Certificates of the Company or any Guarantor.
 
The Trustee shall execute any documents reasonably requested by the Company or a Guarantor in order to evidence the release of such Guarantor from its obligations under its Guarantee endorsed on the Notes and under this Article Eleven.
 
Section 11.05                                 Waiver of Subrogation. Until this Indenture is discharged and all of the Notes are discharged and paid in full, each Guarantor hereby irrevocably waives and agrees not to exercise any claim or other rights which it may now or hereafter acquire against the Company that arise from the existence, payment, performance or enforcement of the Company's obligations under the Notes or this Indenture and such Guarantor's obligations under this Guarantee and this Indenture, in any such instance including, without limitation, any right of subrogation, reimbursement, exoneration, contribution, indemnification, and any right to participate in any claim or remedy of the Holders against the Company, whether or not such claim, remedy or right arises in equity, or under con-tract, statute or common law, including, without limitation, the right to take or receive from the Company, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security on account of such claim or other rights. If any amount shall be paid to
 


any Guarantor in violation of the preceding sentence and any amounts owing to the Trustee or the Holders of Notes under the Notes, this Indenture, or any other document or instrument delivered under or in connection with such agreements or instruments, shall not have been paid in full, such amount shall have been deemed to have been paid to such Guarantor for the benefit of, and held in trust for the benefit of, the Trustee or the Holders and shall forthwith be paid to the Trustee for the benefit of itself or such Holders to be credited and applied to the obligations in favor of the Trustee or the Holders, as the case may be, whether matured or unmatured, in accordance with the terms of this Indenture. Each Guarantor acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by this Indenture and that the waiver set forth in this Section 11.05 is knowingly made in contemplation of such benefits.
 
Section 11.06                                 Immediate Payment. Each Guarantor agrees to make immediate payment to the Trustee for the benefit of the Holders of all Obligations under this Indenture and the Notes owing or payable to the respective Holders upon receipt of a demand for payment therefor by the Trustee to such Guarantor in writing.
 
Section 11.07                                 No Set-Off. Each payment to be made by a Guarantor hereunder in respect of the Obligations hereunder shall be payable in the currency or currencies in which such Obligations are denominated, and shall be made without set-off, defense, counterclaim, reduction or diminution of any kind or nature.
 
Section 11.08                                 Obligations Absolute. The obligations of each Guarantor hereunder are and shall be absolute and unconditional and any monies or amounts expressed to be owing or payable by each Guarantor hereunder which may not be recoverable from such Guarantor on the basis of a Guarantee shall be recoverable from such Guarantor as a primary obligor and principal debtor in respect thereof.
 
Section 11.09                                 Obligations Continuing. The obligations of each Guarantor hereunder shall be continuing and shall remain in full force and effect until all the obligations have been paid and satisfied in full. Each Guarantor agrees with the Trustee that it will from time to time deliver to the Trustee suitable acknowledgments of this continued liability hereunder and under any other instrument or instruments in such form as counsel to the Trustee may advise and as will prevent any action brought against it in respect of any default hereunder being barred by any statute of limitations now or hereafter in force and, in the event of the failure of a Guarantor so to do, it hereby irrevocably appoints the Trustee the attorney and agent of such Guarantor to make, execute and deliver such written acknowledgment or acknowledgments or other instruments as may from time to time become necessary or advisable, in the judgment of the Trustee on the advice of counsel, to fully maintain and keep in force the liability of such Guarantor hereunder.
 
Section 11.10                                 Obligations Not Reduced. The obligations of each Guarantor hereunder shall not be satisfied, reduced or discharged solely by the payment of such principal, premium, if any, interest, fees and other monies or amounts as may at any time prior to discharge of this Indenture pursuant to Article Eight be or become owing or payable under or by virtue of or otherwise in connection with the Notes or this Indenture.
 
Section 11.11                                 Obligations Reinstated. The obligations of each Guarantor hereunder shall continue to be effective or shall be reinstated, as the case may be, if at any time any payment which would otherwise have reduced the obligations of any Guarantor hereunder (whether such payment shall have been made by or on behalf of the Company or by or on behalf of a Guarantor) is rescinded or reclaimed from any of the Holders upon the insolvency, bankruptcy, liquidation or reorganization of the Company or any Guarantor or otherwise, all as though such payment had not been made. If demand for, or acceleration of the time for, payment by the Company is stayed upon the insolvency, bankruptcy, liquidation or reorganization of the Company, all such Indebtedness otherwise subject to demand for payment or acceleration shall nonetheless be payable by each Guarantor as provided herein.
 
Section 11.12                                 Obligations Not Affected. The obligations of each Guarantor hereunder shall not be affected, impaired or diminished in any way by any act, omission, matter or thing whatsoever, occurring before, upon or after any demand for payment hereunder (and whether or not known or consented to by any Guarantor or any of the Holders) which, but for this provision, might constitute a whole or partial defense to a claim against any Guarantor hereunder or might operate to release or otherwise exonerate any Guarantor from any of its obligations hereunder or otherwise affect such obligations, whether occasioned by default of any of the Holders or otherwise, including, without limitation:
 
(a)            any limitation of status or power, disability, incapacity or other circumstance relating to the Company or any other Person, including any insolvency, bankruptcy, liquidation, reorganization, readjustment, composition, dissolution, winding-up or other proceeding involving or affecting the Company or any other Person;
 
(b)            any irregularity, defect, unenforceability or invalidity in respect of any indebtedness or other obligation of the Company or any other Person under this Indenture, the Notes or any other document or instrument;
 
(c)            any failure of the Company, whether or not without fault on its part, to perform or comply with any of the provisions of this Indenture or the Notes, or to give notice thereof to a Guarantor;
 
(d)            the taking or enforcing or exercising or the refusal or neglect to take or enforce or exercise any right or remedy from or against the Company or any other Person or their respective assets or the release or discharge of any such right or remedy;
 
(e)            the granting of time, renewals, extensions, compromises, concessions, waivers, releases, discharges and other indulgences to the Company or any other Person;
 
(f)            any change in the time, manner or place of payment of, or in any other term of, any of the Notes, or any other amendment, variation, supplement, replacement or waiver of, or any consent to departure from, any of the Notes or this Indenture, including, without limitation, any increase or decrease in the principal amount of or premium, if any, or interest on any of the Notes;
 
(g)            any change in the ownership, control, name, objects, businesses, assets, capital structure or constitution of the Company or a Guarantor;
 
(h)            any merger or amalgamation of the Company or a Guarantor with any Person or Persons;
 
(i)            the occurrence of any change in the laws, rules, regulations or ordinances of any jurisdiction by any present or future action of any governmental authority or court amending, varying, reducing or otherwise affecting, or purporting to amend, vary, reduce or otherwise affect, any of the Obligations or the obligations of a Guarantor under its Guarantee; and
 
(j)            any other circumstance, (other than release of the Guarantor pursuant to Section 11.04 and other than by complete, irrevocable payment) that might otherwise constitute a legal or equitable discharge or defense of the Company under this Indenture or the Notes or of a Guarantor in respect of its Guarantee hereunder.
 
Section 11.13                                 Waiver. Without in any way limiting the provisions of Section 11.01, each Guarantor hereby waives notice of acceptance hereof, notice of any liability of any Guarantor hereunder, notice or proof of reliance by the Holders upon the obligations of any Guarantor hereunder, and diligence, presentment, demand for payment on the Company, protest, notice of dishonor or non-payment of any of the Obligations hereunder, or other notice or formalities to the Company or any Guarantor of any kind whatsoever.
 
Section 11.14                                 No Obligation To Take Action Against the Company. Neither the Trustee nor any other Person shall have any obligation to enforce or exhaust any rights or remedies or to take any other steps under any security for the Obligations hereunder or against the Company or any other Person or any property of the Company or any other Person before the Trustee is entitled to demand payment and performance by any or all Guarantors of their liabilities and obligations under their Guarantees or under this Indenture.
 
Section 11.15 Dealing with the Company and Others. The Holders, without releasing, discharging, limiting or otherwise affecting in whole or in part the obligations and liabilities of any Guarantor hereunder and without the consent of or notice to any Guarantor, may
 


(a)            grant time, renewals, extensions, compromises, concessions, waivers, releases, discharges and other indulgences to the Company or any other Person;
 
(b)            take or abstain from taking security or collateral from the Company or from perfecting security or collateral of the Company;
 
(c)            accept compromises or arrangements from the Company;
 
(d)            apply all monies at any time received from the Company or from any security upon such part of the Obligations hereunder as the Holders may see fit or change any such application in whole or in part from time to time as the Holders may see fit; and
 
(e)            otherwise deal with, or waive or modify their right to deal with, the Company and all other Persons and any security as the Holders or the Trustee may see fit.
 
Section 11.16                                 Default and Enforcement. If any Guarantor fails to pay in accordance with Section 11.06, the Trustee may proceed in its name as the Trustee hereunder in the enforcement of the Guarantee of any such Guarantor and such Guarantor's Obligations thereunder and hereunder by any remedy provided by law, whether by legal proceedings or otherwise, and to recover from such Guarantor such Obligations.
 
Section 11.17                                 Amendment, Etc. No amendment, modification or waiver of any provision of this Indenture relating to any Guarantor or consent to any departure by any Guarantor or any other Person from any such pro-vision will in any event be effective unless it is signed by such Guarantor and the Trustee.
 
Section 11.18                                 Acknowledgment. Each Guarantor hereby acknowledges communication of the terms of this Indenture and the Notes and consents to and approves of the same.
 
Section 11.19                                 Costs and Expenses. Each Guarantor shall pay on demand by the Trustee any and all costs, fees and expenses (including, without limitation, legal fees) incurred by the Trustee and the Security Agent, its agents, advisors and counsel or any of the Holders in enforcing any of their rights under any Guarantee.
 
Section 11.20                                 No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of the Trustee or the Holders, any right, remedy, power or privilege hereunder or under this Indenture or the Notes, shall operate as a waiver thereof nor shall any single or partial exercise of any right, remedy, power or privilege hereunder or under this Indenture or the Notes preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges in the Guarantee and under this Indenture, the Notes and any other document or instrument between a Guarantor and/or the Company and the Trustee are cumulative and not exclusive of any rights, remedies, powers and privilege provided by law.
 
Section 11.21                                 Guarantee in Addition to Other Obligations. The obligations of each Guarantor under its Guarantee and this Indenture are in addition to and not in substitution for any other obligations to the Trustee or to any of the Holders in relation to this Indenture or the Notes and any guarantees or security at any time held by or for the benefit of any of them.
 
Section 11.22                                 Severability. Any provision of this Article Eleven which is prohibited or unenforceable in any jurisdiction shall not invalidate the remaining provisions and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction unless its removal would substantially defeat the basic intent, spirit and purpose of this Indenture and this Article Eleven.
 
Section 11.23                                 Successors and Assigns. Unless released in accordance with this Indenture, each Guarantee shall be binding upon and inure to the benefit of each Guarantor and the Trustee and the other Holders and their respective successors and permitted assigns, except that no Guarantor may assign any of its obligations hereunder or thereunder.
 


ARTICLE TWELVE
 
SUBORDINATION OF GUARANTEE AND INTERCREDITOR AGREEMENT
 
Section 12.01                                 Agreement To Subordinate Guarantees and Notes Subject To Intercreditor Agreement. Each of the Guarantors agrees, and each Holder by accepting a Note and related Guarantees agrees, that the Obligations of such Guarantor hereunder are subordinated in right of payment, to the extent and in the manner provided in the Intercreditor Agreement, to the prior payment in full of all Designated Senior Debt of such Guarantor and that the subordination is for the benefit of and enforceable by the holders of such Designated Senior Debt against such Guarantor. Each Holder, by accepting a Note, shall be deemed to have agreed to and accepted the terms and conditions of the Intercreditor Agreement (including the limitations on enforcement and the obligations to turnover contained therein). A copy of the Intercreditor Agreement shall be available on any Business Day upon prior written request at the offices of the Trustee. The obligations hereunder with respect to a Guarantor shall in all respects rank paripassu with all other Pari Passu Indebtedness of such Guarantor and shall rank senior to all existing and future Subordinated Indebtedness of such Guarantor.
 
Each Holder by purchasing or accepting a Note waives any and all notice of the creation, modification, renewal, extension or accrual of any Designated Senior Debt of the Guarantors and notice of or proof of reliance by any holder or owner of Designated Senior Debt of the Guarantors upon this Article Twelve and the Designated Senior Debt of the Guarantors shall conclusively be deemed to have been created, contracted or incurred in reliance upon this Article Twelve, and all dealings between the Guarantors and the holders and owners of the Designated Senior Debt of the Guarantors shall be deemed to have been consummated in reliance upon this Article Twelve.
 
Section 12.02                                 Obligations of the Guarantors Unconditional. Subject to the Intercreditor Agreement, nothing contained in this Article Twelve or elsewhere in this Indenture or in the Guarantees is intended to or shall impair, as between the Guarantors and the Holders, the Obligation of the Guarantors, which is absolute and unconditional, to pay to the Holders all amounts due and payable under the Guarantees as and when the same shall become due and payable in accordance with their terms, or is intended to or shall affect the relative rights of the Holders and creditors of the Guarantors other than the holders of the Designated Senior Debt, nor shall anything herein or therein prevent the Trustee, the Security Agent or any Holder from exercising all remedies otherwise permitted by applicable law upon default under this Indenture, subject to this Article Twelve and the Intercreditor Agreement. Upon any payment or distribution of assets of any Guarantor referred to in this Article Twelve, the Trustee, subject to the pro-visions of Sections 7.01 and 7.02, and the Holders shall be entitled to rely upon any order or decree made by any court of competent jurisdiction in which any liquidation, dissolution, winding up or reorganization proceedings are pending, or a certificate of the receiver, trustee in bankruptcy, liquidating trustee or agent or other Person making any payment or distribution to the Trustee or to the Holders for the purpose of ascertaining the Persons entitled to participate in such payment or distribution, the holders of Designated Senior Debt and other Indebtedness of any Guarantor, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article Twelve. Nothing in this Article Twelve shall apply to the claims of, or payments to, the Trustee under or pursuant to Section 7.07. The Trustee shall be entitled to rely on the delivery to it of a written notice by a Person representing himself or itself to be a holder of any Designated Senior Debt (or a trustee on behalf of, or other representative of, such holder) to establish that such notice has been given by a holder of such Designated Senior Debt or a trustee or representative on behalf of any such holder.
 
In the event that the Trustee determines in good faith that any evidence is required with respect to the right of any Person as a holder of Designated Senior Debt to participate in any payment or distribution pursuant to this Article Twelve, the Trustee may request such Person to furnish evidence to the satisfaction of the Trustee as to the amount of Designated Senior Debt held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and any other facts pertinent to the rights of such Person under this Article Twelve, and if such evidence is not furnished, the Trustee may defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment.
 
Section 12.03                                 Intentionally Omitted.
 


Section 12.04                                 Application by Trustee of Assets Deposited with It. U.S. Legal Tender, U.S. Government Obligations, Euro or Euro Obligations deposited in trust with the Trustee pursuant to and in accordance with Sections 8.01 and 8.02 shall be for the sole benefit of Holders of the Notes and, to the extent allocated for the payment of Notes, shall not be subject to the subordination provisions of this Article Twelve. Otherwise, any deposit of assets or securities by or on behalf of a Guarantor with the Trustee or any Paying Agent for payment of the Guarantees shall be subject to the provisions of this Article Twelve. Nothing contained in this Section 12.04 shall limit the right of the holders of Designated Senior Debt to recover payments as contemplated by this Article Twelve.
 
Section 12.05                                 Holders Authorize Trustee To Effectuate Subordination of Guarantee and IntercreditorAgreement. Each Holder of a Note, by his acceptance thereof, authorizes and expressly directs the Trustee on his behalf to take such action, at all times subject to the Intercreditor Agreement, as may be necessary or appropriate to effect the subordination provisions contained in this Article Twelve and the Intercreditor Agreement, and appoints the Trustee as his attorney-in-fact for such purpose, including, in the event of any liquidation, dissolution, winding up, reorganization, assignment for the benefit of creditors or marshaling of assets of any Guarantor tending towards liquidation or reorganization of the business and assets of any Guarantor, the immediate filing of a claim for the unpaid balance under its or his Guarantee Obligations in the form required in said proceedings and cause said claim to be approved. If the Trustee does not file or procure that the Security Agent files a proper claim or proof of debt in the form required in such proceeding prior to 30 days before the expiration of the time to file such claim or claims, then any of the holders of the Designated Senior Debt or their representative is hereby authorized to file an appropriate claim for and on behalf of the Holders of said Guarantee Obligations.
 
Section 12.06                                 Right of Trustee To Hold Designated Senior Debt. The Trustee shall be entitled to all of the rights set forth in this Article Twelve in respect of any Designated Senior Debt at any time held by it to the same extent as any other holder of Designated Senior Debt, and nothing in this Indenture shall be construed to deprive the Trustee of any of its rights as such holder.
 
Section 12.07                                 No Suspension of Remedies. The failure to make a payment on account of principal of or interest on the Notes by reason of any provision of this Article Twelve shall not be construed as preventing the occurrence of a Default or an Event of Default under Section 6.01.
 
Nothing contained in this Article Twelve shall limit the right of the Trustee or the Holders of Notes to take any action to accelerate the maturity of the Notes pursuant to Article Six or to pursue any rights or remedies here-under or under applicable law, subject to the rights, if any, under this Article Twelve or the Intercreditor Agreement of the holders, from time to time, of Designated Senior Debt.
 
Section 12.08                                 No Fiduciary Duty of Trustee to Holders of Designated Senior Debt. The Trustee shall not, and shall not be deemed to, owe any fiduciary duty to the holders of Designated Senior Debt, and it undertakes to perform or observe such of its covenants and obligations as are specifically set forth in this Article Twelve and the Intercreditor Agreement, and no implied covenants or obligations with respect to the Designated Senior Debt shall be read into this Indenture against the Trustee. The Trustee shall not be liable to any such holders (other than for its willful misconduct or negligence) if it shall pay over or deliver to the Holders of Notes or the Company or any other Person, money or assets in compliance with the terms of this Indenture and the Intercreditor Agreement.
 
ARTICLE THIRTEEN
 
COLLATERAL SECURITY DOCUMENTS AND THE SECURITY AGENT
 
Section 13.01                                 Collateral and Security Documents.
 
(a)            The obligations of the Company under the Notes shall be secured on a second-priority basis, by a pledge of the High Yield Proceeds Loan and on a second-priority basis, by a pledge of 100% of the shares of Nell Funding S.à.r.l. (the "Nell Pledged Shares"). The share pledge in respect of the Nell Pledged Shares is referred to as the "Share Pledge". The pledge agreement in respect of the High Yield Proceeds Loan is referred to as the "HighYield Proceeds Loan Pledge Agreement" and, together with the Share Pledge, the "Security Documents".
 


(b)            Each of the Company, the Guarantors, the Trustee and the Holders agree that the Security Agent shall be the joint creditor (together with the Holders) of each and every obligation of the parties hereto under the Notes and this Indenture, and that accordingly the Security Agent shall have its own independent right to demand performance by the Company or the relevant Guarantor, as applicable, of those obligations, except that such demand shall only be made with the prior written consent of the Trustee or as otherwise permitted under the Intercreditor Agreement. However, any discharge of such obligation to the Security Agent, on the one hand, or to the Trustee or the Holders, as applicable, on the other hand, shall, to the same extent, discharge the corresponding obligation owing to the other.
 
(c)            The Security Agent agrees that it shall hold the security interests in Collateral created under any Security Documents to which it is a party as contemplated by this Indenture and the Intercreditor Agreement, and any and all proceeds thereof, for the benefit of, among others, the Trustee and the Holders, without limiting the Security Agent's rights including under Section 13.02, to act in preservation of the security interest in the Collateral. The Security Agent shall take action or refrain from taking action in connection therewith only as directed by the Trustee, subject to the terms of the Intercreditor Agreement.
 
(d)            Each Holder, by accepting a Note, shall be deemed (i) to have authorized the Security Agent to enter into the Security Documents and (ii) to have authorised the Trustee and the Security Agent to enter into the Inter-creditor Agreement and (iii) to be bound thereby. Each Holder of Notes, by accepting a Note, appoints the Security Agent as its agent under the Security Documents and the Intercreditor Agreement and the Trustee as trustee pursuant to the Intercreditor Agreement and authorizes it to act as such. The claims of Holders shall be subject to the Inter-creditor Agreement.
 
(e)            The Holders may only act to enforce the Security Documents through the Security Agent acting on the instructions of the Trustee. The Holders may only act to enforce the Intercreditor Agreement through the Trustee or the Security Agent as the case may be. The affirmative vote of a majority in principal amount of the then out-standing Notes of each series affected thereby shall be required in order for the Security Agent to enforce the Security Documents or the Trustee or the Security Agent to enforce or direct the enforcement, as the case may be, of the Intercreditor Agreement. The Trustee shall procure that the Security Agent agrees to any release of the security interest created by the Security Documents that is in accordance with this Indenture without requiring any consent of the Holders.
 
(f)            Any instructions received by the Security Agent hereunder shall be subject to the Intercreditor Agreement.
 
Section 13.02                                 Suits To Protect the Collateral.
 
Subject to the provisions of the Security Documents and the Intercreditor Agreement, the Security Agent shall have power to institute and to maintain such suits and proceedings as it may deem expedient to prevent any impairment of the Collateral by any acts which may be unlawful or in violation of any of the Security Documents or this Indenture upon the instructions of the Trustee, and such suits and proceedings as the Security Agent is directed upon the instruction of the Trustee to preserve or protect the security interests in the Collateral created under the Security Documents (including power to institute and maintain suits or proceedings to restrain the enforcement of or compliance with any legislative or other governmental enactment, rule or order that may be unconstitutional or otherwise invalid if the enforcement of, or compliance with, such enactment, rule or order would impair the Lien on the Collateral or be prejudicial to the interests of the Holders or the Trustee). Notwithstanding any other provision of this Indenture, neither the Trustee nor the Security Agent has any responsibility for the validity, perfection, priority or enforceability of the Lien on the Collateral or other security interest and the Trustee and the Security Agent shall have no obligation to take (or, in the case of the Trustee, direct the Security Agent to take) any action to procure or maintain such validity, perfection, priority or enforceability.
 
Section 13.03                                 Resignation and Replacement of Security Agent.
 
Any resignation or replacement of, the Security Agent shall be made in accordance with the Intercreditor Agreement.
 


Section 13.04                                 [Intentionally Omitted].
 
Section 13.05                                 Release of the Lien on the Collateral.
 
Subject to the terms of the Intercreditor Agreement, the Lien on the Collateral created by the Security Documents shall be released (a) so long as there is no Event of Default outstanding under this Indenture, in the event and for so long as all holders of Designated Senior Debt (including the lenders under the Senior Secured Credit Facilities) have released their Lien on the applicable Collateral or (b) following an Event of Default under this Indenture, pursuant to an Enforcement Sale in accordance with the Intercreditor Agreement. In addition, the Collateral shall be released in accordance with the Intercreditor Agreement or if the applicable Subsidiary of which such Capital Stock is pledged is redesignated as an Unrestricted Subsidiary in compliance with Section 4.06. The Security Agent shall agree to any release of the Collateral that is in accordance with this Indenture and the Intercreditor Agreement without requiring any Holder consent. In all cases the Company and such Guarantors that are to be re-leased from the Security Documents shall deliver to the Security Agent and the Trustee an Officer's Certificate and an Opinion of Counsel certifying compliance with this Section 13.05. At the request of the Company, the Security Agent shall execute and deliver an appropriate instrument evidencing such release (in the form provided by the Company). The Collateral will also be released by the Security Agent upon the instruction of the Trustee upon the occurrence of Legal Defeasance or Covenant Defeasance in accordance with Article Eight or upon the full and final payment of all the obligations of the Company under the Notes.
 
Section 13.06                                 [Intentionally Omitted].
 
Section 13.07                                 Conflicts.
 
Each of the Company, the Guarantors, the Trustee and the Holders acknowledge and agree that the Security Agent is acting as security agent and trustee not just on their behalf but also on behalf of the creditors named in the Intercreditor Agreement and acknowledge and agree that pursuant to the terms of the Intercreditor Agreement, the Security Agent may be required by the terms thereof to act in a manner which may conflict with the interests of the Company, the Guarantors, the Trustee and the Holders (including the Holders' interests in the Collateral and the Guarantees) and that it shall be entitled to do so in accordance with the terms of the Intercreditor Agreement.
 
ARTICLE FOURTEEN
 
MISCELLANEOUS
 
Section 14.01                                 [Intentionally Omitted].
 
Section 14.02                                 Notices. Any notices or other communications required or permitted hereunder shall be in writing, and shall be sufficiently given if made by hand delivery, by telex, by telecopier or registered or certified mail, postage prepaid, return receipt requested, addressed as follows:
 
if to the Company or any Guarantor:
 
Nell AF S.à.r.l. c/o Citadel Administration
15-17 Avenue Gaston Diderich
1420 Luxembourg
Attention: Simon Baker
e-mail: swb@citadel.lu


if to the Trustee:
 
The Bank of New York
One Canada Square
48'h Floor
London E14 5AL
England
Attention: Global Trust Services (Global Structured Finance)

The Company, the Guarantors and the Trustee by written notice to each other may designate additional or different addresses for notices. Any notice or communication to the Company, the Guarantors or the Trustee shall be deemed to have been given or made as of the date so delivered if personally delivered; when answered back, if telexed; when receipt is acknowledged, if faxed; and five (5) calendar days after mailing if sent by registered or certified mail, postage prepaid (except that a notice of change of address shall not be deemed to have been given until actually received by the addressee).
 
As long as the Securities are listed on the Irish Stock Exchange and notice is required by the rules of the Irish Stock Exchange, such notice shall be sufficiently given by publication of such notice to Holders of the Securities in English in a leading newspaper having general circulation in Ireland or, if such publication is not practicable, in one other leading English language daily newspaper with general circulation in Europe, such newspaper being published on each business day in morning editions, whether or not it shall be published in Saturday, Sunday or holiday editions.
 
Any notice or communication mailed to a Holder shall be mailed to him by first class mail or other equivalent means at his address as it appears on the registration books of the Registrar and shall be sufficiently given to him if so mailed within the time prescribed.
 
Failure to mail a notice or communication to a Noteholder or any defect in it shall not affect its sufficiency with respect to other Holders. If a notice or communication is mailed in the manner provided above, it is duly given, whether or not the addressee receives it.
 
Section 14.03                                 [Intentionally Omitted].
 
Section 14.04 Certificate and Opinion as to Conditions Precedent. Upon any request or application by the Company or the Guarantors to the Trustee to take any action under this Indenture, the Company shall furnish to the Trustee:
 
(1)            an Officer's Certificate, in form and substance satisfactory to the Trustee, stating that, in the opinion of the signers, all conditions precedent to be performed by the Company, if any, provided for in this Indenture relating to the proposed action have been complied with; and
 
(2)            an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee stating that, in the opinion of such counsel, all such conditions precedent to be performed by the Company, if any, provided for in this Indenture relating to the proposed action have been complied with.
 
Section 14.05 Statements Required in Certificate or Opinion. Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture, other than the Officer's Certificate required by Section 4.07, shall include:
 
(1)            condition;
 
a statement that the Person making such certificate or opinion has read such covenant or
 
(2)            a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;
 


(3)            a statement that, in the opinion of such Person, he has made such examination or investigation as is reasonably necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and
 
(4)            a statement as to whether or not, in the opinion of each such Person, such condition or covenant has been complied with.
 
Section 14.06                                 Rules by Trustee, Paying Agent, Registrar. The Trustee may make reasonable rules in accordance with the Trustee's customary practices for action by or at a meeting of Holders. The Paying Agent or Registrar may make reasonable rules for its functions.
 
Section 14.07                                 Legal Holidays. If a payment date under this Indenture is not a Business Day, payment may be made at such place on the next succeeding day that is a Business Day, and no interest shall accrue for the intervening period.
 
Section 14.08                                 Governing Law. THIS INDENTURE, THE NOTES AND THE GUARANTEES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. Each of the parties hereto agrees to submit to the non-exclusive jurisdiction of the competent courts of the State of New York in any action or proceeding arising out of or relating to this Indenture or the Notes.
 
Section 14.09                                 No Adverse Interpretation of Other Agreements. This Indenture may not be used to interpret another indenture, loan or debt agreement of the Company or any of its Subsidiaries. Any such indenture, loan or debt agreement may not be used to interpret this Indenture. In the event of any inconsistency between the provisions of this Indenture and the Intercreditor Agreement, the Intercreditor Agreement shall prevail.
 
Section 14.10                                 No Recourse Against Others. A director, officer, employee, promoter, advisor, incorporator, or shareholder, as such, of the Company, the Trustee, Security Agent or any Guarantor, past, present or future, shall not have any liability in such capacity for any obligations of the Company under the Notes, this Indenture or the Security Documents or of such Guarantor under its Guarantee, this Indenture or the Security Documents for any claim based on, in respect of or by reason of such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. Such waiver and release are part of the consideration for the issuance of the Notes.
 
Section 14.11                                 Successors. All agreements of the Company in this Indenture and the Notes shall bind its successors. All agreements of the Trustee in this Indenture shall bind its successors.
 
Section 14.12                                 Agent for Service; Submission to Jurisdiction; Waiver of Immunity.
 
(a)            By the execution and delivery of this Indenture, the Company and the Guarantors that are not incorporated or otherwise organized under the laws of any State (including the District of Columbia) of the United States (A) acknowledge that they will, by separate written instrument, designate and appoint Basell Finance USA, Inc. (and any successor entity) as their authorized agent upon which process may be served in any suit or proceeding arising out of or relating to this Indenture that may be instituted in any Federal or state court in the State of New York, New York County or brought under Federal or state securities laws, and acknowledge that Basell Finance USA, Inc. will accept such designation, (B) submit for themselves and their property to the non exclusive jurisdiction of any such court in any such suit or proceeding, (C) consent that any such proceeding may be brought in any such court and waives trial by jury and any objection that any of them may now or hereafter have to the venue of any such proceeding in any such court or that such proceeding was brought in any inconvenient court and agrees not to plead or claim the same, (D) agree that service of process upon Basell Finance USA, Inc. and written notice of said service to the Company and such Guarantors in accordance with Section 14.02 shall be deemed in every respect effective service of process upon the Company and such Guarantors in any such suit or proceeding and (E) agree that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in any other jurisdiction.
 
(b)            To the extent that the Company or any Guarantor may be entitled, in any jurisdiction in which judicial proceedings may at any time be commenced with respect to or arising out of this Indenture, to claim for itself or its revenues, assets or properties immunity (whether by reason of sovereignty or otherwise)
 


from suit, from the jurisdiction of any court (including but not limited to any court of the United States of America or the State of New York), from attachment prior to judgment, from set-off, from execution of a judgment or from any other legal process, and to the extent that in any such jurisdiction there may be attributed such an immunity (whether or not claimed), the Company or such Guarantor hereby irrevocably agrees not to claim and hereby irrevocably waives such immunity to the extent permitted by law.
 
Section 14.13                                 Duplicate Originals. All parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together shall represent the same agreement.
 
Section 14.14                                 Severability. In case any one or more of the provisions in this Indenture or in the Notes shall be held invalid, illegal or unenforceable, in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions shall not in any way be affected or impaired thereby, it being intended that all of the provisions hereof shall be enforceable to the full extent permitted by law.
 
Section 14.15                                 Independence of Covenants. All covenants and agreements in this Indenture and the Notes shall be given independent effect so that if any particular action or condition is not permitted by any of such covenants, the fact that it would be permitted by an exception to, or otherwise be within the limitations of, another covenant shall not avoid the occurrence of a Default or an Event of Default if such action is taken or condition exists.
 
[Remainder of Page Intentionally Left Blank]
 


IN WITNESS WHEREOF, the parties hereto have caused this Indenture to he duly executed, all as of the date first written above.
 

NELL AF S.À.R.L.


By:          /s/ Alejandro Moreno
Name: Alejandro Moreno
Title: Attorney-in-Fact


NELL FUNDING S.À.R.L.


By:           /s/ Alejandro Moreno
Name: Alejandro Moreno
Title: Attorney-in-Fact


NELL BIDCO B.V.


By:          /s/ Alejandro Moreno
Name: Alejandro Moreno
Title: Attorney-in-Fact


NELL US ACQUISITION S.À.R.L.


By:          /s/ Alejandro Moreno
Name: Alejandro Moreno
Title: Attorney-in-Fact


NELL ACQUISITION (US) LLC


By:          /s/ Alejandro Moreno
Name: Alejandro Moreno
Title: Attorney-in-Fact


BASELL FINANCE USA INC.


By:          /s/ F. Svelto                                                      
Name: F. Svelto
Title: Attorney


BASELL NORTH AMERICA INC..


By:          /s/ F. Svelto                                                      
Name: F. Svelto
Title: Attorney


BASELL USA INC.


By:          /s/ F. Svelto                                                      
Name: F. Svelto
Title: Attorney


SIGNATURES

IN WITNESS WHEREOF. the parties hereto have caused this Indenture to be duly executed all as of the date first written above.

NELL AF S.À.R.L.


By:                                                                
Name:
Title:

NELL FUNDING S.À.R.L.
NELL BIDCO B.V.
NELL US ACQUISITION S.À.R.L.
NELL ACQUISITION (US) LLC
BASELL FINANCE USA INC.
BASELL NORTH AMERICA INC..
BASELL USA INC.


By:                                                                
Name:
Title:


THE BANK OF NEW YORK, as Trustee, Registrar,
Paying Agent, Transfer Agent and Listing Agent

By:            /s/ Charlotte Fricker                                                                
Name: Charlotte Fricker
Title: Assistant Vice President


ABN AMRO BANK, N.V., as Security Agent

By:            /s/ (illegible)                                                                
Name:
Title:


AIB/BNY FUND MANAGEMENT (IRELAND)
LIMITED, as Irish Paying Agent

By:            /s/ Charlotte Fricker                                                                
Name: Charlotte Fricker
Title: Assistant Vice President






S-1

EXHIBIT A-1

[FORM OF RESTRICTED DOLLAR NOTE]

THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT") AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A)(1) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (4) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR (B) PURSUANT TO AN-OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

A-1-

NELL AF S.À.R.L.

8-3/8%% Senior Note due 2015

No. [  ]
$ [ ]                                                                                                 CUSIP No. L67302AA4
64016AAA3

NELL AF S.À.R.L., a Luxembourg entity (the "Company"), for value received, promises to pay to [ ] or registered assigns, the principal sum of $[  ], on August 15, 2015.

Interest Payment Dates:  August 15 and February 15

Record Dates:  August 1 and February 1

Reference is made to the further provisions of this Note contained herein, which will for all purposes have the same effect as if set forth at this place.

IN WITNESS WHEREOF, the Company has caused this Note to be signed manually or by facsimile by its duly authorized officer.

Dated:                       [ ]


NELL AF S.À.R.L.


By:                                                                
Name:
Title:

A-1-

CERTIFICATE OF AUTHENTICATION

This is one of the 8-3/8% Senior Notes due 2015 referred to in the within-mentioned Indenture.

Dated: [ ]


THE BANK OF NEW YORK, as authentication agent


By:                                                                
Authorized Signature

A-1-

(REVERSE OF DOLLAR NOTE)

8-3/8% Senior Note due 2015

1.            Interest. NELL AF S.À.R.L., a Luxembourg entity (the "Company"), promises to pay interest on the principal amount of this Dollar Note at the rate per annum shown above. Interest on the Dollar Notes will accrue from the most recent date on which interest has been paid or, if no interest has been paid, from August 10, 2005.1 The Company will pay interest semi-annually in arrears on each August 15 and February 15 (each, an "InterestPayment Date") and at stated maturity, commencing on February 15, 2006.2 Interest will be computed on the basis of a 360-day year comprized of twelve 30-day months.
 
The Company shall pay interest on overdue principal and on overdue installments of interest from time to time on demand at the rate borne by the Dollar Notes (without regard to any applicable grace periods) to the extent lawful.
 
2.            Method of Payment. The Company shall pay interest on the Dollar Notes (except defaulted interest) to the Persons who are the registered Holders at the close of business on the Record Date immediately preceding the Interest Payment Date even if the Dollar Notes are cancelled on registration of transfer or registration of ex-change after such Record Date. Holders must surrender Dollar Notes to a Paying Agent to collect principal payments. The Company shall pay principal, premium and interest in money of the United States that at the time of payment is legal tender for payment of public and private debts ("U.S.Legal Tender"). However, the Company may pay principal, premium and interest by its check payable in such U.S. Legal Tender. The Company may deliver any such interest payment to the Paying Agent or to a Holder at the Holder's registered address.
 
3.            Paying Agent and Registrar. Initially, The Bank of New York (the "Trustee") will act as Paying Agent and Registrar. The Company may change any Paying Agent, Registrar or co-Registrar without notice to the Holders. The Company or any of its Subsidiaries may, subject to certain exceptions, act as Registrar or co-Registrar.
 
4.            Indenture. The Company issued the Dollar Notes under an Indenture, dated as of August 10, 2005 (the "Indenture"), among the Company, each of the Guarantors named therein, The Bank of New York as trustee, registrar, paying agent, transfer agent and listing agent (the "Trustee"), ABN AMRO Bank N.V., as security agent (the "Security Agent"), and AIBBNY Fund Management (Ireland) Limited. This Dollar Note is one of a duly authorized issue of Dollar Notes of the Company designated as its dollar denominated 8-3/8% Senior Notes due 2015 (the "Dollar Notes"), which may be issued under the Indenture. The Company shall be entitled to issue Additional Notes pursuant to Section 2.18 of the Indenture. The Dollar Notes and the Company's euro denominated 8-3/8% Senior Notes due 2015 (the "Euro Notes" and, together with the Dollar Notes, the "Notes") and any Additional Notes issued in accordance with the Indenture are treated as a single class of securities under the Indenture unless otherwise specified in the Indenture. Capitalized terms used herein shall have the meanings assigned to them in the Indenture unless otherwise defined herein.
 
The terms of the Notes include those stated in the Indenture. Notwithstanding anything to the contrary herein, the Notes are subject to all such terms, and Holders of Notes are referred to the Indenture for a statement of them. The Notes are senior obligations of the Company.
 
_____________________
 
1            In the case of Initial Notes.
2            In the case of Initial Notes.

A-1-

5.            Optional Redemption. (a) The Dollar Notes will be redeemable, at the- Company's option, in whole at any time or in part from time to time, on and after August 15, 2010, upon not less than 30 nor more than 60 days' notice, at the following redemption prices (expressed as percentages of the principal amount thereof) if re-deemed during the twelve-month period commencing on August 15 of the year set forth below, plus, in each case, accrued and unpaid interest thereon, if any, to the date of redemption:
 

Year
Percentage
2010
104.250%
2011
102.833%
2012
101.417%
2013 and thereafter
100.000%

 
(b)            At any time, or from time to time, prior to August 15, 2008, the Company may, at its option, use the net cash proceeds of one or more Equity Offerings (as defined below) to redeem up to 35% of the aggregate principal amount of Dollar Notes originally issued (including the original principal amount of any Additional Dollar Notes) at a redemption price equal to 108.375% of the principal amount thereof plus accrued and unpaid interest thereon, if any, to the date of redemption; provided,however, that at least 65% of the aggregate principal amount of the Dollar Notes originally issued remain (including the principal amount of any Additional Dollar Notes) out-standing immediately after any such redemption. In order to effect the foregoing redemption with the proceeds of any Equity Offering, the Company shall make such redemption not more than 120 days after the consummation of any such Equity Offering.
 
(c)            At any time prior to August 15, 2010, the Dollar Notes may be redeemed, in whole or in part at the option of the Company, upon not less than 30 nor more than 60 days' notice, at a redemption price equal to 100.000% of the principal amount thereof plus the Applicable Premium and accrued and unpaid interest to, but not including, the applicable redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date).
 
(d)            The Notes are also redeemable for taxation reasons, as provided in Section 3.07 of the Indenture.
 
6.            Notice of Redemption. Notice of redemption will be mailed at least 30 days but not more than 60 days before the Redemption Date to each Holder whose Dollar Notes are to be redeemed at such Holder's registered address, except as provided in the Indenture. No Dollar Notes of $1,000 or less shall be redeemed in part; provided that no Dollar Notes shall be redeemed in part if the resulting Dollar Note would have a minimum denomination that is less than $75,000.
 
7.            Change of Control Offer. In the event of a Change of Control, upon the satisfaction of the conditions set forth in the Indenture, the Company shall be required to offer to repurchase all of the then outstanding Notes pursuant to a Change of Control Offer at a purchase price equal to 101% of the principal amount thereof plus accrued and unpaid interest, if any, to the date of purchase. Holders of Notes that are the subject of such an offer to repurchase shall receive an offer to repurchase and may elect to have such Notes repurchased in accordance with the provisions of the Indenture pursuant to and in accordance with the terms of the Indenture.
 
8.            Limitation on Asset Sales. Under certain circumstances set forth in Section 4.15 of the Indenture, the Company is required to apply the net proceeds from Asset Sales to offer to repurchase the Notes at a price equal to 100% of the principal amount thereof plus accrued and unpaid interest thereon, if any, to the date of repurchase.
 
9.            Denominations; Transfer; Exchange. The Dollar Notes are in fully registered form only, without coupons, in denominations of $75,000 and integral multiples of $1,000. A Holder shall register the transfer or ex-change of Notes in accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and to pay certain transfer taxes or similar governmental charges payable in connection therewith as permitted by the Indenture. The Registrar need not register the transfer or exchange of any Notes during a period beginning 15 days before the mailing of a redemption notice for any Notes or portions thereof selected for redemption.
 

A-1-

10.            Persons Deemed Owners. The registered Holder of a Note shall be treated as the owner of it for all purposes.
 
11.            Unclaimed Money. If money for the payment of principal or interest remains unclaimed for one year, the Trustee and the Paying Agent will pay the money back to the Company. After that, all liability of the Trustee and such Paying Agent with respect to such money shall cease.
 
12.            Discharge Prior to Redemption or Maturity. If the Company at any time deposits with the Trustee U.S. Legal Tender or non-callable U.S. Government Obligations sufficient to pay the principal of, premium and interest on the Dollar Notes to redemption or maturity and complies with the other provisions of the Indenture relating thereto, the Company will be discharged from certain provisions of the Indenture and the Dollar Notes (including certain covenants, but excluding its obligation to pay the principal of, premium and interest on the Dollar Notes).
 
13.            Amendment; Supplement; Waiver. The Indenture or the Notes may be amended or supplemented as provided in the Indenture.
 
14.            Restrictive Covenants. The Indenture imposes certain limitations on the ability of the Company and its Subsidiaries to, among other things, incur additional Indebtedness, pay dividends or make certain other restricted payments, enter into transactions with Affiliates, create dividend or other payment restrictions affecting Restricted Subsidiaries and merge or consolidate with any other Person, sell, assign, transfer, lease, convey or other-wise dispose of all or substantially all of its assets or adopt a plan of liquidation. Such limitations are subject to a number of important qualifications and exceptions. The Company must annually report to the Trustee on compliance with such limitations.
 
15.            Successors. When a successor assumes, in accordance with the Indenture, all the obligations of its predecessor under the Notes and the Indenture, the predecessor will be released from those obligations.
 
16.            Defaults and Remedies. If an Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then outstanding Notes (including any Additional Notes) may declare all the Notes to be due and payable in the manner, at the time and with the effect provided in the Indenture. Holders of Notes may not direct the Trustee to enforce the Indenture or the Notes except as provided in the Indenture. The Trustee is not obligated to direct the Security Agent to enforce the Indenture or the Notes unless it has been offered indemnity and/or security satisfactory to it. The Indenture permits, subject to certain limitations therein provided and in the Intercreditor Agreement, Holders of a majority in aggregate principal amount of the Notes (including any Additional Notes) then outstanding to direct the Trustee in its exercise of any trust or power. The Trustee may with-hold from Holders of Notes notice of any continuing Default or Event of Default (except a Default in payment of principal or interest) if it determines in good faith that withholding notice is in their interest.
 
17.            Trustee Dealings with Company. The Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Notes and may otherwise deal with the Company, its Restricted and Unrestricted Subsidiaries or their respective Affiliates as if it were not the Trustee.
 
18.            No Recourse Against Others. A past, present or future director, officer, employee, promoter, advisor, incorporator, or shareholder, as such, of the Company, the Trustee, Security Agent or any Guarantor shall not have any liability in such capacity for any obligations of the Company under the Notes, the Indenture or the Security Documents or of such Guarantor under its Guarantee, the Indenture or the Security Documents for any claim based on, in respect of or by reason of such obligations or their creation. Each Holder of a Note by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for the issuance of the Notes.
 
19.            Authentication. This Note shall not be valid until the Trustee or authenticating agent manually signs the certificate of authentication on this Note.
 
20.            Governing Law. This Note shall be governed by, and construed in- accordance with, the laws of the State of New York.
 

A-1-

21.            Abbreviations and Defined Terms. Customary abbreviations may be- used in the name of a Holder of a Note or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
 
22.            CUSIP/ISIN Numbers. The Company may cause CUSIP and/or ISIN numbers to be printed on the Notes as a convenience to the Holders of the Notes. No representation is made as to the accuracy of such numbers as printed on the Notes and reliance may be placed only on the other identification numbers printed hereon.
 
23.            Indenture. Each Holder, by accepting a Note, agrees to be bound by all of the terms and provisions of the Indenture and the Intercreditor Agreement, as the same may be amended from time to time. Capitalized terms used herein and not defined herein have the meanings ascribed thereto in the Indenture
 
24.            Guarantees. This Note will be entitled to the benefits of certain senior subordinated Guarantees made for the benefit of the Holders. Reference is hereby made to the Indenture and the Intercreditor Agreement for a statement of the respective rights, limitations of rights, duties and obligations thereunder of the Guarantors, the Trustee and the Holders.
 
The Company will furnish to any Holder of a Note upon written request and without charge a copy of the Indenture. Requests may be made to: NELL AF S.À.R.L., c/o MeesPierson Intertrust B.V., Rokin 55, 1012, KK Amsterdam, The Netherlands, attention: Magali van Overbeke (e-mail: magali.van.overbeke@meespiersonintertrust.com).
 

A-1-

[FORM OF ASSIGNMENT]

I or we assign to


PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER


(please print or type name and address)

the within Note and all rights thereunder, and hereby irrevocably constitutes and appoints:


attorney to transfer the Note on the books of the Company with full power of substitution in the premises.


Dated:                                                                 Signed:
NOTICE: The signature on this assignment must correspond with the name as it appears upon the face of the within Note in every particular without alteration or enlargement or any change whatsoever and be guaranteed by the endorser's bank or broker.

Signature Guarantee:                                                                                                


In connection with any transfer of this Note occurring prior to the date of the declaration by the Commission of the effectiveness of a registration statement under the Securities Act of 1933, as amended (the "Securities Act"), covering resales of this Note (which effectiveness shall not have been suspended or terminated at the date of the transfer) the undersigned confirms that it has not utilized any general solicitation or general advertising in connection with the transfer and that the sale is being made:
 
 
(1)
q
to the Company or a subsidiary thereof; or
 
 
(2)
q
pursuant to and in compliance with Rule 144A under the Securities Act of 1933, as amended; or
 
 
(3)
q
outside the United States to a "foreign purchaser" in compliance with Rule 904 of Regulation S under the Securities Act of 1933, as amended; or
 
 
(4)
q
pursuant to the exemption from registration provided by Rule 144 under the Securities Act of 1933, as amended; or
 
 
(5)
q
pursuant to an effective registration statement under the Securities Act of 1933, as amended; or
 
 
(6)
q
pursuant to another available exemption from the registration requirements of the Securities Act of 1933, as amended,
 
and, unless the box below is checked, the undersigned confirms that such Note is not being transferred to an "affiliate" of the Company as defined in Rule 144 under the Securities Act of 1933, as amended (an "Affiliate"):
 

A-1-

 
q
The transferee is an Affiliate of the Company.
 
Unless one of the items is checked, the Trustee will refuse to register any of the Notes evidenced by this certificate in the name of any person other than the registered Holder thereof; provided,however, that if item (3), (4) or (6) is checked, the Company or the Trustee may require, prior to registering any such transfer of the Notes, in their sole discretion, such written legal opinions, certifications (including an investment letter in the case of box (3)) and other information as the Trustee or the Company have reasonably requested to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act of 1933, as amended.
 
If none of the foregoing items are checked, the Trustee or Registrar shall not be obligated to register this Note in the name of any person other than the Holder hereof unless and until the conditions to any such transfer of registration set forth herein and in Section 2.16 of the Indenture shall have been satisfied.
 

 
Dated:                                                                 Signed:
(Sign exactly as name appears
on the other side of this Note)

 
Signature Guarantee:                                                                           
 

 
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
 
The undersigned represents and warrants that it is purchasing this Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a "qualified institutional buyer" within the meaning of Rule 144A under the Securities Act of 1933, as amended, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned's foregoing representations in order to claim the exemption from registration provided by Rule 144A.
 
Dated:                       __________                                                                           
NOTICE: To be executed by an
   executive officer

A-1-

OPTION OF HOLDER TO ELECT PURCHASE

If you want to elect to have this Note purchased by the Company pursuant to Section 4.14 or Section 4.15 of the Indenture, check the appropriate box:
 
Section 4.14 q                                            Section 4.15 q
 
If you want to elect to have only part of this Note purchased by the Company pursuant to Section 4.14 or Section 4.15 of the Indenture, state the amount: $
 
Date:                                 Your Signature:
(Sign exactly as name appears on the other side of this Note)

 

 
Signature Guarantee:
Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor program reasonably acceptable to the Trustee)


A-1-

EXHIBIT A-2
[FORM OF RESTRICTED EURO NOTE]

THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT") AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A)(1) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (4) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR (B) PURSUANT TO AN-OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

A-2-

NELL AF S.À.R.L.

8-3/8%% Senior Note due 2015

No. [  ]
$ [ ]                                                                                                 ISIN No. XS0226285699
XS0226286317

NELL AF S.À.R.L., a Luxembourg entity (the "Company"), for value received, promises to pay to [ ] or registered assigns, the principal sum of August 15, 2015.

Interest Payment Dates:  August 15 and February 15

Record Dates:  August 1 and February 1

Reference is made to the further provisions of this Note contained herein, which will for all purposes have the same effect as if set forth at this place.

IN WITNESS WHEREOF, the Company has caused this Note to be signed manually or by facsimile by its duly authorized officer.

Dated:                       [ ]


NELL AF S.À.R.L.


By:                                                                
Name:
Title:

A-2-

CERTIFICATE OF AUTHENTICATION

This is one of the 8-3/8% Senior Notes due 2015 referred to in the within-mentioned Indenture.

Dated: [ ]


THE BANK OF NEW YORK, as Registrar


By:                                                                
Authorized Signature

A-2-

(REVERSE OF EURO NOTE)
 
8-3/8% Senior Note due 2015
 
1.            Interest. NELL AF S.À.R.L., a Luxembourg entity (the "Company"), promises to pay interest on the principal amount of this Euro Note at the rate per annum shown above. Interest on the Euro Notes will accrue from the most recent date on which interest has been paid or, if no interest has been paid, from August 10, 2005.1 The Company will pay interest semi-annually in arrears on each August 15 and February 15 (each, an "InterestPayment Date") and at stated maturity, commencing on February 15, 2006.2 Interest will be computed on the basis of a 360-day year comprized of twelve 30-day months.
 
The Company shall pay interest on overdue principal and on overdue installments of interest from time to time on demand at the rate borne by the Euro Notes (without regard to any applicable grace periods) to the extent lawful.
 
2.            Method of Payment. The Company shall pay interest on the Euro Notes (except defaulted interest) to the Persons who are the registered Holders at the close of business on the Record Date immediately preceding the Interest Payment Date even if the Euro Notes are cancelled on registration of transfer or registration of exchange after such Record Date. Holders must surrender Euro Notes to a Paying Agent to collect principal payments. The Company shall pay principal, premium and interest on the Euro Notes in euro. However, the Company may pay principal, premium and interest by its check payable in euro. The Company may deliver any such interest payment to the Euro Paying Agent or to a Holder at the Holder's registered address.
 
3.            Paying Agent and Registrar. Initially, The Bank of New York, London Branch, will act as Paying Agent for the Euro Notes and Registrar for the Euro Notes. The Company may change any Paying Agent, Registrar or co-Registrar without notice to the Holders. The Company or any of its Subsidiaries may, subject to certain exceptions, act as Registrar or co-Registrar.
 
4.            Indenture. The Company issued the Euro Notes under an Indenture, dated as of August 10, 2005 (the "Indenture"), among the Company, each of the Guarantors named therein, The Bank of New York as trustee, registrar, paying agent, transfer agent and listing agent (the "Trustee"), ABN AMRO Bank N.V., as security agent (the "Security Agent"), and AIB/BNY Fund Management (Ireland) Limited. This Euro Note is one of a duly authorized issue of Euro Notes of the Company designated as its euro denominated 8-3/8% Senior Notes due 2015 (the "Euro Notes") which may be issued under the Indenture. The Company shall be entitled to issue Additional Notes pursuant to Section 2.18 of the Indenture. The Euro Notes and the Company's dollar denominated 8-3/8% Senior Notes due 2015 (the "Dollar Notes" and, together with the Euro Notes, the "Notes") and any Additional Notes is-sued in accordance with the Indenture are treated as a single class of securities under the Indenture unless otherwise specified in the Indenture. Capitalized terms used herein shall have the meanings assigned to them in the Indenture unless otherwise defined herein.
 
The terms of the Notes include those stated in the Indenture. Notwithstanding anything to the contrary herein, the Notes are subject to all such terms, and Holders of Notes are referred to the Indenture for a statement of them. The Notes are senior obligations of the Company.
 
5.            Optional Redemption. (a) The Euro Notes will be redeemable at the Company's option, in whole at any time or in part from time to time, on and after August 15, 2010, upon not less than 30 nor more than 60 days' notice, at the following redemption prices (expressed as percentages of the principal amount thereof) if redeemed
 
_____________________
 
1            In the case of Initial Notes.
2            In the case of Initial Notes.

A-2-

during the twelve-month period commencing on August 15 of the year set forth below, plus, in each case, accrued and unpaid interest thereon, if any, to the date of redemption:
 

Year
Percentage
2010
104.250%
2011
102.833%
2012
101.417%
2013 and thereafter
100.000%

 
(b)            At any time, or from time to time, prior to August 15, 2008, the Company may, at its option, use the net cash proceeds of one or more Equity Offerings (as defined below) to redeem up to 35% of the aggregate principal amount of Euro Notes originally issued (including the original principal amount of any Additional Euro Notes) at a redemption price equal to 108.375% of the principal amount thereof plus accrued and unpaid interest thereon, if any, to the date of redemption; provided,however, that at least 65% of the aggregate principal amount of the Euro Notes originally issued remain (including the principal amount of any Additional Euro Notes) outstanding immediately after any such redemption. In order to effect the foregoing redemption with the proceeds of any Equity Offering, the Company shall make such redemption not more than 120 days after the consummation of any such Equity Offering.
 
(c)            At any time prior to August 15, 2010, the Euro Notes may be redeemed, in whole or in part, at the option of the Company, upon not less than 30 nor more than 60 days' notice, at a redemption price equal to 100.000% of the principal amount thereof plus the Applicable Premium and accrued and unpaid interest to, but not including, the applicable redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date).
 
(d)            The Notes are also redeemable for taxation reasons, as provided in Section 3.07 of the Indenture.
 
6.            Notice of Redemption. Notice of redemption will be mailed at least 30 days but not more than 60 days before the Redemption Date to each Holder whose Euro Notes are to be redeemed at such Holder's registered address, except as provided in the Indenture. No Euro Notes of €1,000 or less shall be redeemed in part; provided that no Euro Notes shall be redeemed in part if the resulting Euro Note would have a minimum denomination that is less than €50,000.
 
7.            Change of Control Offer. In the event of a Change of Control, upon the satisfaction of the conditions set forth in the Indenture, the Company shall be required to offer to repurchase all of the then outstanding Notes pursuant to a Change of Control Offer at a purchase price equal to 101% of the principal amount thereof plus accrued and unpaid interest, if any, to the date of purchase. Holders of Notes that are the subject of such an offer to repurchase shall receive an offer to repurchase and may elect to have such Notes repurchased in accordance with the provisions of the Indenture pursuant to and in accordance with the terms of the Indenture.
 
8.            Limitation on Asset Sales. Under certain circumstances set forth in Section 4.15 of the Indenture, the Company is required to apply the net proceeds from Asset Sales to offer to repurchase the Notes at a price equal to 100% of the principal amount thereof plus accrued and unpaid interest thereon, if any, to the date of repurchase.
 
9.            Denominations; Transfer; Exchange. The Euro Notes are in fully registered form only, without coupons, in denominations of €50,000 and integral multiples of €1,000. A Holder shall register the transfer or ex-change of Notes in accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and to pay certain transfer taxes or similar governmental charges payable in connection therewith as permitted by the Indenture. The Registrar need not register the transfer or exchange of any Notes during a period beginning 15 days before the mailing of a redemption notice for any Notes or portions thereof selected for redemption.
 
10.            Persons Deemed Owners. The registered Holder of a Note shall be treated as the owner of it for all purposes.
 
11.            Unclaimed Money. If money for the payment of principal or interest remains unclaimed for one year, the Trustee and the Paying Agent will pay the money back to the Company. After that, all liability of the Trustee and such Paying Agent with respect to such money shall cease.
 
12.            Discharge Prior to Redemption or Maturity. If the Company at any time deposits with the Trustee euro or non-callable Euro Obligations sufficient to pay the principal of, premium and interest on the Euro Notes to redemption or maturity and complies with the other provisions of the Indenture relating thereto, the Company will be discharged from certain provisions of the Indenture and the Euro Notes (including certain covenants, but excluding its obligation to pay the principal of, premium and interest on the Euro Notes).
 
13.            Amendment; Supplement; Waiver. The Indenture or the Notes may be amended or supplemented as provided in the Indenture.
 
14.            Restrictive Covenants. The Indenture imposes certain limitations on the ability of the Company and its Subsidiaries to, among other things, incur additional Indebtedness, pay dividends or make certain other restricted payments, enter into transactions with Affiliates, create dividend or other payment restrictions affecting Restricted Subsidiaries and merge or consolidate with any other Person, sell, assign, transfer, lease, convey or other-wise dispose of all or substantially all of its assets or adopt a plan of liquidation. Such limitations are subject to a number of important qualifications and exceptions. The Company must annually report to the Trustee on compliance with such limitations.
 
15.            Successors. When a successor assumes, in accordance with the Indenture, all the obligations of its predecessor under the Notes and the Indenture, the predecessor will be released from those obligations.
 
16.            Defaults and Remedies. If an Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then outstanding Notes (including any Additional Notes) may declare all the Notes to be due and payable in the manner, at the time and with the effect provided in the Indenture Holders of Notes may not direct the Trustee to enforce the Indenture or the Notes except as provided in the Indenture. The Trustee is not obligated to direct the Security Agent to enforce the Indenture or the Notes unless it has been offered indemnity and/or security satisfactory to it. The Indenture permits, subject to certain limitations therein provided and in the Intercreditor Agreement, Holders of a majority in aggregate principal amount of the Notes (including any Additional Notes) then outstanding to direct the Trustee in its exercise of any trust or power. The Trustee may with-hold from Holders of Notes notice of any continuing Default or Event of Default (except a Default in payment of principal or interest) if it determines in good faith that withholding notice is in their interest.
 
17.            Trustee Dealings with Company. The Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Notes and may otherwise deal with the Company, its Restricted and Unrestricted Subsidiaries or their respective Affiliates as if it were not the Trustee.
 
18.            No Recourse Against Others. A past, present or future director, officer, employee, promoter, advisor, incorporator, or shareholder, as such, of the Company, the Trustee, Security Agent or any Guarantor shall not have any liability in such capacity for any obligations of the Company under the Notes, the Indenture or the Security Documents or of such Guarantor under its Guarantee, the Indenture or the Security Documents for any claim based on, in respect of or by reason of such obligations or their creation. Each Holder of a Note by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for the issuance of the Notes.
 
19.            Authentication. This Note shall not be valid until the Trustee or authenticating agent manually signs the certificate of authentication on this Note.
 
20.            Governing Law. This Note shall be governed by, and construed in accordance with, the laws of the State of New York.
 
21.            Abbreviations and Defined Terms. Customary abbreviations may be used in the name of a Holder of a Note or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), OUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
 
22.            CUSIP/ISIN Numbers. The Company may cause CUSIP and/or ISIN numbers to be printed on the Notes as a convenience to the Holders of the Notes. No representation is made as to the accuracy of such numbers as printed on the Notes and reliance may be placed only on the other identification numbers printed hereon.
 
23.            Indenture. Each Holder, by accepting a Note, agrees to be bound by all of the terms and provisions of the Indenture and the Intercreditor Agreement, as the same may be amended from time to time. Capitalized terms used herein and not defined herein have the meanings ascribed thereto in the Indenture.
 
24.            Guarantees. This Note will be entitled to the benefits of certain senior subordinated Guarantees made for the benefit of the Holders. Reference is hereby made to the Indenture and the Intercreditor Agreement for a statement of the respective rights, limitations of rights, duties and obligations thereunder of the Guarantors, the Trustee and the Holders.
 
The Company will furnish to any Holder of a Note upon written request and without charge a copy of the Indenture. Requests may be made to: NELL AF S.À.R.L., c/o MeesPierson Intertrust B.V., Rokin 55, 1012, KK Amsterdam, The Netherlands, attention: Magali van Overbeke (e-mail: magali.van.overbeke@meespiersonintertrust.com).
 

A-2-

[FORM OF ASSIGNMENT]

I or we assign to


PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER


(please print or type name and address)

the within Note and all rights thereunder, and hereby irrevocably constitutes and appoints:


attorney to transfer the Note on the books of the Company with full power of substitution in the premises.


Dated:                                                                 Signed:
NOTICE: The signature on this assignment must correspond with the name as it appears upon the face of the within Note in every particular without alteration or enlargement or any change whatsoever and be guaranteed by the endorser's bank or broker.

Signature Guarantee:                                                                                                


In connection with any transfer of this Note occurring prior to the date of the declaration by the Commission of the effectiveness of a registration statement under the Securities Act of 1933, as amended (the "Securities Act"), covering resales of this Note (which effectiveness shall not have been suspended or terminated at the date of the transfer) the undersigned confirms that it has not utilized any general solicitation or general advertising in connection with the transfer and that the sale is being made:
 
 
(1)
q
to the Company or a subsidiary thereof; or
 
 
(2)
q
pursuant to and in compliance with Rule 144A under the Securities Act of 1933, as amended; or
 
 
(3)
q
outside the United States to a "foreign purchaser" in compliance with Rule 904 of Regulation S under the Securities Act of 1933, as amended; or
 
 
(4)
q
pursuant to the exemption from registration provided by Rule 144 under the Securities Act of 1933, as amended; or
 
 
(5)
q
pursuant to an effective registration statement under the Securities Act of 1933, as amended; or
 
 
(6)
q
pursuant to another available exemption from the registration requirements of the Securities Act of 1933, as amended,
 
and, unless the box below is checked, the undersigned confirms that such Note is not being transferred to an "affiliate" of the Company as defined in Rule 144 under the Securities Act of 1933, as amended (an "Affiliate"):
 
 
q
The transferee is an Affiliate of the Company.
 

A-2-

Unless one of the items is checked, the Trustee will refuse to register any of the Notes evidenced by this certificate in the name of any person other than the registered Holder thereof; provided,however, that if item (3), (4) or (6) is checked, the Company or the Trustee may require, prior to registering any such transfer of the Notes, in their sole discretion, such written legal opinions, certifications (including an investment letter in the case of box (3)) and other information as the Trustee or the Company have reasonably requested to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act of 1933, as amended.
 
If none of the foregoing items are checked, the Trustee or Registrar shall not be obligated to register this Note in the name of any person other than the Holder hereof unless and until the conditions to any such transfer of registration set forth herein and in Section 2.16 of the Indenture shall have been satisfied.
 

 
Dated:                                                                 Signed:
(Sign exactly as name appears
on the other side of this Note)

 
Signature Guarantee:                                                                           
 

 
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
 
The undersigned represents and warrants that it is purchasing this Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a "qualified institutional buyer" within the meaning of Rule 144A under the Securities Act of 1933, as amended, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned's foregoing representations in order to claim the exemption from registration provided by Rule 144A.
 
Dated:                       __________                                                                           
NOTICE: To be executed by an
   executive officer

A-2-

OPTION OF HOLDER TO ELECT PURCHASE

If you want to elect to have this Note purchased by the Company pursuant to Section 4.14 or Section 4.15 of the Indenture, check the appropriate box:
 
Section 4.14 q                                            Section 4.15 q
 
If you want to elect to have only part of this Note purchased by the Company pursuant to Section 4.14 or Section 4.15 of the Indenture, state the amount: $
 
Date:                                 Your Signature:
(Sign exactly as name appears on the other side of this Note)

 

 
Signature Guarantee:
Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor program reasonably acceptable to the Trustee)


A-2-

EXHIBIT A-3

[FORM OF UNRESTRICTED DOLLAR NOTE]

NELL AF S.À.R.L.

8-3/8% Senior Note due 2015

No. [  ]
$ [ ]                                                                                                 ISIN No. L67302AA4
64016AAA3

NELL AF S.À.R.L., a Luxembourg entity (the "Company"), for value received, promises to pay to [ ] or registered assigns, the principal sum of August 15, 2015.

Interest Payment Dates:  August 15 and February 15

Record Dates:  August 1 and February 1

Reference is made to the further provisions of this Note contained herein, which will for all purposes have the same effect as if set forth at this place.

IN WITNESS WHEREOF, the Company has caused this Note to be signed manually or by facsimile by its duly authorized officer.

Dated:                       [ ]


NELL AF S.À.R.L.


By:                                                                
Name:
Title:

A-3-

CERTIFICATE OF AUTHENTICATION

This is one of the 8-2/8% Senior Notes due 2015 referred to in the within-mentioned Indenture.

Date: [  ]

THE BANK OF NEW YORK, as authentication agent


By:                                                                
Authorized Signature


A-3-

(REVERSE OF DOLLAR NOTE)
 
8-3/8% Senior Note due 2015
 
1.            Interest. NELL AF S.À.R.L., a Luxembourg entity (the "Company"), promises to pay interest on the principal amount of this Dollar Note at the rate per annum shown above. Interest on the Dollar Notes will accrue from the most recent date on which interest has been paid or, if no interest has been paid, from August 10, 2005.1 The Company will pay interest semi-annually in arrears on each August 15 and February 15 (each, an "Interest Payment Date")  and at stated maturity, commencing on February 15, 2006.2 Interest will be computed on the basis of a 360-day year comprized of twelve 30-day months.
 
The Company shall pay interest on overdue principal and on overdue installments of interest from time to time on demand at the rate borne by the Dollar Notes (without regard to any applicable grace periods) to the extent lawful.
 
2.            Method of Payment. The Company shall pay interest on the Dollar Notes (except defaulted interest) to the Persons who are the registered Holders at the close of business on the Record Date immediately preceding the Interest Payment Date even if the Dollar Notes are cancelled on registration of transfer or registration of ex-change after such Record Date. Holders must surrender Dollar Notes to a Paying Agent to collect principal payments. The Company shall pay principal, premium and interest in money of the United States that at the time of payment is legal tender for payment of public and private debts ("U.S.Legal Tender"). However, the Company may pay principal, premium and interest by its check payable in such U.S. Legal Tender. The Company may deliver any such interest payment to the Paying Agent or to a Holder at the Holder's registered address.
 
3.            Paying Agent and Registrar. Initially, The Bank of New York (the "Trustee") will act as Paying Agent and Registrar. The Company may change any Paying Agent, Registrar or co-Registrar without notice to the Holders. The Company or any of its Subsidiaries may, subject to certain exceptions, act as Registrar or co-Registrar.
 
4.            Indenture. The Company issued the Dollar Notes under an Indenture, dated as of August 10, 2005 (the "Indenture"), among the Company, each of the Guarantors named therein, The Bank of New York as trustee, registrar, paying agent, transfer agent and listing agent (the "Trustee"), ABN AMRO Bank N.V., as security agent (the "Security Agent"), and AIBBNY Fund Management (Ireland) Limited. This Dollar Note is one of a duly authorized issue of Dollar Notes of the Company designated as its dollar denominated 8-3/8% Senior Notes due 2015 (the "Dollar Notes") which may be issued under the Indenture. The Company shall be entitled to issue Additional Notes pursuant to Section 2.18 of the Indenture. The Dollar Notes and the Company's euro denominated 8-3/8% Senior Notes due 2015 (the "Euro Notes" and, together with the Dollar Notes, the "Notes") and any Additional Notes issued in accordance with the Indenture are treated as a single class of securities under the Indenture unless otherwise specified in the Indenture. Capitalized terms used herein shall have the meanings assigned to them in the Indenture unless otherwise defined herein.
 
The terms of the Notes include those stated in the Indenture. Notwithstanding anything to the contrary herein, the Notes are subject to all such terms, and Holders of Notes are referred to the Indenture for a statement of them. The Notes are senior obligations of the Company.
 
5.            Optional Redemption. (a) The Dollar Notes will be redeemable, at the Company's option, in whole at any time or in part from time to time, on and after August 15, 2010, upon not less than 30 nor
 
_____________________
 
1            In the case of Initial Notes.
2            In the case of Initial Notes.

A-3-

more than 60 days' notice, at the following redemption prices (expressed as percentages of the principal amount thereof) if re-deemed during the twelve-month period commencing on August 15 of the year set forth below, plus, in each case, accrued and unpaid interest thereon, if any, to the date of redemption:
 

Year
Percentage
2010
104.250%
2011
102.833%
2012
101.417%
2013 and thereafter
100.000%

 
(b)            At any time, or from time to time, prior to August 15, 2008, the Company may, at its option, use the net cash proceeds of one or more Equity Offerings (as defined below) to redeem up to 35% of the aggregate principal amount of Dollar Notes originally issued (including the original principal amount of any Additional Dollar Notes) at a redemption price equal to 108.375% of the principal amount thereof plus accrued and unpaid interest thereon, if any, to the date of redemption; provided,however, that at least 65% of the aggregate principal amount of the Euro Notes originally issued remain (including the principal amount of any Additional Euro Notes) outstanding immediately after any such redemption. In order to effect the foregoing redemption with the proceeds of any Equity Offering, the Company shall make such redemption not more than 120 days after the consummation of any such Equity Offering.
 
(c)            At any time prior to August 15, 2010, the Dollar Notes may be redeemed, in whole or in part at the option of the Company, upon not less than 30 nor more than 60 days' notice, at a redemption price equal to 100.000% of the principal amount thereof plus the Applicable Premium and accrued and unpaid interest to, but not including, the applicable redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date).
 
(d)            The Notes are also redeemable for taxation reasons, as provided in Section 3.07 of the Indenture.
 
6.            Notice of Redemption. Notice of redemption will be mailed at least 30 days but not more than 60 days before the Redemption Date to each Holder whose Dollar Notes are to be redeemed at such Holder's registered address, except as provided in the Indenture. No Dollar Notes of $1,000 or less shall be redeemed in part; provided that no Dollar Notes shall be redeemed in part if the resulting Dollar Note would have a minimum denomination that is less than $75,000.
 
7.            Change of Control Offer. In the event of a Change of Control, upon the satisfaction of the conditions set forth in the Indenture, the Company shall be required to offer to repurchase all of the then outstanding Notes pursuant to a Change of Control Offer at a purchase price equal to 101% of the principal amount thereof plus accrued and unpaid interest, if any, to the date of purchase. Holders of Notes that are the subject of such an offer to repurchase shall receive an offer to repurchase and may elect to have such Notes repurchased in accordance with the provisions of the Indenture pursuant to and in accordance with the terms of the Indenture.
 
8.            Limitation on Asset Sales. Under certain circumstances set forth in Section 4.15 of the Indenture, the Company is required to apply the net proceeds from Asset Sales to offer to repurchase the Notes at a price equal to 100% of the principal amount thereof plus accrued and unpaid interest thereon, if any, to the date of repurchase.
 
9.            Denominations; Transfer; Exchange. The Dollar Notes are in fully registered form only, without coupons, in denominations of $75,000 and integral multiples of $1,000. A Holder shall register the transfer or ex-change of Notes in accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and to pay certain transfer taxes or similar governmental charges payable in connection therewith as permitted by the Indenture. The Registrar need not register the transfer or exchange of any Notes during a period beginning 15 days before the mailing of a redemption notice for any Notes or portions thereof selected for redemption.
 
10.            Persons Deemed Owners. The registered Holder of a Note shall be treated as the owner of it for all purposes.
 
11.            Unclaimed Money. If money for the payment of principal or interest remains unclaimed for one year, the Trustee and the Paying Agent will pay the money back to the Company. After that, all liability of the Trustee and such Paying Agent with respect to such money shall cease.
 
12.            Discharge Prior to Redemption or Maturity. If the Company at any time deposits with the Trustee U.S. Legal Tender or non-callable U.S. Government Obligations sufficient to pay the principal of, premium and interest on the Dollar Notes to redemption or maturity and complies with the other provisions of the Indenture relating thereto, the Company will be discharged from certain provisions of the Indenture and the Dollar Notes (including certain covenants, but excluding its obligation to pay the principal of, premium and interest on the Dollar Notes).
 
13.            Amendment; Supplement; Waiver. The Indenture or the Notes may be amended or supplemented as provided in the Indenture.
 
14.            Restrictive Covenants. The Indenture imposes certain limitations on the ability of the Company and its Subsidiaries to, among other things, incur additional Indebtedness, pay dividends or make certain other restricted payments, enter into transactions with Affiliates, create dividend or other payment restrictions affecting Restricted Subsidiaries and merge or consolidate with any other Person, sell, assign, transfer, lease, convey or other-wise dispose of all or substantially all of its assets or adopt a plan of liquidation. Such limitations are subject to a number of important qualifications and exceptions. The Company must annually report to the Trustee on compliance with such limitations.
 
15.            Successors. When a successor assumes, in accordance with the Indenture, all the obligations of its predecessor under the Notes and the Indenture, the predecessor will be released from those obligations.
 
16.            Defaults and Remedies. If an Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then outstanding Notes (including any Additional Notes) may declare all the Notes to be due and payable in the manner, at the time and with the effect provided in the Indenture. Holders of Notes may not direct the Trustee to enforce the Indenture or the Notes except as provided in the Indenture. The Trustee is not obligated to direct the Security Agent to enforce the Indenture or the Notes unless it has been offered indemnity and/or security satisfactory to it. The Indenture permits, subject to certain limitations therein provided and in the Intercreditor Agreement, Holders of a majority in aggregate principal amount of the Notes (including any Additional Notes) then outstanding to direct the Trustee in its exercise of any trust or power. The Trustee may with-hold from Holders of Notes notice of any continuing Default or Event of Default (except a Default in payment of principal or interest) if it determines in good faith that withholding notice is in their interest.
 
17.            Trustee Dealings with Company. The Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Notes and may otherwise deal with the Company, its Restricted and Unrestricted Subsidiaries or their respective Affiliates as if it were not the Trustee.
 
18.            No Recourse Against Others. A past, present or future director, officer, employee, promoter, advisor, incorporator, or shareholder, as such, of the Company, the Trustee, Security Agent or any Guarantor shall not have any liability in such capacity for any obligations of the Company under the Notes, the Indenture or the Security Documents or of such Guarantor under its Guarantee, the Indenture or the Security Documents for any claim based on, in respect of or by reason of such obligations or their creation. Each Holder of a Note by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for the issuance of the Notes.
 
19.            Authentication. This Note shall not be valid until the Trustee or authenticating agent manually signs the certificate of authentication on this Note.
 
20.            Governing Law. This Note shall be governed by, and construed in accordance with, the laws of the State of New York.
 
21.            Abbreviations and Defined Terms. Customary abbreviations may be used in the name of a Holder of a Note or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
 
22.            CUSIP/ISIN Numbers. The Company may cause CUSIP and/or ISIN numbers to be printed on the Notes as a convenience to the Holders of the Notes. No representation is made as to the accuracy of such numbers as printed on the Notes and reliance may be placed only on the other identification numbers printed hereon.
 
23.            Indenture. Each Holder, by accepting a Note, agrees to be bound by all of the terms and provisions of the Indenture and the Intercreditor Agreement, as the same may be amended from time to time. Capitalized terms used herein and not defined herein have the meanings ascribed thereto in the Indenture.
 
24.            Guarantees. This Note will be entitled to the benefits of certain senior subordinated Guarantees made for the benefit of the Holders. Reference is hereby made to the Indenture and the Intercreditor Agreement for a statement of the respective rights, limitations of rights, duties and obligations thereunder of the Guarantors, the Trustee and the Holders.
 
The Company will furnish to any Holder of a Note upon written request and without charge a copy of the Indenture. Requests may be made to: NELL AF S.À.R.L., c/o MeesPierson Intertrust B.V., Rokin 55, 1012, KK Amsterdam, The Netherlands, attention: Magali van Overbeke (e-mail: magali.van.overbeke@meespiersonintertrust.com).
 

A-3-

[FORM OF ASSIGNMENT]

I or we assign to


PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER


(please print or type name and address)

the within Note and all rights thereunder, and hereby irrevocably constitutes and appoints:


attorney to transfer the Note on the books of the Company with full power of substitution in the premises.


Dated:                                                                 Signed:
NOTICE: The signature on this assignment must correspond with the name as it appears upon the face of the within Note in every particular without alteration or enlargement or any change whatsoever and be guaranteed by the endorser's bank or broker.

Signature Guarantee:                                                                                                



A-3-

OPTION OF HOLDER TO ELECT PURCHASE

If you want to elect to have this Note purchased by the Company pursuant to Section 4.14 or Section 4.15 of the Indenture, check the appropriate box:
 
Section 4.14 q                                            Section 4.15 q
 
If you want to elect to have only part of this Note purchased by the Company pursuant to Section 4.14 or Section 4.15 of the Indenture, state the amount: $
 
Date:                                 Your Signature:
(Sign exactly as name appears on the other side of this Note)

 

 
Signature Guarantee:
Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor program reasonably acceptable to the Trustee)


A-3-

EXHIBIT A-4

[FORM OF UNRESTRICTED DOLLAR NOTE]

NELL AF S.À.R.L.

8-3/8% Senior Note due 2015

No. [  ]
$ [ ]                                                                                                 ISIN No. XSO226285699
XSO226286317

NELL AF S.À.R.L., a Luxembourg entity (the "Company"), for value received, promises to pay to [ ] or registered assigns, the principal sum of August 15, 2015.

Interest Payment Dates:  August 15 and February 15

Record Dates:  August 1 and February 1

Reference is made to the further provisions of this Note contained herein, which will for all purposes have the same effect as if set forth at this place.

IN WITNESS WHEREOF, the Company has caused this Note to be signed manually or by facsimile by its duly authorized officer.

Dated:                       [ ]


NELL AF S.À.R.L.


By:                                                                
Name:
Title:

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CERTIFICATE OF AUTHENTICATION

This is one of the 8-2/8% Senior Notes due 2015 referred to in the within-mentioned Indenture.

Date: [  ]

THE BANK OF NEW YORK, as authentication agent


By:                                                                
Authorized Signature

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(REVERSE OF EURO NOTE)
 
8-3/8% Senior Note due 2015
 
1.            Interest. NELL AF S.À.R.L., a Luxembourg entity (the "Company"), promises to pay interest on the principal amount of this Euro Note at the rate per annum shown above. Interest on the Euro Notes will accrue from the most recent date on which interest has been paid or, if no interest has been paid, from August 10, 2005.1 The Company will pay interest semi- annually in arrears on each August 15 and February 15 (each, an "InterestPayment Date") and at stated maturity, commencing on February 15, 2006.2 Interest will be computed on the basis of a 360-day year comprized of twelve 30-day months.
 
The Company shall pay interest on overdue principal and on overdue installments of interest from time to time on demand at the rate borne by the Euro Notes (without regard to any applicable grace periods) to the extent lawful.
 
2.            Method of Payment. The Company shall pay interest on the Euro Notes (except defaulted interest) to the Persons who are the registered Holders at the close of business on the Record Date immediately preceding the Interest Payment Date even if the Euro Notes are cancelled on registration of transfer or registration of exchange after such Record Date. Holders must surrender Euro Notes to a Paying Agent to collect principal payments. The Company shall pay principal, premium and interest on the Euro Notes in euro. However, the Company may pay principal, premium and interest by its check payable in euro. The Company may deliver any such interest payment to the Euro Paying Agent or to a Holder at the Holder's registered address.
 
3.            Paying Agent and Registrar. Initially The Bank of New York, London Branch, will act as Paying Agent for the Euro Notes and as Registrar for the Euro Notes. The Company may change any Paying Agent, Registrar or co-Registrar without notice to the Holders. The Company or any of its Subsidiaries may, subject to certain exceptions, act as Registrar or co-Registrar.
 
4.            Indenture. The Company issued the Euro Notes under an Indenture, dated as of August 10, 2005 (the "Indenture"), among the Company, each of the Guarantors named therein, The Bank of New York as trustee, registrar, paying agent, transfer agent and listing agent (the "Trustee"), ABN AMRO Bank N.V., as security agent (the "Security Agent"), and AIB/BNY Fund Management (Ireland) Limited. This Euro Note is one of a duly authorized issue of Euro Notes of the Company designated as its euro denominated 8-3/8% Senior Notes due 2015 (the "Euro Notes") which may be issued under the Indenture. The Company shall be entitled to issue Additional Notes pursuant to Section 2.18 of the Indenture. The Euro Notes and the Company's dollar denominated 8-3/8% Senior Notes due 2015 (the "Dollar Notes" and, together with the Euro Notes, the "Notes") and any Additional Notes is-sued in accordance with the Indenture are treated as a single class of securities under the Indenture unless otherwise specified in the Indenture. Capitalized terms used herein shall have the meanings assigned to them in the Indenture unless otherwise defined herein.
 
The terms of the Notes include those stated in the Indenture. Notwithstanding anything to the contrary herein, the Notes are subject to all such terms, and Holders of Notes are referred to the Indenture for a statement of them. The Notes are senior obligations of the Company.
 
5.            Optional Redemption. (a) The Euro Notes will be redeemable, at the Company's option, in whole at any time or in part from time to time, on and after August 15, 2010, upon not less than 30 nor more than 60 days' notice, at the following redemption prices (expressed as percentages of the principal amount
 
_____________________
 
1            In the case of Initial Notes.
2            In the case of Initial Notes.

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thereof) if redeemed during the twelve-month period commencing on August 15 of the year set forth below, plus, in each case, accrued and unpaid interest thereon, if any, to the date of redemption:

Year
Percentage
2010
104.250%
2011
102.833%
2012
101.417%
2013 and thereafter
100.000%

(b)            At any time, or from time to time, prior to August 15, 2008, the Company may, at its option, use the net cash proceeds of one or more Equity Offerings (as defined below) to redeem up to 35% of the aggregate principal amount of Euro Notes originally issued (including the original principal amount of any Additional Euro Notes) at a redemption price equal to 108.375% of the principal amount thereof plus accrued and unpaid interest thereon, if any, to the date of redemption; provided,however, that at least 65% of the aggregate principal amount of the Euro Notes originally issued remain (including the principal amount of any Additional Euro Notes) outstanding immediately after any such redemption. In order to effect the foregoing redemption with the proceeds of any Equity Offering, the Company shall make such redemption not more than 120 days after the consummation of any such Equity Offering.
 
(c)            At any time prior to August 15, 2010, the Euro Notes may be redeemed, in whole or in part, at the option of the Company, upon not less than 30 nor more than 60 days' notice, at a redemption price equal to 100.000% of the principal amount thereof plus the Applicable Premium and accrued and unpaid interest to, but not including, the applicable redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date).
 
(d)            The Notes are also redeemable for taxation reasons, as provided in Section 3.07 of the Indenture.
 
6.            Notice of Redemption. Notice of redemption will be mailed at least 30 days but not more than 60 days before the Redemption Date to each Holder whose Euro Notes are to be redeemed at such Holder's registered address, except as provided in the Indenture. No Euro Notes of E1,000 or less shall be redeemed in part; provided that no Euro Notes shall be redeemed in part if the resulting Euro Note would have a minimum denomination that is less than E50,000.
 
7.            Change of Control Offer. In the event of a Change of Control, upon the satisfaction of the conditions set forth in the Indenture, the Company shall be required to offer to repurchase all of the then outstanding Notes pursuant to a Change of Control Offer at a purchase price equal to 101% of the principal amount thereof plus accrued and unpaid interest, if any, to the date of purchase. Holders of Notes that are the subject of such an offer to repurchase shall receive an offer to repurchase and may elect to have such Notes repurchased in accordance with the provisions of the Indenture pursuant to and in accordance with the terms of the Indenture.
 
8.            Limitation on Asset Sales. Under certain circumstances set forth in Section 4.15 of the Indenture, the Company is required to apply the net proceeds from Asset Sales to offer to repurchase the Notes at a price equal to 100% of the principal amount thereof plus accrued and unpaid interest thereon, if any, to the date of repurchase.
 
9.            Denominations; Transfer; Exchange. The Euro Notes are in fully registered form only, without coupons, in denominations of E50,000 and integral multiples of E1,000. A Holder shall register the transfer or ex-change of Notes in accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and to pay certain transfer taxes or similar governmental charges payable in connection therewith as permitted by the Indenture. The Registrar need not register the transfer or exchange of any Notes during a period beginning 15 days before the mailing of a redemption notice for any Notes or portions thereof selected for redemption.
 
10.            Persons Deemed Owners. The registered Holder of a Note shall be treated as the owner of it for all purposes.
 

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11.            Unclaimed Money. If money for the payment of principal or interest remains unclaimed for one year, the Trustee and the Paying Agent will pay the money back to the Company. After that, all liability of the Trustee and such Paying Agent with respect to such money shall cease.
 
12.            Discharge Prior to Redemption or Maturity. If the Company at any time deposits with the Trustee euro or non-callable Euro Obligations sufficient to pay the principal of, premium and interest on the Euro Notes to redemption or maturity and complies with the other provisions of the Indenture relating thereto, the Company will be discharged from certain provisions of the Indenture and the Euro Notes (including certain covenants, but excluding its obligation to pay the principal of, premium and interest on the Euro Notes).
 
13.            Amendment; Supplement; Waiver. The Indenture or the Notes may be amended or supplemented as provided in the Indenture.
 
14.            Restrictive Covenants. The Indenture imposes certain limitations on the ability of the Company and its Subsidiaries to, among other things, incur additional Indebtedness, pay dividends or make certain other restricted payments, enter into transactions with Affiliates, create dividend or other payment restrictions affecting Restricted Subsidiaries and merge or consolidate with any other Person, sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its assets or adopt a plan of liquidation. Such limitations are subject to a number of important qualifications and exceptions. The Company must annually report to the Trustee on compliance with such limitations.
 
15.            Successors. When a successor assumes, in accordance with the Indenture, all the obligations of its predecessor under the Notes and the Indenture, the predecessor will be released from those obligations.
 
16.            Defaults and Remedies. If an Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then outstanding Notes (including any Additional Notes) may declare all the Notes to be due and payable in the manner, at the time and with the effect provided in the Indenture. Holders of Notes may not direct the Trustee to enforce the Indenture or the Notes except as provided in the Indenture. The Trustee is not obligated to direct the Security Agent to enforce the Indenture or the Notes unless it has been offered indemnity and/or security satisfactory to it. The Indenture permits, subject to certain limitations therein provided and in the Intercreditor Agreement, Holders of a majority in aggregate principal amount of the Notes (including any Additional Notes) then outstanding to direct the Trustee in its exercise of any trust or power. The Trustee may with-hold from Holders of Notes notice of any continuing Default or Event of Default (except a Default in payment of principal or interest) if it determines in good faith that withholding notice is in their interest.
 
17.            Trustee Dealings with Company. The Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Notes and may otherwise deal with the Company, its Restricted and Unrestricted Subsidiaries or their respective Affiliates as if it were not the Trustee.
 
18.            No Recourse Against Others. A director, officer, employee, promoter, advisor, incorporator, or shareholder, as such, of the Company, the Trustee, Security Agent or any Guarantor shall not have any liability in such capacity for any obligations of the Company under the Notes, the Indenture or the Security Documents or of such Guarantor under its Guarantee, the Indenture or the Security Documents for any claim based on, in respect of or by reason of such obligations or their creation. Each Holder of a Note by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for the issuance of the Notes.
 
19.            Authentication. This Note shall not be valid until the Trustee or authenticating agent manually signs the certificate of authentication on this Note.
 
20.            Governing Law. This Note shall be governed by, and construed in- accordance with, the laws of the State of New York.
 
21.            Abbreviations and Defined Terms. Customary abbreviations may be- used in the name of a Holder of a Note or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
 
22.            CUSIP/ISIN Numbers. The Company may cause CUSIP and/or ISIN numbers to be printed on the Notes as a convenience to the Holders of the Notes. No representation is made as to the accuracy of such numbers as printed on the Notes and reliance may be placed only on the other identification numbers printed hereon.
 
23.            Indenture. Each Holder, by accepting a Note, agrees to be bound by all of the terms and provisions of the Indenture and the Intercreditor Agreement, as the same may be amended from time to time. Capitalized terms used herein and not defined herein have the meanings ascribed thereto in the Indenture.
 
24.            Guarantees. This Note will be entitled to the benefits of certain senior subordinated Guarantees made for the benefit of the Holders. Reference is hereby made to the Indenture and the Intercreditor Agreement for a statement of the respective rights, limitations of rights, duties and obligations thereunder of the Guarantors, the Trustee and the Holders.
 
The Company will furnish to any Holder of a Note upon written request and without charge a copy of the Indenture. Requests may be made to: NELL AF S.À.R.L. , c/o MeesPierson Intertrust B.V., Rokin 55, 1012, KK Amsterdam, The Netherlands, attention: Magali van Overbeke (e-mail: magali.van.overbeke'dmeespierson.intertrust.com).
 

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[FORM OF ASSIGNMENT]

I or we assign to


PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER


(please print or type name and address)

the within Note and all rights thereunder, and hereby irrevocably constitutes and appoints:


attorney to transfer the Note on the books of the Company with full power of substitution in the premises.


Dated:                                                                 Signed:
NOTICE: The signature on this assignment must correspond with the name as it appears upon the face of the within Note in every particular without alteration or enlargement or any change whatsoever and be guaranteed by the endorser's bank or broker.

Signature Guarantee:                                                                                                



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OPTION OF HOLDER TO ELECT PURCHASE

If you want to elect to have this Note purchased by the Company pursuant to Section 4.14 or Section 4.15 of the Indenture, check the appropriate box:
 
Section 4.14 q                                            Section 4.15 q
 
If you want to elect to have only part of this Note purchased by the Company pursuant to Section 4.14 or Section 4.15 of the Indenture, state the amount: $
 
Date:                                 Your Signature:
(Sign exactly as name appears on the other side of this Note)

 

 
Signature Guarantee:
Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor program reasonably acceptable to the Trustee)

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EXHIBIT D
 
GUARANTEE
 
For value received, the undersigned hereby unconditionally guarantees, on a senior subordinated basis, as principal obligor and not only as a surety, to the Holder of this Note the payments of principal of, premium, if any, and interest on this Note in the amounts and at the times when due and interest on the overdue principal, premium, if any, and interest, if any, of this Note, if lawful, and the payment or performance of all other obligations of the Company under the Indenture (as defined below) or the Notes, to the Holders of this Note and the Trustee, all in accordance with and subject to the terms and limitations of this Note, Articles Eleven and Twelve of the Indenture, the Intercreditor Agreement and this Guarantee. This Guarantee will become effective in accordance with Article Eleven of the Indenture and its terms shall be evidenced therein. The validity and enforceability of any Guarantee shall not be affected by the fact that it is not affixed to any particular Note.
 
Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Indenture dated as of August 10, 2005, among, NELL AF S.À.R.L. as issuer (the "Company"), each of the Guarantors named therein, The Bank of New York, as trustee, registrar, paying agent, transfer agent and listing agent, (the "Trustee"), ABN AMRO Bank N.V., as security agent, and AIB/BNY Fund Management (Ireland) Limited, as Irish paying agent, as amended or supplemented (the "Indenture").
 
The obligations of the undersigned to the Holders of Notes and to the Trustee pursuant to this Guarantee and the Indenture are expressly set forth in Articles Eleven and Twelve of the Indenture (including, without limitation, the applicable limitations on this Guarantee as set forth in Section 11.02 of the Indenture [and as set forth be-low] and the provisions relating to the release of this Guarantee as set forth in Section 11.04 of the Indenture) and the Intercreditor Agreement and reference is hereby made to the Indenture for the precise terms of the Guarantee and all of the other provisions of the Indenture to which this Guarantee relates.
 
[INSERT RELEVANT LOCAL JURISDICTION GUARANTEE LIMITATION LANGUAGE, IF ANY]
 
THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. The undersigned Guarantor hereby agrees to submit to the jurisdiction of the courts of the State of New York in any action or proceeding arising out of or relating to this Guarantee.
 
This Guarantee is subject to release upon the terms set forth in the Indenture and the Intercreditor Agreement.
 
IN WITNESS WHEREOF, each Guarantor has caused its Guarantee to be duly executed.
 
as Guarantor
 
Date:
 
As Guarantor
 
_____________________
 
1            Include any necessary guarantee limitations language as deemed appropriate by local counsel.

D-

By:                                                                
Name:
Title:

 

D-

 EX-4.4(A) 5 lyo10k-032808ex44a.htm SUPPLEMENTAL INDENTURE DATED AS OF FEBRUARY 2, 2006 TO THE INDENTURE DATED AS OF AUGUST 10, 2005 lyo10k-022808ex44a.htm
Exhibit 4.4(a)
 
Supplemental Indenture (this “Supplemental Indenture”), dated as of February 2, 2006, among each of Basell Polyolefine GmbH, Basell Bayreuth Chemie GmbH, Basell Germany Holdings GmbH, Basell Polyolefins UK Ltd., Basell UK Holdings Ltd., Basell Canada Inc., Basell Asia Pacific Ltd., Basell Holdings B.V., Basell International Holdings B.V., Basell Benelux B.V., Basell Europe Holdings B.V. and Basell Finance Company B.V., as Guarantors (collectively, the "Guaranteeing Subsidiaries"), and The Bank of New York, a national banking association, as trustee under the Indenture referred to below (the “Trustee”).
 
 
W I T N E S S E T H
 
WHEREAS, Basell AF SCA (formerly NELL AF S.À.R.L.), a company incorporated under the laws of The Grand Duchy of Luxembourg (the "Issuer"), each of the Guarantors named therein, as Guarantors (the "Original Guaranteeing Subsidiary"), The Bank of New York, as Trustee, Registrar, Paying Agent, Transfer Agent and Listing Agent, ABN AMRO Bank N.V., as Security Agent, and AIB/BNY Fund Management (Ireland) Limited, as Irish Paying Agent, have heretofore executed and entered into an indenture (the “Indenture”) dated as of August 10, 2005 providing for the issuance of an aggregate principal amount of $615,000,000 of the Issuer's 8-3/8% Senior Notes due 2015 (the “Dollar Notes”) and €500,000,000 of the Issuer's 8-3/8% Senior Notes due 2015 (together with the Dollar Notes, the "Notes"); and
 
WHEREAS, the Indenture provides that the Issuer shall use its commercially reasonable efforts to cause Restricted Subsidiaries of the Issuer that account for, in the aggregate, greater than 50% of the Consolidated EBITDA of the Issuer for the year ended December 31, 2004 to issue Guarantees in accordance with the Indenture not later than the date that is 180 days after the Issue Date.
 
NOW THEREFORE, in consideration of the foregoing, each of the Guaranteeing Subsidiaries and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows:
 
1.            Capitalized Terms. Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.
 
2.            Agreement to Be Bound. Each Guaranteeing Subsidiary hereby becomes a party to the Indenture as a Guarantor and as such will have all of the rights and be subject to all of the obligations and agreements of a Guarantor under the Indenture. Each Guaranteeing Subsidiary agrees to be bound by all of the provisions of the Indenture applicable to a Guarantor and to perform all of the obligations and agreements of a Guarantor under the Indenture.
 
3.            Agreement to Guarantee. Each Guaranteeing Subsidiary hereby, jointly and severally with each other Guaranteeing Subsidiary and each Original Guaranteeing Subsidiary, unconditionally and irrevocably guarantees, on a senior subordinated basis to each Holder of a Note (including any Additional Notes upon issuance in accordance with Section 2.18 of the Indenture) authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforcement of the Indenture, the Notes or the Obligations of the Issuer or any other Guarantors to the Holders or the Trustee thereunder or under the Indenture, that: (a) the principal of, premium, if any, and interest on the Notes (and any interest accrued pursuant to Section 2.12 of the Indenture or Supplemental Indenture accrued pursuant to Section 4.19(c) of the Indenture payable thereon) shall be duly and punctually paid in full when due, whether at maturity, upon redemption at the option of the Holders pursuant to the provisions of the Notes relating thereto, by acceleration or otherwise, and interest on the overdue principal and (to the extent permitted by law) interest, if any, on the Notes and all other obligations of the Issuer or the Guarantors to the Holders or the Trustee hereunder or thereunder (including amounts due the Trustee under Section 7.07 of the Indenture) and all other payment obligations shall be promptly paid in full or performed, all in accordance with the terms of the Indenture and thereof and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, the same shall be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at maturity, by acceleration or otherwise.
 
4.            Limitation on Guarantees.
 
(a)            General. The obligations of each Guarantor under its Guarantee are limited to the maximum amount which, after giving effect to all other contingent and fixed liabilities of such Guarantor and after giving effect to any collections from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under its Guarantee or pursuant to its contribution obligations under the Indenture, will result in the obligations of such Guarantor under the Guarantee not constituting a fraudulent conveyance or fraudulent transfer under applicable law.
 
(b)            German Guarantors. To the extent that a Guarantee is granted by a Guarantor incorporated in Germany as a limited liability company (GmbH) (a "German Guarantor") and secures debt other than debt of such German Guarantor itself or any of its Subsidiaries, the following shall apply:
 
(i)            Each German Guarantor guarantees the payment of all and any amounts, which correspond to funds that have been received pursuant to the issuance of Notes under the Indenture and have been on-lent to, or otherwise passed on to, the relevant German Guarantor or any of its Subsidiaries, to the extent that any such amount is still outstanding at the time the relevant demand is made against such German Guarantor.
 
(ii)            Each German Guarantor further guarantees the payment of any amount in excess of the amounts payable by the relevant German Guarantor pursuant to paragraph (b)(i) above, its relevant liability is however limited as follows:
 
(A)            The Trustee and holders of Notes shall not be entitled to enforce the Guarantee in an amount exceeding the amounts payable under paragraph (b)(i) above to the extent that the further enforcement of the Guarantee exceeding the amounts payable under paragraph (b)(i) above has the effect of:
 
(1)            reducing the German Guarantor's net assets (Nettovermögen) (the "Net Assets") to an amount less than its stated share capital (Stammkapital); or
 
(2)            (if the Net Assets are already an amount less than the stated share capital) causing such amount to be further reduced,
 
and thereby affect the assets required for the obligatory preservation of its stated share capital according to §§ 30, 31 German GmbH-Act (GmbH-Gesetz) (the "GmbH-Act").
 
(B)            The value of the Net Assets shall be determined in accordance with GAAP consistently applied by the German Guarantor in preparing its unconsolidated balance sheets (Jahresabschluss according to § 42 GmbH-Act, §§ 242, 264 of the German Commercial Code (HGB)) in the previous years, save that:
 
(1)            the amount of any increase of the stated share capital (Stammkapital) of the German Guarantor registered after the date hereof without the prior written consent of the Trustee shall be deducted from the relevant stated share capital;
 
(2)            loans provided to the relevant German Guarantor by the Company or any of its Subsidiaries after the date hereof shall be disregarded if such loans are subordinated, or are considered subordinated pursuant to § 32a GmbH-Act; and
 
(3)            loans and other liabilities incurred in violation of the provisions of the Indenture after the date hereof shall be disregarded.
 
(C)            The limitation set out in paragraph (b)(ii)(A) above shall not apply if the relevant German Guarantor has filed for insolvency or temporary or insolvency proceedings have been commenced.
 
(D)            If the enforcement of the Guarantee in an amount exceeding any amount to be paid under paragraph (b)(i) above has led to one of the effects referred to in paragraph (b)(ii)(A) above, then the relevant German Guarantor shall realise at market value any and all of its assets that are shown in its balance sheet with a book value (Buchwert) that is significantly lower than their market value if such assets are not necessary for the relevant German Guarantor's business (nicht betriebsnotwendig), to the extent necessary to satisfy the amounts requested under this paragraph (b)(ii).
 
(E)            The limitation set out in paragraph (b)(ii)(A) above does not affect the right of the Trustee or holders of Notes to claim again any outstanding amount at a later point in time if and to the extent that paragraph (b)(ii)(A) above would allow this at that later point.
 
Notwithstanding the foregoing the Trustee and the holders of Notes waive their rights to enforce the Guarantee to the extent that and as long as such enforcement would be in violation of the prohibition of an intervention threatening the existence of that German Guarantor (Verstoß gegen das Verbot des existenzvernichtenden Eingriffs).
 
(c)            Dutch Guarantors.  The obligations under a Guarantee of a Guarantor incorporated in The Netherlands (a "Dutch Guarantor") or, for the purpose of paragraph (i) below only, of a Subsidiary of such Dutch Guarantor will not apply to the extent that it would result in the Guarantee given by that Dutch Guarantor:
 
(i)            constituting unlawful financial assistance within the meaning of Section 2:98c or 2:207c of the Dutch Civil Code (Burgerlijk Wetboek); or
 
(ii)            conflicting with Section 2:7 of the Dutch Civil Code (Burgerlijk Wetboek).
 
Any amount which may be guaranteed by Basell Benelux B.V. shall not exceed the amount permitted to be guaranteed or otherwise incurred as Debt (as defined in the Fiscal and Paying Agency Agreement dated 15 March 1997 in respect of the US$300,000,000 8.10 per cent. guaranteed notes due 15 March 2027 issued by Montell Finance Company B.V. (now known as Basell Finance Company B.V.) (the "2027 Notes") as supplemented by the Amendment to Fiscal and Paying Agency Agreement dated as of 25 July 2002 (together, the "Existing Notes Finance Documents") in accordance with the terms of the Existing Notes Finance Documents after taking into account all other Debt (as defined in the Existing Notes Finance Documents) of all Restricted Subsidiaries (as defined in the Existing Notes Finance Documents), provided that such limitation on the amount guaranteed shall not operate so as to release Basell Benelux B.V. from its obligations under its Guarantee and further provided that upon the refinancing in full of the 2027 Notes, the limitations on guarantees which exist as a result of the provisions of the Existing Notes Finance Documents shall be automatically removed from the date of such refinancing and accordingly that this paragraph restricting it as a Guarantor under the Indenture and the Notes shall cease to operate and have any force and effect from the date of such refinancing.
 
Additionally, in the case of Basell Benelux B.V. its obligations under its Guarantee shall apply only insofar as required to guarantee the payment obligations of the Issuer and any other Guarantor with respect to any proceeds of the Notes directly or indirectly made available by the Issuer or any other Guarantor to Basell Benelux B.V. through intra-group loans or facilities and limited to the amount of such loans or facilities available to Basell Benelux B.V. as outstanding from time to time.
 
(d)            Financial Assistance.  Notwithstanding the foregoing each Guarantor is not guaranteeing any liabilities which would result in, and the Trustee and the holders of Notes waive their rights to enforce each Guarantee to the extent and as long as such enforcement would result in, the relevant Guarantor not complying with any applicable financial assistance rules.
 
5.            Ratification of Indenture; Supplemental Indenture Is Part of Indenture. Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect. This Supplemental Indenture shall form a part of the Indenture for all purposes, and every Holder of a Note heretofore or hereafter authenticated and delivered shall be bound hereby.
 
6.            Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. Each of the parties hereto agrees to submit to the non-exclusive jurisdiction of the competent courts of the State of New York in any action or proceeding arising out of or relating to this Supplemental Indenture.
 
7.            Duplicate Originals. All parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together shall represent the same agreement.
 
8.            Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction hereof.
 
9.            The Trustee. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Guaranteeing Subsidiaries.
 

 

 
(Signature page follows.)
 


IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed and attested, all as of the date first above written.
 

 
BASELL POLYOLEFINE GMBH

By:            /s/ P. Vacua
Name:       P. Vacua
Title:         Attorney In Fact


BASELL BAYREUTH CHEMIE GMBH

By:            /s/ P. Vacua
Name:       P. Vacua
Title:         Attorney In Fact


BASELL GERMANY HOLDINGS GMBH

By:            /s/ P. Vacua
Name:       P. Vacua
Title:         Attorney In Fact


BASELL POLYOLEFINS UK LTD.

By:            /s/ P. Vacua
Name:       P. Vacua
Title:         Attorney In Fact


BASELL UK HOLDINGS LTD.

By:            /s/ P. Vacua
Name:       P. Vacua
Title:         Attorney In Fact


BASELL CANADA INC.

By:            /s/ P. Vacua
Name:       P. Vacua
Title:         Attorney In Fact


BASELL ASIA PACIFIC LTD.

By:            /s/ P. Vacua
Name:       P. Vacua
Title:         Attorney In Fact



BASELL HOLDINGS B.V.

By:            /s/ P. Vacua
Name:       P. Vacua
Title:         Attorney In Fact


BASELL INTERNATIONAL HOLDINGS
B.V.

By:            /s/ P. Vacua
Name:       P. Vacua
Title:         Attorney In Fact


BASELL BENELUX B.V.

By:            /s/ P. Vacua
Name:       P. Vacua
Title:         Attorney In Fact

BASELL EUROPE HOLDINGS B.V.

By:            /s/ P. Vacua
Name:       P. Vacua
Title:         Attorney In Fact

BASELL FINANCE COMPANY B.V.

By:            /s/ P. Vacua
Name:       P. Vacua
Title:         Attorney In Fact

 
THE BANK OF NEW YORK, as Trustee
 
By:            /s/ Charlotte Fricker
Name:       Charlotte Fricker
Title:         Assistant Vice President


 EX-4.4(B) 6 lyo10k-032808ex44b.htm SECOND SUPPLEMENTAL INDENTURE DATED AS OF MAY 11, 2007 TO THE INDENTURE DATED AS OF AUGUST 10, 2005 lyo10k-022808ex44b.htm
Exhibit 4.4(b)
 
Second Supplemental Indenture (this “Second Supplemental Indenture”), dated as of May 15, 2007, among each of Basell Sales & Marketing Company B.V. and Basell Finance & Trading Company B.V., as Guarantors (the "Guaranteeing Subsidiaries"), and The Bank of New York, a national banking association, as trustee under the Indenture referred to below (the “Trustee”).
 
 
W I T N E S S E T H
 
WHEREAS, Basell AF SCA (formerly NELL AF S.À.R.L.), a company incorporated under the laws of The Grand Duchy of Luxembourg (the "Issuer"), each of the Guarantors named therein, as Guarantors (the "Original Guaranteeing Subsidiaries"), The Bank of New York, as Trustee, Registrar, Paying Agent, Transfer Agent and Listing Agent, ABN AMRO Bank N.V., as Security Agent, and AIB/BNY Fund Management (Ireland) Limited, as Irish Paying Agent, have heretofore executed and entered into an indenture (as amended on February 2, 2006, the “Indenture”) dated as of August 10, 2005 providing for the issuance of an aggregate principal amount of $615,000,000 of the Issuer's 8-3/8% Senior Notes due 2015 (the “Dollar Notes”) and €500,000,000 of the Issuer's 8-3/8% Senior Notes due 2015 (together with the Dollar Notes, the "Notes");
 
WHEREAS, Section 4.19 of the Indenture provides that the Issuer shall cause each Restricted Subsidiary of the Issuer that, after the Issue Date, guarantees the Senior Secured Credit Facilities to execute and deliver to the Trustee a supplemental indenture pursuant to which such Restricted Subsidiary shall guarantee payment of the Notes on the same terms and subject to the same conditions and limitations as those set forth in the Indenture; and
 
WHEREAS, on June 29, 2006, Basell Sales & Marketing Company B.V. Basell Finance & Trading Company B.V. provided a guarantee under the Senior Secured Credit Facilities;
 
WHEREAS, on June 26, 2006, Basell Finance & Trading Company B.V. provided a guarantee under the Senior Secured Credit Facilities;
 
NOW THEREFORE, in consideration of the foregoing, each of the Guaranteeing Subsidiaries and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows:
 
1.            Capitalized Terms. Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.
 
2.            Agreement to Be Bound. Each Guaranteeing Subsidiary hereby becomes a party to the Indenture as a Guarantor and as such will have all of the rights and be subject to all of the obligations and agreements of a Guarantor under the Indenture. Each Guaranteeing Subsidiary agrees to be bound by all of the provisions of the Indenture applicable to a Guarantor and to perform all of the obligations and agreements of a Guarantor under the Indenture.
 
3.            Agreement to Guarantee. Each Guaranteeing Subsidiary hereby, jointly and severally with each Original Guaranteeing Subsidiary and each subsidiary of the Issuer that issued a Guarantee of the Notes on February 2, 2006, unconditionally and irrevocably guarantees, on a senior subordinated basis to each Holder of a Note (including any Additional Notes upon issuance in accordance with Section 2.18 of the Indenture) authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforcement of the Indenture, the Notes or the Obligations of the Issuer or any other Guarantors to the Holders or the Trustee thereunder or under the Indenture, that: (a) the principal of, premium, if any, and interest on the Notes (and any interest accrued pursuant to Section 2.12 of the Indenture or Supplemental Interest accrued
 


pursuant to Section 4.19(c) of the Indenture payable thereon) shall be duly and punctually paid in full when due, whether at maturity, upon redemption at the option of the Holders pursuant to the provisions of the Notes relating thereto, by acceleration or otherwise, and interest on the overdue principal and (to the extent permitted by law) interest, if any, on the Notes and all other obligations of the Issuer or the Guarantors to the Holders or the Trustee hereunder or thereunder (including amounts due the Trustee under Section 7.07 of the Indenture) and all other payment obligations shall be promptly paid in full or performed, all in accordance with the terms of the Indenture and thereof and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, the same shall be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at maturity, by acceleration or otherwise.
 
4.            Limitation on Guarantees.
 
(a)            General. The obligations of each Guarantor under its Guarantee are limited to the maximum amount which, after giving effect to all other contingent and fixed liabilities of such Guarantor and after giving effect to any collections from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under its Guarantee or pursuant to its contribution obligations under the Indenture, will result in the obligations of such Guarantor under the Guarantee not constituting a fraudulent conveyance or fraudulent transfer under applicable law.
 
(b)            Dutch Guarantors.  The obligations under a Guarantee of a Guarantor incorporated in The Netherlands (a "Dutch Guarantor") or, for the purpose of paragraph (i) below only, of a Subsidiary of such Dutch Guarantor will not apply to the extent that it would result in the Guarantee given by that Dutch Guarantor:
 
(i)            constituting unlawful financial assistance within the meaning of Section 2:98c or 2:207c of the Dutch Civil Code (Burgerlijk Wetboek); or
 
(ii)            conflicting with Section 2:7 of the Dutch Civil Code (Burgerlijk Wetboek).
 
(c)            Financial Assistance.  Notwithstanding the foregoing each Guarantor is not guaranteeing any liabilities which would result in, and the Trustee and the holders of Notes waive their rights to enforce each Guarantee to the extent and as long as such enforcement would result in, the relevant Guarantor not complying with any applicable financial assistance rules.
 
5.            Ratification of Indenture; Second Supplemental Indenture Is Part of Indenture. Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect. This Second Supplemental Indenture shall form a part of the Indenture for all purposes, and every Holder of a Note heretofore or hereafter authenticated and delivered shall be bound hereby.
 
6.            Governing Law. THIS SECOND SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. Each of the parties hereto agrees to submit to the non-exclusive jurisdiction of the competent courts of the State of New York in any action or proceeding arising out of or relating to this Second Supplemental Indenture.
 
7.            Duplicate Originals. All parties may sign any number of copies of this Second Supplemental Indenture. Each signed copy shall be an original, but all of them together shall represent the same agreement.
 
8.            Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction hereof.
 
9.            The Trustee. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Second Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by each Guaranteeing Subsidiary.
 

 

 
(Signature page follows.)
 


IN WITNESS WHEREOF, the parties hereto have caused this Second Supplemental Indenture to be duly executed and attested, all as of the date first above written.
 

 
BASELL SALES & MARKETING COMPANY B.V.


By:            /s/ Francesco Svelto
Name:       Francesco Svelto
Title:         Attorney In Fact


BASELL FINANCE & TRADING COMPANY B.V.


By:            /s/ Francesco Svelto
Name:       Francesco Svelto
Title:         Attorney In Fact


BNY CORPORATE TRUSTEE SERVICES LIMITED, as Trustee
 
By:            /s/ J. Blondell                                                      
Name:       J. Blondell
Title:         AVP


 EX-4.4(C) 7 lyo10k-032808ex44c.htm THIRD SUPPLEMENTAL INDENTURE DATED AS OF JULY 26, 2007 TO THE INDENTURE DATED AS OF AUGUST 10, 2005 lyo10k-022808ex44c.htm
Exhibit 4.4(c)
 
Third Supplemental Indenture (this “Third Supplemental Indenture”), dated as of July 26, 2007, among each of Basell AF SCA (formerly Nell AF S.à.r.l.), a company incorporated under the laws of The Grand Duchy of Luxembourg (the "Issuer"), Nell Acquisition (US) LLC, Basell Finance USA Inc., Basell North America Inc., Basell USA Inc., Basell Funding S.à.r.l. (formerly Nell Funding S.à.r.l.), Basell Holdings B.V. (formerly Nell Bidco B.V.), Basell Polyolefine GmbH, Basell Bayreuth Chemie GmbH, Basell Germany Holdings GmbH, Basell Polyolefins UK Ltd., Basell UK Holdings Ltd., Basell Canada Inc., Basell Asia Pacific Ltd., Basell Holdings B.V., Basell International Holdings B.V., Basell Benelux B.V., Basell Europe Holdings B.V., Basell Finance Company B.V., Basell Sales & Marketing Company B.V. and Basell Finance & Trading Company B.V., as Guarantors (collectively, the "Guarantors"), and The Bank of New York, a national banking association, as trustee under the Indenture referred to below (the “Trustee”).
 
 
W I T N E S S E T H
 
WHEREAS, the Issuer, each of the Guarantors that are a signatory thereto, as Guarantors, The Bank of New York, as Trustee, Registrar, Paying Agent, Transfer Agent and Listing Agent, ABN AMRO Bank N.V., as Security Agent, and AIB/BNY Fund Management (Ireland) Limited, as Irish Paying Agent, have heretofore executed and entered into an indenture (as supplemented by a Supplemental Indenture dated as of February 2, 2006 by and among the Issuer, the Guarantors that are a signatory thereto and the Trustee and a Second Supplemental Indenture dated as of May 11, 2007 by and among the Issuer, the Guarantors that are a signatory thereto and the Trustee, the “Indenture”) dated as of August 10, 2005 providing for the issuance of an aggregate principal amount of $615,000,000 of the Issuer's 8-3/8% Senior Notes due 2015 (the “Dollar Notes”) and €500,000,000 of the Issuer's 8-3/8% Senior Notes due 2015 (together with the Dollar Notes, the "Notes"); and
 
WHEREAS, pursuant to clause (5) of Section 9.01 of the Indenture, the Issuer, each of the Guarantors and the Trustee, together, are authorized to execute and deliver this Third Supplemental Indenture (without the consent of any Holders of Notes) to amend the Indenture to conform the text of the Indenture to provisions of the “Description of Notes” in the offering memorandum of the Issuer dated August 4, 2005;
 
NOW THEREFORE, in consideration of the foregoing, each of the Issuer, the Guarantors and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows:
 
ARTICLE I
Definitions
 
1.            Capitalized Terms. Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.
 
ARTICLE II
Amendments
 
2.            Modification of Definitions.
 
(a)            The definition of “Enforcement Sale” in Section 1.01 of the Indenture is hereby amended so as to replace the term “Designated Senior Debt” in clause (2) thereof with the term “Guarantor Senior Debt,” such that the definition of “Enforcement Sale” in Section 1.01 of the Indenture shall provide as follows (emphasis added):
 


“Enforcement Sale” means (1) any sale or disposition of collateral pursuant to enforcement action taken by the Security Agent in accordance with the provisions of the Intercreditor Agreement, including on behalf of the Designated Senior Debt incurred under the Senior Secured Credit Facilities, to the extent such sale or disposition is effected in compliance with the provisions of the Intercreditor Agreement, or (2) any sale or disposition of collateral pursuant to the enforcement of security in favor of other Guarantor Senior Debt which compiles with the terms of an intercreditor agreement (or if there is no such intercreditor agreement, would substantially comply with the requirements of clause (1) hereof).”
 
(b)            The definition of "Guarantor Senior Debt" is hereby added to Section 1.01 of the Indenture, which shall provide as follows:
 
"Guarantor Senior Debt"  means with respect to any guarantor, the principal of, premium, if any, and interest (including any interest accruing subsequent to the filing of a petition of bankruptcy at the rate provided for in the documentation with respect thereto, whether or not such interest is an allowed claim under applicable law) on any Indebtedness of a guarantor, whether outstanding on the Issue Date or thereafter created, incurred or assumed, except for any such Indebtedness that is expressly subordinated or equal in right of payment to the guarantee of such guarantor. "Guarantor Senior Debt" also includes the principal of, premium, if any, interest (including any interest accruing subsequent to the filing of a petition of bankruptcy at the rate provided for in the documentation with respect thereto, whether or not such interest is an allowed claim under applicable law) on, and all other amounts owing in respect of;
 
(1)            all monetary obligations of every nature of a guarantor in respect of the Credit Facilities, including obligations to pay principal and interest, reimbursement obligations under letters of credit, fees, expenses and indemnities,
 
(2)            all monetary obligations of every nature of a guarantor evidenced by a promissory note and which is, directly or indirectly, pledged as security for the obligations of the Company under the Credit Facilities,
 
(3)            all Interest Swap Obligations and
 
(4)            all obligations under Currency Agreements,
 
in each case whether outstanding on the Issue Date or thereafter incurred.
 
Notwithstanding the foregoing, "Guarantor Senior Debt" does not include
 
(1)            any Indebtedness of such guarantor to its Restricted Subsidiaries or Affiliates or any of such Affiliate's subsidiaries other than as described in clause (2) above,
 
(2)            Indebtedness to, or guaranteed on behalf of, any shareholder, director, officer or employee of such guarantor or any of its Restricted Subsidiaries,
 
(3)            Indebtedness to trade creditors and other amounts incurred in connection with obtaining goods, materials or services,
 
(4)            Indebtedness represented by Disqualified Capital Stock,
 
(5)            any liability for national, state, local or other taxes owed or owing by such guarantor,
 
(6)            Indebtedness incurred in violation of the indenture provisions set forth under Section 4.12,
 
(7)            Indebtedness which, when incurred, is without recourse to the Company and
 
(8)            any Indebtedness that is expressly subordinated in right of payment to any other Indebtedness of such guarantor.
 
3.            Modification of Section 4.12. The first paragraph of Section 4.12 of the Indenture is hereby amended so as to delete the words “which are Guarantors,” such that the first paragraph of Section 4.12 of the Indenture shall provide as follows (deletion added):
 
“Section 4.12  Limitation on Incurrence of Additional Indebtedness.  The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume, guarantee, acquire, become liable, contingently or otherwise, with respect to, or otherwise become responsible for payment of (collectively, “incur”) any Indebtedness (other than Permitted Indebtedness); provided, however, if no Default or Event of Default shall have occurred and be continuing at the time of or as a consequence of the incurrence of any such Indebtedness, the Company and its Restricted Subsidiaries which are Guarantors may incur Indebtedness (including Acquired Indebtedness) if on the date of the incurrence of such Indebtedness, after giving effect to the incurrence thereof, the Consolidated Fixed Charge Coverage Ratio of the Company is greater than 2.0 to 1.0.l.”
 
4.            Modification of Section 6.02. Clause (b) of Section 6.02 of the Indenture is hereby amended so as to delete subclauses (3) and (4) in their entirety and renumber subclause (5) as subclause (3), such that clause (b) of Section 6.02 of the Indenture shall provide as follows (deletion and emphasis added):
 
“(b)  At any time after a declaration of acceleration with respect to the Notes as described in Section 6.02(a), the Holders of a majority in principal amount of the Notes (including any Additional Notes) may rescind and cancel such declaration and its consequences:
 
(1)            if the rescission would not conflict with any judgment or decree;
 
(2)            if all existing Events of Default have been cured or waived except nonpayment of principal or interest that has become due solely because of the acceleration; and
 
(3)            to the extent the payment of such interest is lawful, interest on overdue installments of interest and overdue principal, which has become due otherwise than by such declaration of acceleration, has been paid;
 
(4)            if the Company has paid the Trustee its reasonable compensation and reimbursed the Trustee for its expenses, disbursements and advances; or
 
(3)            in the event of the cure or waiver of an Event of Default of the type described in Section 6.01(6) or (7), the Trustee shall have received an Officer’s Certificate and an Opinion of Counsel that such Event of Default has been cured or waived.  No such rescission shall affect any subsequent Default or impair any right consequent thereto.”
 
ARTICLE III
Miscellaneous
 
11.            Ratification of Indenture; Third Supplemental Indenture Is Part of Indenture. Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect. This Third Supplemental Indenture shall form a part of the Indenture for all purposes, and every Holder of a Note heretofore or hereafter authenticated and delivered shall be bound hereby.
 
12.            Governing Law. THIS THIRD SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. Each of the parties hereto agrees to submit to the non-exclusive jurisdiction of the competent courts of the State of New York in any action or proceeding arising out of or relating to this Third Supplemental Indenture.
 
13.            Duplicate Originals. All parties may sign any number of copies of this Third Supplemental Indenture. Each signed copy shall be an original, but all of them together shall represent the same agreement.
 
14.            Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction hereof.
 
15.            The Trustee. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Third Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Guaranteeing Subsidiaries.
 

 

 
(Signature page follows.)
 


IN WITNESS WHEREOF, the parties hereto have caused this Third Supplemental Indenture to be duly executed and attested, all as of the date first above written.
 

 
BASELL AF SCA


By:            /s/ Francesco Svelto
Name:       Francesco Svelto
Title:         Attorney

NELL ACQUISITION (US) LLC


By:            /s/ Francesco Svelto
Name:       Francesco Svelto
Title:         Attorney

BASELL FINANCE USA INC.


By:            /s/ Francesco Svelto
Name:       Francesco Svelto
Title:         Attorney

BASELL NORTH AMERICA INC.


By:            /s/ Francesco Svelto
Name:       Francesco Svelto
Title:         Attorney

BASELL USA INC.


By:            /s/ Francesco Svelto
Name:       Francesco Svelto
Title:         Attorney

BASELL FUNDING S.à.R.L.


By:            /s/ Francesco Svelto
Name:       Francesco Svelto
Title:         Attorney

BASELL HOLDINGS B.V.


By:            /s/ Francesco Svelto
Name:       Francesco Svelto
Title:         Attorney



BASELL POLYOLEFINE GMBH


By:            /s/ Francesco Svelto
Name:       Francesco Svelto
Title:         Attorney

BASELL BAYREUTH CHEMIE GMBH

By:            /s/ Francesco Svelto
Name:       Francesco Svelto
Title:         Attorney

BASELL GERMANY HOLDINGS
GMBH

By:            /s/ Francesco Svelto
Name:       Francesco Svelto
Title:         Attorney

BASELL POLYOLEFINS UK LTD.

By:            /s/ Francesco Svelto
Name:       Francesco Svelto
Title:         Attorney

BASELL UK HOLDINGS LTD.

By:            /s/ Francesco Svelto
Name:       Francesco Svelto
Title:         Attorney

BASELL CANADA INC.

By:            /s/ Francesco Svelto
Name:       Francesco Svelto
Title:         Attorney

BASELL ASIA PACIFIC LTD.

By:            /s/ Francesco Svelto
Name:       Francesco Svelto
Title:         Attorney



BASELL HOLDINGS B.V.

By:            /s/ Francesco Svelto
Name:       Francesco Svelto
Title:         Attorney

BASELL INTERNATIONAL HOLDINGS
B.V.

By:            /s/ Francesco Svelto
Name:       Francesco Svelto
Title:         Attorney

BASELL BENELUX B.V.

By:            /s/ Francesco Svelto
Name:       Francesco Svelto
Title:         Attorney

BASELL EUROPE HOLDINGS B.V.

By:            /s/ Francesco Svelto
Name:       Francesco Svelto
Title:         Attorney

BASELL FINANCE COMPANY B.V.

By:            /s/ Francesco Svelto
Name:       Francesco Svelto
Title:         Attorney

BASELL SALES & MARKETING
COMPANY B.V.

By:            /s/ Francesco Svelto
Name:       Francesco Svelto
Title:         Attorney

BASELL FINANCE & TRADING
COMPANY B.V.

By:            /s/ Francesco Svelto
Name:       Francesco Svelto
Title:         Attorney

 
THE BANK OF NEW YORK, as Trustee
 
By:            /s/ Jason Blondell
Name:       Jason Blondell
Title:         Authorised Signatory



 EX-4.4(D) 8 lyo10k-032808ex44d.htm FOURTH SUPPLEMENTAL INDENTURE DATED AS OF DECEMBER 20, 2007 TO THE INDENTURE DATED AS OF AUGUST 10, 2005 lyo10k-022808ex44d.htm
Exhibit 4.4(d)
 
Fourth Supplemental Indenture (this “Fourth Supplemental Indenture”), dated as of December 20, 2007, among each of LyondellBasell Finance Company, LBI Acquisition LLC, LBIH LLC, LyondellBasell Netherlands Holdings B.V., Lyondell Refining I LLC, Lyondell Chemical Company, Lyondell LP3 Partners, LP, Lyondell Petrochemical L.P. Inc., Houston Refining LP, Equistar Chemicals, LP, Lyondell Europe Holdings Inc., Lyondell Chemical Products Europe LLC, Lyondell Chimie France LLC, Millennium Specialty Chemicals Inc., Millennium Petrochemicals Inc., Lyondell Chemical Technology, L.P., Lyondell Chemical Technology 1 Inc., Lyondell Refining Company LLC, Lyondell Houston Refinery Inc., Lyondell Chemical Nederland, Ltd., Lyondell-Equistar Holdings Partners, Lyondell (Pelican) Petrochemical L.P.1, Inc., Lyondell LP4 Inc., Lyondell LP3 GP, LLC, Millennium Petrochemicals Partners, LP, Millennium US Op Co, LLC, Millennium America Inc., Millennium America Holdings Inc., Millennium Worldwide Holdings I Inc., Millennium Chemicals Inc., Millennium Petrochemicals GP LLC and Lyondell Chemical Technology Management, Inc., as Guarantors (collectively, the “Guaranteeing Subsidiaries”), and The Bank of New York, a national banking association, as trustee under the Indenture referred to below (the “Trustee”).
 
 
W I T N E S S E T H
 
WHEREAS, Basell AF S.C.A. (formerly Nell AF S.àr.l.), a company incorporated under the laws of The Grand Duchy of Luxembourg (the “Company”), each of the Guarantors that are a signatory thereto, as Guarantors (the “Original Guaranteeing Subsidiaries”), The Bank of New York, as Trustee, Registrar, Paying Agent, Transfer Agent and Listing Agent, ABN AMRO Bank N.V., as Security Agent, and AIB/BNY Fund Management (Ireland) Limited, as Irish Paying Agent, have heretofore executed and entered into an indenture dated as of August 10, 2005 (as supplemented by a supplemental indenture dated as of February 2, 2006 by and among the Guarantors that are a signatory thereto and the Trustee, a second supplemental indenture dated as of May 11, 2007 by and among the Guarantors that are a signatory thereto and the Trustee and a third supplemental indenture dated as of July 26, 2007 by and among the Company, the Guarantors that are a signatory thereto and the Trustee, the “Indenture”) providing for the issuance of an aggregate principal amount of $615,000,000 of the Company’s 83/8% Senior Notes due 2015 (the “Dollar Notes”) and €500,000,000 of the Company’s 83/8% Senior Notes due 2015 (together with the Dollar Notes, the “Notes”); and
 
WHEREAS, Section 4.19 of the Indenture provides that the Company shall cause each Restricted Subsidiary of the Company that, after the Issue Date, guarantees the Senior Secured Credit Facilities (or any facility refinancing or replacing such facilities) to execute and deliver to the Trustee a supplemental inden­ture pursuant to which such Restricted Subsidiary shall guarantee payment of the Notes on the same terms and sub­ject to the same conditions and limitations as those set forth in the Indenture; and
 
WHEREAS, on December 20, 2007, each of the Guaranteeing Subsidiaries guaranteed a credit facility entered into by and among the Company, BIL Acquisition Holdings Limited, Basell Holdings B.V., Basell Finance Company B.V. and Basell Germany Holdings GmbH, as the Borrowers, the guarantors and the other credit parties (if any) party thereto from time to time, the lenders signatory thereto from time to time, Citicorp North America, Inc., as Administrative Agent, Swing Line Lender and Collateral Agent, and Citigroup Global Markets Inc., Goldman Sachs Credit Partners, L.P., Merrill Lynch, Pierce, Fenner & Smith Incorporated, ABN AMRO Incorporated and UBS Securities LLC, as joint lead arrangers and joint bookrunners, which facility will be used, inter alia, to refinance the Senior Secured Credit Facilities;
 
NOW THEREFORE, in consideration of the foregoing, each of the Guaranteeing Subsidiaries and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows:
 
1.  Capitalized Terms. Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.
 
2.  Agreement to Be Bound. Each Guaranteeing Subsidiary hereby becomes a party to the Indenture as a Guarantor and as such will have all of the rights and be subject to all of the obligations and agreements of a Guarantor under the Indenture. Each Guaranteeing Subsidiary agrees to be bound by all of the provisions of the Indenture applicable to a Guarantor and to perform all of the obligations and agreements of a Guarantor under the Indenture.
 
3.  Agreement to Guarantee. Each Guaranteeing Subsidiary hereby, jointly and severally with each Original Guaranteeing Subsidiary, each subsidiary of the Company that issued a Guarantee of the Notes on February 2, 2006 and each subsidiary of the Company that issued a Guarantee of the Notes on May 11, 2007, unconditionally and irrevocably guarantees, on a senior subordinated basis to each Holder of a Note (including any Additional Notes upon issuance in accordance with Section 2.18 of the Indenture) authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforcement of the Indenture, the Notes or the Obligations of the Company or any other Guarantors to the Holders or the Trustee thereunder or under the Indenture, that: (a) the principal of, premium, if any, and interest on the Notes (and any interest accrued pursuant to Section 2.12 of the Indenture or Supplemental Interest accrued pursuant to Section 4.19(c) of the Indenture payable thereon) shall be duly and punctually paid in full when due, whether at maturity, upon redemption at the option of the Holders pursuant to the provisions of the Notes relating thereto, by acceleration or otherwise, and interest on the overdue principal and (to the extent permitted by law) interest, if any, on the Notes and all other obligations of the Company or the Guarantors to the Holders or the Trustee hereunder or thereunder (including amounts due the Trustee under Section 7.07 of the Indenture) and all other payment obligations shall be promptly paid in full or performed, all in accordance with the terms of the Indenture and thereof and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, the same shall be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at maturity, by acceleration or otherwise.
 
4.  Limitation on Guarantees.
 
(a)  
General. The obligations of each Guarantor under its Guarantee are limited to the maximum amount that, after giving effect to all other contingent and fixed liabilities of such Guarantor and after giving effect to any collections from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under its Guarantee or pursuant to its contribution obligations under the Indenture, will result in the obligations of such Guarantor under the Guarantee not constituting a fraudulent conveyance or fraudulent transfer under applicable law.
 
(b)  
Millennium Chemicals Inc. The obligations of any of the Guaranteeing Subsidiaries that is a Restricted Subsidiary (as defined in the indenture dated January 29, 1996 in respect of the Millennium America Inc. 75/8% Senior Notes due 2026 (the “Millennium Notes”), as supplemented by supplemental indentures dated February 15, 1996, December 1, 1997, December 3, 2000 and November 17, 2000, as in effect on the date hereof (the “Millennium Indenture”)) of Millennium Chemicals Inc. shall not exceed the amount permitted to be Incurred (as defined in the Millennium Indenture) as Funded Debt (as defined in the Millennium Indenture) as more fully set forth in Section 1009 of the Millennium Indenture; provided, however, that upon the refinancing in full of the Millennium Notes, this section 4(b) shall cease to operate and have any force and effect as of the date of such refinancing.
 
(c)  
Dutch Guarantors. The obligations under a Guarantee of a Guarantor incorporated in The Netherlands (a “Dutch Guarantor”) or, for the purpose of paragraph (i) below only, of a Subsidiary of such Dutch Guarantor will not apply to the extent that it would result in the Guarantee given by that Dutch Guarantor:
 
i.  
constituting unlawful financial assistance within the meaning of Section 2:98c or 2:207c of the Dutch Civil Code (Burgerlijk Wetboek); or
 
ii.  
conflicting with Section 2:7 of the Dutch Civil Code (Burgerlijk Wetboek).
 
(d)  
Financial Assistance.  Notwithstanding the foregoing each Guarantor is not guaranteeing any liabilities which would result in, and the Trustee and the holders of Notes waive their rights to enforce each Guarantee to the extent and as long as such enforcement would result in, the relevant Guarantor not complying with any applicable financial assistance rules.
 
5.  Ratification of Indenture; fourth Supplemental Indenture Is Part of Indenture. Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect. This Fourth Supplemental Indenture shall form a part of the Indenture for all purposes, and every Holder of a Note heretofore or hereafter authenticated and delivered shall be bound hereby.
 
6.  Governing Law. THIS FOURTH SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. Each of the parties hereto agrees to submit to the non-exclusive jurisdiction of the competent courts of the State of New York in any action or proceeding arising out of or relating to this Fourth Supplemental Indenture.
 
7.  Duplicate Originals. All parties may sign any number of copies of this Fourth Supplemental Indenture. Each signed copy shall be an original, but all of them together shall represent the same agreement.
 
8.  Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction hereof.
 
9.  The Trustee. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Fourth Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by each Guaranteeing Subsidiary.
 

 

 
(Signature page follows.)
 


IN WITNESS WHEREOF, the parties hereto have caused this Fourth Supplemental Indenture to be duly executed and attested, all as of the date first above written.
 

 
LYONDELLBASELL FINANCE COMPANY


By:            /s/ Bruce Dresbach
Name:
Title:


LBI ACQUISITION LLC


By:            /s/ Bruce Dresbach
Name:
Title:


LBIH LLC


By:            /s/ Bruce Dresbach
Name:
Title:


BASELL NETHERLANDS HOLDINGS B.V.


By:            /s/ Bruce Dresbach
Name:
Title:


LYONDELL REFINING I LLC


By:            /s/ Gerald A. O’Brien
Name:
Title:


LYONDELL CHEMICAL COMPANY


By:            /s/ Gerald A. O’Brien
Name:
Title:

 

LYONDELLPOTECHLP, INC.


By:            /s/ Gerald A. O’Brien
Name:
Title:


LYONDELL LP3 PARTNERS, LP


By:            /s/ Gerald A. O’Brien
Name:
Title:


LYONDELL PETROCHEMICAL L.P. INC.


By:            /s/ Gerald A. O’Brien
Name:
Title:


HOUSTON REFINING LP


By:            /s/ Gerald A. O’Brien
Name:
Title:


EQUISTAR CHEMICALS, LP


By:            /s/ Gerald A. O’Brien
Name:
Title:


LYONDELL EUROPE HOLDINGS INC.


By:            /s/ Gerald A. O’Brien
Name:
Title:



 

LYONDELL CHEMICAL PRODUCTS EUROPE LLC


By:            /s/ Gerald A. O’Brien
Name:
Title:


LYONDELL CHIMIE FRANCE LLC


By:            /s/ Gerald A. O’Brien
Name:
Title:


MILLENNIUM SPECIALTY CHEMICALS INC.


By:            /s/ Gerald A. O’Brien
Name:
Title:


MILLENNIUM PETROCHEMICALS INC.


By:            /s/ Gerald A. O’Brien
Name:
Title:


LYONDELL CHEMICAL TECHNOLOGY, L.P.


By:            /s/ Gerald A. O’Brien
Name:
Title:


LYONDELL CHEMICAL TECHNOLOGY 1 INC.


By:            /s/ Gerald A. O’Brien
Name:
Title:


 

LYONDELL REFINING COMPANY LLC


By:            /s/ Gerald A. O’Brien
Name:
Title:


LYONDELL HOUSTON REFINERY INC.


By:            /s/ Gerald A. O’Brien
Name:
Title:


LYONDELL CHEMICAL NEDERLAND, LTD.


By:            /s/ Gerald A. O’Brien
Name:
Title:


LYONDELL-EQUISTAR HOLDINGS PARTNERS


By:            /s/ Gerald A. O’Brien
Name:
Title:


LYONDELL (PELICAN) PETROCHEMICAL L.P.1, INC.


By:            /s/ Gerald A. O’Brien
Name:
Title:


LYONDELL LP4 INC.


By:            /s/ Gerald A. O’Brien
Name:
Title:



 

LYONDELL LP3 GP, LLC


By:            /s/ Gerald A. O’Brien
Name:
Title:


MILLENNIUM PETROCHEMICALS PARTNERS, LP


By:            /s/ Gerald A. O’Brien
Name:
Title:


MILLENNIUM US OP CO, LLC


By:            /s/ Gerald A. O’Brien
Name:
Title:


MILLENNIUM AMERICA INC.


By:            /s/ Gerald A. O’Brien
Name:
Title:


MILLENNIUM AMERICA HOLDINGS INC.


By:            /s/ Gerald A. O’Brien
Name:
Title:


MILLENNIUM WORLDWIDE HOLDINGS I INC.


By:            /s/ Gerald A. O’Brien
Name:
Title:



 

MILLENNIUM CHEMICALS INC.


By:            /s/ Gerald A. O’Brien
Name:
Title:


MILLENNIUM PETROCHEMICALS GP LLC


By:            /s/ Gerald A. O’Brien
Name:
Title:


LYONDELL CHEMICAL TECHNOLOGY MANAGEMENT, INC.


By:            /s/ Gerald A. O’Brien
Name:
Title:


THE BANK OF NEW YORK, as Trustee
 
By:            /s/ Jason Blondell
Name:
Title:

 

 EX-4.5 9 lyo10k-032808ex45.htm SENIOR SECURED INVENTORY-BASED CREDIT AGREEMENT DATED AS OF DECEMBER 20, 2007 lyo10k-022808ex45.htm
EXHIBIT 4.5
 
$1,000,000,000

CREDIT AGREEMENT

Dated as of December 20, 2007

among

LYONDELL CHEMICAL COMPANY

EQUISTAR CHEMICALS, LP,

HOUSTON REFINING LP,

BASELL USA INC.

and

THE SUBSIDIARIES OF BASELL AF S.C.A.
(to be renamed LYONDELLBASELL INDUSTRIES AF S.C.A)
FROM TIME TO TIME PARTY HERETO,
as Borrowers

THE LENDERS PARTY HERETO,

CITIBANK, N.A.,
as Administrative Agent and Co-Collateral Agent

GENERAL ELECTRIC CAPITAL CORPORATION,
as Co-Collateral Agent

CITIGROUP GLOBAL MARKETS INC.
GOLDMAN SACHS CREDIT PARTNERS L.P.,
MERRILL LYNCH CAPITAL CORPORATION,
ABN AMRO INCORPORATED
and
UBS SECURITIES LLC,
Joint Lead Arrangers and Joint Bookrunners

 
GOLDMAN SACHS CREDIT PARTNERS, L.P.
Syndication Agent,

 
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,
Transaction Coordinator

 
TABLE OF CONTENTS

Page

ARTICLE 1
Definitions
 
    
Section 1.01.
Definitions
1
Section 1.02.
Accounting Terms
45
Section 1.03.
Terms Generally
45
Section 1.04.
Classification of Loans and Borrowings
46
Section 1.05.
Lyondell Collateral
46
     
ARTICLE 2
The Loans
     
Section 2.01.
Commitments
46
Section 2.02.
Loans
47
Section 2.03.
Notice of Borrowings
48
Section 2.04.
Conversions and Continuations
49
Section 2.05.
Swingline Loans
50
Section 2.06.
Letters of Credit
52
Section 2.07.
Fees
57
Section 2.08.
Maturity of Loans; Mandatory Prepayments
59
Section 2.09.
Evidence of Debt
60
Section 2.10.
Interest on Loans
61
Section 2.11.
Interest on Overdue Amounts; Alternative Rate of Interest
62
Section 2.12.
Termination and Reduction of Commitments and Swingline Facility
62
Section 2.13.
Optional Prepayment of Loans
63
Section 2.14.
Reserve Requirements; Change in Circumstances
64
Section 2.15.
Change in Legality
66
Section 2.16.
Indemnity
67
Section 2.17.
Pro Rata Treatment
67
Section 2.18.
Sharing of Setoffs
68
Section 2.19.
Taxes
68
Section 2.20.
Duty to Mitigate; Assignment of Commitments Under Certain Circumstances
70
Section 2.21.
Optional Increase In Commitments
71
     
ARTICLE 3
Representations And Warranties
 
    
Section 3.01.
Existence, Qualification And Power; Compliance With Laws
72
Section 3.02.
Authorization; No Contravention.
72
 
i
 
Section 3.03.
Governmental Authorization; Other Consents
73
Section 3.04.
Binding Effect
73
Section 3.05.
Financial Statements; No Material Adverse Effect.
73
Section 3.06.
Litigation
74
Section 3.07.
[Reserved].
74
Section 3.08.
[Reserved].
75
Section 3.09.
Taxes
75
Section 3.10.
ERISA Compliance
75
Section 3.11.
[Reserved].
75
Section 3.12.
Margin Regulations; Investment Company Act
75
Section 3.13.
Disclosure
76
Section 3.14.
[Reserved].
76
Section 3.15.
Anti-Terrorism Laws.
76
Section 3.16.
Solvency
76
Section 3.17.
Collateral
76
     
ARTICLE 4
Conditions Of Lending
     
Section 4.01.
All Borrowings
77
Section 4.02.
Effective Date
78
     
ARTICLE 5
Affirmative Covenants
     
Section 5.01.
Reporting Requirements
79
Section 5.02.
Payment of Obligations
82
Section 5.03.
Preservation Of Existence, Etc
82
Section 5.04.
Maintenance of Properties
83
Section 5.05.
Maintenance of Insurance
83
Section 5.06.
Compliance with Laws
83
Section 5.07.
Compliance with Environmental Laws; Environmental Reports
83
Section 5.08.
Books and Records.
83
Section 5.09.
Inspection Rights
84
Section 5.10.
ERISA.
84
Section 5.11.
Know Your Customer Requests
85
Section 5.12.
Borrowing Base Reports
85
Section 5.13.
Information Regarding Collateral
86
Section 5.14.
Further Assurances
86
     
ARTICLE 6
Negative Covenants
 
    
Section 6.01.
Liens
87
Section 6.02.
Investments
92
Section 6.03.
Indebtedness
95
 
ii
 
Section 6.04.
Fundamental Changes
99
Section 6.05.
Dispositions
100
Section 6.06.
Restricted Payments; Use of Proceeds
102
Section 6.07.
Change in Nature of Business
104
Section 6.08.
Transactions with Affiliates
104
Section 6.09.
Burdensome Agreements
106
Section 6.10.
Anti-Money Laundering
108
Section 6.11.
Capital Expenditures.
108
Section 6.12.
Accounting Changes
109
Section 6.13.
Prepayments, Etc.
109
Section 6.14.
Fixed Charge Coverage Ratio
109
Section 6.15.
Securitization Transactions.
110
 
    
ARTICLE 7
Events Of Default
     
Section 7.01.
Events of Default.
110
     
ARTICLE 8
Administrative Agent
     
     
ARTICLE 9
The Obligors
     
Section 9.01.
Appointment and Authorization of Borrowers Agent
116
Section 9.02.
Joint and Several Obligations
116
Section 9.03.
Contribution; Subordination
117
Section 9.04.
Limitation on Obligations of  Borrowers
117
     
ARTICLE 10
Miscellaneous
     
Section 10.01.
Notices
118
Section 10.02.
No Waivers; Amendments
119
Section 10.03.
Payments
121
Section 10.04.
Governing Law; Submission to Jurisdiction
121
Section 10.05.
Expenses; Documentary Taxes; Indemnity
122
Section 10.06.
Survival of Agreements, Representations and Warranties, Etc
124
Section 10.07.
Successors and Assigns
124
Section 10.08.
Right of Setoff
128
Section 10.09.
Severability
129
Section 10.10.
Cover Page, Table of Contents and Section Headings
129
Section 10.11.
Counterparts; Effectiveness
129
Section 10.12.
WAIVER OF JURY TRIAL.
129
Section 10.13.
Entire Agreement
129
Section 10.14.
Confidentiality
130
Section 10.15.
Lender Action
130

iii
 
Schedules
  
Schedule 1.01
Existing Letters of Credit
Schedule 2.01
Lenders Commitments
Schedule 4.02
Closing Documents
Schedule 5.01:
Website for Posting of Company Financial Statements
Schedule 6.01(b):
Existing liens
Schedule 6.02(e):
Investments
Schedule 6.05(k):
Permitted Dispositions
Schedule 6.08(c):
Transactions With Affiliates
Schedule 6.09:
Burdensome Agreements
Schedule X
Billed but not Shipped Inventory
 
  
Exhibits
  
Exhibit A
Form of Assignment and Acceptance
Exhibit B
Form of Revolving Borrowing Request
Exhibit C
Form of Borrowing Base Certificate
Exhibit D
[Reserved]
Exhibit E-1
Form of Opinion of Skadden, Arps, Slate, Meagher & Flom LLP,
 
Special Counsel for Lyondell
Exhibit E-2
Form of Opinion of Gerald A. OBrien, Esq.,
 
Deputy General Counsel of Lyondell
Exhibit F
Form of Security Agreement
Exhibit G
Form of Borrower Designation
Exhibit H
Form of Collateral Access Agreement
Exhibit I-1
Form of Intercreditor Agreement
Exhibit I-2
Form of ABL Intercreditor Agreement
Exhibit I-3
Form of Basell Capital Intercreditor Agreement
Exhibit J
Form of Subsidiary Guaranty

iv

CREDIT AGREEMENT dated as of December 20, 2007, among LYONDELL CHEMICAL COMPANY (which is the surviving entity following its merger with BIL ACQUISITION HOLDINGS LIMITED), a Delaware corporation, EQUISTAR CHEMICALS, LP, a Delaware limited partnership, HOUSTON REFINING LP, a Delaware limited partnership, BASELL USA INC., a Delaware corporation, and the Subsidiaries of LYONDELLBASELL INDUSTRIES AF S.C.A (formerly known as BASELL AF S.C.A.) from time to time party hereto as Borrowers; the LENDERS party hereto and CITIBANK, N.A., as Administrative Agent, Collateral Agent and Fronting Bank (this Agreement).

The Borrowers (such term and each other capitalized term used but not otherwise defined herein having the meaning assigned to it in Article 1) desire to borrow on a revolving basis an aggregate principal amount not in excess of $1,000,000,000 (subject to increase pursuant to the terms of Section 2.21).  The proceeds of Borrowings on the Effective Date are to be used to finance the Transaction.  The proceeds of Borrowings subsequent to the Effective Date are to be used for general corporate or partnership purposes, as applicable, otherwise permitted hereunder.  The Lenders are willing to extend such credit to the Borrowers on the terms and subject to the conditions set forth herein.

Accordingly, in consideration of the mutual agreements herein contained and other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto hereby agree as follows:


ARTICLE 1
Definitions

Section 1.01.  Definitions.  As used in this Agreement, the following terms shall have the meanings specified below:

ABR Borrowing shall mean a Borrowing comprised of ABR Loans.

ABR Loan shall mean (i) any Swingline Loan and (ii) any Revolving Loan bearing interest at a rate determined by reference to the Alternate Base Rate in accordance with Article 2.

Access Agreement shall mean an agreement, in form and substance reasonably acceptable to the Administrative Agent (it being understood that such agreements entered into by Equistar and its Subsidiaries since December 17, 2003 and prior to the date of this Agreement are acceptable to Administrative Agent), pursuant to which a holder of a Lien on premises of the Borrowers where Eligible Inventory is located agrees and acknowledges, among other things, that the Administrative Agent may without interference from such Lien holder (i) gain access to, remove and exercise its rights against any Inventory located at such premises after an Event of Default, and that such Lien holder may not remove or exercise any remedies against such Inventory except as agreed, (ii) for a period of time not less than ninety (90) days (or such shorter time period as the Administrative Agent may agree in its sole discretion) after the Administrative Agent shall have taken possession of such Inventory, (A) store such Inventory at such premises and (B) conduct a sale of such Inventory at such premises and (iii) examine and make copies of books and records of the Borrowers located at such premises with respect to such Inventory.


Acquisition means the merger of BIL Acquisition Holdings Limited into Lyondell pursuant to the Acquisition Agreement.

Acquisition Agreement means that certain Agreement and Plan of Merger, dated as of July 16, 2007, by and among the Company, BIL Acquisition Holdings Limited and Lyondell.

Additional Letter of Credit shall mean a letter of credit issued hereunder by the Fronting Bank on or after the Effective Date.

Adjusted LIBO Rate shall mean, with respect to any Interest Period for any LIBOR Loan, an interest rate per annum equal to the rate per annum obtained by dividing (a) the LIBO Rate by (b) a percentage equal to (i) 100% minus (ii) the reserve percentage applicable two (2) Business Days before the first day of such Interest Period under regulations issued from time to time by the FRB for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) for a member bank of the Federal Reserve System in New York City with respect to liabilities or assets consisting of or including Eurocurrency liabilities (or with respect to any other category of liabilities that includes deposits by reference to which the LIBO Rate is determined) having a term equal to such Interest Period.

Administrative Agent shall mean Citibank, in its capacity as administrative agent for the Lenders under the Loan Documents, and its successors in such capacity.

Administrative Fees shall have the meaning assigned to such term in Section 2.07(c).

Administrative Questionnaire shall mean, with respect to each Lender, an administrative questionnaire in the form prepared by the Administrative Agent, completed by such Lender and returned to the Administrative Agent.

Affiliate shall man, with respect to any specified Person, any other Person that directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such specified Person.  The term control means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise; controlling and controlled have meanings correlative of the foregoing; provided, however, that none of the Arrangers or their respective Affiliates shall be deemed an Affiliate of the Company.

2

Agent shall mean any of the Administrative Agent, the Collateral Agent, the Syndication Agent and the Transaction Coordinator, and Agents shall mean any two or more of the foregoing.

Agreement shall have the meaning specified in the recitals hereto.

Alternate Base Rate shall mean, for any period, a fluctuating interest rate per annum as shall be in effect from time to time, which rate per annum shall be equal at all times to the highest of the following:

(a)            the rate of interest announced publicly by Citibank in New York, New York, from time to time, as Citibanks base rate (or equivalent rate otherwise named);

(b)            the sum (adjusted to the nearest 0.25% or, if there is no nearest 0.25%, to the next higher 0.25%) of (i) 0.5% per annum, (ii) the rate per annum obtained by dividing (A) the latest three (3)-week moving average of secondary market morning offering rates in the United States for three (3)-month certificates of deposit of major United States money market banks, such three (3)-week moving average being determined weekly on each Monday (or, if any such day is not a Business Day, on the next succeeding Business Day) for the three (3)-week period ending on the previous Friday by Citibank on the basis of such rates reported by certificate of deposit dealers to and published by the Federal Reserve Bank of New York or, if such publication shall be suspended or terminated, on the basis of quotations for such rates received by Citibank from three (3) New York certificate of deposit dealers of recognized standing selected by Citibank, by (B) a percentage equal to 100% minus the average of the daily percentages specified during such three (3)-week period by the FRB for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) for Citibank in respect of liabilities consisting of or including (among other liabilities) three (3)-month U.S. dollar nonpersonal time deposits in the United States and (iii) the average during such three (3)-week period of the maximum annual assessment rates estimated by Citibank for determining the then current annual assessment payable by Citibank to the Federal Deposit Insurance Corporation (or any successor) for insuring Dollar deposits in the United States; and

(c)            0.5% per annum plus the Federal Funds Effective Rate.

3

Anti-Terrorism Laws shall mean:

(a)            the Executive Order No. 13224 of September 23, 2001 blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten To Commit, or Support Terrorism;

(b)            the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56 (commonly known as the USA Patriot Act);

(c)            the Money Laundering Control Act of 1986, Public Law 99-570;

(d)            the International Emergency Economic Powers Act, 50 U.S.C. 1701 et seq, the Trading with the Enemy Act, 50 U.S.C. App. 1 et seq, any Executive Order or regulation promulgated thereunder and administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury; and

(e)            any similar law enacted in the United States of America subsequent to the date of this Agreement.

Anti-Terrorism Party shall mean  any person listed:

(a)            in the Annex to Executive Order No. 13224 on Terrorist Financing, effective September 2001;

(b)            on the Specially Designated Nationals and Blocked Persons list maintained by the Office of Foreign Assets Control of the U.S. Department of the Treasury;

(c)            in any successor list to either of the foregoing; or

(d)            any person or entity that commits, threatens or conspires to commit or supports terrorism as defined in Executive Order No. 13224 on Terrorist Financing, effective September 2001.

Applicable Commitment Fee Rate shall mean (a) for the initial period commencing on the Effective Date and ending on the last day of the calendar month in which the Administrative Agent receives unaudited financial statements of the Company and its consolidated subsidiaries as of, and for the fiscal quarter ending, June 30, 2008 in accordance with and satisfying the requirements of Section 5.01, 0.35% per annum and (b) thereafter, 0.35% per annum for any day on which Total Outstandings are less than or equal to 50% of the Total Commitment, and 0.25% per annum for any day on which Total Outstandings exceed 50% of the Total Commitment.

4

Applicable L/C Margin shall mean (a) for the initial period commencing on the Effective Date and ending on the last day of the calendar month in which the Administrative Agent receives unaudited financial statements of the Company and its consolidated subsidiaries as of, and for the fiscal quarter ending, June 30, 2008 in accordance with and satisfying the requirements of Section 5.01, 1.75% per annum, and (b) thereafter, as of any date of determination, a per annum rate equal to the rate set forth below opposite the then applicable Average Monthly Excess Availability (determined as of the last day of the most recently concluded calendar month):

Average Monthly Excess Availability
ApplicableL/C Margin
Greater than or equal to $1,500,000,000
1.50%
Less than $1,500,000,000 and greater than or equal to $500,000,000
1.75%
Less than $500,000,000
2.00%

provided, however, that upon the occurrence and during the continuance of an Event of Default, the Applicable L/C Margin shall be the sum of the otherwise applicable rate set forth in the table above plus 2.00% per annum.  Changes in the Applicable L/C Margin resulting from a change in the Average Monthly Excess Availability for any calendar month shall become effective as to all outstanding Letters of Credit on the first day of the next calendar month.

Applicable Lending Office shall mean, with respect to each Lender, (i) such Lenders domestic lending office in the case of an ABR Loan or (ii) such Lenders LIBOR Lending Office in the case of a LIBOR Loan.

Applicable Margin shall mean (a) for the initial period commencing on the Effective Date and ending on the last day of the calendar month in which the Administrative Agent receives unaudited financial statements of the Company and its consolidated subsidiaries as of, and for the fiscal quarter ending, June 30, 2008 in accordance with and satisfying the requirements of Section 5.01, in the case of ABR Loans, 1.00% per annum and, in the case of LIBOR Loans, 2.00% per annum; and (b) thereafter, as of any date of determination, a per annum rate equal to the rate set forth below opposite the then applicable Average Monthly Excess Availability (determined as of the last day of the most recently concluded calendar month):

Average Monthly Excess Availability
ABR Loans
Libor Loans
Greater than or equal to $1,500,000,000
0.75%
1.75%
Less than $1,500,000,000 and greater than or equal to $500,000,000
1.00%
2.00%
Less than $500,000,000
1.25%
2.25%

5
 
provided, however, that upon the occurrence and during the continuance of an Event of Default, the Applicable Margin shall be the sum of the otherwise applicable rate set forth in the table above for ABR Loans or LIBOR Loans, as the case may be, plus 2.00% per annum.  Changes in the Applicable Margin resulting from a change in the Average Monthly Excess Availability for any calendar month shall become effective as to all Loans on the first day of the next calendar month.

Appraisal Report shall mean any appraisal report reasonably satisfactory to the Administrative Agent and prepared by independent consultants selected by the Administrative Agent and reasonably satisfactory to the Borrowers.

Arranger shall mean each of Citigroup Global Markets Inc., Goldman Sachs Credit Partners L.P., Merrill Lynch Capital Corporation, ABN AMRO Incorporated and UBS Securities LLC, in its capacity as a joint lead arranger and joint bookrunner in respect of this Agreement.

Assignment and Acceptance shall mean an assignment and acceptance entered into by a Lender and an assignee, substantially in the form of Exhibit A.

Attributable Indebtedness shall mean, on any date, in respect of any Capitalized Lease of any Person, the capitalized amount thereof of any liability that would be required to appear on a balance sheet of such Person prepared as of such date in accordance with GAAP.

6

Availability Reserves shall mean, as of any date of determination and without duplication of any Valuation Reserves or any other Availability Reserves, such reserves in amounts as the Administrative Agent may from time to time establish (upon five (5) Business Days notice to the Borrowers in the case of new reserve categories established after the Effective Date and changes in the methodology for determining a reserve and upon one (1) Business Days notice to the Borrowers in other cases) and revise (upward or downward based upon existing methodology): (i) to reflect events, conditions, contingencies or risks which, as reasonably determined by the Administrative Agent, do or are reasonably likely to materially adversely affect either (a) Eligible Inventory or its value or (b) the security interests and other rights of any Agent or Lender in the Collateral other than Ineligible Inventory (including the enforceability, perfection and priority thereof) or (ii) to reflect the Administrative Agents reasonable belief that any collateral report or financial information furnished by or on behalf of the Borrowers is or may have been incomplete, inaccurate or misleading in any material respect in a manner which adversely affects one or more components of the Borrowing Base to an extent greater than that otherwise contemplated in the determination thereof (such reserve to remain applicable for so long as such adverse effect remains applicable) or (iii) in respect of any state of facts that the Administrative Agent reasonably determines constitutes a Default or an Event of Default and that adversely affects one or more components of the Borrowing Base to an extent greater than that otherwise contemplated in the determination thereof (such reserve to remain applicable for so long as such adverse effect remains applicable); provided that, at any date of determination (unless and until otherwise determined by the Administrative Agent), Availability Reserves shall include (a) a reserve equal to three times the most recently reported monthly aggregate amount of charges by a landlord, bailee, consignee, processor, warehouseman or other third-party who stores, processes, maintains or holds Eligible Inventory and applicable rail car lease and transportation expense as determined by Lyondell (but excluding any such expense as to which the rights of the payee are subject to a Third Party Agreement), (b) a reserve for deductibles applicable to the Borrowers insurance policies covering Eligible Inventory, (c) a reserve for other credit exposures secured by the Collateral (other than credit exposures secured exclusively by Ineligible Inventory) including obligations arising out of cash management arrangements related to this Agreement and (d) a reserve for any Liens on Eligible Inventory or on premises of the Borrowers where Eligible Inventory is located (other than (x) Liens consisting of (i) easements, building restrictions, rights-of-way, irregularities of title and other such encumbrances or charges not interfering in any material respect with the ordinary conduct of business of any Borrower, (ii) leases, subleases or licenses by any Borrower as lessor, sublessor or licensor in the ordinary course of business and (iii) without limiting the applicability of an Availability Reserve under clause (a) above, the interest of a lessor or licensor under an operating lease or license under which any Borrower is lessee, sublessee or licensee, including protective financing statement filings, on such premises and (y) nonconsensual Liens on such premises that do not impair access to, or the removal of or exercise of remedies in respect of, such Inventory), unless the rights of the holder of such Lien are subject to a Third Party Agreement (such reserve not to exceed the lesser of (i) the amount of the affected Eligible Inventory and (ii) the amount of the obligations secured by such holders Lien).

Available Inventory shall mean, at any time, the lesser of (a) 75% of each Category of Eligible Inventory and (b) the product of (x) 85%  (70% in the case of High Seas Inventory) of the Orderly Liquidation Value Rate multiplied by (y) each Category of Eligible Inventory; provided that (i) Available Inventory shall in no event exceed 75% of Eligible Inventory and (ii) the amount of Available Inventory in respect of High Seas Inventory shall at no time exceed $100,000,000.

Average Monthly Excess Availability shall mean, for any calendar month, the sum, without duplication, of (i) the average daily Total Excess Availability plus (ii) the average daily unrestricted cash of the Restricted Parties (as determined by Lyondell from treasury records on a non-GAAP basis), in each case for such calendar month.

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Basell USA shall mean Basell USA Inc., a Delaware corporation

Borrower shall mean each of Lyondell, HRLP, Equistar, Basell USA and any other Subsidiary of the Company (i) that is not a Foreign Subsidiary, (ii) that is not a member of the Millennium Holdings Group, unless any member of the Millennium Holdings Group has become an Originator under and as defined in the 2007 RSA and (iii) that the Company designates as a Borrower for purposes hereof by causing such Subsidiary to deliver to the Administrative Agent an instrument in substantially the form of Exhibit G duly executed by such Subsidiary, provided that such Subsidiary shall not become a Borrower until such time as the Collateral Requirement shall be satisfied after giving effect to its designation as a Borrower.

Borrowers Agent shall mean Lyondell, in its capacity as agent for the Borrowers under the Loan Documents, and its successors in such capacity.

Borrowing shall mean (a) a Loan or group of Loans of a single Class and Type made by the Lenders on a single date and as to which a single Interest Period is in effect or (b) a Swingline Loan.

Borrowing Base shall mean, at any time, subject to adjustment as provided in Section 5.14(b)(iii), an amount equal to the sum of (i) (x) Available Inventory as reflected in the most recent Borrowing Base Certificate delivered pursuant to Section 5.12 less (y) Availability Reserves at such time plus (ii) Cash Collateral at such time.  Standards of eligibility and reserves and advance rates of the Borrowing Base may be revised and adjusted from time to time by the Administrative Agent (subject to Section 10.02(b) hereof and to any limitations herein expressly made applicable to the exercise of such rights) upon one (1) Business Days notice to the Borrowers; provided that any such changes in such standards or in advance rates shall not be effective until five (5) Business Days after giving notice thereof to the Borrowers.  Actions by the Administrative Agent pursuant to the preceding sentence, and all other actions by the Administrative Agent in respect of the determination of the Borrowing Base (including as provided in the definitions of Availability Reserves, Ineligible Inventory and Valuation Reserves), shall be taken by it in the good faith exercise of its discretion in a manner consistent with its customary credit policies for asset-based credit facilities.

Borrowing Base Certificate shall mean a certificate, appropriately completed and substantially in the form of Exhibit C (with such modifications as to format and presentation as may be reasonably requested by the Administrative Agent upon five (5) Business Days notice) together with all attachments and supporting documentation (i) as contemplated thereby and (ii) as outlined on Schedule 1 to Exhibit C.

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Borrowing Request shall mean a request made pursuant to Section 2.03 substantially in the form of Exhibit B.

Business Day shall mean any day which is not a Saturday, Sunday or legal holiday in the State of New York or the State of Texas on which banks are open for business in New York City and Houston, provided, however, that when used in connection with the Adjusted LIBO Rate, the term Business Day shall also exclude any day on which banks are not open for dealings in deposits in United States dollars in the London interbank market.

Capital Expenditures shall have the meaning specified in the Senior Facility Credit Agreement.

Capitalized Leases shall mean all leases which, in accordance with GAAP, are recorded as capitalized leases; provided that for all purposes hereunder the amount of principal obligations under any Capitalized Lease shall be the Attributable Indebtedness related thereto.

Carry-Forward Amount has the meaning specified in Section 6.11.

Cash Collateral shall mean cash on deposit in, and Liquid Investments held in, the Cash Collateral Account.

Cash Collateral Account shall have the meaning specified in the Security Agreement.

Cash Equivalents shall mean any of the following types of Investments, to the extent owned by any Restricted Party:

(a)  a time deposit or demand deposit in local currencies held by it from time to time in the ordinary course of business;

(b)  an obligation, maturing within two (2) years after the date of its acquisition, issued or guaranteed by the United States of America, Australia, Switzerland, Japan, Canada or any state which was a member state of the European Union on December 31, 2003 or an instrumentality or agency thereof;

(c)  a certificate of deposit or bankers acceptance, maturing within one (1) year after the date of its acquisition, issued by any Lender or a U.S. national or state bank or trust company or a European, Canadian, Australian, Swiss or Japanese bank, in each case having capital, surplus and undivided profits of at least $100,000,000 and whose long-term unsecured debt has a rating of A or better by S&P or A2 or better by Moodys or the equivalent rating by any other nationally recognized rating agency;

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(d)  commercial paper, maturing within one (1) year after the date of its acquisition, which has a rating of A1 or better by S&P or P1 or better by Moodys, or the equivalent rating by any other nationally recognized rating agency;

(e)  repurchase agreements and reverse repurchase agreements with an outstanding term not in excess of one (1) year after the date of its acquisition with any financial institution which has been elected as a primary government securities dealer by the Federal Reserve Board or in respect of instruments set forth in clauses (c) or (d) above of the credit quality set forth in such applicable clause;

(f)  Money Market preferred stock maturing within six (6) months after the date of its acquisition or municipal bonds issued by a corporation organized under the laws of any state of the United States, Australia, Japan, Canada, Switzerland or any state which was a member state of the European Union on December 31, 2003, or an instrumentality or agency thereof, which has a rating of A or better by S&P or Moodys or the equivalent rating by any other nationally recognized rating agency;

(g)  tax exempt floating rate option tender bonds backed by letters of credit issued by a national or state bank whose long-term unsecured debt has a rating of AA or better by S&P or Aa2 or better by Moodys or the equivalent rating by any other nationally recognized rating agency; and

(h)  shares of any fund holding assets consisting (except for de minimis amounts) of the type specified in clauses (b) through (g) above.

Casualty Event shall mean any event that gives rise to the receipt by any Restricted Party of any insurance proceeds or condemnation awards in respect of (i) any Collateral or (ii) any equipment, fixed assets or real property (including any improvements thereon) to replace or repair such equipment, fixed assets or real property.

Category shall mean any of the categories of inventory classification set forth in Exhibit C.

CERCLA shall mean the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as subsequently amended.

Change in Law means, the introduction of, or any change in or in the interpretation of, any law, treaty or governmental rule, regulation or order or the compliance with any guideline, request or directive from any Governmental Authority (whether or not having the force of law)

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Change of Control means the occurrence of any of the following:

(1)            the Sponsor (as defined in the Senior Facility Credit Agreement) ceases to hold legally and beneficially:

(a)            issued share capital having the right to cast at least 51% (or, following a Listing, at least 35%) of the votes capable of being cast in general meetings of the Company; or

(b)            before a Listing, the right to determine the composition of the majority of the board of directors or equivalent body of the Company;

(2)            following a Listing, any Person or group of Persons acting in concert (other than the Sponsor) owns, directly or indirectly, a greater percentage of the issued share capital or issued share capital with voting rights of the Company than the Sponsor or, at any time, otherwise acquires control of the Company; or

(3)            the replacement of a majority of the board of directors of the Company over a two (2)-year period from the directors who constituted the board of directors of the Company at the beginning of such period, and such replacement shall not have been approved by a vote of at least a majority of the board of directors of the Company then still in office who either were members of such board of directors at the beginning of such period or whose election as a member of such board of directors was previously so approved; or

(4)            the adoption by the stockholders of the Company of a plan or proposal for the liquidation or dissolution of the Company, other than, in each case, a transaction complying with the covenant described in Section 7.04 of the Senior Facility Credit Agreement; or

(5)            the Company ceases to own, directly or indirectly, 100% of the Equity Interests in any Borrower unless such Borrower ceases to be a Borrower hereunder.

Citibank shall mean Citibank, N.A., a national banking association, and its successors.

Class, when used in respect of any Loan or Borrowing, shall refer to whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans or Swingline Loans.

Code means the Internal Revenue Code of 1986, as amended from time to time.

Collateral shall mean any and all Collateral, as defined in any applicable Collateral Document.

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Collateral Access Agreement shall mean an agreement substantially in the form of Exhibit H.

Collateral Agent shall mean Citibank in its capacity as collateral agent in respect of the Loan Documents.

Collateral Availability shall mean, at any time, an amount equal to (i) the Borrowing Base at such time, less (ii) the Total Outstandings at such time.

Collateral Documents shall mean the Security Agreement and any additional security or control documentation delivered or required to be delivered pursuant to the Loan Documents to secure the Obligations or the Secured Obligations as defined in any such Loan Document.

Collateral Requirement shall mean, subject to Section 1.05, the requirement that:

(a)            the Administrative Agent shall have received a counterpart of the Security Agreement duly executed and delivered on behalf of each Borrower;

(b)            the Administrative Agent shall have a perfected security interest in all outstanding Equity Interests of Basell Capital Corporation;

(c)            all documents and instruments, including Uniform Commercial Code financing statements, required by law or reasonably requested by the Administrative Agent to be filed, registered or recorded to create the Liens intended to be created by the Collateral Documents and perfect or record such Liens to the extent, and with the priority, required by the Loan Documents, shall have been filed, registered or recorded;

(d)            each Loan Party shall have obtained all material consents and approvals required to be obtained by it in connection with the execution and delivery of all Collateral Documents to which it is a party, the performance of its obligations thereunder and the granting of the Liens granted by it thereunder;

(e)            each Loan Party shall have taken all other action required under the Collateral Documents to perfect, register and/or record the Liens granted by it thereunder;

(f)            each Restricted Account contemplated by the Security Agreement shall have been established, and the Administrative Agent shall have control (within the meaning of Section 9-104 of the UCC) of the Inventory Concentration Account, the Sweep Account and the Cash Collateral Account;

(g)            the Administrative Agent shall have received a favorable written opinion of counsel to the Loan Parties addressed to the Administrative Agent and the Lenders covering the matters reasonably requested by the Administrative Agent; and

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(h)            the Administrative Agent shall have received a fully executed copy of the Intercreditor Agreement.

Commitment shall mean, with respect to each Lender, the commitment of such Lender to make Revolving Loans and to acquire participations in Letters of Credit and Swingline Loans hereunder, as set forth on Schedule 2.01 or, in the case of any new Lender, in the Assignment and Acceptance pursuant to which such Lender shall have assumed its Commitment, in each case as such commitment may be (a) reduced from time to time pursuant to Section 2.12 , (b) increased from time to time pursuant to Section 2.21 or (c) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 10.07.  The aggregate amount of the Commitments on the Effective Date is $1,000,000,000.

Company shall mean LyondellBasell Industries AF S.C.A (formerly known as Basell AF S.C.A.), a company existing under the laws of the Grand Duchy of Luxembourg.

Compliance Period means the period commencing on the Effective Date and ending (i) ten (10) days thereafter with respect to the matters in clauses (c) and (e) of the definition of Collateral Requirement and (ii) thirty (30) days thereafter with respect to the matters set forth in clause (f) of such definition (or such longer period thereafter as the Administrative Agent may, in the good faith exercise of its discretion, determine to be warranted).

Consolidated EBITDA means, with respect to the Company and its Restricted Subsidiaries, for any Test Period, the sum, without duplication, of:

(1)  Consolidated Net Income, and

(2)  to the extent such Consolidated Net Income has been reduced thereby,

(a)            all income taxes paid or accrued (other than income taxes attributable to extraordinary gains or losses),

(b)            Consolidated Interest Expense,

(c)            Consolidated Non-cash Charges,

(d)            the amount of net loss resulting from the payment of any premiums, fees or similar amounts that are required to be paid under the terms of the instrument(s) governing any Indebtedness upon the repayment or other extinguishment of such Indebtedness in accordance with the terms of such Indebtedness,

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(e)            management fees and merger and acquisition advisory fees paid to the Sponsor,

(f)            any inventory write-up in connection with purchase accounting in respect of acquisitions (including the Acquisition), and

(g)            the amount of net cost savings projected by the Company in good faith to be realized by specified actions taken prior to or during such period; provided that (x) such cost savings are reasonably identifiable and factually supportable, (y) such actions have been taken or are to be taken within twelve (12) months of the date or determination to take such action and the benefit is expected to be realized within twelve (12) months of taking such action, and (z) the aggregate amount of such cost savings added pursuant to this clause (i) shall not exceed $150,000,000 during such Test Period.

Consolidated Interest Expense means, with respect to the Company and its Restricted Subsidiaries and for any period, without duplication:

(1)            the interest expense (including yield expense in the case of any Securitization Transaction) in respect of Financial Indebtedness, including:
 
(a)            any amortization of debt discount;

(b)            all capitalized interest; and

(c)            the interest portion of any deferred payment obligation,

 but excluding, in each case, any amortization or write-off of deferred financing costs and fees incurred in connection with the incurrence of any Indebtedness or Securitization Transactions; plus

(2)            the net amount paid (or deducting the net amount received) by the Company and its Restricted Subsidiaries in respect of the relevant period under any Obligations in respect to Swap Contracts consisting of interest rate hedging arrangements or the interest rate component of currency hedging arrangements, plus

(3)            the interest component of Capitalized Leases paid, accrued and/or scheduled to be paid or accrued during such period,
 
less  interest income.

Consolidated Net Income means, with respect to the Company and its Restricted Subsidiaries, for any Test Period:

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(1)  net income (or loss), plus

(2)  cash dividends or distributions paid to the Company or any Restricted Subsidiary by any other Person (the Payor) other than a Restricted Subsidiary, to the extent not otherwise included in Consolidated Net Income, which have not been derived from Indebtedness of the Payor to the extent such Indebtedness is Guaranteed by the Company or a Restricted Subsidiary;

provided that there shall be excluded therefrom (but only to the extent included in the calculation of the foregoing):

(a)  after-tax gains from asset sales or abandonments or reserves relating thereto;

(b)  after-tax items classified as extraordinary gains or losses (including for the avoidance of doubt and irrespective of its classification, the effect of any impairment of goodwill arising as a result of the Acquisition) and any gains or losses on the disposal or reversal of impairment losses on assets;

(c)  the net income (but not loss) of any Restricted Subsidiary that is not a Loan Party, to the extent that the declaration of dividends or similar distributions by that Restricted Subsidiary of that income is restricted;

(d)  the net income or loss of any Person other than a Restricted Subsidiary, except to the extent of cash dividends or distributions paid to the Company or to a Restricted Subsidiary by such Person;

(e)  any restoration to income of any contingency reserve, except to the extent that provision for such reserve was made out of Consolidated Net Income accrued at any time following the Effective Date;

(f)  income or loss attributable to discontinued operations (including, operations disposed of during such period whether or not such operations were classified as discontinued);

(g)  in the case of a successor to the Company by consolidation, merger or amalgamation or as a transferee of the Companys assets, any earnings or losses of the successor corporation prior to such consolidation, merger, amalgamation or transfer of assets;

(h)  all dividends received by the Company as described in clause (4) of the second paragraph of the definition of Indebtedness to the extent the Company is obligated to apply such dividends in the repayment of such Indebtedness; and

(i)  any increase in amortization or depreciation as a result of the receipt of any insurance proceeds from damage to property.

Consolidated Net Tangible Assets means, as of any date, the total amount of assets (less applicable reserves and other properly deductible items) of the Company and its Restricted Subsidiaries, as of the last day of the then most recently ended fiscal year for which financial statements have been delivered pursuant to Section 5.01, after deducting therefrom (1) all current liabilities (excluding any thereof which are by their terms extendible or renewable at the option of the obligor thereon to a time more than twelve (12) months after the time as of which the amount thereof is being computed and excluding current maturities of long term debt), and (2) all goodwill, IP Rights, unamortized debt discount and other like intangible assets.

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Consolidated Non-cash Charges means, with respect to the Company and its Restricted Subsidiaries, for any period, the aggregate depreciation, amortization and other non-cash expenses reducing Consolidated Net Income of such Person for such period (excluding any such charges constituting an extraordinary item or loss or any such charge which requires an accrual of or a reserve for cash charges for any future period).

Covered Disposition shall mean any Disposition by any Loan Party, but excluding  Dispositions permitted by Section 6.05(a) - (e), (g) - (i) or (k) - (n).

Credit Event shall mean any Borrowing (including a Borrowing resulting from a conversion or continuation of Loans pursuant to Section 2.04) or any issuance, amendment, renewal or extension of a Letter of Credit.

Credit Exposure shall mean, with respect to any Lender at any time, such Lenders Commitment at such time or, if the Commitments shall have been terminated, such Lenders Outstandings at such time.

Debtor Relief Laws means the Bankruptcy Code of the United States, the Dutch Bankruptcy Act (Faillissementswet), the German Insolvency Law, the Luxembourg insolvency laws and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, faillissement, surseance van betaling, onderbewindstelling, ontbinding, or similar debtor relief laws of the United States, The Netherlands, Luxembourg or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally (including, in the case of Loan Parties incorporated or organized in England, Wales or Hong Kong, administration, administrative receivership, voluntary arrangement and schemes of arrangement).

Default shall mean any condition or event that constitutes an Event of Default or that with the giving of notice or lapse of time or both would constitute an Event of Default.

Defaulting Lender shall mean any Lender that (a) has failed to fund any portion of the Revolving Loans, participations in Letters of Credit or participations in Swingline Loans required to be funded by it hereunder within one (1) Business Day of the date required to be funded by it hereunder, unless the subject of a good faith dispute or subsequently cured (but only from when subsequently cured), (b) has otherwise failed to pay over to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder within one (1) Business Day of the date when due, unless the subject of a good faith dispute or subsequently cured (but only from when subsequently cured), or (c) has been deemed insolvent or become the subject of a bankruptcy or insolvency proceeding.

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Disposition or Dispose means the sale, transfer, license, lease or other disposition (including any sale and leaseback transaction and any sale or issuance of Equity Interests) of any property by any Person, including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith.

Disqualified Equity Interests means that portion of any Equity Interest which, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event, matures or is mandatorily redeemable (other than redeemable only for Equity Interests of such Person that is not itself a Disqualified Equity Interest), pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof, on or prior to the date that is ninety-one (91) days after the Commitment Termination Date, provided, however, that any Equity Interest that would not constitute a Disqualified Equity Interest but for provisions thereof giving holders thereof the right to require such Person to purchase or redeem such Equity Interest upon the occurrence of a change of control occurring prior to the date that is ninety-one (91) days after the Commitment Termination Date shall not constitute a Disqualified Equity Interest.

Notwithstanding the preceding sentence, only the portion of such Equity Interest which so matures or is mandatorily redeemable or is so convertible or exchangeable prior to the date that is ninety-one (91) days after the Termination Date shall be so deemed a Disqualified Equity Interest.  The amount of any Disqualified Equity Interest that does not have a fixed redemption, repayment or repurchase price will be calculated in accordance with the terms of such Disqualified Equity Interest as if such Disqualified Equity Interest were redeemed, repaid, converted or repurchased on any date on which the amount of such Disqualified Equity Interest is to be determined pursuant hereto; provided, however, that if such Disqualified Equity Interest could not be required to be redeemed, repaid, converted or repurchased at the time of such determination, the redemption, repayment or repurchase price will be the book value of such Disqualified Equity Interest as reflected in the most recent financial statements of such Person.

Dividend Payment means

(1)            a declaration or payment of any dividend or the making of any distribution, other than dividends or distributions payable in Qualified Equity Interests of a Borrower and dividends or distributions payable solely to a Borrower or a Restricted Subsidiary of a Borrower, and other than pro rata dividends or other distributions made by a Subsidiary of a Borrower that is not a wholly-owned Subsidiary to minority shareholders (or owners of an equivalent interest in the case of a Subsidiary that is an entity other than a corporation), on or in respect of shares of a Persons Equity Interests to holders of such Equity Interests,
 
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(2)            the purchase, redemption or other acquisition or retirement for value of any Equity Interests of a Borrower or any warrants, rights or options to purchase or acquire shares of any class of such Equity Interests, or

(3)            any Investment other than an Investment permitted by Section 6.02.

Dollars or $ shall mean lawful currency of the United States of America.

Effective Date shall mean the date, on or before December 31, 2007, on which all the conditions specified in Section 4.02 shall have been satisfied (or waived in accordance with Section 10.02).

Effective Date Fees shall have the meaning assigned to such term in Section 2.07(d).

Eligible Inventory shall mean at any date of determination thereof an amount equal to (i) the aggregate value (as reflected on the books and records of the Borrowers and consistent with the Borrowers current and historical accounting practices) at such date of all Inventory in each Category owned by the Borrowers, adjusted on any date of determination to exclude, without duplication, all Inventory that is Ineligible Inventory, minus (ii) all Valuation Reserves (or, if the context so requires, Eligible Inventory shall mean the related Inventory).

Environmental Laws means the common law and any and all Federal, state, local, and foreign statutes, Laws, regulations, ordinances, rules, judgments, orders, decrees, permits, licenses, agreements or governmental restrictions relating to pollution, the protection of the environment, the generation, treatment, storage, transport, distribution, handling or recycling of Hazardous Materials or the presence, Release or threat of Release of Hazardous Materials and, to the extent relating to exposure to Hazardous Materials, human health and to workplace health and safety.

Environmental Permits means any permit, approval, identification number, license or other authorization required under any Environmental Law.

Equistar shall mean Equistar Chemicals, LP, a Delaware limited partnership.

Equity Interest means, with respect to any Person, all of the capital stock of such Person and all of the warrants, options or other rights to acquire the capital stock of such Person, including any contribution from shareholders without any issuance of shares (but excluding any debt security that is convertible into, or exchangeable for, such capital stock).

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ERISA means the Employee Retirement Income Security Act of 1974, as amended from time to time.

ERISA Affiliate means any trade or business (whether or not incorporated) that is under common control with any Loan Party within the meaning of Section 414 of the Code or Section 4001 of ERISA.

ERISA Event means (a) a Reportable Event with respect to a Pension Plan; (b) with respect to a Pension Plan, the failure to satisfy the minimum funding standard of Section 412 of the Code and Section 302 of ERISA, whether or not waived; (c) the failure to make by its due date a required contribution under Section 412(m) of the Code (or Section 430(j) of the Code, as amended by the Pension Protection Act of 2006) with respect to any Pension Plan or the failure to make any required contribution to a Multiemployer Plan; (d ) a withdrawal by a Loan Party, any Subsidiary or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (e) a complete or partial withdrawal by a Loan Party, any Subsidiary or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (f) the filing of a notice of intent to terminate, the treatment of a Plan amendment as a termination under Section 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan or the occurrence of any event or condition which could reasonably be expected to constitute grounds under ERISA for the termination of or the appointment of a trustee to administer any Pension Plan, in each case where Pension Plan assets are not sufficient to pay all Plan liabilities; (g) an event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; (h) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon a Loan Party, any Subsidiary or any ERISA Affiliate; or (i) the occurrence of a nonexempt prohibited transaction (within the meaning of Section 4975 of the Code or Section 406 of ERISA) which could reasonably be expected to result in liability to a Loan Party or any Restricted Subsidiary.

Event of Default shall have the meaning specified in Article 7.

Excess Availability shall mean, at any time, an amount equal to (i) the Maximum Facility Availability, less (ii) the Total Outstandings, determined as of the close of business on each Business Day giving effect to all changes in Total Outstandings during such Business Day.

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Excluded Capital Expenditures has the meaning specified in the Senior Facility Credit Agreement.

Excluded Receivable shall have the meaning specified in Article 6.

Excluded Taxes shall mean, with respect to any Agent, any Lender, the Fronting Bank or any other recipient of any payment to be made by or on account of any obligation of the Borrowers hereunder, (a) income, franchise or doing business taxes imposed on (or measured by) its net income, or bank share taxes, imposed by the United States of America, or by the jurisdiction under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located, (b) any branch profits taxes imposed by the United States of America or any similar tax imposed by any other jurisdiction in which any Borrower is located, (c) in the case of a Foreign Lender (other than an assignee pursuant to a request by the Borrowers under Section 2.20(b)) any withholding tax that is imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party to this Agreement (or designates a new lending office) or is attributable to such Foreign Lenders failure to comply with Section 2.19(e), except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts from the Borrowers with respect to such withholding tax pursuant to Section 2.19(a) and (d) United States backup withholding taxes.

Existing Letters of Credit shall mean the letters of credit issued before the Effective Date and listed in Schedule 1.01 hereto.

Existing Notes means, collectively, the $615,000,000 8⅜% Senior Notes due 2015 of the Company, the 500,000,000 8⅜% Senior Notes due 2015 of the Company and the $300,000,000 8.10% Guaranteed Notes due 2027 of Basell Finance, the 10% Senior Secured Notes due 2013 of Lyondell, the 8% Senior Unsecured Notes due 2014 of Lyondell, the 8% Senior Unsecured Notes due 2016 of Lyondell, the 6.875% Senior Unsecured Notes due 2017 of Lyondell, the 10% Debentures due 2010 of Lyondell, the 9.8% Debentures due 2020 of Lyondell, the 10⅝% Senior Unsecured Notes due 2008 of Equistar, the 101/8% Senior Unsecured Notes due 2011 of Equistar, the 7.55% Debentures due 2026 of Equistar, the 7⅝% Senior Notes due 2026 of Millennium America Inc. and the 8% Unsecured Notes due 2009 of Equistar, in each case to the extent outstanding on the Effective Date and the 4% Convertible Debentures due 2023 of Millennium Chemicals Inc. (to the extent not converted on the Effective Date).

FCC Period shall have the meaning specified in Section 6.14.

Federal Funds Effective Rate shall mean, for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Effective Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Effective Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Citibank, N.A. on such day on such transactions as determined by the Administrative Agent.

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Fees shall mean the Unused Commitment Fee, the L/C Fee, the L/C Issuance Fee, the Administrative Fees and the Effective Date Fees.

Financial Indebtedness means (without duplication), at any time, the principal amount of Indebtedness of the Company and its Restricted Subsidiaries outstanding at such time, referred to in paragraphs (a), (b), (f), (h) and (i) of the definition of Indebtedness under the Senior Facility Credit Agreement (but, as to clause (i) only in respect of clauses (a), (b), (c), (f) and (h) of such definition).

Foreign Lender shall mean any Lender that is organized under the laws of a jurisdiction other than the United States of America, a State thereof or the District of Columbia.

Fixed Charge Coverage Ratio means, with respect to any FCC Period, the ratio of (A) Consolidated EBITDA for such FCC Period minus Capital Expenditures made during such FCC Period to (B):

(x)  Consolidated Interest Expense; plus

(y)  the sum of

(a)            the amount of all dividend payments on any series of preferred stock (other than dividends paid in Qualified Equity Interests and other than dividends paid to the Company or to a Restricted Subsidiary) paid or accrued, plus

(b)            tax actually paid in cash by the Company or any Restricted Subsidiary and attributable to the items referred to in paragraph (a) of this clause (y); plus

(z)  the principal amount of all scheduled amortization payments on all Financial Indebtedness (including the principal component of all Capitalized Leases);

provided that the Fixed Charge Coverage Ratio shall be calculated for the FCC Period ending (i) March 31, 2008 based on the Consolidated Interest Expense and amortization payments referred to in clauses (x) and (z) above for each full fiscal quarter ending after the Effective Date multiplied by four, (ii) June 30, 2008 based on the sum of the Consolidated Interest Expense and amortization payments referred to in clauses (x) and (z) above for each full fiscal quarter ending after the Effective Date multiplied by two and (iii) September 30, 2008 based on the sum of the Consolidated Interest Expense and amortization payments referred to in the clauses (x) and (z) above for each full fiscal quarter ending after the Effective Date multiplied by 4/3.

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Foreign Subsidiary shall mean any Subsidiary organized under the laws of a jurisdiction outside the United States of America.

FRB means the Board of Governors of the Federal Reserve System of the United States.

Fronting Bank shall mean (a) Citibank and JPMorgan Chase Bank, N.A., in their capacity as the issuers of the Existing Letters of Credit and (b) Citibank and other banks as mutually agreed by the Borrowers Agent and the Administrative Agent, in their capacity as the issuers of Additional Letters of Credit hereunder, with their respective successors in such capacity as provided in Section 2.06(j).  In respect of Additional Letters of Credit, the Fronting Bank may, in its discretion, arrange for one or more Letters of Credit to be issued by Affiliates of the Fronting Bank, in which case the term Fronting Bank shall include any such Affiliate with respect to Letters of Credit issued by such Affiliate.

GAAP means generally accepted accounting principles in the United States of America as in effect from time to time as adopted by the Company; provided that the Company may make a one-time election to switch to IFRS, if permitted to do so by the SEC in its filings with the SEC, and following such election and the notification in writing to the Administrative Agent by the Company thereof, GAAP shall mean IFRS. After such election, the Company cannot subsequently elect to report under U.S. generally accepted accounting principles. If at any time the Company notifies the Administrative Agent in writing that the Company wishes to eliminate the effect of any change in GAAP on any provision of this Agreement, then such provision shall be applied on the basis of GAAP as in effect immediately before the relevant change in GAAP became effective until either such notice is withdrawn or such provision is amended in a manner satisfactory to the Required Lenders.

Governmental Authority means any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, court, administrative tribunal, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

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Guarantee means, as to any Person, without duplication, (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other monetary obligation payable or performable by another Person (the primary obligor) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other monetary obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other monetary obligation of the payment or performance of such Indebtedness or other monetary obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other monetary obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness or other monetary obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part), or (b) any Lien on any assets of such Person securing any Indebtedness or other monetary obligation of any other Person, whether or not such Indebtedness or monetary other obligation is assumed by such Person (or any right, contingent or otherwise, of any holder of such Indebtedness to obtain such Lien); provided that the term Guarantee shall not include endorsements for collection or deposit, in either case in the ordinary course of business, or customary and reasonable indemnity obligations in effect on the Effective Date or entered into in connection with any acquisition or disposition of assets permitted under this Agreement (other than such obligations with respect to Indebtedness).  The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith.  The term Guarantee as a verb has a corresponding meaning.

Hazardous Materials means all materials, chemicals, substances, wastes, pollutants, contaminants, constituents and compounds of any nature or in any form, including petroleum or petroleum distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas or mold that are regulated pursuant to, or can give rise to liability under, any applicable Environmental Law.

High Seas Inventory means Inventory which is (i) in transit to a property located in the United States of America that is owned or leased by one or more of the Borrowers, (ii) subject to a maritime bill of lading which, if so requested in writing by the Administrative Agent, has been delivered to the Administrative Agent and (iii) outside the territorial waters of any country.

Holding Company means, in relation to a company, corporation or other legal entity, any other company, corporation or other legal entity in respect of which the former company, corporation or other legal entity is a Subsidiary.

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HRLP shall mean Houston Refining LP, a Delaware limited partnership.

IFRS shall mean the International Financial Reporting Standards issued and/or adopted by the International Accounting Standards Board, as in effect from time to time.

Illegality shall have the meaning assigned to such term in Section 2.15(a).

Increasing Lender shall have the meaning assigned to such term in Section 2.21.

Indebtedness means, as to any Person at any time, without duplication, all of the following:

(a)  all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;

(b)  the maximum amount (after giving effect to any prior drawings or reductions which may have been reimbursed) of all outstanding letters of credit (including standby and commercial), bankers acceptances, bank guaranties, surety bonds, performance bonds and similar instruments issued or created by or for the account of such Person;

(c)  net obligations of such Person under any Swap Contract;

(d)  all obligations of such Person issued or assumed as the deferred purchase price of property that is due more than six (6) months after taking delivery of such property, all conditional sale obligations and all obligations under any title retention agreement (but excluding trade accounts payable and other accrued liabilities arising in the ordinary course of business that are not overdue by ninety (90) days or more or are being contested in good faith by appropriate proceedings promptly instituted and diligently conducted);

(e)  all obligations of any third party of the type referred to in clauses (a), (b), (c), (d), (f) and (h) of this definition which are secured by any lien on any property or asset of such Person the amount of such obligation being deemed to be the lesser of the fair market value of such property or asset or the amount of the obligation so secured;

(f)  all Receivables Financings, Securitization Transactions and obligations under Asset Backed Credit Facilities (each as defined under the Senior Facility Credit Agreement);

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(g)  all Disqualified Equity Interests issued by such Person or preferred stock issued by a Restricted Subsidiary of such Person with the amount of Indebtedness represented by such Disqualified Equity Interests or preferred stock being equal to the greater of its voluntary or involuntary liquidation preference and its maximum fixed repurchase price, but excluding accrued dividends, if any. For purposes hereof, the maximum fixed repurchase price of any Disqualified Equity Interests or preferred stock which do not have a fixed repurchase price shall be calculated in accordance with the terms of such Disqualified Equity Interests or preferred stock as if such Disqualified Equity Interests or preferred stock were purchased on any date on which Indebtedness shall be required to be determined pursuant to the this Agreement, and if such price is based upon, or measured by, the fair market value of such Disqualified Equity Interests or preferred stock, such fair market value shall be determined reasonably and in good faith by the board of directors of the issuer of such Disqualified Equity Interests or preferred stock; and
 
(h)  all Capitalized Leases of such Person;

if and to the extent that the foregoing would constitute indebtedness or a liability in accordance with GAAP; and

(i)  to the extent not otherwise included above, all Guarantees of any third partys Indebtedness in respect of any of the foregoing clauses.
Notwithstanding the foregoing, Indebtedness shall not include:

(1)  advances paid by customers in the ordinary course of business for services or products to be provided or delivered in the future,

(2)  deferred taxes,

(3)  unsecured indebtedness of such Person incurred to finance insurance premiums in a principal amount not in excess of the insurance premiums to be paid by such Person and its Restricted Subsidiaries for a three (3)-year period beginning on the date of any incurrence of such indebtedness,

(4)  Indebtedness owed or incurred by any Restricted Subsidiary whose activities are limited to holding shares in Joint Venture(s) (but only to the extent that (a) the creditors under the relevant agreement have no recourse to the Company other than such Restricted Subsidiary; and (b) the recourse those creditors have to such Restricted Subsidiary is limited to the proceeds (if any) of dividends received by such Restricted Subsidiary in respect of such Restricted Subsidiarys investment in such Joint Venture),

(5)  non-recourse Indebtedness permitted by Section 6.03(u) collateralized by  any Limited Recourse Stock Pledge or any non-recourse guarantee given solely to support such pledge,

(6)  any Indebtedness which has been defeased in accordance with GAAP or defeased pursuant to the deposit of cash or government obligations (in an amount sufficient to satisfy all such Indebtedness at the stated maturity thereof or redemption, as applicable, and all payments of interest and premium, if any) in a trust or account created or pledged for the sole benefit of the holders of such Indebtedness, and subject to no other Liens, and other applicable terms of the instrument governing such Indebtedness; or

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(7)  Indebtedness for which irrevocable notice of redemption has been duly given and for which redemption money in the necessary amount has been irrevocably deposited with the applicable trustee or paying agent in trust for the holders of such Indebtedness.

Notwithstanding the foregoing, any accrual of interest, accrual of dividends, the accretion of value, the obligation to pay commitment fees and the payment of interest in the form of Indebtedness shall not be Indebtedness for the purposes of Section 6.03 only.

Indemnified Taxes shall mean Taxes other than Excluded Taxes.

Ineligible Inventory shall mean all Inventory described in one or more of the following clauses, without duplication:

(a)            Inventory that is not subject to a perfected first priority Lien in favor of the Administrative Agent or that is subject to any other Lien that is not a Qualified Lien; or

(b)            Inventory that is not located at and is not in transit to property that is owned or leased by the Borrowers unless:

(i)            such Inventory has been delivered to a carrier and no document of title is issued with respect to such Inventory by such carrier and the relevant Borrower has the absolute and unconditional right to obtain such Inventory from such carrier free and clear of any and all Liens other than Qualified Liens; or

(ii)            such Inventory is either subject to (x) a Third-Party Agreement or (y) an Availability Reserve as specified in clause (a) of the proviso in the definition of Availability Reserves; or

(c)            Inventory located on premises of the Borrowers that are subject to any Lien (other than (x) Liens consisting of (i) easements, building restrictions, rights-of-way, irregularities of title and other such encumbrances or charges not interfering in any material respect with the ordinary conduct of business of any Borrower, (ii) leases, subleases or licenses by any Borrower as lessor, sublessor or licensor in the ordinary course of business, (iii) the interest of a lessor or licensor under an operating lease or license under which any Borrower is lessee, sublessee or licensee, and (iv) any other Qualified Liens, including protective financing statement filings on such premises, and (y) nonconsensual Liens on such premises that do not impair access to, or the removal of or exercise of remedies in respect of, such Inventory) unless:

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(i)            such Inventory is subject to an Availability Reserve as specified in clause (d) of the proviso in the definition of Availability Reserves; or

(ii)            the holder of such Lien and the Administrative Agent have entered into an Access Agreement with respect to such Inventory on such premises; or

(d)            Inventory that is on consignment or that is subject to a negotiable document of title (as such terms are defined in the UCC); or

(e)            Inventory that is billed not shipped Inventory; provided that Inventory billed but not shipped to the Persons listed on Schedule X, as of the date hereof and as updated from time to time by the Borrowers with the written approval of the Administrative Agent, shall not be Ineligible Inventory by reason of this clause (e); or

(f)            Inventory (other than High Seas Inventory) that is not located in the United States of America (including its territorial waters); or

(g)            Inventory that is not owned solely by the Borrowers, or as to which the Borrowers do not have good, valid and marketable title thereto (it being understood that such Inventory may be commingled with Inventory owned by others); or

(h)            Inventory that consists of (i) supplies (other than that classified as stores inventory), (ii) work-in-process and catalysts, in each case not saleable in their current form or (iii) feedstock and line fill classified as captive feedstock or feedstock line fill; or

(i)            Inventory that does not otherwise conform to the representations and warranties contained in this Agreement or the other Loan Documents; or

(j)            such other Inventory as may be deemed ineligible by the Administrative Agent acting in good faith from time to time in accordance with its customary credit policies and the definition of Borrowing Base.

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Intercreditor Agreement shall mean, collectively, (i) the Intercreditor Agreement dated as of December 20, 2007 by and among Citibank, as Receivables Agent, Citibank, as Lender Agent, RPA Seller, as Transferor, Lyondell, as Originator, as Initial Servicer and as Borrower, and the other Originators and Loan Parties from time to time party thereto, (ii) the Intercreditor Agreement dated as of December 20, 2007 among Citicorp North America, Inc. as Receivables Agent (as such term is defined therein), Citibank, N.A. as ABL Agent (as such term is defined therein), Basell Capital Corporation as Transferor (as defined therein), Basell USA as Originator, Receivables Servicer and Borrower (as defined therein), and the other originators and borrowers party thereto and (iii) the Intercreditor Agreement dated as of December 20, 2007 by and among Citibank, in its capacity as Senior Agent (as defined therein), Security Agent (as defined therein) and ABL Agent (as defined therein), the Interim Facility Agent (as defined therein), the High Yield Notes Trustee (as defined therein), the Arco Notes Trustee (as defined therein), the Equistar Notes Trustee (as defined therein), the Company, the Subsidiaries of the Company specified therein and the other parties thereto from time to time, as amended, substantially in the forms of Exhibits I-1, I-2 and I-3.

Interest Payment Date shall mean (a) with respect to any Loan, the last day of each Interest Period applicable to the Borrowing of which such Loan is a part, (b) in the case of a LIBOR Loan with an Interest Period of more than three (3) months duration, each day that would have been an Interest Payment Date had successive Interest Periods of three (3) months duration been applicable to such Loan and, in addition, the date of any continuation or conversion of such Loan with or to a Loan of a different Type and (c) with respect to any Loan, the date of termination of the Commitments in their entirety.

Interest Period shall mean (a) as to any LIBOR Borrowing, the period commencing on the date of such Borrowing or on the last day of the immediately preceding Interest Period applicable to such Borrowing, as the case may be, and ending on the seventh day thereafter (if at the time of the relevant Borrowing Request all Lenders participating therein agree to make a seven (7)-day Interest Period available) or on the numerically corresponding day (or, if there is no numerically corresponding day, on the last day) in the calendar month that is one (1), two (2), three (3) or six (6) months thereafter, as the Borrower may elect, (b) as to any ABR Borrowing, the period commencing on the date of such Borrowing or on the last day of the immediately preceding Interest Period applicable to such Borrowing, as the case may be, and ending on the next succeeding date that is the last day of a calendar month or, if earlier, the date of prepayment or conversion of such Borrowing, and (c) as to any Swingline Loan, the period commencing on the date of such Loan and ending on the last Business Day of the then current calendar month; provided, however, that (i) if any Interest Period would end on a day that shall not be a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless, in the case of LIBOR Loans only, such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day, (ii) no Interest Period with respect to any Loan shall end later than the Termination Date, (iii) interest shall accrue from and including the first day of an Interest Period to but excluding the last day of such Interest Period and (iv) there shall be outstanding at any one time no more than 10 Interest Periods applicable to LIBOR Loans.

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Inventory shall mean all now owned and hereafter acquired inventory, goods and merchandise, wherever located, to be furnished under any contract for service or held for sale or lease, all returned goods, raw materials, work-in-process, finished goods (including embedded software), other materials and supplies of any kind, nature, or description which are used or consumed in any Loan Partys business or used in connection with the packing, shipping, advertising, selling or finishing of such goods, merchandise, and all documents of title or other documents representing them and shall include all feedstocks, line fill, stores inventory, catalysts, chemicals and additives.

Inventory Concentration Account shall have the meaning specified in the Security Agreement.

Investment means, with respect to any Person, any direct or indirect loan or other extension of credit (including a Guarantee) or capital contribution (with respect to such loan, extension of credit or capital contribution, by means of any transfer of cash or other property to others or any payment for property or services for the account or  use of others), or any purchase or acquisition by such Person of any Equity Interest, bonds, notes, debentures or other securities or other Indebtedness issued by, any other Person.  Investment excludes (i) extensions of trade credit, (ii) commissions, loans, advances, fees and compensation paid in the ordinary course of business to officers, directors and employees, and (iii) reimbursement or payment obligations in respect of letters of credit and tender, bid, performance, government contract, surety and appeal bonds, in each case solely with respect to obligations of any Restricted Party or Receivables Restricted Party in accordance with the normal trade practices of such Restricted Party or Receivables Restricted Party.  For the purposes of Section 6.06,

(1)  Investment shall include and be valued at the fair market value of the net assets of any Restricted Subsidiary of a Borrower at the time that such Restricted Subsidiary is designated an Unrestricted Subsidiary and shall exclude the fair market value of the net assets of any Unrestricted Subsidiary at the time that such Unrestricted Subsidiary is designated a Restricted Subsidiary of a Loan Party or a Transaction Party under the 2007 Securitization Facility and

(2)  the amount of any Investment in any Person is the original cost of such Investment plus the cost of all additional Investments therein by the Restricted Parties, without any adjustments for increases or decreases in value, or write-ups, write-downs or write-offs with respect to such Investment, reduced by the payment of dividends or distributions in connection with such Investment or any other amounts received in respect of such Investment;

provided that no such payment of dividends or distributions or receipt of any such other amounts shall reduce the amount of any Investment if such payment of dividends or distributions or receipt of any such amounts would be included in Consolidated Net Income (as defined in the Senior Facility Credit Agreement).

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If any Restricted Party sells or otherwise disposes of any voting Equity Interests of any Restricted Subsidiary of a Borrower such that, after giving effect to any such sale or disposition, the Borrowers do not own, directly or indirectly, greater than 50% of the outstanding common Equity Interests of such Restricted Subsidiary, such Restricted Party will be deemed to have made an Investment on the date of any such sale or disposition equal to the fair market value of the voting Equity Interests of such Restricted Subsidiary not sold or disposed of.

IP Rights shall have the meaning specified in the Senior Facility Credit Agreement.

Joint Venture means any joint venture entity, whether a company, unincorporated firm, association, partnership or any other entity which, in each case, is not a Subsidiary of a Restricted Party or a Receivables Restricted Party but in which a Restricted Party or a Receivables Restricted Party has a direct or indirect equity or similar interest.

Junior Financing has the meaning specified in the Senior Facility Credit Agreement.

Junior Financing Documentation means any documentation governing any Junior Financing.

JV Investor has the meaning specified in Section 6.03

Laws means, as to any Person, collectively, all international, foreign, federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case binding on such Person or to which such Person or any of its property or assets is subject.

LC Disbursement shall mean a payment made by the Fronting Bank pursuant to a Letter of Credit.

LC Exposure shall mean, at any time, the sum of (a) the aggregate amount available for drawing (assuming satisfaction of applicable drawing conditions) under all outstanding Letters of Credit at such time plus (b) the aggregate amount of all LC Disbursements that have not yet been reimbursed by or on behalf of the Borrowers at such time.  The LC Exposure of any Lender at any time shall be its Revolving Percentage of the total LC Exposure at such time.

LC Sublimit shall mean $750,000,000.

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Legal Reservations means;

(a)            the principle that equitable remedies may be granted or refused at the discretion of a court;

(b)            the limitation of enforcement by law relating to insolvency, reorganization, penalties and other laws generally affecting the rights of creditors;

(c)            the time barring of claims under the statutes of limitation;

(d)            the possibility that an undertaking to assume liability for or indemnify a person against the non-payment of UK stamp duty may be void;

(e)            defenses or set-off or counterclaim; and

(f)            principles which are set out in the qualifications as to matters of law in any legal opinion delivered on the Effective Date in connection with this Agreement.

Lender shall mean any of the Persons listed on Schedule 2.01 and any other Person that shall have become a party hereto pursuant to an Assignment and Acceptance, other than any such Person that ceases to be party hereto pursuant to an Assignment and Acceptance.  Unless the context otherwise requires, the term Lender includes the Swingline Lender.

Letter of Credit shall mean any Existing Letter of Credit or Additional Letter of Credit.

Lien means any mortgage, deed of trust, pledge, hypothecation, assignment, transfer for security purposes, deposit arrangement, encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or preferential arrangement, of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any easement, right of way or other encumbrance on title to real property and any Capitalized Lease having substantially the same economic effect as any of the foregoing).

LIBO Rate shall mean, with respect to any Borrowing comprised of LIBOR Loans for any Interest Period, the rate appearing on Page 3750 of the Moneyline Telerate Markets (or on any successor or substitute page of such Service) at approximately 11:00 a.m., London time, two (2) Business Days prior to the commencement of such Interest Period, as the rate for Dollar deposits with a maturity comparable to such Interest Period.  In the event that such rate is not available at such time for any reason, then the LIBO Rate with respect to such Borrowing for such Interest Period shall be the rate at which Dollar deposits in an amount approximately equal to the Loan to be made by Citibank as part of such Borrowing and for a maturity comparable to such Interest Period are offered by the principal London office of Citibank in immediately available funds to prime banks in the London interbank market at approximately 11:00 a.m., London time, two (2) Business Days prior to the commencement of such Interest Period.

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LIBOR Lending Office shall mean, with respect to each Lender, the branches or Affiliates of such Lender which such Lender has designated as its LIBOR Lending Office in its Administrative Questionnaire or, as to any Person who becomes a Lender after the Effective Date, in the Assignment and Acceptance executed by such Person or such other office of such Lender as such Lender may hereafter designate from time to time as its LIBOR Lending Office by notice to the Borrowers and the Administrative Agent.

LIBOR Loan shall mean any Revolving Loan bearing interest at a rate determined by reference to the Adjusted LIBO Rate in accordance with the provisions of Article 2.

Limited Recourse Stock Pledge means the pledge of the Equity Interests in any joint venture or any Subsidiary (the Pledged Subsidiary) to secure non-recourse debt of such joint venture or such Pledged Subsidiary, the activities of which are solely limited to making and managing Investments, and owning Equity Interests, in such joint venture or Pledged Subsidiaries, but only for so long as its activities are so limited.

Liquid Investments shall have the meaning specified in the Security Agreement.

Listing means a listing of all or any of the share capital of the Company or any of its Subsidiaries or any Holding Company or any of its Subsidiaries (excluding the Sponsor as defined in the Senior Facility Credit Agreement (to the extent not a Subsidiary of the Company) and any such Holding Company of the Company or any of its Subsidiaries, but in each case only if a majority of the investments of such company are not constituted by the Company or any of its Subsidiaries) on any investment exchange or any other sale or issue by way of flotation or public offering or any equivalent circumstances in relation to the Company or any of its Subsidiaries or any Holding Company of the Company or any of its Subsidiaries (excluding the Sponsor (to the extent not a Subsidiary of the Company) and any such Holding Company of the Company or any of its Subsidiaries, but in each case only if a majority of the investments of such company are not constituted by the Company or any of its Subsidiaries) in any jurisdiction or county.

Loan shall mean a Revolving Loan whether made as a LIBOR Loan or an ABR Loan, or a Swingline Loan.

Loan Documents shall mean this Agreement, the Notes, the Subsidiary Guaranty and the Collateral Documents.

Loan Party shall mean each Borrower and each Subsidiary Guarantor.

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Lyondell shall mean Lyondell Chemical Company (the surviving entity following its merger with BIL Acquisition Holdings Limited), a Delaware corporation.

Major Casualty Proceeds shall mean (i) the aggregate insurance proceeds received in respect of Collateral in connection with one or more related events by any Loan Party under any Property Insurance Policy or (ii) any award or other cash compensation with respect to any one or more related condemnations of Collateral (or any transfer or disposition of such property in lieu of condemnation) received by any Loan Party if the amount of such aggregate insurance proceeds or award or other cash compensation in respect of Collateral exceeds $25,000,000.  Insurance proceeds paid to the Administrative Agent, as loss payee on any Property Insurance Policy covering Inventory, shall be deemed to be received by a Loan Party and shall be included in any determination of Major Casualty Proceeds.

Management Agreement means the Management Agreement dated as of December 11, 2007 between, among others, the Company and certain of its Subsidiaries and Nell Limited, as in effect on the Effective Date.

Material Adverse Effect means (a) a material adverse effect on the business, operations, assets, liabilities (actual or contingent) or financial condition of the Company and its Restricted Subsidiaries (taken as a whole), (b) a material adverse effect on the ability of the Loan Parties (taken as a whole) to perform their respective payment obligations under any Loan Document to which any of the Loan Parties is a party or (c) a deficiency in the rights and remedies of the Lenders under the Loan Documents (taken as a whole) which is materially adverse to the Lenders.

Material Subsidiary has the meaning specified in the Senior Facility Credit Agreement.

 Maximum Facility Availability shall mean, at any date, an amount equal to the lesser of (i) the aggregate amount of the Commitments on such date and (ii) the Borrowing Base on such date.

Millennium Holdings Group shall have the meaning specified in Article 7.

Moodys shall mean Moodys Investors Service, Inc., and its successors.

Multiemployer Plan means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which any Loan Party, any Subsidiary or any ERISA Affiliate makes or is obligated to make contributions, during the preceding five plan years, has made or been obligated to make contributions or otherwise could reasonably be expected to incur liability.

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Net Proceeds means with respect to any Disposition or Casualty Event 100% of the cash proceeds actually received by any Restricted Party from any such Disposition or Casualty Event (including any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or purchase price adjustment receivable or otherwise and including casualty insurance settlements and condemnation awards in respect of any Collateral or any equipment, fixed assets or real property (including any improvements thereof) to replace or repair such equipment, fixed assets or real property, but only as and when received, and excluding any liabilities assumed by the transferee and deemed to be cash for purposes of Section 7.05(j)(ii)), in each case net of

(i)            attorneys fees, accountants fees, investment banking fees, purchaser due diligence costs (to the extent borne by any Restricted Party), survey costs, title insurance premiums, and related search and recording charges, transfer taxes, deed or mortgage recording taxes, required debt payments and required payments of other obligations relating to the applicable asset to the extent such debt or obligations are  secured by a Lien permitted hereunder (other than pursuant to the Loan Documents) on such asset, other customary expenses and brokerage, consultant and other customary fees actually incurred in connection therewith,

(ii)            Taxes paid or payable as a result thereof,

(iii)            the amount of any reserve certified by the Principal Financial Official as reasonable and established in accordance with GAAP against any adjustment to the sale price or to fund any liabilities (other than any taxes deducted pursuant to clause (ii) above) (x) related to any of the applicable assets and (y) retained by any Restricted Party, including pension and other post-employment benefit liabilities and liabilities related to environmental matters or against any indemnification obligations (provided, however, that the amount of any subsequent reduction of such reserve (other than in connection with a payment in respect of any such liability) shall be deemed to be Net Proceeds of such Disposition or Casualty Event received on the date of such reduction), and

(iv)           except in the case of a Disposition or Casualty Event with respect to the Collateral, any other application of such proceeds required or permitted by the Senior Facility Credit Agreement.

For purposes of calculating the amount of Net Proceeds, fees, commissions and other costs and expenses payable to the Company shall be disregarded.

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New Lender shall have the meaning assigned to such term in Section 2.21.

 Notes shall mean promissory notes of the Borrowers, substantially in a form reasonably satisfactory to the Administrative Agent, evidencing the Borrowers obligation to repay the Loans, and Note shall mean any one of such promissory notes issued hereunder.

Obligations shall mean the obligations of the Loan Parties under the Loan Documents (as the same may hereafter be amended, restated, extended, supplemented or otherwise modified from time to time) with respect to the due and punctual payment, whether at maturity, by acceleration or otherwise, of (a) the principal amount of the Loans, (b) interest and premium on the Loans, (c) LC Disbursements and interest thereon and (d) all other monetary obligations of any Borrower, whether for fees, costs, indemnification or otherwise.

Orderly Liquidation Value Rate shall mean, with respect to Eligible Inventory in each Category, the applicable orderly liquidation value (or in the case of Premium Inventory, fair market value, and in any case net of costs and expenses incurred in connection with liquidation) of such Inventory, which applicable percentage shall be determined by reference to the most recent Appraisal Report on such Inventory received by the Administrative Agent, as a percentage of the aggregate book value of such Inventory.

 Other Taxes shall mean any and all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise with respect to, the Loan Documents (but excluding any Excluded Taxes).

Outstandings shall mean, with respect to any Lender at any time, the sum of the outstanding principal amount of such Lenders Revolving Loans and its LC Exposure and Swingline Exposure at such time.

Participation Register shall have the meaning set forth in Section 10.07(d).

PBGC Settlement shall have the meaning set forth in the Senior Facility Credit Agreement.

Permitted Acquisition shall have the meaning set forth in Section 6.02(g) hereof.

Permitted Business shall mean any business which is the same, similar, related or complementary to the businesses in which the Restricted Parties or Receivables Restricted Parties were engaged on the Effective Date (including, for the avoidance of doubt, following consummation of the Acquisition), except to the extent that after engaging in any new business, the Restricted Parties or Receivables Restricted Parties, taken as a whole, remain substantially engaged in similar or related lines of business as were conducted by them on the Effective Date.

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Permitted Joint Venture shall mean (1) any person that is not a Subsidiary of a Borrower or a Transaction Party under the 2007 Securitization Facility that such Borrower or Transaction Party has a direct or indirect ownership interest in that is engaged in a Permitted Business or (2) any entity through which a Borrower or a Transaction Party has an ownership interest as described in clause (1), in the case of (1) and (2), for which the Sponsor (as defined in the Senior Facility Credit Agreement) does not hold an ownership interest (other than through its ownership interest in the Borrower).

Permitted Refinancing shall have the meaning set forth in the Senior Facility Credit Agreement.

Person shall mean any natural Person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

Plan means any employee benefit plan (as such term is defined in Section 3(3) of ERISA) established by any Loan Party or Subsidiary or, with respect to any such plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA Affiliate.

Premium Inventory shall mean Eligible Inventory that consists solely of finished goods owned by HRLP.

Prepayment Event shall mean (a) at any time, any Covered Disposition of Collateral or Casualty Event with respect to Collateral and (b) during any Sweep Period, any other Covered Disposition or Casualty Event.  The description of any transaction as falling within the above definition does not affect any limitation on such transaction imposed by Article 6 or Article 7 of this Agreement.

Principal Financial Officer shall mean the chief financial officer, the treasurer or the principal accounting officer of Lyondell (or other specified Person).  Any action taken or document delivered by a Principal Financial Officer pursuant to the Loan Documents shall be taken or delivered in his capacity as such.

Property Insurance Policy shall mean any insurance policy maintained by any Loan Party covering losses with respect to tangible real or personal property or improvements, but excluding coverage for losses from business interruption.

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Qualified Equity Interests means any Equity Interest that is not a Disqualified Equity Interest.

Qualified Lien shall mean (i) an inchoate tax, PBGC or other Lien arising solely by operation of law, (ii) a Lien securing payments of (A) expenses of a landlord, bailee, consignee, processor, warehouseman or other third party who stores, processes, maintains or holds Collateral and (B) rail car lease and transportation expense applicable to Collateral and (iii) any other Lien approved by the Administrative Agent, which in each case is (x) permitted by Section 6.01 and (y) covered by an Availability Reserve as specified herein (unless the Person who holds such Lien has entered into a Third Party Agreement), as determined by the Administrative Agent in accordance with the definitions of Availability Reserve and Borrowing Base.

Real Property means, collectively, all right, title and interest (including any leasehold, easement, mineral or other estate) in and to any and all parcels of or interests in real property owned, leased or operated by any Person, whether by lease, license or other means, together with, in each case, all easements, hereditaments and appurtenances relating thereto, all improvements and appurtenant fixtures and equipment, all general intangibles and contract rights and other property and rights incidental to the ownership, lease or operation thereof.

Receivables Restricted Party means a Restricted Party under the 2007 Securitization Facility.

Register shall have the meaning assigned to such term in Section 10.07(f).

Regulation U shall mean Regulation U of the FRB, as the same is from time to time in effect, and all official rulings and interpretations thereunder or thereof.

Regulation X shall mean Regulation X of the FRB, as the same is from time to time in effect, and all official rulings and interpretations thereunder or thereof.

Related Fund shall mean, with respect to any Lender that is a fund that invests in bank loans, any other fund that invests in bank loans and is advised or managed by the same investment advisor as such Lender or by an Affiliate of such Lender.

Related Parties shall mean, with respect to any specified Person, such Persons Affiliates and the respective directors, trustees, officers, employees, agents and advisors of such Person and such Persons Affiliates.

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Release means any spilling, leaking, seepage, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, disposing, depositing, dispersing or migrating in, into, onto or through the Environment.

Required Lenders shall mean, at any time, Lenders having in the aggregate more than 50% of the aggregate amount of the Credit Exposures at such time; provided that (i) any Credit Exposure held by Lyondell or any of its Subsidiaries or any of their respective Affiliates shall be excluded for purposes of determining such percentage and (ii) the portion of the Commitments held or deemed held by any Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders.

Responsible Officer means the chief executive officer, president, any vice president, chief financial officer, treasurer or assistant treasurer or other similar officer of a Loan Party and, as to any document delivered on the Effective Date, any secretary of such Loan Party or anyone granted a power of attorney by the board of directors or other governing body of a Loan Party.  Any document delivered hereunder that is signed by a Responsible Officer of a Loan Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Loan Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party.

Restricted Account shall have the meaning specified in the Security Agreement.

Restricted Party shall mean each Loan Party and Restricted Subsidiary.

Restricted Payment shall mean

(1)            a declaration or payment of any dividend or the making of any distribution, other than dividends or distributions payable in Qualified Equity Interests of the Company and dividends or distributions payable solely to the Company or a Restricted Subsidiary, and other than pro rata dividends or other distributions made by a Subsidiary that is not a wholly-owned Subsidiary to minority shareholders (or owners of an equivalent interest in the case of a Subsidiary that is an entity other than a corporation), on or in respect of shares of a Persons Equity Interests to holders of such Equity Interests,

(2)            the purchase, redemption or other acquisition or retirement for value of any Equity Interests of any Person or any warrants, rights or options to purchase or acquire shares of any class of such Equity Interests, or

(3)            any Investment other than an Investment permitted by Section 6.02.

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Restricted Subsidiary shall have the meaning specified in the Senior Facility Credit Agreement.

Revolving Loan shall mean a Loan made pursuant to Section 2.01.

Revolving Percentage shall mean, with respect to any Lender, the percentage of the Total Commitment represented by such Lenders Commitment.  If the Commitments shall have been terminated or shall have expired, the Revolving Percentages shall be determined based upon the Commitments most recently in effect, giving effect to any subsequent assignments pursuant to Section 10.07.

Revolving Period shall mean the period from and including the Effective Date to but excluding the earlier of the Termination Date and the date of termination of the Commitments.

RPA Seller shall mean LyondellBasell Receivables I, LLC, a Delaware limited liability company.

The RP Trigger is in effect for the purposes of Section 6.06 unless, both before and after giving effect to any Dividend Payment contemplated by that Section, (i) the daily average Total Excess Availability exceeds $225,000,000 on each Business Day during the five (5) consecutive Business Days immediately preceding the date of such Dividend Payment and (ii) on the date of such Dividend Payment, no Default shall have occurred and be continuing.

S&P shall mean Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc., and its successors.

SEC means the U.S. Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.

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Securitization Facility shall mean (i) the receivables securitization facility (the 2007 Securitization Facility) established pursuant to the Receivables Sale Agreement dated as of December 20, 2007 among Lyondell and the other Sellers party thereto, as seller, RPA Seller, as buyer, and Lyondell, as buyers servicer (the 2007 RSA), and the Receivables Purchase Agreement dated as of December 20, 2007 among RPA Seller, as seller, Lyondell, as servicer, the purchasers party thereto, Citibank, as administrative agent and the other agents party thereto (the 2007 RPA), (ii) the receivables securitization facility (the 2005 Securitization Facility) established pursuant to the Purchase and Contribution Agreement dated as of July 29, 2005 between Basell and Basell Canada Inc., as sellers, and Basell Capital Corporation, as purchaser (the 2005 PCA), and the Receivables Purchase Agreement dated as of July 29, 2005 among Basell Capital Corporation, as seller, CAFCO, LLC, as an investor, Citibank, as a bank, Basell Canada Inc., as an originator, and Basell, as servicer and as an originator, and (iii) any replacement facility established pursuant to documentation stating that such facility is in replacement or substitution of the 2005 Securitization Facility or the 2007 Securitization Facility; provided that, in the case of a replacement receivables securitization facility that replaces the 2007 Securitization Facility, (x) if such replacement receivables securitization facility is not approved in writing by the Administrative Agent for purposes of this Agreement, such replacement receivables securitization facility shall not constitute a 2007 Securitization Facility for purposes of SF Asset Availability and SF Excess Availability (and defined terms and provisions which incorporate SF Asset Availability or SF Excess Availability by reference) and such amounts shall be deemed to be zero for that purpose and (y) in connection with any such replacement receivables securitization facility, limitations on Excluded Receivables and arrangements with respect to the Restricted Accounts substantially identical to those established with respect to the 2007 Securitization Facility or other arrangements no less favorable to the Lenders shall be entered into, all in form and substance reasonably satisfactory to the Administrative Agent, and all applicable requirements of the Intercreditor Agreement shall be satisfied.

Securitization Transaction shall mean any financing transaction in which any Loan Party sells or otherwise transfers accounts receivable (a) to one or more third party purchasers or (b) to a special purpose entity that borrows against such accounts receivable or sells such accounts receivable to one or more third party purchasers.

Security Agreement shall mean a security agreement in substantially the form of Exhibit F executed and delivered or to be executed and delivered by the Lien Grantors (as defined therein), the Borrowers Agent (as defined therein) and Citibank, as Administrative Agent.

Senior Facility Credit Agreement shall mean the Credit Agreement dated as of December 20, 2007 among the Company, BIL Acquisition Holdings Limited (to be merged with and into Lyondell Chemical Company), Basell Holdings B.V., Basell Finance Company B.V. and Basell Germany Holdings GmbH and the other borrowers from time to time party thereto, the Subsidiary Guarantors party thereto from time to time, Citibank, as administrative agent, a swing line lender and collateral agent, and each lender from time to time party thereto.

SF Asset Availability shall mean Receivable Asset Availability as defined in the 2007 Securitization Facility.

SF Excess Availability shall mean Receivables Excess Availability as defined in the 2007 Securitization Facility.

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Solvent and Solvency mean, with respect to any Person on any date of determination, that on such date (a) the fair value of the property of such Person is greater than the total amount of liabilities, including contingent liabilities, of such Person, (b) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Persons ability to pay such debts and liabilities as they mature and (d) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Persons property would constitute an unreasonably small capital.  The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

Specified Joint Venture shall mean Al-Waha Petrochemical Company and Saudi Ethylene and Polyethylene Company.

Sponsor shall have the meaning specified in the Senior Facility Credit Agreement.

Subsidiaryshall mean with respect to any Person, (1) a corporation a majority of the voting Equity Interests of which are at the time, directly or indirectly, owned by such Person; and (2) any other Person (other than a corporation), including, a partnership, limited liability company, business trust or joint venture, in which such Person, at the time thereof, directly or indirectly, has at least a majority ownership interest entitled to vote in the election of directors, managers or trustees thereof (or other Person performing similar functions).  For the purposes of this Agreement, references to Subsidiaries of the Company under this Agreement shall be deemed to include Lyondell and its Subsidiaries after giving effect to the Acquisition.

Subsidiary Guarantor shall mean each Subsidiary of any Borrower (which is not itself a Borrower) which is, or is required to be, a party to the Subsidiary Guaranty.

Subsidiary Guaranty shall mean the Subsidiary Guaranty dated as of the date hereof, substantially in the form of Exhibit J.

Successor Borrower has the meaning specified in Section 6.04(d).

Swap Contract shall mean (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, emission rights, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a Master Agreement), including any such obligations or liabilities under any Master Agreement.

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Sweep Account shall have the meaning specified in the Security Agreement.

Sweep Period shall mean any period during which a Triggering Event exists.

Swingline Exposure shall mean, at any time, the aggregate principal amount of all Swingline Loans outstanding at such time.  The Swingline Exposure of any Lender at any time shall be its Revolving Percentage of the total Swingline Exposure at such time.

Swingline Facility shall mean the swingline facility made available by the Swingline Lender pursuant to Section 2.05.

Swingline Lender shall mean Citibank, in its capacity as lender of Swingline Loans hereunder.

Swingline Loan shall mean a Loan made pursuant to Section 2.05.

Swingline Sublimit shall mean $75,000,000.

Syndication Agent shall mean Goldman Sachs Credit Partners, L.P., in its capacity as syndication agent in respect of the Loan Documents.

Taxes shall mean any and all present or future taxes, levies, imposts, duties, deductions, charges or withholdings imposed by any Governmental Authority.

Termination Date  shall mean the fifth anniversary of the Effective Date.

Test Period shall mean, for any date of determination under this Agreement, the four consecutive fiscal quarters of the Company then last ended.

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Third Party Agreement shall mean an agreement, in form and substance reasonably acceptable to the Administrative Agent, pursuant to which a landlord, bailee, consignee, processor, warehouseman or other third party who stores, processes, maintains or holds Collateral (including a holder of a Lien on premises of the Borrowers where Eligible Inventory is located) acknowledges, among other things, the Administrative Agents Lien on such Collateral, the Administrative Agents ability to enforce its Lien on such Collateral and the subordination of any Lien held by such landlord, bailee, consignee, processor, or warehouseman or other third party on such Collateral to the Administrative Agents Lien thereon.  Each Collateral Access Agreement is a Third Party Agreement and is in a form reasonably satisfactory to the Administrative Agent.  Each Access Agreement is a Third Party Agreement, notwithstanding any absence therein of any subordination of the Lien held by such party to the Administrative Agents Lien.

Threshold Amount shall mean $100,000,000.

Threshold Indebtedness shall have the meaning specified in Section 7.01.

Total Commitment shall mean, at any time, the aggregate amount of the Commitments at such time.  On the Effective Date, the Total Commitment is $1,000,000,000.

Total Collateral Availability shall mean, at any time, the sum of (i) Collateral Availability plus (ii) SF Asset Availability, in each case at such time.

Total Excess Availability shall mean, at any time, the sum of (i) Excess Availability plus (ii) SF Excess Availability, in each case at such time. Total Excess Availability shall be determined on a pro forma basis, based on the Borrowing Base Certificate delivered pursuant to Section 4.02(d) and the first monthly Seller Report delivered pursuant to Section 5.5(e) of the 2007 RPA, to the extent required to be determined in respect of days prior to the Effective Date.

Total Outstandings shall mean at any time the aggregate Outstandings of all Lenders at such time.

Transaction Coordinator shall mean Merrill Lynch, Pierce, Fenner & Smith Incorporated, in its capacity as transaction coordinator in respect of the Loan Documents.

Transferee shall have the meaning assigned to such term in Section 2.19(a).

Treasury Services Agreement shall have the meaning specified in the Senior Facility Credit Agreement.

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Triggering Event shall mean any of the following events:  (i) the Termination Date, (ii) the occurrence of an Event of Default, (iii) Total Collateral Availability being less than $225,000,000 on each Business Day during any period of five (5) consecutive Business Days, (iv) Total Excess Availability being less than $200,000,000 on each Business Day during any period of five (5) consecutive Business Days unless on each Business Day during such period both (x) Total Collateral Availability is greater than or equal to $275,000,000 and (y) Total Excess Availability is greater than or equal to $150,000,000 or (v) Total Collateral Availability being less than $200,000,000 on any Business Day; provided that if, following a Triggering Event described in clause (iii), (iv) or (v), Total Collateral Availability subsequently equals or exceeds $250,000,000 on each Business Day during a period of twenty (20) consecutive Business Days such Triggering Event shall cease to exist upon the first day following such twenty (20)-Business Day period (unless the Borrowers otherwise elect by notice to the Administrative Agent); and provided further that if, following a Triggering Event described in clause (ii), the related Event of Default shall cease to exist, such Triggering Event shall cease to exist.  For the avoidance of doubt, the cessation of an existing Triggering Event does not preclude the occurrence of a subsequent Triggering Event.

2005 PCA shall have the meaning specified in the definition of Securitization Facility.

2005 Securitization Facility shall have the meaning specified in the definition of Securitization Facility.

2007 RSA shall have the meaning specified in the definition of Securitization Facility.

2007 RPA shall have the meaning specified in the definition of Securitization Facility.

2007 Securitization Facility shall have the meaning specified in the definition of Securitization Facility.

Type, when used in respect of any Loan or Borrowing, shall refer to the rate by reference to which interest on such Loan or on the Loans comprising such Borrowing is determined.  For purposes hereof, rate shall include the LIBO Rate or the Alternate Base Rate.

Unfunded Current Liability of any Plan means the amount, if any, by which the Accumulated Benefit Obligation (as defined under Statement of Financial Accounting Standards No. 87 (SFAS 87)) under the Plan as of the close of its most recent plan year, determined in accordance with SFAS 87 as in effect on the Effective Date, exceeds the fair market value of the assets allocable thereto.

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Uniform Commercial Code or UCC shall mean, at any time, the Uniform Commercial Code as from time to time in effect in the State of New York at such time; provided, however, that in the event that, by reason of mandatory provisions of law, the perfection, effect of perfection or non-perfection or priority of the security interest in any Collateral created by the Loan Documents is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, the term UCC shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or priority.

Unrestricted Subsidiary has the meaning specified in the Senior Facility Credit Agreement.

Unused Commitment Fee shall have the meaning assigned to such term in Section 2.07(a).

Valuation Reserves shall mean the sum of the following, without duplication of any Availability Reserves or any Valuation Reserve:

(a)            any book reserves maintained by the Borrowers in respect of Eligible Inventory (excluding a LIFO reserve under GAAP);

(b)            to the extent not included in clause (a) or otherwise reflected in the book value thereof, a lower of cost or market reserve for all Eligible Inventory selling for less than cost as determined by the Borrowers; and

(c)            such other reserves to reflect events, conditions, contingencies or risks which, as reasonably determined by the Administrative Agent, do or are reasonably likely to materially adversely affect the value of Eligible Inventory, established in accordance with the definition of Borrowing Base;

provided that the Administrative Agent shall give five (5) Business Days notice to the Borrowers in the case of new reserve categories established pursuant to clause (c) after the Effective Date and changes in the methodology for determining a reserve and one (1) Business Days notice to the Borrowers in other cases.

Section 1.02. Accounting Terms.  All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in accordance with, GAAP, except as otherwise specifically prescribed herein.

Section 1.03.  Terms Generally.  Except where the context requires otherwise, the definitions in Section 1.01 shall apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  The words include, includes and including shall be deemed to be followed by the phrase without limitation.  Unless otherwise stated, references to Sections, Articles, Schedules and Exhibits made herein are to Sections, Articles, Schedules or Exhibits, as the case may be, of this Agreement.  Writing, written and comparable terms refer to printing, typing and other means of reproducing words in a visible form.  References to any agreement or contract are to such agreement or contract as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof.  References to any Person include the successors and permitted assigns of such Person.  References from or through any date mean, unless otherwise specified, from and including or through and including, respectively.

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Section 1.04.  Classification of Loans and Borrowings.  For purposes of this Agreement, Loans may be classified and referred to by Class (e.g., a Revolving Loan) or by Type (e.g., a LIBOR Loan) or by Class and Type (e.g., a LIBOR Revolving Loan).  Borrowings also may be classified and referred to by Class (e.g., a Revolving Borrowing) or by Type (e.g., a LIBOR Borrowing) or by Class and Type (e.g., a LIBOR Revolving Borrowing).

Section 1.05.  Lyondell Collateral.  From the Effective Date, the obligations of Lyondell under the Loan Documents will not be secured by any Liens on its assets (except to the extent set forth in respect of Lyondell's obligations in respect of cash collateralization of Letters of Credit under Section 2.06(k)), and the Collateral Requirement will not apply to Lyondell.  Subject to the next sentence, any provision of the Loan Documents purporting to create or require collateral security in assets of Lyondell (except to the extent set forth in respect of Lyondell's obligations in respect of cash collateralization of Letters of Credit under Section 2.06(k)) shall to that extent be ineffective, and Lyondell assets shall be excluded in any determination of the Borrowing Base.  Lyondell may at any time irrevocably elect by notice to the Administrative Agent to satisfy the Collateral Requirement as to itself, and upon its satisfaction of the Collateral Requirement the provisions of this Section 1.05 shall cease to apply (it being understood that the opinion requirement therein would be satisfied pursuant to the delivery of legal opinions in form and substance substantially identical to opinions delivered pursuant hereto on the Effective Date).


ARTICLE 2
The Loans

Section 2.01.  Commitments.  Subject to the terms and conditions and relying upon the representations and warranties herein set forth, each Lender agrees, severally and not jointly, to make Revolving Loans to the Borrowers from time to time on any Business Day during the Revolving Period in amounts such that (i) the Outstandings of such Lender shall at no time exceed the amount of its Commitment and (ii) the Total Outstandings shall at no time exceed the Maximum Facility Availability.  Within the foregoing limits, the Borrowers may borrow, pay or prepay and reborrow Revolving Loans hereunder during the Revolving Period and subject to the terms, conditions and limitations set forth herein.

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Section 2.02.  Loans.   Article 2 Each Revolving Loan shall be made as part of a Borrowing consisting of Revolving Loans made ratably by the Lenders in accordance with their respective Commitments; provided, however, that the failure of any Lender to make any Revolving Loan shall not in itself relieve any other Lender of its obligation to lend hereunder (it being understood, however, that no Lender shall be responsible for the failure of any other Lender to make any Loan to be made by such other Lender).  The Loans comprising any Revolving Borrowing shall be in an aggregate principal amount which is an integral multiple of $1,000,000 and not less than the lesser of $10,000,000 and the remaining available balance of the Commitments.

(b)         Each Revolving Borrowing shall be comprised entirely of LIBOR Loans or ABR Loans, as the Borrowers may request pursuant to Section 2.03.  Each Lender may at its option make any LIBOR Loan by causing any branch or Affiliate of such Lender to make such Loan; provided, however, that any exercise of such option shall not affect the obligation of the Borrowers to repay such Loan in accordance with the terms of this Agreement; provided, further, that if the designation of any such foreign branch or Affiliate shall result in any costs, reductions or Taxes which would not otherwise have been applicable and for which such Lender would, but for this proviso, be entitled to request compensation under Section 2.15, 2.16 or 2.19, such Lender shall not be entitled to request such compensation unless it shall in good faith have determined such designation to be necessary or advisable to avoid any material disadvantage to it.  Borrowings of more than one Type may be outstanding at the same time.  For purposes of the foregoing, Borrowings having different Interest Periods, regardless of whether they commence on the same date, shall be considered separate Borrowings.

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(c)         Subject to Section 2.04 and paragraph (d) below, each Lender shall make its Loans on the proposed date or dates thereof (i) in the case of Loans other than Swingline Loans, by wire transfer of immediately available funds to the Administrative Agent in New York, New York, not later than 12:30 p.m., New York City time, and (ii) in the case of Swingline Loans, as provided for in Section 2.05.  The Administrative Agent shall credit on such date the amounts so received to the general deposit account of the Borrowers Agent with the Administrative Agent or to another account specified by the Borrowers and acceptable to the Administrative Agent by 3:00 p.m., New York City time; provided that ABR Loans made to finance the reimbursement of an LC Disbursement shall be remitted by the Administrative Agent to the Fronting Bank; and provided, further, that if a Borrowing shall not occur on such date because any condition precedent herein specified shall not have been met, the Administrative Agent shall return the amounts so received to the respective Lenders.  Revolving Loans shall be made by the Lenders ratably in accordance with their Commitments as provided in Section 2.17.  Unless the Administrative Agent shall have received notice from a Lender prior to the date of any Borrowing that such Lender will not make available to the Administrative Agent such Lenders portion of such Borrowing, the Administrative Agent may assume that such Lender has made such portion available to the Administrative Agent on the date of such Borrowing in accordance with this paragraph (c) and the Administrative Agent may, in reliance upon such assumption, make available to the Borrowers on such date a corresponding amount.  If and to the extent that such Lender shall not have made such portion available to the Administrative Agent, such Lender, on the one hand, and the Borrowers, on the other hand, severally agree to repay to the Administrative Agent forthwith on demand such corresponding amount, together with interest thereon, for each day from the date such amount is made available to the Borrowers until the date such amount is repaid to the Administrative Agent at (i) in the case of the Borrowers, the interest rate applicable to ABR Loans and (ii) in the case of such Lender, the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.  If such Lender shall repay to the Administrative Agent such corresponding amount, such amount shall be deemed to constitute such Lenders Loan as part of such Borrowing for purposes of this Agreement as if it were made on the date of such Borrowing.  Nothing herein shall prejudice any rights that the Borrowers may have against any Lender as a result of any default by such Lender hereunder.

(d)         Notwithstanding any other provision of this Agreement, the Borrowers shall not be entitled to request any Borrowing if the Interest Period requested with respect thereto would not comply with the limitations specified in the definition of Interest Period.

Section 2.03.  Notice of Borrowings.  Article 3 In order to request a Revolving Borrowing, the Borrowers shall give notice in writing (including telecopy or other electronic communication) (or telephone notice promptly confirmed in writing (including telecopy or other electronic communication)) to the Administrative Agent in the form of Exhibit B (i) in the case of a LIBOR Borrowing, not later than 12:30 p.m.., New York City time, three (3) Business Days before a proposed Borrowing and (ii) in the case of an ABR Borrowing, not later than 12:30 p.m., New York City time, on the Business Day of a proposed Borrowing.

(b)         The Administrative Agent may waive any prior notice in connection with any Borrowing to be made on the date hereof. Any notice given pursuant to this Section shall be irrevocable and shall in each case refer to this Agreement and specify (x) whether such Borrowing is to be a LIBOR Borrowing or an ABR Borrowing; (y) the date of such Borrowing (which shall be a Business Day) and the amount thereof; and (z) if such Borrowing is to be a LIBOR Borrowing, the Interest Period with respect thereto. If no election as to the Type of Borrowing is specified in any such notice, then the requested Borrowing shall be an ABR Borrowing. If no Interest Period with respect to any LIBOR Borrowing is specified in any such notice, then the Borrowers shall be deemed to have selected an Interest Period of one (1) months duration.  The Administrative Agent shall promptly advise the Lenders of each notice given pursuant to this Section and of each Lenders portion of the requested Borrowing.

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Section 2.04.  Conversions and Continuations.  Each Revolving Borrowing initially shall be of the Type specified in the applicable Borrowing Request and, in the case of a LIBOR Borrowing, shall have an initial Interest Period as specified in such Borrowing Request.  Thereafter, the Borrowers shall have the right at any time upon prior irrevocable telephonic notice (which shall be confirmed promptly in writing (including telecopy or other electronic communication)) to the Administrative Agent by the time that a Borrowing Request would be required under Section 2.03 if the Borrowers were requesting a Borrowing of the Type resulting from such election to be made on the effective date of such election, to convert such borrowing to a different Type of Borrowing, or in the case of a LIBOR Borrowing, to continue such Borrowing as a LIBOR Borrowing for an additional Interest Period, subject in each case to the following:

(a)         if fewer than all the Loans comprising any Borrowing are to be converted or continued, such conversion or continuation shall be made pro rata among the Lenders in accordance with the respective Loans of such Lenders that are part of such Borrowing immediately prior to such conversion or continuation;

(b)         in the case of a conversion or continuation of fewer than all the Loans comprising any Borrowing, the aggregate principal amount of Loans converted or continued shall be an amount that would be a permitted Borrowing amount for Loans of the same Type under the last sentence of Section 2.02(a);

(c)         accrued interest on a LIBOR Loan (or portion thereof) being converted or continued shall be paid by the Borrowers at the time of conversion or continuation;

(d)         if any LIBOR Loan is converted at a time other than the end of an Interest Period applicable thereto, the Borrowers shall pay any increased costs associated therewith pursuant to Section 2.16;

(e)         the duration of any Interest Period shall comply with the limitations specified in the definition of Interest Period, and any portion of a LIBOR Loan for which the shortest available Interest Period would extend beyond such date shall be automatically converted at the end of the Interest Period at the time in effect into an ABR Loan, and, if applicable, the number of outstanding Interest Periods (after giving effect to any such conversion or continuation), shall comply with the limitations specified in the definition of Interest Period; and

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(f)         the Borrowers shall not be entitled to elect to convert any Loans to, or continue any Loans for an additional Interest Period as, LIBOR Loans if an Event of Default shall exist when the Borrowers deliver notice of such election to the Administrative Agent.

The Interest Period applicable to any LIBOR Loan resulting from a conversion of a Loan shall be specified by the Borrowers in the irrevocable notice of conversion delivered pursuant to this Section; provided, however, that if no such Interest Period shall be specified, the Borrowers shall be deemed to have selected an Interest Period of one (1) months duration.  If the Borrowers shall not have given timely notice to continue any LIBOR Loan into a subsequent Interest Period (and shall not otherwise have given notice to convert such Loan), such Loan (unless repaid pursuant to the terms hereof) shall, subject to Section 4.01, automatically be continued as a LIBOR Loan with an Interest Period of one (1) months duration.  The Administrative Agent shall promptly advise the applicable Lenders of any notice given pursuant to this Section and of each such Lenders portion of the continuation or conversion hereunder.  This Section shall not apply to Swingline Borrowings, which may not be converted or continued.

Section 2.05.  Swingline Loans.  Article 4 Subject to the terms and conditions set forth herein, the Swingline Lender agrees to make Swingline Loans to the Borrowers from time to time during the Revolving Period, in an aggregate principal amount at any time outstanding that will not result in (i) the aggregate principal amount of outstanding Swingline Loans exceeding the Swingline Sublimit (ii) the Total Outstandings exceeding the Maximum Facility Availability.  Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrowers may borrow, prepay and reborrow Swingline Loans.

(b)         The Borrowers may request a Swingline Loan, by notifying the Swingline Lender of such request by telephone (confirmed in writing (including telecopy or other electronic communication) if requested by the Swingline Lender), not later than 12:30 p.m., New York City time, on the day of a proposed Swingline Loan. Each such notice shall be irrevocable and shall specify the requested date (which shall be a Business Day) and amount of the requested Swingline Loan. The Swingline Lender shall make each Swingline Loan available to the Borrowers by means of a credit to the general deposit account of the Borrowers Agent with the Swingline Lender (or, in the case of a Swingline Loan made to finance the reimbursement of an LC Disbursement as provided in Section 2.06(f), by remittance to the Fronting Bank) by 3:00 p.m., New York City time, on the requested date of such Swingline Loan.

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(c)         The Swingline Lender may by written notice given to the Borrowers and the Administrative Agent not later than 10:00 a.m., New York City time, on any Business Day, require the Borrowers to give a Borrowing Request on such date for a Borrowing on the earliest date permitted by Section 2.03 of Revolving Loans in an amount sufficient to repay all outstanding Swingline Loans.

(d)         Whether or not it shall have given a notice pursuant to Section 2.05(c), the Swingline Lender may by written notice given to the Administrative Agent not later than 10:00 a.m., New York City time, on any Business Day require the Lenders to acquire participations on such Business Day in all or a portion of the Swingline Loans outstanding; provided that if the aggregate principal amount of Swingline Loans outstanding on the last Business Day of any week exceeds $5,000,000, then the Swingline Lender shall deliver such notice to the Administrative Agent on such last Business Day of such week and require the Lenders to acquire participations on such last Business Day of such week in all of the Swingline Loans then outstanding.  Such notice shall specify the aggregate amount of Swingline Loans in which Lenders will participate.  Promptly upon receipt of such notice, the Administrative Agent will give notice thereof to each Lender, specifying in such notice such Lenders Revolving Percentage of such Swingline Loan or Loans.  Each Lender hereby absolutely and unconditionally agrees, upon receipt of notice as provided above, to pay to the Administrative Agent, for the account of the Swingline Lender, such Lenders Revolving Percentage of such Swingline Loan or Loans.  Each Lender acknowledges and agrees that its obligation to acquire participations in Swingline Loans pursuant to this paragraph is absolute and unconditional and shall not be affected by any circumstance whatsoever, including the occurrence and continuance of a Default or reduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever.  Each Lender shall comply with its obligation under this paragraph by wire transfer of immediately available funds, in the same manner as provided in Section 2.02 with respect to Revolving Loans made by such Lender (and Section 2.02 shall apply, mutatis mutandis, to the payment obligations of the Lenders), and the Administrative Agent shall promptly pay to the Swingline Lender the amounts so received by it from the Lenders.  The Administrative Agent shall notify the Borrowers of any participations in any Swingline Loan acquired pursuant to this paragraph, and thereafter payments in respect of such Swingline Loan shall be made to the Administrative Agent and not to the Swingline Lender.  Any amounts received by the Swingline Lender from the Borrowers (or other party on behalf of the Borrowers) in respect of a Swingline Loan after receipt by the Swingline Lender of the proceeds of a sale of participations therein shall be promptly remitted to the Administrative Agent; any such amounts received by the Administrative Agent shall be promptly remitted by the Administrative Agent to the Lenders that shall have made their payments pursuant to this paragraph and to the Swingline Lender, as their interests may appear.  Any payment by a Lender pursuant to this paragraph to purchase a participation in a Swingline Loan shall not constitute a Revolving Loan and shall not relieve the Borrowers of their obligation to repay such Swingline Loan.

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Section 2.06.  Letters of Credit.   Article 5 Existing Letters of Credit. On the Effective Date, without further action by any party hereto, each Fronting Bank that has issued an Existing Letter of Credit shall be deemed to have granted to each Lender, and each Lender shall be deemed to have acquired from such Fronting Bank, a participation in each Existing Letter of Credit equal to such Lenders Revolving Percentage of (i) the aggregate amount available to be drawn under such Existing Letter of Credit and (ii) the aggregate amount of any outstanding reimbursement obligations in respect thereof. Such participations shall be on all the same terms and conditions as participations granted in Additional Letters of Credit under Section 2.06(e). With respect to each Existing Letter of Credit (i) if the relevant Fronting Bank has, prior to the Effective Date, sold a participation therein to a Lender, such Lender and Fronting Bank agree that such participation shall be automatically canceled on the Effective Date and (ii) if the relevant Fronting Bank has, prior to the Effective Date, sold a participation therein to any bank or financial institution that is not a Lender, such participation shall be cancelled upon the Administrative Agent receiving the written consent of such bank or financial institution to the effectiveness of this Agreement as contemplated by Section 4.02(c).

(b)         Additional Letters of Credit.  Subject to the terms and conditions set forth herein, the Borrowers may request the issuance of Additional Letters of Credit for their account, in a form reasonably acceptable to the Administrative Agent and the relevant Fronting Bank, at any time and from time to time during the period beginning on the Effective Date and ending on the thirtieth day prior to the Termination Date.  In the event of any inconsistency between the terms and conditions of this Agreement and the terms and conditions of the letter of credit application and any related documentation submitted by the Borrowers to, or entered into by the Borrowers with, the relevant Fronting Bank relating to any Letter of Credit, the terms and conditions of this Agreement shall control.

(c)         Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions.  To request the issuance of an Additional Letter of Credit (or the amendment, renewal or extension of an outstanding Letter of Credit), the Borrowers shall hand deliver or telecopy (or transmit by electronic communication, if arrangements for doing so have been approved by the relevant Fronting Bank) to the relevant Fronting Bank and the Administrative Agent (reasonably in advance of the requested date of issuance, amendment, renewal or extension) a notice requesting the issuance of an Additional Letter of Credit, or identifying the Letter of Credit to be amended, renewed or extended, the date of issuance, amendment, renewal or extension, the date on which such Letter of Credit is to expire (which shall comply with paragraph (d) of this Section), the amount of such Additional Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit.  If requested by the relevant Fronting Bank, the Borrowers also shall submit a letter of credit application in a form reasonably acceptable to the relevant Fronting Bank in connection with any request for an Additional Letter of Credit.  An Additional Letter of Credit shall be issued, amended, renewed or extended only if (and upon issuance, amendment, renewal or extension of each Letter of Credit the Borrowers shall be deemed to represent and warrant that), after giving effect to such issuance, amendment, renewal or extension Article 6 the LC Exposure shall not exceed the LC Sublimit and Article 7 the Total Outstandings shall not exceed the Maximum Facility Availability.  Within the foregoing limits and subject to the terms and conditions set forth herein, the relevant Fronting Bank agrees to issue such Additional Letters of Credit (or amend, renew or extend an outstanding Letter of Credit, as the case may be).

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(d)         Expiration Date.  Each Additional Letter of Credit shall expire at or prior to the close of business on the date one (1) year after the date of the issuance of such Additional Letter of Credit (or, in the case of any renewal or extension thereof, one (1) year after such renewal or extension).  If the Borrowers so request, the relevant Fronting Bank shall issue an Additional Letter of Credit that has automatic extension provisions (each, an Auto-Extension Letter of Credit); provided that any such Auto-Extension Letter of Credit must permit the relevant Fronting Bank to prevent any such extension at least once in each twelve (12) month period (commencing with the date of issuance of such Letter of Credit) by giving prior notice to the beneficiary thereof not later than a day (the Non-Extension Notice Date) in each such twelve (12) month period to be agreed upon at the time such Letter of Credit is issued.  Unless otherwise directed by the relevant Fronting Bank, the Borrowers shall not be required to make a specific request to the relevant Fronting Bank for any such extension.  Once an Auto-Extension Letter of Credit has been issued, the Lenders shall be deemed to have authorized (but may not require) the relevant Fronting Bank to permit the extension of such Letter of Credit at any time to an expiry date not later than the first anniversary of the Termination Date; provided that the relevant Fronting Bank shall not permit any such extension if (i) it has determined that it would have no obligation at such time to issue such Letter of Credit in its extended form under the terms hereof or (ii) it has received notice (which may be by telephone or in writing) on or before the day that is five (5) Business Days before the Non-Extension Notice Date from the Administrative Agent, any Lender or any Borrower that one or more of the applicable conditions specified in Section 4.01 is not then satisfied.

(e)         Participations.  By the issuance of an Additional Letter of Credit (or an amendment to a Letter of Credit increasing the amount thereof) and without any further action on the part of the relevant Fronting Bank or the Lenders, the relevant Fronting Bank hereby grants to each Lender, and each Lender hereby acquires from such Fronting Bank, a participation in such Letter of Credit equal to such Lenders Revolving Percentage of the aggregate amount available to be drawn under such Letter of Credit.  In consideration and in furtherance of the foregoing, each Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for the account of the relevant Fronting Bank, such Lenders Revolving Percentage of each LC Disbursement made by such Fronting Bank and not reimbursed by the Borrowers on the date due as provided in paragraph (f) of this Section, or of any reimbursement payment required to be refunded to the Borrowers for any reason.  Each Lender acknowledges and agrees that its obligation to acquire participations pursuant to this paragraph in respect of Letters of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including any amendment, renewal or extension of any Letter of Credit or the occurrence and continuance of a Default or reduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever; provided that such participations by a Lender shall not be construed as a waiver of any claims such Lender may have against the relevant Fronting Bank for gross negligence or willful misconduct (as finally determined by a court of competent jurisdiction).

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(f)         Reimbursement.  If any Fronting Bank shall make any LC Disbursement in respect of a Letter of Credit, the Borrowers shall reimburse such LC Disbursement by paying to the Administrative Agent an amount equal to such LC Disbursement not later than 12:30 p.m., New York City time, on the date that such LC Disbursement is made, if the Borrowers shall have received notice of such LC Disbursement prior to 10:00 a.m., New York City time, on such date, or, if such notice has not been received by the Borrowers prior to such time on such date, then not later than 12:30 p.m., New York City time, on the Business Day immediately following the day that the Borrowers receive such notice; provided that the Borrowers may, subject to the conditions to the Borrowing set forth herein, request in accordance with Section 2.03 or 2.05 that such payment be financed with an ABR Revolving Borrowing or Swingline Loan in an equivalent amount and, to the extent so financed, the Borrowers obligation to make such payment shall be discharged and replaced by the resulting ABR Revolving Borrowing or Swingline Loan.  If the Borrowers fail to make such payment when due, the Administrative Agent shall notify each Lender of the applicable LC Disbursement, the payment then due from the Borrowers in respect thereof and such Lenders Revolving Percentage thereof.  Promptly following receipt of such notice, each Lender shall pay to the Administrative Agent its Revolving Percentage of the payment then due from the Borrowers, in the same manner as provided in Section 2.02 with respect to Loans made by such Lender (and Section 2.02 shall apply, mutatis mutandis, to the payment obligations of the Lenders), and the Administrative Agent shall promptly pay to the relevant Fronting Bank the amounts so received by it from the Lenders.  Promptly following receipt by the Administrative Agent of any payment from the Borrowers pursuant to this paragraph, the Administrative Agent shall distribute such payment to the relevant Fronting Bank or, to the extent that Lenders have made payments pursuant to this paragraph to reimburse such Fronting Bank, then to such Lenders and such Fronting Bank as their interests may appear.  Any payment made by a Lender pursuant to this paragraph to reimburse a Fronting Bank for any LC Disbursement (other than the funding of ABR Revolving Loans or a Swingline Loan as contemplated above) shall not constitute a Loan and shall not relieve the Borrowers of their obligation to reimburse such LC Disbursement.

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(g)         Obligations Absolute.  The Borrowers obligation to reimburse LC Disbursements as provided in paragraph (f) of this Section shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any Letter of Credit or this Agreement, or any term or provision therein, (ii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect, (iii) payment by any Fronting Bank under a Letter of Credit against presentation of a draft or other document that does not comply with the terms of such Letter of Credit, or (iv) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of setoff against, the Borrowers obligations hereunder.  None of the Administrative Agent, the Lenders nor any Fronting Bank, nor any of their Related Parties shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to in the preceding sentence), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the relevant Fronting Bank; provided that the foregoing shall not be construed to excuse the relevant Fronting Bank from liability to the Borrowers to the extent of any direct damages (as opposed to consequential damages, claims in respect of which are hereby waived by the Borrowers to the extent permitted by applicable law) suffered by the Borrowers that are caused by such Fronting Banks failure to exercise care when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof.  The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of any Fronting Bank (as finally determined by a court of competent jurisdiction), such Fronting Bank shall be deemed to have exercised care in each such determination.  In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented which appear on their face to be in substantial compliance with the terms of a Letter of Credit, the relevant Fronting Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit.

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(h)         Disbursement Procedures.  Each Fronting Bank shall, promptly following its receipt thereof, examine all documents purporting to represent a demand for payment under a Letter of Credit.  The relevant Fronting Bank shall promptly notify the Administrative Agent and the Borrowers by telephone (confirmed by telecopy or other electronic communication) of such demand for payment and whether such Fronting Bank has made or will make an LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrowers of their obligation to reimburse such Fronting Bank and the Lenders with respect to any such LC Disbursement.

(i)         Interim Interest.  If any Fronting Bank shall make any LC Disbursement, then, unless the Borrowers shall reimburse such LC Disbursement in full on the date such LC Disbursement is made, the unpaid amount thereof shall bear interest, for each day from and including the date such LC Disbursement is made to but excluding the date that the Borrowers reimburse such LC Disbursement, at the rate per annum then applicable to ABR Revolving Loans; provided that, if the Borrowers fail to reimburse such LC Disbursement when due pursuant to paragraph (f) of this Section, then Section 2.11 shall apply.  Interest accrued pursuant to this paragraph shall be for the account of the relevant Fronting Bank, except that interest accrued on and after the date of payment by any Lender pursuant to paragraph (f) of this Section to reimburse such Fronting Bank shall be for the account of such Lender to the extent of such payment.

(j)         Replacement of Fronting Bank.  Any Fronting Bank may be replaced at any time by written agreement among the Borrowers, the Administrative Agent, the replaced Fronting Bank and the successor Fronting Bank.  The Administrative Agent shall notify the Lenders of any such replacement of any Fronting Bank.  At the time any such replacement shall become effective, the Borrowers shall pay all unpaid fees accrued for the account of the replaced Fronting Bank pursuant to Section 2.07(b).  From and after the effective date of any such replacement, (v) the successor Fronting Bank shall have all the rights and obligations of the Fronting Bank under this Agreement with respect to Letters of Credit to be issued thereafter and (vi) references herein to the term Fronting Bank shall be deemed to refer to such successor or to any previous Fronting Bank, or to such successor and all previous Fronting Banks, as the context shall require.  After the replacement of a Fronting Bank hereunder, the replaced Fronting Bank shall remain a party hereto and shall continue to have all the rights and obligations of a Fronting Bank under this Agreement with respect to Letters of Credit issued by it prior to such replacement, but shall not be required to issue Additional Letters of Credit and, for the avoidance of doubt, no Letter of Credit issued by it prior to such replacement shall be renewed or extended.

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(k)         Cash Collateralization.  If any Event of Default shall occur and be continuing and the maturity of the Revolving Loans shall be accelerated or the Commitments terminated as provided in Article 7, on the Business Day that the Borrowers receive notice from the Administrative Agent or Lenders with LC Exposure representing greater than 50% of the total LC Exposure demanding the deposit of cash collateral pursuant to this paragraph, the Borrowers shall deposit in the Cash Collateral Account an amount in cash equal to 105% of the LC Exposure as of such date plus any accrued and unpaid interest thereon; provided that the obligation to deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or other notice of any kind, (vii) upon the occurrence of any Event of Default with respect to any Borrower described in Section 7.01(f) or (viii) if any Letters of Credit remain outstanding and undrawn on the Termination Date and, in case of either (i) or (ii), a backstop letter of credit reasonably acceptable to the Fronting Bank shall not have been provided as collateral for such Letters of Credit.  Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrowers under this Agreement.  The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account.  Such deposits shall, pending their application as provided below, be invested by the Administrative Agent, at the Borrowers risk and expense, in repurchase obligations with respect to United States of America Treasury securities or other high-quality overnight or short-term investments (which may include certificates of deposit of the Administrative Agent), and any interest earned through the investment of such deposits shall be for the Borrowers account and shall be added to the deposits held by the Administrative Agent under this Section and applied as provided herein.  Moneys in such account shall be applied by the Administrative Agent to reimburse the relevant Fronting Bank for LC Disbursements for which it has not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrowers for the LC Exposure at such time or, subject to the consent of Lenders with LC Exposure representing greater than 50% of the total LC Exposure, be applied to satisfy other obligations of the Borrowers under this Agreement.  If the Borrowers are required to provide an amount of cash collateral hereunder as a result of the occurrence of an Event of Default, such amount, together with any interest earned thereon (to the extent not applied as aforesaid), shall be returned to the Borrowers within three (3) Business Days after all Events of Default have been cured or waived.

Section 2.07.  Fees.   (b) The Borrowers agree to pay to each Lender, through the Administrative Agent, on the second Business Day following each March 31, June 30, September 30 and December 31, commencing March 31, 2008, and on the second Business Day following the date on which the Commitment of such Lender shall be terminated as provided herein, a fee (the Unused Commitment Fee) at the Applicable Commitment Fee Rate on the daily average amount by which the Commitment of such Lender exceeded the sum of its outstanding Revolving Loans and its LC Exposure during the quarter then ended (or other period commencing on the Effective Date or ending on the Termination Date or any date on which the Commitment of such Lender shall be terminated, as applicable).  The Unused Commitment Fee shall be computed on the basis of the actual number of days elapsed over a year of three hundred and sixty (360) days (including the first day but excluding the last day).  The Unused Commitment Fee due to each Lender shall commence to accrue on the Effective Date and shall cease to accrue on the earlier of the Termination Date and the termination of the Commitment of such Lender as provided herein.

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(b)         The Borrowers agree to pay (i) to the Administrative Agent for the account of each Lender a participation fee (the L/C Fee) with respect to its participations in Letters of Credit, which shall accrue at the Applicable L/C Margin on the average daily amount of such Lenders LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) during the period from and including the Effective Date to but excluding the later of the date on which such Lenders Commitment terminates and the date on which such Lender ceases to have any LC Exposure, and (ii) to each Fronting Bank, as applicable, a fronting fee, (the L/C Issuance Fee) which shall accrue at a rate of 0.25% per annum on the average daily amount of the LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) during the period from and including the Effective Date to but excluding the later of the date of termination of the Commitments and the date on which there ceases to be any LC Exposure.  Participation fees and fronting fees shall be payable on the second Business Day following each March 31, June 30, September 30 and December 31, commencing March 31, 2008; provided that all such fees shall be payable on the second Business Day following the date on which the Commitments terminate and any such fees accruing after the date on which the Commitments terminate shall be payable on demand.  All participation fees and fronting fees shall be computed on the basis of a year of three hundred and sixty (360) days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).

(c)         The Borrowers agree to pay to the Administrative Agent, for its own account, collateral management, agency and administrative fees (the Administrative Fees) at the times and in the amounts heretofore agreed between them.

(d)         The Borrowers agree to pay on the Effective Date to the Administrative Agent, for its own account and for the accounts of the Arrangers, the other Agents and the Lenders, fees in the amounts heretofore mutually agreed (the Effective Date Fees).

(e)         All Fees shall be paid on the dates due, in immediately available funds, to the Administrative Agent for distribution, if and as appropriate, to the relevant Fronting Bank or among the Lenders. The Administrative Fees shall be paid on the dates due, in immediately available funds, to the Administrative Agent directly.

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Section 2.08.  Maturity of Loans; Mandatory Prepayments.  (c) The Borrowers hereby agree that the outstanding principal balance of each Loan shall be payable on the Termination Date; provided that on each date that a Revolving Borrowing is made, the Borrowers shall repay all Swingline Loans borrowed prior to such date and then outstanding.

(b)         Mandatory Prepayments.

(i)    Upon the receipt by (or for the account of) any Loan Party of Net Proceeds in respect of any Prepayment Event, the Borrowers shall prepay the Loans in an amount equal to the lesser of (i) the outstanding principal amount of the Loans and (ii) such Net Proceeds in accordance with (and subject to) subsection (c) below.  Each such prepayment shall be required to be made not later than the fifth Business Day following receipt of such Net Proceeds; provided that if the Net Proceeds in respect of any Prepayment Event arising from a Covered Disposition of Collateral are less than $25,000,000 or the Net Proceeds in respect of any Prepayment Event arising from receipt of Casualty Proceeds do not constitute Major Casualty Proceeds, no such prepayment shall be required until the amount of such Net Proceeds, together with the amount of all other Net Proceeds in respect of Prepayment Events arising from Covered Dispositions of Collateral or receipt of Casualty Proceeds, respectively,  in respect of which no prepayment under this subsection (b) shall have theretofore been made because such Net Proceeds aggregated less than $25,000,000 or did not constitute Major Casualty Proceeds, as applicable, are equal to at least $25,000,000 or constitute Major Casualty Proceeds.

(ii)    If at any date the Total Outstandings exceed the Maximum Facility Availability calculated as of such date, then not later than the next succeeding Business Day, the Borrowers shall be required to take one of the following actions (as elected by the Borrowers): (A) prepay the Loans, (B) deposit cash in the Cash Collateral Account or (C) a combination of (A) and (B), in each case in an amount equal to such excess so that the Total Outstandings no longer exceed the Maximum Facility Availability.  So long as either (x) no Default exists or (y) Total Outstandings are zero, any cash so deposited shall be released to the Borrowers if and to the extent that Total Outstandings, after giving effect to such release, would not exceed the Maximum Facility Amount.

(iii)    During each Sweep Period, all amounts collected in the Sweep Account will be applied to the repayment of Loans in accordance with (and subject to) subsection (c) below.

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(c)         Application of Prepayments.

(i)    Each payment of principal of the Loans shall be applied first to any outstanding Swingline Loans until the Swingline Loans shall have been repaid in full and then to Revolving Loans.

(ii)    Each payment of principal of the Revolving Loans shall be applied ratably to the respective Revolving Loans of all Lenders.

(iii)    Each payment of principal of the Revolving Loans pursuant to subsection (b) above shall be applied to outstanding ABR Loans up to the full amount thereof and then to outstanding LIBOR Loans.

(iv)    Each payment of principal of LIBOR Loans shall be made together with interest accrued and unpaid on the amount repaid to the date of payment.

(v)    So long as no Event of Default has occurred and is continuing, if subsection (b) would otherwise require prepayment of LIBOR Loans or portions thereof prior to the last day of the then current Interest Period therefor, each such prepayment may, if the Borrowers so elect by notice to the Administrative Agent, be deferred to such last day of the related Interest Period.  In the event of a deferral pursuant to this subsection, cash in the amount of the required prepayment shall be deposited in the Cash Collateral Account on the date the required prepayment would otherwise have been required for application on the deferred payment date unless the Borrowers would have been able, had the required prepayment been made, to reborrow that amount consistent with Section 4.01.  Any amounts deposited in the Cash Collateral Account pursuant to the previous sentence but not yet applied to repay a LIBOR Loan shall be released to the Borrowers on any date prior to the last day of the then current Interest Period if on such date (D) the Borrowers are able to reborrow the amount consistent with Section 4.01 or (E) Total Outstandings are zero.

(d)         Each payment of the LIBOR Loans shall be applied to such Borrowings as the Borrowers may designate (or, failing such designation, as determined by the Administrative Agent).

(e)         For the avoidance of doubt, no prepayment shall result in any reduction of the Lenders Commitments hereunder.

Section 2.09.  Evidence of Debt.   (d) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness to such Lender resulting from each Loan made by such Lender from time to time, including the amounts of principal and interest payable and paid to such Lender from time to time under this Agreement.

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(b)         The Administrative Agent shall maintain accounts in which it will record (i) the amount of each Loan made hereunder, the Class and Type of each Loan and the Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrowers to each Lender hereunder, (iii) the amount of any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lenders share thereof and (iv) the amount of any interest thereon payable from the Borrowers to each Lender hereunder.

(c)         The entries made in the accounts maintained pursuant to paragraphs (a) and (b) above shall, absent manifest error and to the extent permitted by applicable law, be prima facie evidence of the existence and amounts of the obligations therein recorded; provided, however, that the failure of any Lender or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligations of the Borrowers to repay the Loans in accordance with their terms.

(d)         Notwithstanding any other provision of this Agreement, in the event any Lender shall request a Note evidencing the Loans made by it hereunder, the Borrowers shall deliver such a Note or Notes payable to such Lender.

Section 2.10.  Interest on Loans.   Article 8 Subject to the provisions of Section 2.11, each ABR Revolving Loan shall bear interest at a rate per annum equal to the sum of the Applicable Margin plus the Alternate Base Rate.  Interest on each ABR Loan shall be payable on each applicable Interest Payment Date.  The Alternate Base Rate shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error.

(b)         Subject to the provisions of Section 2.11, each LIBOR Loan shall bear interest at a rate per annum equal to the Adjusted LIBO Rate for the Interest Period in effect for such Loan plus the Applicable Margin.  Interest on each LIBOR Loan shall be payable on each applicable Interest Payment Date (and, in the case of Revolving Loans, upon termination of the Commitments).  The Adjusted LIBO Rate for each Interest Period shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error.  The Administrative Agent shall promptly advise the Borrowers and each applicable Lender of such determination.

(c)         Subject to the provisions of Section 2.11, each Swingline Loan shall bear interest at the rate per annum applicable to ABR Revolving Loans as provided in paragraph (a) above.

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(d)         Interest on each Loan shall accrue from and including the date on which such Loan is made and to but excluding the date such Loan is repaid.

(e)         All computations of interest for ABR Loans when the Alternate Base Rate is determined by Citibanks base rate shall be made on the basis of 365 days or 366 days, as applicable, and actual days elapsed.  All other computations of fees and interest shall be made on the basis of a three hundred and sixty (360)-day year and actual days elapsed.

Section 2.11.  Interest on Overdue Amounts; Alternative Rate of Interest.  (a) If the Borrowers shall default in the payment of interest on any Loan or any Fees or other amount (other than principal) becoming due hereunder, whether by scheduled maturity, notice of prepayment, acceleration or otherwise, the Borrowers shall on demand pay interest from and including the date of such default, to the extent permitted by law, on such defaulted amount (other than principal) up to (but not including) the date of actual payment (after as well as before judgment) at a rate per annum (computed as provided in Section 2.10(a)) equal to the rate then applicable to ABR Loans plus (but not in addition to the 2.00% increment contemplated by the proviso to the definition of Applicable Margin) 2.00% per annum.

(b)         In the event, and on each occasion, that on the day two (2) Business Days prior to the commencement of any Interest Period for a LIBOR Borrowing the Administrative Agent shall have determined that deposits in the requested principal amounts of the LIBOR Loans are not generally available in the London interbank market to the Lenders or that reasonable means do not exist for ascertaining the LIBO Rate or that the rate at which such deposits are being offered will not adequately and fairly reflect the cost to the Lenders of making such LIBOR Loan, during such Interest Period, the Administrative Agent shall, as soon as practicable thereafter, give notice of such determination to the Borrowers and any request by the Borrowers for a LIBOR Borrowing shall, until the circumstances giving rise to such notice no longer exist, Article 9 if such notice relates to a Revolving Borrowing, be deemed a request for an ABR Borrowing; provided, however, that the Borrowers may withdraw any such request prior to the making of any such ABR Borrowing, or Article 10 if such notice relates to the conversion of any outstanding Borrowing to, or continuation of any outstanding Borrowing as, a LIBOR Borrowing, be deemed to be a request for a conversion to, or continuation as, an ABR Borrowing, as applicable.  Each determination by the Administrative Agent hereunder shall be conclusive absent manifest error.

Section 2.12.  Termination and Reduction of Commitments and Swingline Facility.  (a) Unless previously terminated, the Commitments and the Swingline Facility shall be automatically and permanently terminated on the Termination Date.

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(b)         Upon at least three (3) Business Days prior irrevocable notice to the Administrative Agent (a copy of which the Administrative Agent shall promptly provide to each Lender), the Borrowers may at any time in whole permanently terminate, or from time to time in part permanently reduce, the Total Commitment; provided, however, that (i) each partial reduction of the Total Commitment shall be in an integral multiple of $1,000,000 and in a minimum principal amount of $5,000,000 and (ii) no such termination or reduction shall be made (A) which would reduce the Total Commitment to an amount less than the Total Outstandings or (B) which would reduce any Lenders Commitment to an amount that is less than such Lenders Outstandings.  Notwithstanding the foregoing, a notice of termination or reduction of the Total Commitment delivered by the Borrowers may state that such notice is conditioned upon the effectiveness of other debt incurrences, equity issuances or asset sales, in which case such notice may be revoked by the Borrowers (by notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied.

(c)         Each reduction in the Commitments shall be made ratably among the Lenders in accordance with their respective Commitments.

Section 2.13.  Optional Prepayment of Loans.  (b) The Borrowers shall have the right at any time and from time to time to prepay any Borrowing, in whole or in part without premium or penalty, upon giving telephonic notice (which shall be confirmed promptly in writing (including telecopy or other electronic communication)) to the Administrative Agent (which shall promptly provide a copy to each Lender): (i) before 12:30 p.m., New York City time, at least two (2) Business Days prior to prepayment, in the case of LIBOR Loans and (ii) before 12:30 p.m., New York City time, on the date of prepayment, in the case of ABR Loans; provided, however, that (x) each such partial prepayment of LIBOR Loans shall be in a minimum principal amount of $10,000,000 and an integral multiple of $1,000,000 and (y) each such partial prepayment of Swingline Loans shall be in a minimum principal amount of $100,000 and an integral multiple of $100,000.

(b)         On the date of any termination or reduction of the Total Commitment pursuant to Section 2.12, the Borrowers shall pay or prepay so much of the Revolving Borrowings as shall be necessary in order that the Total Outstandings will not exceed the Maximum Facility Availability after giving effect to such termination or reduction.

(c)         Except to the extent otherwise specified by the Borrowers when making a prepayment, all prepayments under this Section 2.13 of Revolving Loans shall be applied to outstanding ABR Loans up to the full amount thereof and then shall be applied to outstanding LIBOR Loans up to the full amount thereof.

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(d)         All prepayments under this Section shall be subject to Section 2.16 but otherwise without premium or penalty.  All prepayments of LIBOR Loans shall be accompanied by accrued interest on the principal amount being prepaid to the date of prepayment.

Section 2.14.  Reserve Requirements; Change in Circumstances.   (c) Notwithstanding any other provision herein (but subject to paragraph (d) below and Section 2.20), if after the date any Lender or Fronting Bank becomes a Lender or Fronting Bank hereunder any change in applicable law or regulation or in the interpretation or administration thereof by any Governmental Authority charged with the interpretation or administration thereof (whether or not having the force of law) shall change the basis of taxation of payments to any Lender or any Fronting Bank, as applicable, of the principal of or interest on any LIBOR Loan made by such Lender or any Letter of Credit or participation therein or any fees or other amounts payable hereunder (other than changes in respect of Taxes referred to in clause (a) or (b) of the definition of Excluded Taxes) or by any political subdivision or taxing authority therein), or shall impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with or for the account of or credit extended by such Lender or Fronting Bank or shall impose on such Lender, such Fronting Bank or the London interbank market any other condition affecting this Agreement or LIBOR Loans made by such Lender or any Letter of Credit or participation therein, and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any such Loan or to increase the cost to such Lender or such Fronting Bank of participating in, issuing or maintaining any Letter of Credit or to reduce the amount of any sum received or receivable by such Lender or such Fronting Bank hereunder (whether of principal, interest or otherwise) in respect thereof by an amount deemed by such Lender to be material, then the Borrowers will pay to such Lender or such Fronting Bank, as the case may be, such additional amount or amounts as will compensate such Lender or such Fronting Bank for such additional costs incurred or reduction suffered.

(b)         Subject to Section 2.20, if any Lender or any Fronting Bank shall have determined that the adoption after the date any Lender or Fronting Bank becomes a Lender or Fronting Bank hereunder of any law, rule, regulation or guideline regarding capital adequacy, or any change after such date in any of the foregoing or in the interpretation or administration of any of the foregoing by any Governmental Authority charged with the interpretation or administration thereof, or compliance by any Lender or any Fronting Bank (or any lending office of such Lender or Fronting Bank) or any Lenders or any Fronting Banks holding company with any request or directive regarding capital adequacy (whether or not having the force of law) made or promulgated after such date by any such Governmental Authority, has or would have the effect of reducing the rate of return on such Lenders or such Fronting Banks capital or on the capital of such Lenders or such Fronting Banks holding company, if any, as a consequence of its obligations under this Agreement or the Loans made by, or participations in Letters of Credit held by, such Lender, or the Letters of Credit issued by any Fronting Bank, pursuant hereto to a level below that which such Lender or such Fronting Bank or such Lenders or such Fronting Banks holding company could have achieved but for such adoption, change or compliance (taking into consideration such Lenders or such Fronting Banks guidelines with respect to capital adequacy) by an amount deemed by such Lender or such Fronting Bank to be material, then from time to time the Borrowers shall pay to such Lender or such Fronting Bank such additional amount or amounts as will compensate such Lender or such Fronting Bank or such Lenders or such Fronting Banks holding company for any such reduction suffered.

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(c)         A certificate of each Lender or any Fronting Bank setting forth such amount or amounts as shall be necessary to compensate such Lender or Fronting Bank (or its participating banks or other entities pursuant to Section 10.07) as specified in paragraph  (a) or (b) above, as the case may be, shall be delivered to the Borrowers and shall be conclusive absent manifest error.  Except as provided in paragraph (d) below, the Borrowers shall pay each Lender or Fronting Bank the amount shown as due on any such certificate delivered by such Lender or Fronting Bank within thirty (30) days after receipt of the same.  Each Lender or Fronting Bank shall submit such a certificate no more often than monthly; provided, however, that certificates with respect to amounts due with respect to identifiable Loans may be submitted at the ends of such Loans Interest Periods.

(d)         Failure on the part of any Lender or Fronting Bank to demand compensation for any increased costs or reduction in amounts received or receivable or reduction in return on capital shall not constitute a waiver of such Lenders or Fronting Banks rights with respect to any period to demand compensation for any increased costs or reduction in amounts received or receivable or reduction in return on capital with respect to such period or any other period; provided, however, that neither any Lender nor any Fronting Bank shall be entitled to compensation under this Section 2.14 for any costs incurred or reductions suffered more than ninety (90) days prior to the date on which it shall have requested compensation therefor; provided further, that if the change in law or regulation or in the interpretation or administration thereof that shall give rise to any such costs or reductions shall be retroactive, then the ninety (90)-day period referred to above shall be extended to include the period of retroactive effect thereof.  Notwithstanding any other provision of this Section 2.14, neither any Lender nor any Fronting Bank shall demand compensation for any increased cost or reduction referred to above if it shall not at the time be the general policy or practice of such Lender or such Fronting Bank to demand such compensation in similar circumstances under comparable provisions of other credit agreements, if any.  If any Lender or any Fronting Bank shall receive as a refund any moneys from any source that it has listed on the certificate provided pursuant to (c) above as an increased cost, to the extent that the Borrowers have previously paid such increased cost to such Lender or such Fronting Bank, such Lender or Fronting Bank shall promptly forward such refund to the Borrowers without interest.

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Section 2.15.  Change in Legality.   (d) Notwithstanding anything to the contrary herein contained (but subject to Section 2.20), if after the date of this Agreement any change in any law or regulation or in the interpretation thereof or any new law, regulation or interpretation by any Governmental Authority charged with the administration or interpretation thereof or any judgment, order or directive of any competent court, tribunal or authority shall make it unlawful for any Lender or its Applicable Lending Office to make or maintain any LIBOR Loan or to give effect to its obligations as contemplated hereby with respect to any LIBOR Loan (collectively, an Illegality), then, by written notice to the Borrowers and to the Administrative Agent, such Lender, so long as such Illegality continues to exist:

(i)    may declare that LIBOR Loans will not thereafter be made by such Lender hereunder, whereupon any request by the Borrowers for a LIBOR Borrowing (x) shall, as to such Lender only, be deemed a request for an ABR Borrowing or (y) at the option of the Borrowers, shall be withdrawn as to the Lender prior to the time for making the Borrowing; and

(ii)    shall promptly enter into negotiations with the Borrowers and negotiate in good faith to agree to a solution to such Illegality; provided, however, that if such an agreement has not been reached by the date at which such change in law is given effect with respect to the outstanding LIBOR Loans of such Lender, the Borrowers shall immediately, at the option of the Borrowers, either (A) prepay the affected Loans or (B) convert any such LIBOR Loan to an ABR Loan.

(b)         For purposes of this Section 2.15, a notice by a Lender shall be effective as to each Loan, if lawful, on the last day of the then current Interest Period with respect thereto; provided, however, that such notice shall be effective on the date of receipt if there are no outstanding LIBOR Loans; provided further, that if it is not lawful for such Lender to maintain any Loan in its current form until the end of the Interest Period applicable thereto, then the notice shall be effective upon receipt.

(c)         Each Lender that has delivered a notice of Illegality pursuant to paragraph (a) above agrees that it will notify the Borrowers as soon as practicable if the conditions giving rise to the Illegality cease to exist.

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Section 2.16.  Indemnity.  The Borrowers agree to indemnify each Lender against any loss (other than loss of margin) or expense which such Lender may actually sustain or incur, and to pay any customary breakage charges such Lender may impose, as a consequence of (e) any payment, prepayment or conversion of a LIBOR Loan made to it required by any provision of this Agreement or otherwise made, or any transfer of any such Loan pursuant to Section 2.20(b), on a date other than the last day of the applicable Interest Period, (f) any default in payment or prepayment of the principal amount of any Loan made to it or any part thereof or interest accrued thereon, as and when due and payable (whether at scheduled maturity, by notice of prepayment, acceleration or otherwise), (g) the occurrence of any Event of Default, including any loss actually sustained or incurred or to be sustained or incurred in liquidating or employing deposits from third parties acquired to effect or maintain such Loan or any part thereof as a LIBOR Loan, (h) any failure by the Borrowers to fulfill on the date of any Borrowing hereunder the applicable conditions set forth in Article 4, (i) any failure of the Borrowers to borrow or to convert or continue any Loan made to it hereunder after irrevocable notice of such Borrowing, conversion or continuation has been given pursuant to Section 2.03, 2.04 or 2.05.  Such loss or expense shall be the difference as reasonably determined by such Lender between (x) an amount equal to the principal amount of such LIBOR Loan being paid, prepaid, converted or transferred or not borrowed, converted or continued multiplied by a percentage per annum (computed on the basis of a three hundred and sixty (360)-day year and actual days remaining for the balance of the Interest Period applicable, or which would have been applicable, to such LIBOR Loan being paid, prepaid, converted, transferred or not borrowed, converted or continued) equal to the greater of (i) the Adjusted LIBO Rate applicable to such LIBOR Loan being paid, prepaid, converted or transferred or not borrowed, converted or continued or (ii) such Lenders cost of obtaining the funds for such LIBOR Loan being paid, prepaid, converted, transferred or not borrowed, converted or continued, but in the case of LIBOR Loans, not in excess of the Adjusted LIBO Rate applicable to such Loan plus 1/16th of 1% per annum, and (y) any lesser amount that would be realized by such Lender in reemploying the funds received in payment, prepayment, conversion or transfer or as a result of the failure to borrow, convert or continue during the period from the date of such payment, prepayment, conversion or transfer or failure to borrow, convert or continue to the end of the Interest Period applicable to such LIBOR Loan at the interest rate that would apply to an interest period of approximately such duration.  Any such Lender shall provide to the Borrowers a statement explaining the amount of any such loss or expense, which statement shall, in the absence of manifest error, be conclusive.

Section 2.17.  Pro Rata Treatment.  Each Revolving Borrowing, each payment of the Unused Commitment Fee and each reduction of the Total Commitment shall be allocated among the Lenders in accordance with their respective Revolving Percentages.  Except as required under Section 2.15, each payment or prepayment of principal of any Borrowing and each continuation or conversion of any Borrowing shall be allocated pro rata among the Lenders in accordance with the respective principal amounts of their outstanding Loans comprising such Borrowing.  Each payment of interest on any Borrowing shall be allocated pro rata among the Lenders in accordance with the respective amounts of accrued and unpaid interest on their outstanding Loans comprising such Borrowing.  Each payment of interest on any Swingline Borrowing or LC Disbursement shall be allocated in accordance with Sections 2.05 and 2.06, respectively.

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Section 2.18.  Sharing of Setoffs.  Each Lender agrees that if it shall, through the exercise of a right of bankers lien, setoff or counterclaim or pursuant to a secured claim under Section 506 of Title 11 of the United States Code or other security or interest arising from, or in lieu of, such secured claim, received by such Lender under any applicable bankruptcy, insolvency or other similar law or otherwise, obtain payment (voluntary or involuntary) in respect of any Loans or participations in LC Disbursements or Swingline Loans as a result of which the unpaid principal portion of its Loans or participations in LC Disbursements or Swingline Loans shall be proportionately less than the unpaid principal portion of the Loans or participations in LC Disbursements or Swingline Loans of any other Lender, it shall be deemed simultaneously to have purchased from such other Lender at face value, and shall promptly pay to such other Lender the purchase price for, a participation in the Loans or participations in LC Disbursements or Swingline Loans of such other Lender, so that the aggregate unpaid principal amount of such Loans or participations in LC Disbursements or Swingline Loans and participations in the foregoing held by each Lender shall be in the same proportion to the aggregate unpaid principal amount of all such Loans or participations in LC Disbursements or Swingline Loans then outstanding as the principal amount of its Loans or participations in LC Disbursements or Swingline Loans prior to such exercise of bankers lien, setoff or counterclaim or other event was to the principal amount of all such Loans or participations in LC Disbursements or Swingline Loans outstanding prior to such exercise of such bankers lien, setoff or counterclaim or other event; provided, however, that (i) if any such purchase or adjustments shall be made pursuant to this Section 2.18 and the payment giving rise thereto shall thereafter be recovered, such purchase or purchases or adjustments shall be rescinded to the extent of such recovery and the purchase price or prices or adjustment restored without interest and (ii) the provisions of this Section shall not be construed to apply to any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or participations in LC Disbursements or Swingline Loans to any assignee or participant other than a Loan Party or any Affiliate thereof.  Each Borrower expressly consents to the foregoing arrangements and agrees, to the fullest extent it may effectively do so under applicable law, that any Lender holding a participation in a Loan made to it or participations in LC Disbursements or Swingline Loans deemed to have been so purchased may exercise any and all rights of bankers lien, setoff or counterclaim with respect to any and all moneys owing by such Borrower to such Lender by reason thereof as fully as if such Lender had made a Loan directly to such Borrower in the amount of such participation.

Section 2.19.  Taxes.   (j) Any and all payments by or on account of any obligation of the Borrowers hereunder shall be made free and clear of and without deduction for any Indemnified Taxes or Other Taxes; provided that if the Borrowers shall be required to deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section) the Administrative Agent, Lender (which term, as used in this Section, shall include any assignee or transferee of a Lender, including any participation holder, subject to Section 10.07 (any such Person, a Transferee)) or Fronting Bank (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrowers shall make such deductions and (iii) the Borrowers shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law.

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(b)         In addition, the Borrowers shall pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.

(c)         The Borrowers shall indemnify each Agent, each Lender and Fronting Bank, within ten (10) days after written demand therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by such Agent, such Lender or Fronting Bank, as the case may be on account of any obligation of the Borrowers hereunder (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrowers by an Agent, a Lender or a Fronting Bank, or by the Administrative Agent on its own behalf or on behalf of a Lender or Fronting Bank, shall be conclusive absent manifest error.

(d)         As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Borrowers to a Governmental Authority, the Borrowers shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

(e)         Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which the Borrowers are located, or any treaty to which such jurisdiction is a party, with respect to payments under this Agreement shall deliver to the Borrowers (with a copy to the Administrative Agent), at the time or times prescribed by applicable law, such properly completed and executed documentation prescribed by applicable law or reasonably requested by the Borrowers as will permit such payments to be made without withholding or at a reduced rate. Each Lender and Agent that is a United States person (within the meaning of Section 7701(a)(3) of the Code shall provide an IRS Form W-9 to the Agent and Borrowers at the times and in the manners described above with respect to the other withholding forms; provided, however, that a Person that the Borrowers may treat as an exempt recipient (within the meaning of the Treasury Regulations Section 1.6049-4(c) (without regard to the third sentence thereof) shall not be required to deliver an IRS Form W-9, except to the extent necessary to avoid U.S. withholding taxes under Treasury Regulations Section 1.1441-1.

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(f)         If an Agent, a Lender or a Fronting Bank shall become aware that it is entitled to receive a refund in respect of Indemnified Taxes or Other Taxes for which it shall have received payment from the Borrowers under this Section, it shall promptly notify the Borrowers of the availability of such refund and shall, within ten (10) days after receipt of a request by the Borrowers, apply for such refund at the Borrowers expense.  If an Agent, any Lender or any Fronting Bank shall receive a refund in respect of any such Indemnified Taxes or Other Taxes, it shall promptly repay such refund (including any penalties or interest received with respect thereto) to the Borrowers, net of all out-of-pocket expenses of such Agent, such Lender or Fronting Bank, provided that the Borrowers, upon the request of such Agent, such Lender or Fronting Bank, agrees to return such refund (plus penalties, interest or other charges) to such Agent, such Lender or Fronting Bank in the event such Agent, such Lender or Fronting Bank shall be required to repay such refund.

Section 2.20.  Duty to Mitigate; Assignment of Commitments Under Certain Circumstances.  (k) If any Lender (or Transferee) claims any additional amounts payable pursuant to Section 2.14 or exercises its rights under Section 2.15 or if the Borrowers are required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.19, then such Lender shall use reasonable efforts (consistent with legal and regulatory restrictions) to file any certificate or document, including, without limitation, any such certificate or document reasonably requested by the Borrowers, or to change the jurisdiction of its Applicable Lending Office or to take other actions (including the filing of certificates or documents) known to it to be available if the making of such a filing or change or the taking of such other action would avoid the need for or reduce the amount of any such additional amounts which may thereafter accrue or avoid the circumstances giving rise to such exercise and would not, in the sole determination of such Lender (or Transferee), be otherwise disadvantageous to such Lender (or Transferee).

(b)         In the event that any Lender shall have delivered a notice or certificate pursuant to Section 2.14 or 2.15, or the Borrowers shall be required to make additional payments to any Lender under Section 2.19, the Borrowers shall have the right, at its own expense (which shall include the processing and recordation fee referred to in Section 10.07(b)), upon notice to such Lender and the Administrative Agent, to require such Lender to transfer and assign without recourse (in accordance with and subject to the restrictions contained in Section 10.07) all its interests, rights and obligations hereunder to another financial institution approved by the Administrative Agent, and each Fronting Bank and the Swingline Lender (which approval shall not be unreasonably withheld) which shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided, however, that (i) no such assignment shall conflict with any law, rule or regulation or order of any Governmental Authority and (ii) the assignee or the Borrowers shall pay to the affected Lender in immediately available funds on the date of such assignment the outstanding principal of its Loans and participations in LC Disbursements and Swingline Loans, accrued interest thereon, accrued fees and all other amounts accrued for its account or owed to it hereunder (including the additional amounts asserted and payable pursuant to Section 2.14 or 2.19, if any).

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Section 2.21.  Optional Increase In Commitments.  At any time the Borrowers, may, if they so elect, increase the aggregate amount of the Commitments, either by designating a financial institution not theretofore a Lender (a New Lender) to become a Lender (such designation to be effective only with the prior written consent of the Administrative Agent, which consent will not be unreasonably withheld or delayed), or by agreeing with an existing Lender that such Lenders Commitment shall be increased. Upon execution and delivery by the Borrowers and such Lender or other financial institution of an instrument in form reasonably satisfactory to the Administrative Agent, such existing Lender shall have a Commitment as therein set forth or such other financial institution shall become a Lender with a Commitment as therein set forth and all the rights and obligations of a Lender with such a Commitment hereunder; provided:

(a)         that the Borrowers shall provide prompt notice of such increase to the Administrative Agent, who shall promptly notify the Lenders;

(b)         that any such increase shall be in an amount greater than or equal to $50,000,000;

(c)         that immediately after such increase is made, the aggregate amount of increases in the Commitments pursuant to this Section 2.21, when combined with the aggregate amount of increases in the commitments under the 2007 RPA pursuant to Section 2.19 thereof, shall not exceed $600,000,000; and

(d)         that the Borrowers may elect to increase the aggregate amount of the Commitments pursuant to this Section 2.21 no more than four times in total.

On the effective date of any increase in the aggregate amount of the Commitments pursuant to this Section 2.21, (i) each New Lender shall pay to the Agent an amount equal to its pro rata share of the aggregate outstanding Loans and (ii) any Lender (an Increasing Lender) whose Commitment has been increased shall pay to the Administrative Agent an amount equal to the increase in its pro rata share of the aggregate outstanding Loans, in each case such payments shall be for the account of each other Lender.  Upon receipt of such amount by the Administrative Agent, (i) each other Lender shall be deemed to have ratably assigned that portion of its outstanding Loans that is being reduced to the New Lenders and the Increasing Lenders in accordance with such Lenders new Commitment or the increased portion thereof as applicable, and (ii) the Administrative Agent shall promptly distribute to each other Lender its ratable share of the amounts received by the Administrative Agent pursuant to this paragraph.

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ARTICLE 3
Representations and Warranties

Each Borrower (or in the case of Section 3.05, Lyondell only) represents and warrants to the Administrative Agent and the Lenders that:

Section 3.01.  Existence, Qualification And Power; Compliance With Laws.  Subject to the Legal Reservations, each Borrower and their respective Material Subsidiaries Article 11 is a Person duly organized or formed, validly existing and in good standing, in each case where such concept exists, under the laws of the jurisdiction of its incorporation or organization, Article 12 has all requisite constitutional, corporate or other similar power and authority to (i) own or lease its material assets and carry on its business substantially  as currently conducted and (ii) execute, deliver and perform its obligations under the Loan Documents to which it is a party, Article 13 is duly qualified and in good standing, in each case where such concept exists, under the laws of each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification, Article 14 is in compliance with all laws, orders, writs and injunctions and Article 15 has all requisite governmental licenses, authorizations, consents and approvals to operate its business as currently conducted; except in each case referred to in clause (c), (d) or (e), to the extent that failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 3.02.  Authorization; No Contravention. The execution, delivery and performance by such Borrower and its Subsidiaries of each Loan Document to which such Person is a party, and the consummation of the transactions contemplated thereby, are within such Persons corporate or other powers, have been duly authorized by all necessary corporate or other organizational action, and do not and will not Article 16 contravene the terms of any of such Persons Organization Documents; Article 17 in any material way, conflict with or result in any breach or contravention of, or the creation of any Lien under (other than as permitted by Section 6.01), or require any payment to be made under (i) except payments as set forth in the funds flow memorandum dated the Effective Date and delivered to the Administrative Agent, any contractual obligation to which such Person is a party or affecting such Person or the properties of such Person or any of its Subsidiaries or (ii) any order in any material way, injunction, writ or decree of any Governmental Authority or any arbitral award to which such Person or its property is subject in any material way; or Article 18 violate any material law in any material way; except with respect to any conflict, breach or contravention or payment (but not creation of Liens) referred to in clause (b)(i), to the extent that such conflict, breach, contravention or payment could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

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Section 3.03.  Governmental Authorization; Other Consents.  Subject to the Legal Reservations, no material approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required of a Loan Party in connection with Article 19 the execution, delivery or performance by, or enforcement against, any Loan Party of this Agreement or any other Loan Document, or for the consummation of the transactions contemplated thereby, Article 20 the grant by any Loan Party of the Liens granted by it pursuant to the Collateral Documents, Article 21 the perfection or maintenance of the Liens created under the Collateral Documents (including the priority thereof) or Article 22 the exercise by the Administrative Agent or any Lender of its rights under the Loan Documents or the remedies in respect of the Collateral pursuant to the Collateral Documents, except for (i) the UCC filings, notices, consents and registrations contemplated by the Loan Documents, (ii) the approvals, consents, exemptions, authorizations, actions, notices and filings which have been duly obtained, taken, given or made and are in full force and effect (or, with respect to consummation of the transactions contemplated by the Loan Documents, will be duly obtained, taken, given or made and will be in full force and effect, in each case within the time period required to be so obtained, taken, given or made) and (iii) those approvals, consents, exemptions, authorizations or other actions, notices or filings, the failure of which to obtain or make could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 3.04.  Binding Effect.   This Agreement and each other Loan Document dated on or prior to the date this representation is made constitutes a legal, valid and binding obligation of such Loan Party, enforceable against each such Loan Party that is a party thereto in accordance with its terms, except as such enforceability may be limited by (iv) Debtor Relief Laws and by general principles of equity, and (v) the need for filings and registrations necessary to perfect any Liens created by the Loan Documents.

Section 3.05.  Financial Statements; No Material Adverse Effect.

(a)         The unaudited pro forma consolidated balance sheet of Lyondell and its Subsidiaries as of September 30, 2007 (including the notes thereto) and the related pro forma consolidated statement of income of Lyondell and its Subsidiaries for the twelve (12) months ended September 30, 2007, a copy of each of which has been furnished to the Administrative Agent for distribution to the Lenders, have been prepared in good faith, based on assumptions believed by Lyondell to be reasonable as of the date of delivery thereof, and present fairly in all material respects on a pro forma basis the estimated financial position of Lyondell and its Subsidiaries as of September 30, 2007 and their estimated results of operations for the period covered thereby, assuming that the events specified in the preceding sentence had actually occurred at such date or at the beginning of the period covered thereby.

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(b)         On the Effective Date, the audited consolidated financial statements of Lyondell and its consolidated subsidiaries as of December 31, 2006 which have been furnished to the Administrative Agent prior to the Effective Date, present in all material respects the financial condition of Lyondell and its Subsidiaries as of the dates thereof and their results of operations for the period covered thereby in accordance with GAAP consistently applied throughout the periods covered thereby, except as otherwise expressly noted therein. During the period from December 31, 2006 to and including the Effective Date, there has been Article 23 no sale, transfer or other disposition by Lyondell or any of its Subsidiaries of any material part of the business or property of such Borrower or any of its Subsidiaries, taken as a whole (other than the sale of Lyondells worldwide inorganic chemicals business in May 2007), and Article 24 no purchase or other acquisition by Lyondell or any of its Subsidiaries of any business or property (including any Equity Interests of any other Person) material in relation to the consolidated financial condition of the Company and its Subsidiaries, in each case, which is not reflected in the foregoing financial statements or in the notes thereto or has not otherwise been disclosed in writing to the Lenders prior to the Effective Date.

(c)         The forecasts of consolidated balance sheets, income statements and cash flow statements of Lyondell and its Subsidiaries which have been furnished to the Administrative Agent prior to the Effective Date have been prepared in good faith on the basis of the assumptions stated therein, which assumptions were believed to be reasonable at the time of preparation of such forecasts, it being understood that actual results may vary from such forecasts and that such variations may be material.

(d)         There has been no event or circumstance since December 31, 2006, that either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

Section 3.06.  Litigation.   There are no actions, suits, proceedings, claims or disputes pending or, to the knowledge of such Borrower, threatened in writing or contemplated, at law, in equity, in arbitration or before any Governmental Authority, by or against such Borrower or any of its Subsidiaries or against any of their properties or revenues that could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 3.07.  [Reserved].

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Section 3.08.  [Reserved].

Section 3.09.  Taxes.  Except as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, Article 25 each Borrower and each of their respective Subsidiaries has (i) timely filed all tax returns required to be filed and all such tax returns are true and correct, (ii) timely paid all taxes levied or imposed upon it or its properties (whether or not shown on a tax return), and (iii) satisfied all of its tax withholding obligations; Article 26 there are no current, pending or threatened audits, examinations or claims with respect to Taxes of any Loan Party or any of their respective Subsidiaries and Article 27 no Borrower, nor any of their respective Subsidiaries has ever participated in a listed transaction within the meaning of Treasury Regulation Section 1.6011-4.

Section 3.10.  ERISA Compliance.  Article 28 Except as could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect, each Plan is in compliance with the applicable provisions of ERISA, the Code and other Federal or state laws.

(b)         Article 29 No ERISA Event has occurred or is reasonably expected to occur and (i) neither such Borrower nor any of its Subsidiaries nor any ERISA Affiliate has engaged in a transaction that could be subject to Section 4069 or 4212(c) of ERISA, except, with respect to each of the foregoing clauses of this Section 3.10(b), as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(c)         Except where noncompliance could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect, Article 30 each Foreign Plan has been maintained in compliance with its terms and with the requirements of any and all applicable laws, statutes, rules, regulations and orders and has been maintained, where required, in good standing with applicable regulatory authorities, and Article 31 neither any Loan Party nor any Subsidiary has incurred any obligation in connection with the termination of or withdrawal from any Foreign Plan.

Section 3.11.  [Reserved].

Section 3.12.  Margin Regulations; Investment Company Act.  Such Borrower is not and each of its Subsidiaries is not engaged nor will it engage, principally or as one of its important activities, in the business of purchasing or carrying margin stock (within the meaning of Regulation U issued by the FRB), or extending credit for the purpose of purchasing or carrying margin stock, and no proceeds of any Loans will be used for any purpose that violates Regulation U.  None of such Borrower or any of its Affiliates is or is required to be registered as an investment company under the Investment Company Act of 1940.

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Section 3.13.  Disclosure.  As of the Effective Date, to the best of such Borrowers knowledge, no report, financial statement, certificate or other written information furnished by or on behalf of such Borrower or any of its Subsidiaries to any Administrative Agent or Lender in connection with the transactions contemplated hereby and the negotiation of this Agreement or delivered hereunder or any other Loan Document (as modified or supplemented by other information so furnished) when taken as a whole contains any material misstatement of fact or, as at the Effective Date only, omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not materially misleading; provided that, with respect to projected financial information and pro forma financial information, such Borrower represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time of preparation; it being understood that such projections may vary from actual results and that such variances may be material.

Section 3.14.  [Reserved].

Section 3.15.  Anti-Terrorism Laws.

(a)         To the best knowledge of such Borrower, no Loan Party organized in the United States nor any Subsidiary thereof: Article 32 is, or is controlled by or is acting on behalf of, an Anti-Terrorism Party; Article 33 has received funds or other property from an Anti-Terrorism Party; or Article 34 is in breach of or is the subject of any action or investigation under any Anti-Terrorism Law.

(b)         To the best of such Borrowers knowledge, each of the Transaction Parties organized in the United States and each Subsidiary thereof has taken reasonable measures to ensure compliance with the Anti-Terrorism Laws.

Section 3.16.  Solvency.  On the Effective Date, the Loan Parties (taken as a whole) after giving effect to the transactions contemplated by the Loan Documents, are Solvent.

Section 3.17.  Collateral.  The Collateral Documents create valid security interests in the Collateral purported to be covered thereby, which security interests are and will remain perfected security interests prior to all other Liens other than Liens permitted by Section 6.01.  Each of the representations and warranties made by each Loan Party in each Collateral Document to which it is a party is true and correct in all material respects as of each date made or deemed made.

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ARTICLE 4
Conditions of Lending

Section 4.01.  All Borrowings.  On the date of each Credit Event, the obligations of the Lenders to make Loans and the obligation of the Fronting Banks to issue, amend, renew or extend any Letter of Credit hereunder shall be subject to the satisfaction of the following conditions:

(a)         The Administrative Agent or the relevant Fronting Bank shall have received a notice of such Credit Event as required by Section 2.03 or 2.06, as applicable.

(b)         The representations and warranties of the Loan Parties set forth in the Loan Documents shall be true and correct in all material respects on and as of the date of such Credit Event with the same effect as though made on and as of such date, except (i) in the case of a Credit Event consisting solely of a conversion of a Borrowing to another Type or the continuation of a Borrowing as a LIBOR Borrowing for an additional Interest Period, (ii) to the extent such representations and warranties expressly relate to an earlier date, which representations and warranties shall be true and correct in all material respects on and as of such earlier date, (iii) any qualifier in any such representation and warranty as to materiality, Material Adverse Effect or similar qualification shall be disregarded for the purposes of this condition, and (iv) in the case of the  initial Credit Event, only the representations and warranties set forth in Section 3.02, Section 3.04 and Section 3.12 need be true and correct.

(c)         At the time of such Credit Event (except in the case of the initial Credit Event or a Credit Event consisting of conversion of LIBOR Loans to ABR Loans), no event has occurred and is continuing, or would result from such Credit Event or from the application of the proceeds therefrom which constitutes an Event of Default or (except in the case of a conversion of a Loan to a Loan of a different Type or the continuation of a Borrowing as a LIBOR Borrowing for an additional Interest Period) a Default.

(d)         After giving effect to such Credit Event, Total Outstandings will not exceed the Maximum Facility Availability.

(e)         Except in the case of the initial Credit Event, the making of such Borrowing, Swingline Loan, or the issuance of such Letter of Credit, shall not violate any material requirement of law binding upon the Borrowers and shall not be enjoined temporarily, preliminarily or permanently.

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Each Credit Event shall be deemed to constitute a representation and warranty on the date of such Credit Event as to the applicable matters specified in paragraphs (b), (c), (d) and (e) of this Section.

Section 4.02.  Effective Date.  The obligations of the Lenders and the Fronting Banks to make the initial Loans, assume the Existing Letters of Credit and issue the initial Additional Letters of Credit under this Agreement shall not become effective until the date on which each of the following conditions has been (or shall substantially simultaneously be) satisfied (or waived in accordance with Section 10.02):

(a)            The Collateral Requirement shall have been satisfied as of the Effective Date; provided that the matters described in clauses (c), (e) and (f) of the definition of Collateral Requirement may be satisfied within the Compliance Period (failing which an Event of Default shall occur hereunder);

(b)            The Administrative Agent shall have received all Fees and other amounts due and payable on or prior to the Effective Date, including to the extent invoiced at least two (2) Business Days prior to the Effective Date, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrowers hereunder.

(c)            The Administrative Agent shall have received evidence satisfactory to it that each participation in an Existing Letter of Credit granted by the relevant Fronting Bank to a bank or financial institution that is not a Lender has been cancelled on or before the Effective Date as contemplated by Section 2.06(a).

(d)            The Administrative Agent shall have received a completed Borrowing Base Certificate signed by a Principal Financial Officer.

(e)            The Administrative Agent shall have received, and be satisfied in all respects with, an Appraisal Report with respect to the Available Inventory.

(f)            Total Excess Availability (after giving effect to the effectiveness of this Agreement and the 2007 Securitization Facility) shall be at least $500,000,000 on the Effective Date.

(g)            The Administrative Agents receipt of the documents set forth in Schedule 4.02, each of which shall be originals or facsimilies (followed promptly by originals) unless otherwise specified, each properly executed by a Responsible Officer of the signing Loan Party to the extent such Loan Party is a party thereto, each in form and substance reasonably satisfactory to the Administrative Agent and its legal counsel.

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(h)            Prior to or substantially simultaneously with the Credit Events on the Effective Date, the Acquisition shall have been consummated in accordance with the terms of the Acquisition Agreement (except for the filing of the merger certificate which shall occur substantially concurrently), without giving effect to any amendments or waivers thereto (excluding any waiver by Lyondell of the conditions set forth in Section 6.3(a)(i) of the Acquisition Agreement) that are materially adverse to the Lenders made without reasonable consent of the Arrangers (such consent not to be unreasonably withheld or delayed), and in compliance with applicable material Laws and regulatory approvals.

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Notwithstanding the foregoing, the obligations of the Lenders to make Loans and of the Fronting Banks to issue Letters of Credit hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 10.02) at or prior to 3:00 p.m., New York City time, on December 31, 2007 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).  The Administrative Agent shall promptly notify the Borrowers, the Fronting Bank and each Lender of the Effective Date, and such notice shall be conclusive and binding on all parties hereto.


ARTICLE 5
Affirmative Covenants

Until the later of (i) the date of termination of the Commitments in their entirety and (ii) the date upon which no Loans or other Obligations (other than contingent indemnification obligations) remain unpaid, each Borrower shall, and shall cause its Restricted Subsidiaries to:

Section 5.01.  Reporting Requirements.  The Borrowers Agent shall furnish to the Administrative Agent for distribution to the Lenders:

(a)         Monthly Reports.  During the existence of a Triggering Event, within thirty (30) days after the end of each of the first two fiscal months in each fiscal quarter of Lyondell, unaudited consolidated financial statements (which shall include a balance sheet and income statement, as well as statements of partners equity and cash flow) showing the financial condition and results of operation of Lyondell and its consolidated subsidiaries as of the end of and for such fiscal month and that portion of the current fiscal year ending as of the close of such month, in each case certified by a Principal Financial Officer of Lyondell as being the same monthly financial statements generated in accordance with Lyondells normal procedures and submitted to management of Lyondell.  The Administrative Agent and the Lenders acknowledge that any monthly unaudited consolidated financial statements furnished pursuant to this Section 5.01(a) will not be accompanied by the footnotes and other disclosures that would be necessary for fair presentation in accordance with GAAP.

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(b)         Quarterly Reports.  Subject to the last two unlettered paragraphs of this Section 5.01, as soon as available, but in any event within forty-five (45) days (sixty (60) days in the case of the first three quarters of the fiscal year ending December 31, 2008) (or such earlier date on which the Company is required to make any public filing of such information), after the end of each of the first three (3) fiscal quarters of each fiscal year of the Company, (1) a consolidated balance sheet of the Company and its Subsidiaries as at the end of such fiscal quarter, and the related consolidated statements of income and cash flows, each for such fiscal quarter and the portion of the fiscal year then ended, setting forth in each case in comparative form the figures for the corresponding fiscal quarter of the previous fiscal year and the corresponding portion of the previous fiscal year, all certified (subject to normal year-end adjustments) as to fairness of presentation and consistency by a Responsible Officer (excepting any Responsible Officer who is a Responsible Officer solely by virtue of a power of attorney) of the Company as fairly presenting in all material respects the financial condition, results of operations and cash flows of the Company and its Subsidiaries in accordance with GAAP, subject only to normal year-end audit adjustments and the absence of footnotes and (2) promptly, any other information, documents and other reports which the Company or any Subsidiary is (when registered) required to file with the SEC pursuant to Section 13(a) or 15(d) of the Exchange Act;

(c)         Annual Reports.  Subject to the last two unlettered paragraphs of this Section 5.01, as soon as available, but in any event within ninety (90) days (one-hundred and twenty (120) days in the case of the fiscal year ending December 31, 2007) (or such earlier date on which the Company is required to make any public filing of such information) after the end of each fiscal year of the Company beginning with the fiscal year ending December 31, 2007, a consolidated balance sheet of the Company and its Subsidiaries as at the end of such fiscal year, and the related consolidated statements of income and retained earnings and of cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on without material qualification (including any going concern or like qualification) by an independent registered public accounting firm of nationally recognized standing.

(d)         Principal Financial Officers Certification.  Concurrently with (c) and (b) above, a certificate of a Principal Financial Officer of the Borrowers Agent,

(i)    certifying that to the best knowledge of such Principal Financial Officer no Default has occurred and is continuing or, if a Default has occurred and is continuing, specifying the nature and extent thereof and any corrective action taken or proposed to be taken with respect thereto; and

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(ii)    solely in the case of (b) above, certifying that except as previously notified to the Administrative Agent pursuant to Section 6.04, since the Effective Date or the date of the most recently delivered Principal Financial Officers Certification, as applicable, there has been no change in any Loan Partys name, form of organization, jurisdiction of organization and organizational number or Federal Taxpayer Identification Number.

(e)         Litigation, etc.  Give the Administrative Agent prompt written notice (which the Administrative Agent shall promptly deliver to the Lenders) after any Responsible Officer learns of the following:

(i)    the issuance by any Governmental Authority of any injunction, order, decision or other restraint prohibiting, or having the effect of prohibiting, the Loans contemplated by the Loan Documents, including the making of the Loans, or having the effect of invalidating any provision of this Agreement or any other Loan Document or the initiation of any litigation or similar proceeding seeking any such injunction, order, decision or other restraint;

(ii)    the filing or commencement of any action, suit or proceeding against any Loan Party or any Subsidiary, whether at law or in equity or by or before any Governmental Authority or any arbitrator, as to which action, suit or proceeding there is a reasonable possibility of an adverse determination and which, if determined adversely to such Loan Party or any Subsidiary, could reasonably be expected to result in a Material Adverse Effect;

(iii)    the occurrence of any development or event which could reasonably be expected to result in a Material Adverse Effect; and

(iv)    the existence of (i) any Triggering Event or (ii) any Default, specifying the nature and extent thereof and the action (if any) which is proposed to be taken with respect thereto.

(f)         Major Casualty Proceeds.  Within five (5) Business Days of the date of receipt of Major Casualty Proceeds, a certificate of a Principal Financial Officer setting forth in reasonable detail the amount of such Major Casualty Proceeds.

(g)         Other. Promptly, from time to time, such other information, documents, records or reports respecting this Agreement or the other Loan Documents, Collateral or the condition or operations, financial or otherwise, of any Loan Party as the Administrative Agent may from time to time reasonably request.

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Notwithstanding the foregoing, the obligations to deliver financial statements pursuant to clauses (c) and (b) of this Section 5.01 will be satisfied with respect to financial information of the Company by furnishing (A) the applicable financial statements of the Company or (B) the Companys Form 10-K or 10-Q, as applicable, filed with the SEC; provided that, with respect to each of clauses (A) and (B), to the extent such information is in lieu of information required to be provided under Section 5.01(b), all such materials are to be reported on without material qualification (including any going concern or like qualification) by an independent registered public accounting firm of nationally recognized standing.

Documents required to be delivered pursuant to clauses (c) and (b) of this Section 5.01 may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which the Company (or any direct or indirect parent of the Company) posts such documents, or provides a link thereto on the website on the Internet at the website address listed on Schedule 5.01; or (ii) on which such documents are posted on the Companys behalf on IntraLinks/IntraAgency or another website identified in the notice provided pursuant to paragraph (z) immediately below, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent); provided that: (y) upon written request by the Administrative Agent or any Lender, the Borrowers Agent shall deliver paper copies of the information referred to in clauses (c) and (b) of this Section 5.01 as requested by the Administrative Agent or Lender (as applicable) and (z) the Borrowers Agent shall notify (which may be by facsimile or electronic mail) the Administrative Agent of the posting of any such documents.  Each Lender shall be solely responsible for timely accessing posted documents or requesting delivery of paper copies of such documents from the Administrative Agent and maintaining its copies of such documents.

Section 5.02. Payment of Obligations.  Timely pay, discharge or otherwise satisfy as the same shall become due and payable in the normal conduct of its business, all its obligations and liabilities in respect of the Taxes imposed upon it or upon its income or profits or in respect of its property, except, in each case, to the extent the failure to pay or discharge the same could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 5.03.  Preservation Of Existence, Etc.  (a) Preserve, renew and maintain in full force and effect its legal existence under the Laws of the jurisdiction of its organization except (x) in a transaction permitted by Section 6.04 or Section 6.05 and (y) any Restricted Party may merge, amalgamate or consolidate with any other Restricted Party (provided that if either such Restricted Party was a Borrower immediately prior to such transaction, the surviving or resulting entity from such transaction shall be a Borrower) and (b) take all reasonable action to maintain all rights, privileges (including its good standing, where such concept exists), permits, licenses and franchises necessary or desirable in the normal conduct of its business, except (i) to the extent that failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect or (ii) pursuant to a transaction permitted by Section 6.04 or Section 6.05 or clause (a)(y) of this Section.

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Section 5.04.  Maintenance of Properties.  Except if the failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, maintain, preserve and protect all of its material properties and equipment necessary in the operation of its business in good working order, repair and condition, ordinary wear and tear excepted and casualty or condemnation excepted.

Section 5.05.  Maintenance of Insurance.  Maintain with reputable insurance companies, insurance with respect to its assets, properties and business against loss or damage to the extent available on commercially reasonable terms of the kinds customarily insured against by Persons of similar size engaged in the same or similar industry, of such types and in such amounts (after giving effect to any self-insurance (including captive industry insurance) reasonable and customary for similarly situated Persons of similar size engaged in the same or similar businesses as such Restricted Party) as are customarily carried under similar circumstances by such other Persons.

Section 5.06.  Compliance with Laws.  Comply in all material respects with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its business or property, except to the extent the failure to comply therewith could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 5.07.  Compliance with Environmental Laws; Environmental Reports. Comply, and cause all lessees and other Persons occupying its Real Property to comply, with all Environmental Laws and Environmental Permits applicable to its operations, facilities and Real Property, except where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; obtain and renew all material Environmental Permits applicable to its operations, facilities and Real Property; and conduct all responses required by, and in accordance with, Environmental Laws; provided that neither such Restricted Party nor any of its Subsidiaries shall be required to undertake any response to the extent that its obligation to do so is being contested in good faith and by proper proceedings and appropriate reserves are being maintained with respect to such circumstances in accordance with GAAP.

Section 5.08.  Books and Records. Maintain proper books of record and account, in which entries that are full, true and correct in all material respects and which reflect all material financial transactions and matters involving the assets and business of the Restricted Parties.

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Section 5.09.  Inspection Rights.  Permit representatives and independent contractors of the Administrative Agent or, as provided in the second proviso below, any Lender to visit and inspect any of its properties, to examine its corporate, financial and operating records, and make copies thereof or abstracts therefrom, and to discuss its affairs, finances and accounts with its directors, officers, and independent public accountants, all at the reasonable expense of the Borrowers and at such reasonable times during normal business hours, upon reasonable advance notice to Lyondell; provided that, excluding any such visits and inspections during the continuation of an Event of Default, only the Administrative Agent on behalf of the Lenders may exercise rights of the Administrative Agent and the Lenders under this Section and the Administrative Agent shall not exercise such rights more often than two (2) times during any calendar year at the expense of the Borrowers; provided further that when an Event of Default exists, the Administrative Agent or any Lender (or any of their respective representatives or independent contractors) may do any of the foregoing at the expense of the Borrowers at any time during normal business hours and upon reasonable advance notice.  The Administrative Agent and the Lenders shall give such Restricted Party the opportunity to participate in any discussions with such Restricted Partys independent public accountants.  Notwithstanding anything to the contrary in this Section, at all times during such visits and inspections to the Administrative Agent or any Lender (or their respective representatives or contractors) must comply with all applicable site regulations as the Restricted Party or any of their respective officers or employees may require by reasonable notice of the same.

Section 5.10.  ERISA. Promptly after any Borrower or any ERISA Affiliate knows or has reason to know of the occurrence of any of the following events that, individually or in the aggregate (including in the aggregate such events previously disclosed or exempt from disclosure hereunder, to the extent the liability therefor remains outstanding), would reasonably be expected to have a Material Adverse Effect, deliver to the Administrative Agent and each of the Lenders a certificate of a Financial Officer setting forth details as to such occurrence and the action, if any, that such Borrower or such ERISA Affiliate is required or proposes to take, together with any notices (required, proposed or otherwise) given to or filed with or by the Borrower, such ERISA Affiliate, the PBGC, a Plan participant (other than notices relating to any individual participants benefits) or the Plan administrator with respect thereto: (A) that a Reportable Event has occurred; (B) that an accumulated funding deficiency has been incurred or an application is to be made to the Secretary of the Treasury for a waiver or modification of the minimum funding standard (including any required installment payments) or an extension of any amortization period under Section 412 of the Code (or Section 430 of the Code as amended by the Pension Protection Act of 2006) with respect to a Plan; (C) that a Plan having an Unfunded Current Liability has been or is to be terminated, reorganized, partitioned or declared insolvent under Title IV of ERISA (including the giving of written notice thereof); (D) that proceedings will be or have been instituted to terminate a Plan having an Unfunded Current Liability (including the giving of written notice thereof); (E) that a proceeding has been instituted against such Borrower or an ERISA Affiliate pursuant to Section 515 of ERISA to collect a delinquent contribution to a Plan; (F) that the PBGC has notified such Borrower or any ERISA Affiliate of its intention to appoint a trustee to administer any Plan; that such Borrower or any ERISA Affiliate has failed to make a required installment or other payment pursuant to Section 412 of the Code with respect to a Plan; or (G) that such Borrower or any ERISA Affiliate has incurred or will incur (or has been notified in writing that it will incur) any liability (including any contingent or secondary liability) to or on account of a Plan pursuant to Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201 or 4204 of ERISA or Section 4971 or 4975 of the Code.

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Section 5.11.  Know Your Customer Requests.  If:

(1)            a Change in Law after the Effective Date;

(2)            any change in the status of a Loan Party or the composition of the shareholders or interest holders of a Loan Party after the Effective Date; or

(3)            a proposed assignment or transfer by a Lender of any of its rights and obligations under this Agreement to a party that is not a Lender prior to such assignment or transfer,

obliges the Administrative Agent or any Lender (or, in the case of paragraph (3) above, any prospective new Lender) to comply with know your customer or similar identification procedures in circumstances where the necessary information is not already available to it, each Borrower shall promptly upon the request of the Administrative Agent, in its capacity as a Lender or on behalf of any Lender, supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Administrative Agent (for itself or on behalf of any Lender, or, in the case of the event described in paragraph (3) above, on behalf of any prospective new Lender) in order for the Administrative Agent, such Lender or, in the case of the event described in paragraph (3) above, such prospective new Lender to carry out and be satisfied it has complied with all necessary know your customer or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Loan Documents..

Section 5.12.  Borrowing Base Reports.  Furnish to the Administrative Agent (and the Administrative Agent shall thereafter deliver to each Lender):

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(i)                  as soon as available and in any event (A) within twenty-five (25) days after the last day of each of the first three calendar months after the Effective Date and (B) within seventeen (17) days after the last day of each calendar month thereafter, a completed Borrowing Base Certificate calculating and certifying the Borrowing Base as of the end of such calendar month, signed on behalf of the Borrowers by a Principal Financial Officer;

(ii)                  promptly after any request therefor, such other information in such detail concerning the amount, composition and manner of calculation of the Borrowing Base as the Administrative Agent may reasonably request; and

(iii)                  as soon as practicable and in any event within five (5) Business Days after any disposition outside the ordinary course of business (including by way of casualty or condemnation) of Collateral having a book value exceeding $25,000,000, an updated Borrowing Base Certificate calculating (on a pro forma basis, after giving effect to such disposition and reflecting only the changes to the affected component of Eligible Inventory) and certifying such pro forma Borrowing Base as of the end of the most recent calendar month for which a Borrowing Base Certificate was delivered pursuant to clause (i) above.  The Borrowing Base set forth in each Borrowing Base Certificate delivered with respect to each calendar month occurring after the calendar month covered by the updated Borrowing Base Certificate described in the preceding sentence and ending prior to any such disposition shall be calculated on a pro forma basis, after giving effect to such disposition.

At their option, no more frequently than quarterly, the Borrowers may obtain a new Appraisal Report, and the Borrowers shall submit to the Administrative Agent such Appraisal Report, together with a Borrowing Base Certificate based on such Appraisal Report and otherwise complying with paragraph (i) above.

Section 5.13.  Information Regarding Collateral.  Give the Administrative Agent written notice at least ten (10) days prior to (in the case of (ii) or (iii)) or within twenty (20) days after (in any other case) any change in any Borrowers (i) name, (ii) form of organization, (iii) jurisdiction of organization, (iv) organizational number, (v) Federal Taxpayer Identification Number or (vi) address.

Section 5.14.  Further Assurances.   (b) If any Subsidiary of any Borrower (other than a Foreign Subsidiary) at any time Guarantees any Senior Facility Indebtedness of any Borrower, within three (3) Business Days, notify the Administrative Agent thereof and cause such Subsidiary to become a Subsidiary Guarantor in accordance with the Subsidiary Guaranty.

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(b)         Promptly upon request by the Administrative Agent or the Required Lenders:

(i)                  correct any material defect or error that may be discovered in any Loan Document or in the execution, acknowledgment, filing or recordation thereof;

(ii)                  execute any and all further documents, financing statements, agreements and instruments, and take all such further actions (including the filing and recording of financing statements and other documents), which may be required under any applicable law, or which the Administrative Agent or the Required Lenders may reasonably request, to cause the Collateral Requirement to be and remain satisfied in all material respects, all at the expense of the Loan Parties. The Borrowers also agree to provide to the Administrative Agent, from time to time upon request, evidence reasonably satisfactory to the Administrative Agent as to the perfection and priority of the Liens created or intended to be created by the Collateral Documents; and

(iii)                  permit the Administrative Agent and any representatives designated by it (including any consultants, accountants, lawyers and appraisers retained by the Administrative Agent) to conduct evaluations and appraisals of the assets included in the Borrowing Base and the Borrowers computation of the Borrowing Base, all at such reasonable times and as often as reasonably requested and, except during the continuance of a Default, upon at least ten (10) Business Days (or, during the continuance of a Triggering Event of the type described in clause(iii), (iv) or (v) of the definition of Triggering Event, five (5) Business Days) prior notice; provided that unless a Default has occurred and is continuing, the Administrative Agent and its representatives shall conduct no more than four such collateral reviews and evaluations and no more than four such appraisals in any calendar year; provided further that unless Total Excess Availability is less than $200,000,000 during any period of five (5) consecutive Business Days within any twelve (12)-month period, the Administrative Agent and its representatives shall conduct no more than two such collateral reviews and evaluations and no more than two such appraisals during such twelve (12)-month period.  the Borrowers shall pay (i) the documented fees and expenses of employees or other representatives of the Administrative Agent (with in-house field examination charges being limited to $1,000 per day per person (employee or representative) plus such persons reasonable out-of-pocket expenses, including travel expenses) incurred in connection with periodic collateral reviews and evaluations (or in connection with an appraisal pursuant to (ii) below) and (ii) any inventory appraisal firm retained by the Administrative Agent, in consultation with the Borrowers, to conduct any such appraisals.  The Administrative Agent and any representative designated by the Administrative Agent to conduct such collateral reviews, evaluations and appraisals shall, during any review, inspection or other activity performed at any of the Borrowers plant sites, (X) be accompanied at all times by a plant safety representative (and the Borrowers hereby agree to cause such a plant safety representative to be available for such purpose at such reasonable hours as may be requested and upon reasonable prior notice) and (Y) comply at all times with the Borrowers rules regarding safety and security to the extent that the Administrative Agent or representative has been notified of such rules.  The Administrative Agent shall furnish to each Lender a copy of the final written collateral review or appraisal report prepared in connection with such review or appraisal. The Administrative Agent shall furnish to the Borrowers a copy of the final appraisal report prepared in connection with any such appraisal, and shall provide the Borrowers with a summary of the Collateral analysis contained in any final written collateral review, in each case not less than two (2) Business Days prior to delivery thereof to the Lenders.

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ARTICLE 6
Negative Covenants

Until the later of (i) the date of termination of the Commitments in their entirety and (ii) the date upon which no Loans or other Obligations (other than contingent indemnification obligations) remain unpaid, each Borrower shall not, nor shall it permit any of its Restricted Subsidiaries to, directly or indirectly:

Section 6.01.  Liens.  Create, incur, assume or suffer to exist or become effective any Lien of any kind upon any of its property, assets or revenues, whether now owned or hereafter acquired, other than the following:

(a)         Liens created pursuant to (i) any Loan Document, (ii) any Transaction Document under the 2007 Securitization Facility or (iii) any transaction document under the 2005 Securitization Facility or any other Securitization Facility;

(b)         Liens existing on the Effective Date or which are required to come into effect as a result of existing contractual provisions (in each case, to the extent in respect of underlying obligations exceeding $1,000,000 individually listed on Schedule 6.01(b) and any reissuance, renewals or extensions thereof;

(c)         Liens for taxes, assessments or governmental charges or claims that are extinguished within sixty (60) days of notice of their existence, are not yet due and payable or that are being contested in good faith by appropriate proceedings;

(d)         Liens of landlords, carriers, vendor, pipeline, warehousemen, mechanics, suppliers, materialmen, repairmen, employees, pension plan administrators or other like Liens arising by operation of law in the ordinary course of business of such Restricted Party which secure amounts which are not overdue for a period of more than thirty (30) days or not yet subject to penalties for nonpayment or that are being contested in good faith by appropriate proceedings;

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(e)         Liens (i) arising out of pledges or deposits made in the ordinary course of business in connection with workers compensation, unemployment insurance and other types of social security or other insurance (including unemployment insurance) and (ii) arising out of pledges and deposits in the ordinary course of business securing liability for reimbursement or indemnification obligations with respect to premiums and exit fees of (including to support obligations in respect of letters of credit or bank guarantees for the benefit of) insurance carriers providing property, casualty or liability insurance to the Company or any of its Subsidiaries;

(f)         Liens arising out of pledges or deposits made to secure the performance of tenders, bids or trade or government contracts, or to secure leases, statutory or regulatory, insurance obligations, surety, judgment or appeal bonds, completion guarantee, surety, letters of credit, performance bonds, guarantees or other obligations of a like nature (including those to secure health, safety and environmental obligations) incurred in the ordinary course of business (other than obligations for the payment of borrowed money);

(g)         zoning restrictions of governmental authorities, easements, licenses, reservations of, or rights of others for, licenses reservations, title defects, rights of others for rights-of-way, utilities, sewers, electrical lines, telephone lines, telegraph wires, restrictions, encroachments and other similar charges, encumbrances or title defects of zoning, survey exceptions, encumbrances, or other restrictions as to the use of real property or Liens incurred in the ordinary course of business that do not in the aggregate materially interfere with in any material respect the ordinary conduct of the business of the Company and its Restricted Subsidiaries, taken as a whole;

(h)         Liens arising by reason of any judgment, decree or order of any court so long as such Lien is adequately bonded and any appropriate legal proceedings that may have been duly initiated for the review of such judgment, decree or order shall not have been finally terminated or the period within which such proceedings may be initiated shall not have expired;

(i)         (x) leases or subleases or licenses or sublicenses of Real Property or IP Rights granted in the ordinary course of business to others that do not individually or in the aggregate interfere in any material respect with the ordinary conduct of the business of the Company and its Restricted Subsidiaries, taken as a whole and (y) any interest or title of a lessor or in property subject to a lease other than a capitalized lease;

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(j)          Liens in favor of customs and revenue authorities arising as a matter of Law to secure payment of customs duties in connection with the importation of goods;

(k)         Liens (i) of a collection bank arising under Section 4-210 of the Uniform Commercial Code on items in the course of collection, (ii) attaching to commodity trading accounts or other commodities brokerage accounts incurred in the ordinary course of business, and (iii) in favor of banking or other financial institutions arising as a matter of Law encumbering deposits (including the right of set-off) and which are within the general parameters customary in the banking industry or arising pursuant to such banking institutions general terms and conditions;

(l)          Liens (i) on cash advances in favor of the seller of any property to be acquired in or monies placed in escrow pursuant to an Investment permitted pursuant to Section 6.02 to be applied against the purchase price for such Investment, (ii) over assets being acquired pursuant to Investments permitted by Section 6.02 pending payment in full of the purchase price (iii) consisting of an agreement to Dispose of any property in a Disposition permitted under Section 6.05 and (iv) consisting of intellectual property licenses permitted by Section 6.02(n);

(m)     Liens in favor of any Restricted Subsidiary securing Indebtedness permitted under Section 6.03 (other than Indebtedness owed to a Restricted Subsidiary that is not a Loan Party or Transaction Party under the 2007 Securitization Facility);

(n)         Liens arising out of conditional sale, title retention, consignment or similar arrangements for sale of goods entered into by any Restricted Party in the ordinary course of business;

(o)         Liens upon specific items of inventory or other goods and proceeds of any Person securing such Persons obligations in respect of documentary letters of credit. Liens on documents of title in respect of documenting letters of credit or bankers acceptances issues or credit for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;

(p)         Liens on assets that do not constitute Collateral securing Indebtedness and other Obligations under and as defined in the Senior Facility Credit Agreement;

(q)         Liens arising by reason of deposits necessary to qualify such Restricted Party to conduct business, maintain self insurance or comply with any law and Liens securing the PBGC Settlement;

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(r)         Liens securing any Capitalized Lease and Liens to secure Indebtedness (including Capitalized Leases) permitted by clause (e) of Section 6.03 covering only the property or assets acquired with such Indebtedness;

(s)         Liens securing obligations under Swap Contracts of the Company or any Restricted Subsidiary permitted under the Senior Facility Credit Agreement or any collateral for the obligations under such Swap Contracts

(t)         Liens on property of, or on Equity Interests or Indebtedness of, any Person or attaching to any assets existing at the time such property or Person is acquired by, merged with or into or consolidated with, or assets are acquired by such Restricted Party; provided that such Liens (a) do not extend to or cover any property or assets of such Restricted Party other than the property or assets acquired (other than assets and property affixed or appurtenant thereto) or the property and assets of the Person merged into or consolidated with such Restricted Party and (b) were created prior to, and not in connection with or in contemplation of, such acquisition, merger, amalgamation or consolidation;

(u)         Liens granted by Restricted Parties (other than Loan Parties or Transaction Parties under the 2007 Securitization Facility) in support of Indebtedness of Restricted Subsidiaries (other than Loan Parties or Transaction Parties under the 2007 Securitization Facility); provided that the aggregate amount secured by such Liens does not exceed $500,000,000 at any one time outstanding;

(v)         Liens in respect of the Senior Second Lien Debt, any Permanent Financing or any Permitted Refinancing (each as defined in the Senior Facility Credit Agreement)

(w)     Liens of the Restricted Parties with respect to obligations that do not exceed, in the aggregate, the greater of (i) $250,000,000 and (ii) 1% of Consolidated Net Tangible Assets (as defined in the Senior Facility Credit Agreement) at any one time outstanding;

(x)         Liens over shares in joint ventures or over dividends in respect thereof in any Restricted Subsidiary acting as a special purpose vehicle with the sole purpose to hold shares in a joint venture to secure Indebtedness or other obligations of such joint venture or Restricted Subsidiary or Indebtedness permitted by Section 6.03(u);

(y)         Liens resulting from any Limited Recourse Stock Pledge;

(z)         Liens granted in favor of Restricted Parties and Transaction Parties under the 2007 Securitization Facility and Liens on any property or assets of a Restricted Subsidiary granted in favor of a Borrower, or any wholly owned Restricted Subsidiary;

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(aa)    Liens securing Indebtedness incurred to modify, refinance, defease, refund, extend, renew or replace Indebtedness that has been secured by a Lien permitted by this Agreement; provided that (a) such new Lien shall be limited to all or part of the same property and assets that secured or, under the written agreements pursuant to which the original Lien arose, could secure the original Lien plus improvements and accessions to, such property or proceeds or distributions thereof); and (b) the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of (i) the outstanding principal amount or, if greater, committed amount of the Indebtedness at the time the original Lien became a Lien permitted under this Section and (ii) an amount necessary to pay any fees and expenses, including prepayment premiums, associated hedging break costs and premiums or replacement hedges, related to such refinancing, refunding, extension, renewal or replacement;

(bb)    any extension, amendment, renewal or replacement, in whole or in part, of any Lien described in Sections 6.01 (b), (t) and (v); provided that any such extension, renewal or replacement shall be no more restrictive in any material respect than the Lien so extended, amended, renewed or replaced and shall not extend to any additional property or assets;

(cc)    Liens arising from precautionary Uniform Commercial Code financing statement filings;

(dd)    any netting or set-off arrangements entered into by any Restricted Party in the ordinary course of its banking arrangements (including, for the avoidance of doubt, cash pooling arrangements) for the purposes of netting debit and credit balances of any Restricted Party, including pursuant to any Treasury Services Agreement; and

(ee)    Liens over cash deposits deposited with the trustees in connection with the purchase of certain Existing Notes.

Notwithstanding the foregoing, until such time, if ever, as the Collateral Requirement shall be satisfied as to Lyondell, Lyondell shall not create, incur, assume or suffer to exist any Lien (other than a Qualified Lien or a Lien under Section 2.06(k)) on any asset of Lyondell that would constitute Collateral upon satisfaction of the Collateral Requirement with respect to Lyondell.

Section 6.02.  Investments.  Make or hold any Investments, except:

(a)         Investments in cash or Cash Equivalents;

(b)         loans and advances to employees, directors and officers of such Borrower and its Subsidiaries (i) required by applicable employment laws or (ii) otherwise in the ordinary course of business for travel, business, related entertainment, relocation, as part of a recruitment or retention plan and related expenses in an aggregate principal amount outstanding not to exceed $10,000,000;

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(c)         Investments (i) by such Restricted Party in any Loan Party or any Transaction Party under the 2007 Securitization Facility or any Person that will, substantially contemporaneously with the making of the relevant Investment, become a Loan Party or Transaction Party under the 2007 Securitization Facility (ii) by any Restricted Party that is not or will not be a Loan Party or a Transaction Party under the 2007 Securitization Facility in any other Restricted Subsidiary that is not at the time of such Investment a Loan Party or Transaction Party under the 2007 Securitization Facility, (iii) by such Restricted Party (A) in any Subsidiary, constituting an exchange of Equity Interests of such Subsidiary for Indebtedness of such Subsidiary or (B) constituting Guarantees of Indebtedness or other monetary obligations of Subsidiaries owing to such Restricted Party and (iv) consisting of intercompany Investments incurred in the ordinary course of business among the Restricted Parties and any Receivables Restricted Parties on the one hand, and the Company or any of its Restricted Subsidiaries on the other;

(d)         [Reserved]

(e)         (i) Investments existing on the Effective Date, (ii) Investments contemplated on the Effective Date and set forth on Schedule 6.02(e) and (iii) any modification, replacement, renewal, reinvestment or extension of any Investment set forth on Schedule 7.02(e) that does not increase the aggregate amount thereof;

(f)         Swap Contracts entered into in the ordinary course of business and otherwise permitted under the Senior Facility Credit Agreement;

(g)         any acquisition of all or substantially all the assets of, or all the Equity Interests (other than directors qualifying shares) in, a Person or division or line of business of a Person to the extent (A) such acquisition is effected by a contribution to capital not constituting Disqualified Equity Interests, (B) the consideration paid is settled by the issuance or with proceeds of the issuance of Qualified Equity Interests of the Company or Parent or any Holding Company of Parent or (C) immediately after giving effect thereto: Article 35 no Default shall have occurred and be continuing or would result therefrom;   Article 36 the acquired entity, assets, division or line of business shall be in a Permitted Business; Article 37 after giving effect to such acquisition the Company and its Restricted Subsidiaries would be in pro forma compliance with the Consolidated Fixed Charge Coverage Ratio required by (and as defined under) the Senior Facility Credit Agreement; and Article 38 with respect to such Investments by Loan Parties in assets that are not (or do not be or become) owned by a Loan Party or in Persons that are not or do not become Loan Parties within ninety (90) days of consummation of the acquisition (1) such Person shall not be designated an Unrestricted Subsidiary within 12 months of such acquisition and (2) the aggregate consideration paid in such Investments pursuant to this clause (iv) shall not exceed $2,000,000,000 (net of any capital distribution in respect of any such Investment) (any such acquisition, a Permitted Acquisition);

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(h)         loans and advances to the Company and any other direct or indirect parent of a Restricted Subsidiary, in lieu of, and not in excess of the amount of (after giving effect to any other loans, advances or Restricted Payments in respect thereof), Restricted Payments to the extent permitted to be made to such parent in accordance with Section 6.06; provided that such loans and advances shall be deemed a Restricted Payment for the purposes of Section 6.06;

(i)         Additional Investments to the extent of the Applicable Amount (as defined in the Senior Facility Credit Agreement), as and to the extent permitted under the Senior Facility Credit Agreement;

(j)           Investments (including Investments in securities) received pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of any debtors of such Restricted Party or received in settlement of debts created in the ordinary course of business and owing to such Restricted Party or in satisfaction of judgments or in settlement of any litigation or arbitration;

(k )         Investments by a Restricted Party in a Securitization Entity (as defined in the senior Facility Agreement) or any Investment by a Securitization Entity in any other Person in connection with a Securitization Transaction (as defined in the Senior Facility Credit Agreement); provided that any Investment in a Securitization Entity is in the form of a purchase money note or an equity interest;

(l)           Investments held by any Person (other than an Affiliate of such Person) that becomes a Restricted Subsidiary of a Borrower; provided that such Investments were not acquired in contemplation of the acquisition of such Person;

(m)         Investments in Subsidiaries of Restricted Parties and Permitted Joint Ventures not to exceed $500,000,000 plus

(i)    the aggregate net after-tax amount returned in cash on or with respect to any Investments made in such Unrestricted Subsidiaries and Permitted Joint Ventures whether through interest payments, principal payments, dividends or other distributions or payments on account of such Investment,

(ii)    the net after-tax cash proceeds received by such Restricted Party from the disposition of all or any portion of such Investments (other than to a Restricted Party),

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(iii)    upon redesignation of an Unrestricted Subsidiary of a Restricted Party as a Restricted Subsidiary, the fair market value of such Subsidiary; and

(iv)    Investments in Equity Interests of Specified Joint Ventures in an amount not to exceed $20,000,000;

(n)         Investments in a Permitted Business having an aggregate value, taken together with all other Investments made pursuant to this clause (n) that are at that time outstanding, not to exceed $250,000,000 (with the value of each such Investment being measured at the time made and without giving effect to subsequent changes in value);

(o)         Investments through the licensing contribution of technology in a Person that is or will be as a result of such Investment a Permitted Joint Venture, or Investments though the licensing, contribution or transactions that economically result in a contribution in kind of intellectual property pursuant to joint venture arrangements, in each case in the ordinary course of business;

(p)         Guarantees of Indebtedness to the extent such Guarantee is permitted under Section 6.03;

(q)         Investments made by such Restricted Party as consideration for a Disposition pursuant to Section 6.05(c), (j), (l) and (n);

(r)         Limited Recourse Stock Pledges; and

(s)         Investments not otherwise permitted in the Company or its Restricted Subsidiaries.

Notwithstanding the foregoing, no Investments shall be made in any member of Millennium Holdings Group other than Investments (x) outstanding on the Effective Date and set forth on Schedule 6.02(e), (y) pursuant to Section 6.02(i) or Section 6.06(d) for the purpose of paying final judgments or settlements or orders for the payment of money or for the purpose of paying costs and expenses associated with litigation and claims under related insurance policies and (z) in respect of environmental remediation capital expenditures or for the purpose of paying costs and expenses associated with litigation and claims under related insurance policies.

Section 6.03.  Indebtedness.  Create, incur, assume or suffer to exist any Indebtedness, except:

(a)            Indebtedness of any Loan Party under the Loan Documents or any Transaction Party under the 2007 Securitization Facility thereunder or, in either case, any refinancings thereof;

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(b)            Indebtedness existing or outstanding on the Effective Date and any refinancing thereof permitted under the Senior Facility Credit Agreement;

(c)            Guarantees by such Restricted Party in respect of Indebtedness of the Company and any Restricted Subsidiary;

(d)            (i) Indebtedness of such Restricted Party owing to the Company or any Restricted Subsidiary to the extent such Indebtedness would be permitted under the Senior Facility Credit Agreement and (ii) non-ordinary course intercompany Indebtedness of such Restricted Party owing to any Restricted Party for so long as such Indebtedness is held by any Restricted Party, in each case subject to no Lien held by a Person other than any Restricted Party; provided that in the case of clause (ii) if as of any date any Person other than any Restricted Party owns or holds any such intercompany Indebtedness or holds a Lien in respect of such Indebtedness, it shall be deemed the incurrence of Indebtedness not permitted by this Section 6.03(d);

(e)            Indebtedness incurred in the ordinary course of business not to exceed the greater of (i) $200,000,000 in the aggregate and (ii) 0.8% of Consolidated Net Tangible Assets at the date of incurrence, in each case, at any one time outstanding and

(1)            representing Capitalized Leases or;

(2)            constituting Indebtedness incurred to finance the acquisition of, or cost of design, construction, installation, repair, addition to or improvement of, property or assets of a Restricted Party or a Receivables Restricted Party used in the ordinary course of business of such Restricted Party or Receivables Restricted party; provided, however, that such Indebtedness shall not exceed the cost of such property or assets or repair or improvement thereof and shall not be secured by any property or assets of such Restricted Party or Receivables Restricted Party other than the property and assets so acquired;

(f)            Swap Contracts that are incurred for the purpose of (i) fixing or hedging interest rate or currency risk with respect to any fixed or floating rate Indebtedness permitted under this Agreement or any receivable or liability the payment of which is determined by reference to a foreign currency; provided that the notional principal amount of any such Swap Contract does not exceed the principal amount of the Indebtedness to which such Swap Contract relates or (ii) managing fluctuations in the price or cost of raw materials, emission rights, manufactured products or related commodities; provided that, in each case, such obligations are entered into in the ordinary course of business to hedge or mitigate risks to which the Company or any of its Restricted Subsidiaries is exposed in the conduct of its business or the management of its liabilities;

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(g)            Indebtedness under the Senior Second Lien Debt, any Permanent Financing (each as defined in the Senior Facility Agreement) and the Existing Notes, the Guarantees thereof and any refinancing thereof permitted under the Senior Facility Credit Agreement;

(h)            Indebtedness arising from agreements of such Borrower or a Subsidiary providing for indemnification, adjustment of purchase price, earn out or similar obligations, in each case, incurred in connection with the disposition or acquisition of any business, assets or Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition; provided that the maximum aggregate liability in respect of all such Indebtedness shall at no time exceed the gross proceeds actually received by such Borrower and the Subsidiary in connection with such disposition except to the extent such Borrower or relevant Subsidiary has a liability in respect of such business, asset or Subsidiary before (and not created in contemplation of) such disposition;

(i)            Treasury Services Agreements entered into in the ordinary course of business;

(j)            [Reserved];

(k)            Indebtedness consisting of obligations of such Restricted Party under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and any acquisition, Investment, or Disposition expressly permitted hereunder;

(l)            Indebtedness of such Restricted Party, in an aggregate principal amount not to exceed the greater of (i) $750,000,000 and (ii) 3% of Consolidated Net Tangible Assets at the date of incurrence, in each case, at any time outstanding;

(m)            Indebtedness of such Restricted Party represented by letters of credit, bank guarantees, bankers acceptances and warehouse receipts for the account of such Restricted Party or Receivables Restricted Party or similar instruments, as the case may be, in order to provide security for workers compensation or environmental claims, payment obligations in connection with self-insurance or similar requirements in the ordinary course of business;

(n)            obligations in respect of, tender, bid, judgment, appeal, performance or governmental contract bonds and completion guarantees, surety, standby letters of credit and warranty and contractual service obligations of a like nature, trade letters of credit and documentary letters of credit and similar bonds or guarantees provided by such Restricted Party or Receivables Restricted Party in the ordinary course of business;

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(o)          (i) the incurrence by a Securitization Entity of Indebtedness in a Securitization Transaction permitted hereunder that is not recourse to the Company or any Subsidiary of the Company (except for Standard Securitization Undertakings) and (ii) the incurrence of indebtedness under any other Receivables Financings (as defined in the Senior Facility Credit Agreement);

(p)          Indebtedness of a Restricted Party to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by such Restricted Party from any such Subsidiary which assets are subsequently conveyed by such Restricted Party to a Securitization Entity in a Securitization Transaction;

(q)          Guarantees by such Restricted Party of Indebtedness incurred by Permitted Joint Ventures or Unrestricted Subsidiaries not to exceed the greater of Article 39 $250,000,000 in the aggregate and Article 40 1% of Consolidated Net Tangible Assets at the date of incurrence, in each case, at any one time outstanding;

(r)          Indebtedness of a Person existing at the time that Person becomes a Restricted Party or assumed in connection with an acquisition by a Restricted Party or Indebtedness attaching to assets acquired in a Permitted Acquisition, and, in each case not incurred in connection with or in anticipation of such acquisition; provided that the holders of any such Indebtedness do not, at any time, have direct or indirect recourse to any property or assets of such Restricted Party other than the property or assets of such acquired Person and its Subsidiaries; provided, further, that on the date of such acquisition and after giving pro forma effect thereto, either (i) the Company would have been able to incur at least $1.00 of additional Indebtedness pursuant to Section 7.03(r) of the Senior Facility Credit Agreement or (ii) the Consolidated Fixed Charge Coverage Ratio (as defined in the Senior Facility Credit Agreement) would be greater than or equal to the Consolidated Fixed Charge Coverage Ratio (as defined in the Senior Facility Credit Agreement) immediately prior to giving pro forma effect to such acquisition in each case, together with any Permitted Refinancing thereof;

(s)          (i) other Indebtedness of the Company or any Guarantor which may be secured by a Lien to the extent permitted under Section 7.01 of the Senior Facility Credit Agreement; provided that, (x) both immediately prior to and after giving effect thereto on a pro forma basis, no Default as defined in the Senior Facility Credit Agreement shall exist or result therefrom and (y) the Consolidated Fixed Charge Coverage Ratio (as defined in the Senior Facility Credit Agreement) of the Company and its Restricted Subsidiaries (calculated on a pro forma basis after giving effect to the incurrence of such Indebtedness) for the most recently ended four (4) fiscal quarters for which financial statements are available immediately preceding the date on which such Indebtedness is incurred would have been at least 2.00 to 1.00 and (ii) any Permitted Refinancings thereof;

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(t)          Indebtedness of a Person existing at the time that Person becomes a Restricted Party or assumed in connection with an acquisition by a Restricted Party or Indebtedness attaching to assets acquired in an acquisition, and, in each case not incurred in connection with or in anticipation of such acquisitions; provided that the holders of any such Indebtedness do not, at any time, have direct or indirect recourse to any property or assets of such Restricted Party other than the property or assets of such acquired Person and its Subsidiaries;

(u)          Indebtedness of such Restricted Party (each a JV Investor) the purpose of which is to finance a Permitted Joint Venture or an investment therein; provided that at all times (a) the creditors under the relevant facility have no direct or indirect recourse to any Restricted Party other than such JV Investor and (b) the only direct or indirect recourse those creditors have to such JV Investor is limited to the proceeds (if any) of dividends received by such JV Investor in respect of such JV Investors investment in that Permitted Joint Venture;

(v)          Indebtedness consisting of take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business; and

(w)          Indebtedness arising form the honoring by a bank or other financial institution of a check or draft or similar instrument drawn against insufficient funds, overdrafts and money market lines in the ordinary course of business..

Section 6.04.  Fundamental Changes.  Merge and amalgamate, dissolve, liquidate, consolidate with or into another Person, or Dispose of (whether in one transaction or in a series of related transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to or in favor of any Person (other than as part of the Transaction), except that:

(a)          any Restricted Party (other than a Loan Party) may merge and amalgamate with any Restricted Party;

(b)          any Disposition permitted under Section 6.05;

(c)          any Restricted Subsidiary (other than a Loan Party) may Dispose of all or substantially all of its assets (upon voluntary liquidation or otherwise) to any Borrower or to another Restricted Subsidiary of a Borrower; and

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(d)          so long as no Default exists or would result therefrom, such Restricted Party may merge, consolidate or amalgamate with any other Person; provided that (i) such Restricted Party shall be the continuing or surviving corporation or (ii) if the Person formed by or surviving any such merger, amalgamation or consolidation is not such Borrower (any such Person, the Successor Borrower), (A) the Successor Borrower shall be an entity in the same corporate form organized or existing under the laws of the United States, any state thereof, the District of Columbia or any territory thereof, (B) the Successor Borrower shall expressly assume all the obligations of the Borrower under this Agreement and the other Loan Documents to which such Borrower is a party pursuant to a supplement hereto or thereto in form reasonably satisfactory to the Administrative Agent, (C) after giving effect to such transaction and the use of any proceeds therefrom, the Company would have the ability to incur (i) an additional $1.00 of Indebtedness under Section 7.03(r) of the Senior Facility Credit Agreement or (ii) the Consolidated Fixed Charge Coverage Ratio under (and as defined in) the Senior Facility Credit Agreement at the time of such transaction and after giving pro forma effect thereto as if such transaction had occurred at the beginning of the applicable four (4)-quarter period will be equal to or greater than it was immediately before such transaction; and (D) the Borrower shall have delivered to the Administrative Agent a certificate of a Financial Officer and an opinion of counsel, each stating that such merger, amalgamation or consolidation and such supplement to this Agreement or any Loan Document comply with this Agreement; provided, further, that if the foregoing are satisfied, the Successor Borrower, will succeed to, and be substituted for, the Borrower under this Agreement; provided, further that, unless such person is a Borrower, neither Millennium Chemicals Inc. nor Millennium Holdings LLC nor any of their respective Subsidiaries as of the Effective Date may be merged with or into any Restricted Party.

Section 6.05.  Dispositions.  Make any Disposition or enter into any agreement to make any Disposition (other than as part of or in connection with the transactions contemplated by the Loan Documents), except:

(a)            Dispositions of obsolete, redundant, surplus or worn out property, whether now owned or hereafter acquired, in the ordinary course of business and Dispositions of property no longer used or useful in the conduct of the business of any Restricted Party;

(b)            Dispositions of inventory in the ordinary course of business;

(c)            Dispositions of property to the extent that (i) such property is exchanged for credit against the purchase price of similar replacement property or (ii) the proceeds of such Disposition are promptly applied to the purchase price of such replacement property;

(d)            Dispositions to the Company or any Restricted Subsidiary to the extent such Dispositions would be permitted under the Senior Facility Credit Agreement;

(e)            Dispositions permitted by Sections 6.04 and 6.07 and Liens permitted by Section 6.01;

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(f)            Dispositions of property other than Collateral pursuant to sale-leaseback transactions; provided that the fair market value of all property so Disposed of after the Effective Date shall not exceed $250,000,000;

(g)            Dispositions of cash and Cash Equivalents;

(h)            leases, subleases, licenses or sublicenses (including the provision of software under an open source license), in each case in the ordinary course of business and which do not materially interfere with the business of the Company and its Restricted Subsidiaries;

(i)            transfers of property as a result of Casualty Events;

(j)            Dispositions of property not otherwise permitted under this Section, the proceeds (net of costs associated with such Disposition) of which do not to exceed $1,000,000,000 in any transaction or series of related transactions in the aggregate; provided that (i) at the time of such Disposition, no Default shall exist or would result from such Disposition, and (ii) with respect to any Disposition pursuant to this clause for a purchase price in excess of $50,000,000, the Restricted Parties shall receive not less than 75% of such consideration in the form of cash or Cash Equivalents (in each case, free and clear of all Liens at the time received); provided for the purposes of this clause (ii) any liabilities (as shown on the Companys most recent balance sheet or in the footnotes thereto) of such Restricted Party, other than liabilities that are by their terms subordinated to the payment in cash of the Obligations, that are assumed by the transferee with respect to the applicable disposition and for which each Restricted Party shall have been validly released by all applicable creditors in writing shall be deemed to be cash; and (iii) the Net Proceeds shall be used to prepay Loans to the extent required by Section 2.08(b);

(k)          Dispositions listed in Schedule 6.05(k) hereto;

(l)            Dispositions of accounts receivable in connection with Securitization Transactions or Dispositions of Excluded Receivables permitted by Section 6.15;

(m)            any swap of assets in exchange for services or other assets in the ordinary course of business of comparable or greater value or usefulness to the business of the Company and its Subsidiaries, taken as a whole, as determined in good faith by the management of the Company; and

(n)            Dispositions pursuant to buy-sell arrangements or similar agreements between Lyondell China Holdings Limited of Ningbo ZRCC and Lyondell Chemical Company Ltd.

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provided that any Disposition of any property pursuant to this Section 6.05 (except pursuant to Section 6.05(e) and Section 6.05(i) and (i) and except for Dispositions (x) of Collateral from a Borrower to a Borrower and (y) of other property from a Loan Party or Transaction Party under the 2007 Securitization Facility to any other Loan Party or Transaction Party under the 2007 Securitization Facility) shall be for no less than the fair market value of such property at the time of such Disposition. To the extent any Collateral is Disposed of as expressly permitted by this Section 6.05 to any Person other than a Loan Party, such Collateral shall be sold free and clear of the Liens created by the Loan Documents, and the Administrative Agent shall be authorized to take any actions deemed appropriate in order to effect the foregoing.

Section 6.06. Restricted Payments; Use of Proceeds.  Declare or make, directly or indirectly, any Restricted Payment, except:

(a)            such Restricted Party may make Restricted Payments to the Company and Restricted Subsidiaries (and, in the case of a Restricted Payment by a non-Wholly Owned Restricted Party, to the Company and any other Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests);

(b)            such Restricted Party may declare and make dividend payments or other Restricted Payments payable solely in the Equity Interests (other than Disqualified Equity Interests not otherwise permitted by Section 6.03) of such Person;

(c)            the payment of any dividend or consummation of any irrevocable redemption within sixty (60) days after the date of declaration of such dividend or the giving of a redemption notice if the dividend or redemption would have been permitted on the date of declaration or giving of notice;

(d)            any Restricted Payments, either (i) solely in exchange for shares of Qualified Equity Interests of the Company or (ii) if no Default or Event of Default under and as defined in the Senior Facility Credit Agreement shall have occurred and be continuing, through the application of net cash proceeds of a substantially concurrent equity offering (other than to a subsidiary of the Company) or capital contribution received by the Company;

(e)            to the extent constituting Restricted Payments, a Restricted Party may enter into and consummate the Acquisition transactions expressly permitted by any provision of Section 6.04;

(f)            cash repurchases of Equity Interests in such Restricted Party deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants;

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(g)            beginning on August 1, 2010, so long as no Default or Event of Default under and as defined in the Senior Facility Credit Agreement shall have occurred and be continuing or would be caused thereby, repurchases by such Restricted Party of, or declarations and payments of dividends to a direct or indirect parent of such Restricted Party to permit repurchases by such direct or indirect parent of, Equity Interests of the Company or a Restricted Subsidiary or such parent from employees, former employees, directors or former directors of the Company or a Restricted Subsidiary or any of its Subsidiaries (or permitted transferees of such Persons) or their authorized representatives upon the death, disability or termination of employment of such employees or directors, in an aggregate amount for all periods not to exceed 2.0% of the capital stock of the Company from time to time at fair market value at the date of such repurchase;

(h)            Restricted Payments to any direct or indirect parent company of the Company for legal, audit, tax and other expenses directly relating to the administration of that parent company (or any of its parent companies) including customary compensation payable to that Persons directors and employees, not to exceed 1,500,000 or the equivalent dollar amount in any fiscal year;

(i)            cash payments in lieu of issuing fractional shares pursuant to the exercise or conversion of any exercisable or convertible securities;

(j)            payments or distributions to dissenting shareholders pursuant to applicable Law in connection with or in contemplation of, any acquisition, merger, amalgamation, consolidation or transfer of assets that complies with Section 4.04;

(k)            payments of dividends on Disqualified Equity Interests issued in accordance with Section 6.03;

(l)            directors fees (including non-executive directors of such Borrower) or if the Borrower is a partnership, directors fees of the general partner of the Borrower, in an amount not to exceed $1,500,000 per year;

(m)            so long as no Default or Event of Default under and as defined in the Senior Facility Credit Agreement shall have occurred and be continuing or would be caused thereby, Restricted Payments in respect of sums payable (including payment of fees) pursuant to the Management Agreement in an aggregate amount not to exceed (x) in respect of any fiscal year in which Consolidated EBITDA is less than $6,000,000,000 or (y) $30,000,000.00 in respect of any fiscal year in which Consolidated EBITDA exceeds $6,000,000,000;

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(n)            so long as no Default or Event of Default under and as defined in the Senior Facility Credit Agreement shall have occurred and be continuing or would be caused thereby, (i) Restricted Payments by any Restricted Party in an amount not to exceed (x) prior to Listing $50,000,000 per annum and $200,000,000 in the aggregate, plus (y) at any time, if, the Applicable Amount Availability Condition under and as defined in the Senior Facility Credit Agreement shall be met,  other Restricted Payments in an aggregate amount pursuant to this clause (n) not to exceed the portion, if any, of the Applicable Amount under and as defined in the Senior Facility Credit Agreement on the date of such election that the Borrowers Agent elects to apply pursuant to this clause (n), such election to be specified in a written notice of a Principal Financial Officer calculating in reasonable detail the amount of Applicable Amount immediately prior to such election and the amount thereof elected to be so applied, and (ii) following Listing, the payment of dividends on the listed common stock at a rate not to exceed 6% per annum of the net cash proceeds received by the Company in connection with such Listing or any subsequent Listing; provided that if such Listing was of the share capital of a Holding Company of the Company, the net proceeds of any such dividend are used to fund a corresponding dividend in equal or greater amount on the share capital of such Holding Company;

(o)            distributions by any Restricted Party or any joint venture of chemicals to a holder of Equity Interests of such Restricted Party or joint venture if such distributions are made pursuant to a provision in a joint venture agreement or other arrangement entered into in connection with the establishment of such joint venture or Restricted Party that requires such holder to pay a price for such chemicals equal to that which would be paid in a comparable transaction negotiated on an arms-length basis (or pursuant to a provision that imposes a substantially equivalent requirement); and

(p)            payments in the amounts and on the conditions described in the Tax Sharing Agreement (as defined in the Senior Facility Credit Agreement).
 
The proceeds of the Loans shall be used for general corporate purposes.  If the RP Trigger is in effect, no proceeds of any Loan shall be used to make Dividend Payments.

Section 6.07.  Change in Nature of Business.  Engage in any material line of business substantially different from a Permitted Business.

Section 6.08.  Transactions with Affiliates.  Enter into any transaction of any kind with any Affiliate of such Restricted Party, whether or not in the ordinary course of business, other than:

(a)          reasonable fees and compensation paid to and employee benefit arrangements, customary insurance and indemnity provided on behalf of, officers, directors, managers, employees or consultants of such Restricted Party as determined in good faith by the board of directors or senior management of the Company or such Restricted Party;

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(b)          transactions exclusively between or among the Company and any of its Restricted Subsidiaries or exclusively between or among such Restricted Subsidiaries in each case, provided such transactions are not otherwise prohibited hereby;

(c)          any agreement as in effect as of the Effective Date set forth on Schedule 6.08(c) or any amendment or renewal thereto or any transaction contemplated thereby or in any replacement agreement thereto so long as any such amendment or renewal or replacement agreement is not more disadvantageous to the Lenders (as determined by the board of directors of the Company in their reasonable and good faith judgment) in any material respect than the original agreement;

(d)          Investments of the type described in clauses(b),(c),(h),(i) and (m) of Section 6.02 and Restricted Payments made in compliance with Section 6.06;

(e)          transactions between any of the Borrowers, the Transaction Parties under the 2007 Securitization Facility and any of their respective Subsidiaries in connection with a the transactions contemplated by the 2007 RPA, the 2007 RSA or this Agreement;

(f)          transactions with customers, clients, suppliers, distributors or other purchases or sales of goods or services, in each case in the ordinary course of business;

(g)          transactions with Permitted Joint Ventures entered into in the ordinary course of business and in a manner consistent with past practice;

(h)          the issuance or sale of any Qualified Equity Interests of such Borrower or capital contributions received by such Borrower;

(i)          transactions entered into between or among such Restricted Party and any joint venture, or other Affiliate that would otherwise be subject to this covenant solely because a Restricted Party owns any Equity Interests of or otherwise controls such person, or other Affiliate engaged in a Permitted Business that is under common control with such Restricted Party, on terms that are no less favorable as might reasonably have been obtained at such time from an unaffiliated party or, if no such comparable transaction is available, on terms that are fair from a financial point of view to such Restricted Party;

(j)          transactions entered into by a Person prior to the time such Person becomes a Restricted Subsidiary or is merged or consolidated into a Restricted Party (provided such transaction is not entered into in contemplation of such event);

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(k)          dividends and distributions to the Company and its Restricted Subsidiaries by any Unrestricted Subsidiary of the Company or joint venture; and

(l)          transactions (x) involving aggregate payments of consideration equal to or less than $10,000,000 or (y) on terms that are no less favorable to the relevant Restricted Party than those terms that might reasonably have been obtained in a comparable transaction at such time on an arms-length basis by such Restricted Party and an unrelated Person or, if no such comparable transaction with a Person who is not an Affiliate is available on terms that are fair from a financial point of view to such Restricted Party as certified by an independent financial advisor; provided that (x) the board of directors of each of such Restricted Party or the parent of such Restricted Party must approve each transaction with an Affiliate to which they are a party that involves aggregate payments or other property with a fair market value in excess of $25,000,000, such approval to be evidenced by a board resolution that states that the board of directors has determined that the transaction complies with the foregoing provisions and (y) if any Restricted Party enters into a transaction with an Affiliate that involves payments or other property with an aggregate fair market value of more than $100,000,000, then prior to the consummation of such transaction, the parties to such transaction must obtain a favorable opinion as to the fairness of such transaction or series of related transactions to such Restricted Party from a financial point of view, from an independent financial advisor and deliver the same to the Administrative Agent.

Section 6.09.  Burdensome Agreements.  Enter into or permit to exist any Contractual Obligation (other than this Agreement or any other Loan Document) that limits the ability of  any Restricted Party to make Restricted Payments to any Borrower; provided that the foregoing clause shall not apply to Contractual Obligations which:

(i)            (x) exist on the Effective Date and (to the extent not otherwise permitted by this Section) are listed on Schedule 6.09 and (y) to the extent Contractual Obligations permitted by clause (x) are set forth in an agreement evidencing Indebtedness, are set forth in any agreement evidencing any permitted renewal, extension or refinancing of such Indebtedness so long as such renewal, extension or refinancing does not expand the scope of such Contractual Obligation,

(ii)            are binding on a Restricted Subsidiary at the time such Restricted Subsidiary first becomes a Restricted Subsidiary, so long as such Contractual Obligations were not entered into solely in contemplation of such Person becoming a Restricted Subsidiary and as amended or modified; provided, however, that any such amendment or modification is no less favorable to such Borrower in any material respect as determined by the board of directors of such Borrower in their reasonable and good faith judgment than the provisions prior to such amendment or modification; provided further that this clause (ii) shall not apply to Contractual Obligations that are binding on a Person that becomes a Restricted Subsidiary pursuant to Section 6.04,

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(iii)            represent Indebtedness of a Restricted Subsidiary which is not a Loan Party which is permitted by Section 6.03,

(iv)            arise in connection with any Disposition permitted by Section 6.04 or Section 6.05 and relate solely to the assets or Person subject to such Disposition,

(v)            are customary provisions in joint venture agreements and other similar agreements applicable to joint ventures permitted under Section 6.02 and applicable solely to such joint venture entered into in the ordinary course of business,

(vi)            are negative pledges and restrictions on Liens in favor of any holder of Indebtedness permitted under Section 6.03 but solely to the extent any negative pledge relates to the property financed by such Indebtedness, and excluding in any event any Indebtedness constituting Junior Financing,

(vii)            are customary restrictions on leases, subleases, licenses or asset sale agreements otherwise permitted hereby so long as such restrictions relate to the assets subject thereto,

(viii)            comprise restrictions imposed by any agreement relating to secured Indebtedness permitted pursuant to Section 6.03(e) to the extent that such restrictions apply only to the property or assets securing such Indebtedness,

(ix)            are customary provisions restricting subletting or assignment of any lease governing a leasehold interest of such Restricted Party,

(x)              are customary provisions restricting assignment of any agreement entered into in the ordinary course of business,

(xi)             comprise restrictions imposed by the Senior Facility Credit Agreement and related documentation, the Senior Second Lien Debt Documentation or under any Asset Backed Credit Facilities or Securitization Transactions (each as defined in the Senior Facility Credit Agreement);

(xii)            are restrictions on cash or other deposits imposed by customers under contracts entered into in the ordinary course of business and

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(xiii)            customary restrictions in construction loans, purchase money obligations, Capitalized Leases, security agreements or mortgages securing Indebtedness of such Restricted Party to the extent such restrictions restrict the transfer of the property subject to such Capitalized Leases, security agreements or mortgages.

Section 6.10.  Anti-Money Laundering.  Each Restricted Party will use commercially reasonable efforts to ensure that no funds used to pay the obligations under the Loan Documents are derived from any unlawful activity.

Section 6.11.  Capital Expenditures.

Limitation on Capital Expenditures.  Permit the aggregate amount of Capital Expenditures (other than Excluded Capital Expenditures) made in any fiscal year by the Company  and its Restricted Subsidiaries to exceed the amount set forth opposite such fiscal year below (each such amount, a Scheduled Capital Expenditure Amount):

Year
Amount (in millions)
   
January 1, 2008    -    December 31, 2008
$1,250
   
January 1, 2009 and each fiscal year thereafter
$1,000


provided, however, that

(i)            so long as no Default has occurred and is continuing or would result from such expenditure, an amount equal to 50% of any portion of any amount set forth above, if not expended in the fiscal year for which it is permitted above, may be carried over for expenditure in the following fiscal year (each such amount, a Carry-Forward Amount); provided that if any such amount is so carried over, it will be deemed used in the fiscal year after the amount set forth opposite such fiscal year above; and

(ii)            so long as no Default has occurred and is continuing or would result from such expenditure, if Capital Expenditures (other than Excluded Capital Expenditures) made during any fiscal year exceed the amount set forth opposite such fiscal year above, if any, an amount up to 50% of the Scheduled Capital Expenditures Amount for the next succeeding fiscal year (each such amount, a carry-back amount) may be carried back to such prior fiscal year and utilized to make Capital Expenditures in such prior fiscal year (it being understood and agreed that (A) no carry-back amount may be carried back beyond the fiscal year immediately prior to the fiscal year of such Scheduled Capital Expenditure Amount and (B) the portion of the carry-back amount actually utilized in any fiscal year shall be deducted from the Scheduled Capital Expenditure Amount in the fiscal year from which it was carried back); provided further that if the Applicable Amount Availability Condition (as defined in the Senior Facility Credit Agreement) shall be met, the Restricted Parties shall be permitted to make Capital Expenditures in an aggregate amount pursuant to Section 7.11(c) of the Senior Facility Credit Agreement not to exceed the portion, if any, of the Applicable Amount (as defined in the Senior Facility Credit Agreement) on the date of such election that the Restricted Parties elect to apply such clause.

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Section 6.12.  Accounting Changes.  Make any change in its fiscal year; provided, however, that such Borrower may, upon written notice to the Administrative Agent, change its or any of its Subsidiaries fiscal year to any other fiscal year reasonably acceptable to the Administrative Agent , in which case the Borrower and the Administrative Agent shall, and are hereby authorized by the Lenders to, make any adjustments to this Agreement that are reasonably necessary to reflect such change in fiscal year.

Section 6.13.  Prepayments, Etc. of Indebtedness.

(a)          Prepay, redeem, purchase, defease or otherwise satisfy prior to the scheduled maturity thereof in any manner (it being understood that payments of regularly scheduled interest shall be permitted) any contractually subordinated Indebtedness or any Indebtedness other than the Indebtedness issued pursuant to the terms of the Junior Financings or make any payment in violation of any subordination terms of any documentation related thereto, except (i) the refinancing thereof with the net proceeds of any Indebtedness, (ii) the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of the Company or any of its direct or indirect parents, (iii) the prepayment of Indebtedness under the 2015 Notes and (iv) prepayments, redemptions, purchases, defeasances and other payments in respect of Junior Financings prior to their scheduled maturity as authorized by and in accordance with Section 7.13(a)(iv) of the Senior Facility Credit Agreement.

(b)          Amend, modify or change in any manner materially adverse to the interests of the Lenders any term or condition of any Junior Financing Documentation without the consent of the Administrative Agent (which consent shall not be unreasonably withheld).

Section 6.14. Fixed Charge Coverage Ratio.  If with respect to any period of four consecutive fiscal quarters ending on or after March 31, 2008, the Fixed Charge Coverage Ratio calculated as of the end of such four-quarter period is less than 1.10 to 1:00 (an FCC Period), permit to exist a period of five (5) consecutive Business Days during the fiscal quarter immediately following such FCC Period during which Total Excess Availability on each such Business Day is less than $200,000,000 unless on each Business Day during such five (5) Business Day period both (x) Total Collateral Availability is greater than or equal to $275,000,000 and (y) Total Excess Availability is greater than or equal to $150,000,000.

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Section 6.15.  Securitization Transactions. Enter into a Securitization  Transaction  other than the 2005 Securitization Facility, the 2007 Securitization Facility, or any other Securitization Facility which is a substantially similar replacement securitization facility therefor; provided that a Restricted Party may sell to (i) a Subsidiary which is a special purpose entity formed solely to facilitate a sale to a third party or (ii) any other Person which is not a Restricted Party accounts receivable which are elected to be excluded from any such Securitization Facility pursuant to the terms thereof and subject to the limitations imposed thereby (as in effect on the Effective Date with respect to the 2005 Securitization Facility and the 2007 Securitization Facility) (Excluded Receivables), whether or not such sales constitute a Securitization Transaction (Excluded Obligor Sales); provided further that each Excluded Obligor Sale shall be made without recourse except to the extent that a Restricted Party may be liable for the representations, warranties and covenants made in connection with such Excluded Obligor Sale.


ARTICLE 7.
Events of Default

Section 7.01.  Events of Default. Any of the following shall constitute an event of default (Events of Default):

(a)          Non-Payment.  Any Loan Party fails to pay Article 41 when and as required to be paid herein, any amount of principal of any Loan, or Article 42 within five (5) Business Days after the same becomes due, any interest on any Loan or any other amount payable hereunder or with respect to any other Loan Document; or

(b)          Specific Covenants.  Article 43 Any Borrower fails to perform or observe any term, covenant or agreement contained in Section 5.01(d)(i), Section 5.02, Section 5.12 or Article 6; or

(c)          Other Defaults.  Any Loan Party fails to perform or observe any other covenant or agreement (not specified in Section 7.01(a) or (b) above) contained in any Loan Document on its part to be performed or observed and such failure continues for thirty (30) days, or solely with respect to a failure to comply with Section 5.01(a), (b) or (c) ten (10) Business Days, after notice thereof by the Administrative Agent to the Borrowers Agent; or

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(d)          Representations and Warranties.  Any representation, warranty, certification or statement of fact made or deemed made by or on behalf of any Loan Party herein, in any other Loan Document, or in any document required to be delivered in connection herewith or therewith  (or any certification by a Principal Financial Officer or the Borrowers Agent expressly contemplated by this Agreement) shall be incorrect or misleading in any material respect when made or deemed made; or

(e)          Cross-Default.  Any Loan Party or any Restricted Subsidiary Article 44 fails to make any payment beyond the applicable grace period with respect thereto, if any (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise) in respect of any Indebtedness (other than Indebtedness hereunder) having an aggregate principal amount of not less than the Threshold Amount, or Article 45 fails to observe or perform any other agreement or condition relating to any such Indebtedness of not less than the Threshold Amount (any such Indebtedness, Threshold Indebtedness), or any other event occurs (other than, with respect to Indebtedness consisting of Swap Contracts, termination events or equivalent events pursuant to the terms of such Swap Contracts), the effect of which default or other event is to cause, or to permit the holder or holders of such Indebtedness (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause, with the giving of notice if required, such Indebtedness to become due or to be repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an offer to repurchase, prepay, defease or redeem such Indebtedness to be made, prior to its Stated Maturity; provided that this clause (e)(ii) shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness, if such sale or transfer is permitted hereunder and under the documents providing for such Indebtedness; provided further that such failure is unremedied and is not waived by the holders of such Indebtedness; or a Receivables Termination Notice shall have been delivered under (and as defined in) the Intercreditor Agreement; or

(f)          Insolvency Proceedings, Etc.  Any of the Company, any Loan Party or any Material Subsidiary to the fullest extent permitted under applicable mandatory provisions of law institutes or consents to the institution of any proceeding under any Debtor Relief Law or files for the opening of insolvency proceedings or a third person files for the opening of insolvency proceedings, or makes an assignment for the benefit of creditors; or applies for or consents to the appointment of any receiver, trustee (not being a custodian), custodian, conservator, liquidator, rehabilitator, administrator, administrative receiver or similar officer for it or for all or any material part of its property under any applicable Debtor Relief Laws; or any receiver, trustee, custodian, conservator, liquidator, rehabilitator, administrator, administrative receiver or similar officer is appointed without the application or consent of such Person and the appointment continues undischarged or unstayed for sixty (60) calendar days; or any proceeding under any Debtor Relief Law relating to any such Person or to all or any material part of its property is instituted without the consent of such Person and continues undismissed or unstayed for sixty (60) calendar days, or an order for relief is entered in any such proceeding; or

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(g)          Inability to Pay Debts; Attachment.  Article 46 Any of the Company, any Loan Party or any Material Subsidiary becomes unable or admits in writing its inability or fails generally to pay its debts in excess of the Threshold Amount as they become due, or Article 47 any writ or warrant of attachment or execution or similar process is issued or levied against all or any material part of the property of the Loan Parties and the Restricted Subsidiaries taken as a whole, and is not released, vacated or fully bonded within sixty (60) days after its issue or levy; or

(h)          Judgments.  There is entered against any Loan Party or any Restricted Subsidiary one or more final judgments or orders for the payment of money in an aggregate amount exceeding the Threshold Amount (to the extent not covered by independent third-party insurance as to which the insurer has been notified of such judgments or orders and has not denied  coverage) and such judgment or order shall not have been satisfied, vacated, discharged or stayed or bonded pending an appeal for a period of sixty (60) consecutive days; or

(i)          Invalidity of Loan Documents.  Any material portion of any material Loan Document, at any time after its execution and delivery and for any reason other than as expressly permitted hereunder or thereunder or as a result of acts or omissions by the Administrative Agent or Collateral Agent or any Lender or the satisfaction in full of all the Obligations, ceases to be in full force and effect; or any Loan Party contests in writing the validity or enforceability of any provision of any Loan Document or the validity or priority of a Lien as required by the Collateral Documents on a material portion of the Collateral; or any Loan Party denies in writing that it has any or further liability or obligation under any Loan Document (other than as a result of repayment in full of the payment Obligations and termination of the Total Commitments), or purports in writing to revoke or rescind any Loan Document; or it becomes unlawful for any Loan Party to perform any of its Obligations under the Loan Documents; or

(j)          Change of Control.  There occurs or shall exist any Change of Control; or

(k)          Collateral Documents.  Any Collateral Document or the Intercreditor Agreement after delivery thereof shall for any reason (other than pursuant to the terms hereof or thereof or solely as a result of acts or omissions of the Administrative Agent or any Lender) cease to create a valid and perfected Lien, with the priority required by the Collateral Documents and the Intercreditor Agreement on and security interest in any material portion of the Collateral, subject to Liens permitted under Section 6.01, except to the extent that any such loss of perfection or priority results from the failure of the Administrative Agent or the Collateral Agent to Article 48 maintain possession of certificates actually delivered to it representing securities pledged under the Collateral Documents or Article 49 file Uniform Commercial Code continuation statements; or

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(l)          ERISA.  An ERISA Event occurs which, together with all other ERISA Events that have occurred, has resulted or could reasonably be expected to result in a Material Adverse Effect; or

(m)          [Reserved]

(n)          Event of Termination under 2007 Securitization Facility. An Event of Termination shall exist under (and as defined in) the 2007 Securitization Facility;

(o)          Total Excess Availability.  Total Excess Availability shall for a period of two (2) consecutive Business Days be less than 100,000,000;

then, and in any such event (other than an event with respect to a Loan Party described in paragraph (f) above, and at any time thereafter during the continuance of such event, the Administrative Agent may, or at the written direction of the Required Lenders shall, by written or telecopied notice to the Borrowers, take any or all of the following actions, at the same or different times: (i) terminate forthwith the Commitments, (ii) demand cash collateral as provided in Section 2.06(k) and (iii) declare the Loans then outstanding to be forthwith due and payable, whereupon the principal of the Loans so declared due and payable, together with accrued interest and any unpaid accrued Fees and all other liabilities of the Borrowers accrued hereunder, shall become forthwith due and payable both as to principal and interest, without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived by the Borrowers, anything contained herein to the contrary notwithstanding; provided, however, that, in the event of a default with respect to a Loan Party described in paragraph (f) above, the Commitments shall automatically terminate, the deposit of cash collateral as provided in Section 2.06(k) shall automatically be required and the principal of the Loans then outstanding, together with accrued interest thereon and any unpaid accrued Fees and all other liabilities of the Borrowers accrued hereunder, shall automatically become due and payable, without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived by the Borrowers, anything contained herein to the contrary notwithstanding.

Notwithstanding the foregoing, Events of Default under Section 7.01(e), and Section 7.01(h) shall not apply with respect to Millennium Holdings LLC or any Person that is a Subsidiary of Millennium Holdings LLC as of the Effective Date (collectively, the Millennium Holdings Group), so long as none of the foregoing is a Borrower hereunder, if, at the time of determination, (x) the event that would otherwise give rise to such an Event of Default is excluded from the corresponding provisions in all other Threshold Indebtedness or would otherwise not give rise to an event of default thereunder in accordance with the terms of such Threshold Indebtedness and (y) the Millennium Holdings Group, taken as a whole, is not a Material Subsidiary of the Company.

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ARTICLE 8
Administrative Agent

Each of the Lenders and Fronting Banks irrevocably authorizes the Administrative Agent to take such action on its behalf and to exercise such powers under the Loan Documents as are specifically delegated to the Administrative Agent by the terms thereof together with such powers as are reasonably incidental thereto.  The Administrative Agent may perform any and all its duties and exercise its rights and powers by or through any one or more sub-agents selected and appointed by such Administrative Agent.  Each of the Administrative Agent and any such sub-agent may perform any and all its duties and exercise its rights and powers through Affiliates or its or its Affiliates employees.  The exculpatory provisions of the following paragraphs shall apply to any such sub-agent, to the Affiliates of the Administrative Agent and any such sub-agent and to the directors, officers and employees of the Administrative Agent, any such sub-agent and their respective Affiliates.

The Administrative Agent is hereby expressly authorized and directed by the Lenders to the extent provided in this Agreement, without hereby limiting any implied authority, (a) to receive on behalf of the Lenders all payments of principal of and interest on the Loans and all other amounts due to the Lenders under the Loan Documents, and promptly to distribute to each Lender its proper share of each payment so received; (b) to give notice on behalf of each of the Lenders to the Borrowers of any Event of Default specified in this Agreement of which the Administrative Agent has actual knowledge acquired in connection with its agency hereunder; and (c) to distribute to each Lender copies of all notices, financial statements and other materials delivered by the Borrowers pursuant to the Loan Documents as received by the Administrative Agent.

Neither the Administrative Agent nor any of their directors, officers, employees or agents shall be liable as such for any action taken or omitted to be taken by it or them under the Loan Documents or in connection therewith (a) at the request or with the approval of the Required Lenders (or, if otherwise specifically required hereunder, the consent of all the Lenders) or (b) in the absence of its or their own bad faith, gross negligence or willful misconduct.  Each Lender acknowledges that it has decided to enter into this Agreement and to extend the Loans hereunder based on its own analysis of the creditworthiness of the Borrowers and agrees that the Administrative Agent shall bear no responsibility for such creditworthiness.

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The Administrative Agent shall not be responsible in any manner to any of the Lenders for the effectiveness, enforceability, genuineness, validity or due execution of the Loan Documents or any other agreements or certificates, requests, financial statements, notices or opinions of counsel or for any recitals, statements, warranties or representations contained in the Loan Documents or in any such instrument or be under any obligation to ascertain or inquire as to the performance or observance of any of the terms, provisions, covenants, conditions, agreements or obligations of the Loan Documents or any other agreements on the part of any Loan Party and, without limiting the generality of the foregoing, the Administrative Agent shall, in the absence of knowledge to the contrary, be entitled to accept any certificate furnished pursuant to any Loan Document as conclusive evidence of the facts stated therein and shall be entitled to rely on any note, notice, consent, certificate, affidavit, letter, telegram, teletype or telecopy message, statement, order or other document which it reasonably believes to be genuine and correct and to have been signed or sent by the proper Person or Persons.  It is understood and agreed that the Administrative Agent may exercise its rights and powers under other agreements and instruments to which it is or may be a party and engage in other transactions with Lyondell or any Subsidiary or other Affiliate as though it were not the agent of the Lenders hereunder.

The Administrative Agent may consult with legal counsel selected by it in connection with matters arising under the Loan Documents and any action taken or suffered in good faith by it in accordance with the opinion of such counsel shall be full justification and protection to it.  The Administrative Agent may exercise any of its powers and rights and perform any duty under the Loan Documents through agents or attorneys.

The Lenders shall ratably, in accordance with their Credit Exposures at the time of demand for indemnification hereunder, indemnify the Administrative Agent, in its capacity as agent on behalf of the Lenders (to the extent not reimbursed by the Borrowers pursuant to the terms hereof and without limiting the obligations of the Borrowers to do so) against any cost, expense (including reasonable counsel fees and disbursements), claim, demand, action, loss or liability (except such as results from such Administrative Agents gross negligence or willful misconduct) that such Administrative Agent may suffer or incur in connection with this Agreement or any action taken or omitted by it under the Loan Documents.

Subject to the appointment and acceptance of a successor Administrative Agent as provided below, the Administrative Agent may resign at any time by notifying the Lenders, the Fronting Banks and the Borrowers.  Upon any such resignation, the Required Lenders shall have the right to appoint a successor Administrative Agent with the consent of the Borrowers, such consent not to be unreasonably withheld.  If no successor Administrative Agent shall have been so appointed by the Required Lenders and shall have accepted such appointment within thirty (30) days after the retiring Administrative Agent gives notice of resignation, then the retiring Administrative Agent may, on behalf of the Lenders, appoint a successor Administrative Agent which shall be a bank having an office (or an Affiliate with an office) in New York, New York, with a combined capital and surplus of at least $500,000,000.  Upon the acceptance of any appointment as Administrative Agent hereunder by a successor bank, such successor shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder.  After any Administrative Agents resignation hereunder, the provisions of this Article shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as Administrative Agent.

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The Lenders hereby acknowledge that the Administrative Agent shall not be under any duty to take any discretionary action permitted to be taken by it pursuant to the provisions of this Agreement unless it shall be requested in writing to do so by the Required Lenders or, where required, all the Lenders.

No Agent other than the Administrative Agent shall have any responsibility, obligation or liability whatsoever under the Loan Documents in such capacity (other than as set forth in Section 10.14).


ARTICLE 9
The Obligors

Section 9.01.  Appointment and Authorization of Borrowers Agent.  Each of the Borrowers irrevocably appoints and authorizes the Borrowers Agent, as agent on its behalf, to exercise in its discretion all of the rights and powers of the Borrowers or any of them under the Loan Documents.  Each of the Borrowers irrevocably agrees that the Agents and the Lenders may conclusively rely on the authority of the Borrowers Agent in the exercise of such rights and powers.

Section 9.02.  Joint and Several Obligations.  The obligations of the Borrowers under the Loan Documents shall be joint and several.  The Agents and the Lenders may enforce against any one or more Borrowers the obligations of the Borrowers to make the payments due under the Loan Documents, and each Borrower shall be responsible to the Agents and the Lenders for the full amount of such payments due.  The obligations of each of the Borrowers under the Loan Documents shall be unconditional and absolute and, without limiting the generality of the foregoing, shall not be released, discharged or otherwise affected by:

(i)            any extension, renewal, settlement, compromise, waiver or release in respect of any obligation of any other Loan Party under any Loan Documents, by operation of law or otherwise;

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(ii)            any release, impairment, non-perfection or invalidity of any direct or indirect security for any obligation of any other Loan Party under any Loan Documents;

(iii)            any change in the existence, structure or ownership of any other Loan Party;

(iv)            any insolvency, bankruptcy, reorganization or other similar proceeding affecting any other Loan Party or its assets or any resulting release or discharge of any obligation of any other Loan Party under any Loan Documents;

(v)            any invalidity or unenforceability relating to or against any other Loan Party for any reason of any Loan Documents, or any provision of applicable law or regulation purporting to prohibit the payment by any other Loan Party of the principal of or interest on any Note or any other amount payable by any other Loan Party under any Loan Documents; or

(vi)            any other act or omission to act or delay of any kind by any other Loan Party or any other corporation or Person or any other circumstance whatsoever which might, but for the provisions of this paragraph, constitute a legal or equitable discharge of the Borrowers obligations hereunder.

Section 9.03.  Contribution; Subordination.  Each Borrower (a Contributing Borrower) agrees that when a payment shall be made by any other Borrower under the Loan Documents upon enforcement thereof (such other Borrower, the Claiming Borrower), the Contributing Borrower shall indemnify the Claiming Borrower in an amount equal to the amount of such payment multiplied by a fraction of which the numerator shall be the net worth of the Contributing Borrower on December 31, 2006 (or, with respect to any Borrower becoming a party hereto pursuant to Section 9.04, the date such Contributing Borrower became a Borrower) and the denominator shall be the aggregate net worth of all Borrowers on December 31, 2006 (or, in the case of any Borrower becoming a party hereto pursuant to Section 9.04, the date such Borrower became a Borrower).  All rights of the Borrowers under this Section and any other rights of indemnity, contribution or subrogation under applicable law or otherwise shall be fully subordinated to the indefeasible payment in full in cash of all amounts payable by the Borrowers pursuant to the Loan Documents.

Section 9.04.  Limitation on Obligations of  Borrowers.  The obligations of each Borrower  under this Agreement shall be limited to an aggregate amount equal to the largest amount that would not render its obligations hereunder subject to avoidance under Section 548 of the United States Bankruptcy Code or any comparable provisions of applicable law.

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ARTICLE 10
Miscellaneous

Section 10.01.  Notices.  Except as specifically provided elsewhere herein, notices and other communications provided for herein shall be in writing and shall be delivered or mailed (or, if by telecopy or electronic communication equipment of the sending party, delivered by such equipment) addressed:

(a)          If to any or all of the Borrowers, in all cases to the Borrowers Agent at:

Lyondell Chemicals Company
1221 McKinney Street, Suite 700
Houston, Texas 77010
Telecopy:  713-652-4598
Attention of Treasury Department

(b)          If to the Administrative Agent, in all cases to:

Citibank, N.A.
388 Greenwich Street
20th Floor
New York, New York  10013
Telecopy:  212-816-2613
Attention of David Jaffe

(c)          If to any Lender, in all cases to it at its address as set forth in its Administrative Questionnaire or as it shall subsequently specify in writing to the Borrowers and the Administrative Agent.

(d)          If to the Swingline Lender or Fronting Bank, to it at:

Citibank, N.A.
388 Greenwich Street
20th Floor
New York, New York  10013
Telecopy:  212-816-2613
Attention of David Jaffe

All notices and other communications given to any party hereto in accordance with the provisions of this Agreement (other than telephonic notices permitted hereunder) shall be deemed to have been given on the date of receipt if delivered by hand or overnight courier service or sent by telecopy or electronic communication equipment of the sender, or on the date five (5) Business Days after dispatch by certified or registered mail if mailed, in each case delivered, sent or mailed (properly addressed) to such party as provided in this Section 10.01 or in accordance with the latest unrevoked direction from such party given in accordance with this Section 10.01.

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Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communications pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices pursuant to Article 2 unless otherwise agreed by the Administrative Agent and the applicable Lender.  The Administrative Agent or Lyondell may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.

Section 10.02.  No Waivers; Amendments.  (a) No failure or delay of any Fronting Bank, any Agent or any Lender in exercising any power or right under any Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power.  The rights and remedies of the Agents, the Fronting Banks and the Lenders under the Loan Documents are cumulative and not exclusive of any rights or remedies which they would otherwise have.  Except as may be otherwise expressly provided herein, no waiver of any provision of this Agreement nor any consent to any departure by any Borrower therefrom shall in any event be effective unless the same shall be in writing and signed by the Required Lenders (unless otherwise specified herein), and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given.  No notice or demand on the Borrowers in any case shall entitle the Borrowers to any other or further notice or demand in similar or other circumstances.  Without limiting the generality of the foregoing, the making of a Loan or issuance of a Letter of Credit shall not be construed as a waiver of any Default, regardless of whether any Agent, any Lender or any Fronting Bank may have had notice or knowledge of such Default at the time.

(b)          Neither this Agreement nor any Exhibit or Schedule hereto may be amended or modified except pursuant to an agreement or agreements in writing entered into by the Borrowers Agent on behalf of the Borrowers and by the Required Lenders; provided, however, that no such agreement shall (i) increase the Commitment of any Lender, or subject any Lender to any additional obligation, without the prior written consent of such Lender, (ii) postpone any scheduled date of payment of the principal amount of any Loan or LC Disbursement, or any interest thereon, or any Fee payable hereunder, or reduce the amount of, waive or excuse any such payment, or reduce the Applicable Margin, or postpone the scheduled date of expiration of any Commitment, without the written consent of each Lender affected thereby, (iii) amend or modify or otherwise affect the rights or duties of any Agent, any Fronting Bank or the Swingline Lender without its prior written consent, (iv) amend or modify the definition of Required Lenders, or otherwise change the percentage of Commitments or Credit Exposures, or the number of Lenders, which shall be required for the Lenders or any of them to take action hereunder, or increase the amount of the Total Commitment, or amend or modify Section 2.17, this Section 10.02 or Section 10.07, in each case without the prior written consent of each Lender or (v) amend or modify the definitions of Available Inventory, Collateral Availability, Eligible Inventory, Excess Availability, Ineligible Inventory, SF Excess Availability, Total Collateral Availability or Total Excess Availability, or amend, or waive a Default arising under, Section 7.01(n), in each case without the prior written consent of Lenders having aggregate Credit Exposures representing at least 662/3% of the sum of all Credit Exposures at such time; provided that any increase in any percentage set forth in the definition of Available Inventory, or any amendment of the definition of Available Inventory that would have the effect of so increasing any such percentage, shall require the prior written consent of each Lender.  Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder, except that the Commitment of such Defaulting Lender may not be increased or decreased without the consent of such Defaulting Lender (it being understood that a waiver of any condition precedent set forth in Article IV or waiver of any Default, mandatory prepayment or mandatory reduction of the Commitments shall not constitute an extension or increase of any Commitments).

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(c)          Any provision of the Collateral Documents may be amended or waived if, but only if, such amendment or waiver is in writing and is signed by each Loan Party thereto whose consent to such amendment or waiver is required by the terms of such Collateral Document and by and the Administrative Agent with the consent of the Required Lenders; provided that no such amendment or waiver shall, unless signed by all the Lenders, effect or permit a release of, or the consensual subordination of the Liens of the Collateral Documents on, all or substantially all of the Collateral or release any Loan Party from its obligations under the Loan Documents.  Notwithstanding the foregoing, Collateral (but not the proceeds thereof) shall be released from the Lien of the Collateral Documents, and a Loan Party (other than Lyondell) shall be released from such obligations, from time to time as necessary to effect any sale of assets, including the sale of a Subsidiary Loan Party, permitted by the Loan Documents, and the Administrative Agent shall execute and deliver all release documents reasonably requested to evidence such release (without the requirement of consent from any Lender)

(d)          If, in connection with any proposed amendment, modification, waiver or termination requiring the consent of all affected Lenders, the consent of the Required Lenders is obtained but the consent of other Lenders whose consent is required is not obtained (any such Lender whose consent is not obtained being referred to as a Non-Consenting Lender), then, so long as the Lender that is the same entity as the Administrative Agent is not a Non-Consenting Lender, at the Borrowers request, the Administrative Agent in its sole discretion (but shall have no obligation) or an Eligible Assignee with the Administrative Agent's consent (not to be unreasonably withheld) to purchase from such Non-Consenting Lender, and such Non-Consenting Lender agrees that it shall, upon the Administrative Agents request, sell and assign to the Lender that is the same entity as the Administrative Agent or to such Eligible Assignee, all of the Commitment and Loans of such Non-Consenting Lender for an amount equal to the outstanding principal amount of the Loans by the Non-Consenting Lender plus all accrued interest and fees with respect thereto through the date of sale less unamortized upfront fees, such purchase and sale to be consummated pursuant to an executed Assignment and Acceptance.

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(e)          It is understood that the operation of Section 2.21 in accordance with its terms is not an amendment subject to this Section 10.02.

(f)          Notwithstanding the foregoing, any Loan Document may be amended by the Administrative Agent and the Borrowers to correct any typographical error or similar defect.

Section 10.03.  Payments.  Except as otherwise provided in this Agreement, all payments to be made by the Borrowers to the Lenders hereunder shall be made to the Administrative Agent in immediately available funds at Citibank, N.A., 388 Greenwich Street, New York, New York  10013, Attention: David Jaffe (Account Number 3685-2248, ABA 021000089 and Reference: LyondellBasell Industries) not later than 12:30 p.m., New York City time, on the date due.  Funds received after the applicable time shall be deemed to have been received by the Lenders on the following Business Day.

Unless otherwise provided herein, if any payment of principal, interest or any other amount payable by the Borrowers hereunder shall fall due on a day that is not a Business Day, then such due date shall be extended to the next succeeding Business Day, and such extension of time shall be included in computing interest, if any, in connection with such payment.

Upon receipt of any payment for the accounts of the Lenders hereunder, the Administrative Agent will promptly distribute to each Lender its share of such payment.

Section 10.04.  Governing Law; Submission to Jurisdiction.  (b) THIS AGREEMENT SHALL BE CONSTRUED AND INTERPRETED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

(b)          To the extent it may effectively do so under applicable law, each Borrower (i) irrevocably submits to the nonexclusive jurisdiction of any New York State or Federal court sitting in the Borough of Manhattan, The City of New York, over any suit, action or proceeding arising out of or relating to any Loan Document or any other document contemplated thereby, and (ii) irrevocably waives and agrees not to assert, by way of motion, as a defense or otherwise, any claim that it is not subject to the jurisdiction of any such court, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.

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(c)          Each Borrower agrees, to the fullest extent it may effectively do so under applicable law, that a judgment in any suit, action or proceeding of the nature referred to in paragraph (b) above brought in any such court shall be conclusive and binding upon such Borrower and may be enforced in the courts of the United States of America or the State of New York (or any other courts to the jurisdiction of which such Borrower is or may be subject) by a suit upon such judgment.

(d)          To the extent it may effectively do so under applicable law, each Borrower consents to process being served in any suit, action or proceeding of the nature referred to in paragraph (b) by mailing a copy thereof by registered or certified mail, postage prepaid, return receipt requested, to the address of such Borrower set forth or referred to in Section 10.01.  To the extent it may effectively do so under applicable law, each Borrower agrees that such service (iii) shall be deemed in every respect effective service of process upon such Borrower in any such suit, action or proceeding and (iv) shall be taken and held to be valid personal service upon and personal delivery to such Borrower.

(e)          Nothing in this Section 10.04 shall affect the right of any Agent or Lender to serve process in any manner permitted by law, or limit any right that any Agent or Lender may have to bring proceedings against any Borrower in the courts of any jurisdiction or to enforce in any lawful manner a judgment obtained in one jurisdiction in any other jurisdiction.

Section 10.05.  Expenses; Documentary Taxes; Indemnity.  i) The Borrowers shall pay (v) all reasonable out of pocket expenses incurred by the Administrative Agent, the Fronting Banks and their respective Affiliates, including the reasonable fees, charges and disbursements of Davis Polk & Wardwell, special counsel for the Agents and any local counsel retained by them, in connection with the syndication of the credit facilities provided for herein, the preparation and administration of the Loan Documents or any amendments, modifications or waivers of the provisions thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (vi) all reasonable out of pocket expenses incurred by the Fronting Banks in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (vii) all reasonable out of pocket expenses incurred by the Administrative Agent, the Fronting Banks or any Lender, including the reasonable fees, charges and disbursements of any counsel for the Administrative Agent, the Fronting Banks or any Lender, in connection with the enforcement or protection of its rights in connection with any Loan Document, including its rights under this Section, or in connection with the Loans made or Letters of Credit issued hereunder, including all such out of pocket expenses incurred during any workout or restructuring in respect of such Loans or Letters of Credit. It is understood that reimbursement of the Administrative Agent in respect of matters covered by Section 5.14(b)(iii) of this Agreement is subject to the applicable limitations specified therein.

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(b)          The Borrowers shall indemnify each Agent, each Fronting Bank and each Lender, and each Related Party of any of the foregoing Persons (each such Person being called an Indemnitee) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses, including the fees, charges and disbursements of any counsel for any Indemnitee, incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of any actual or threatened claim, litigation, investigation or proceeding, whether based on contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto, relating to (viii) the execution or delivery of the Loan Documents or any agreement or instrument contemplated thereby, the performance by the parties hereto of their respective obligations under the Loan Documents or the consummation of the transactions contemplated thereby, (ix) any Loan or Letter of Credit or the use of the proceeds therefrom (including any refusal by a Fronting Bank to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), or (x) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by Lyondell or any of its Subsidiaries, or any Environmental Liability related in any way to Lyondell or any of its Subsidiaries; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses resulted from the gross negligence or willful misconduct of such Indemnitee. Without limiting the generality of the foregoing, each Borrower hereby waives all rights for contribution or any other rights of recovery with respect to liabilities, losses, damages, costs and expenses arising under or related to Environmental and Safety Laws that it might have by statute or otherwise against any Indemnitee.  No Indemnitee shall be liable for any damages arising from the use by others of any information or other materials obtained through IntraLinks or other similar information transmission systems in connection with this Agreement, nor shall any Indemnitee or the Borrowers or any Subsidiary have any liability for any special, punitive, indirect or consequential damages relating to this Agreement or any other Loan Document or arising out of its activities in connection herewith or therewith (whether before or after the Effective Date).

(c)          The provisions of this Section 10.05 shall remain operative and in full force and effect regardless of the expiration of the term of this Agreement, the consummation of the transactions contemplated hereby, the repayment of the Loans, the invalidity or unenforceability of any term or provision of this Agreement or any other Loan Document, or any investigation made by or on behalf of the Lenders or the Administrative Agent.  All amounts due under this Section 10.05 shall be payable on written demand therefor.

123

Section 10.06.  Survival of Agreements, Representations and Warranties, Etc.  All warranties, representations and covenants made by any Loan Party herein or in any certificate or other instrument delivered by any Loan Party or on its behalf in connection with the Loan Documents shall be considered to have been relied upon by the Lenders and shall survive the making of the Loans and issuance of any Letters of Credit herein contemplated regardless of any investigation made by the Lenders or the Agents or on their behalf and shall continue in full force and effect so long as any amount due or to become due hereunder is outstanding and unpaid.  The right of each Lender to receive payments pursuant to Sections 2.14, 2.16 and 2.19 shall survive the termination of this Agreement and the repayment of the Loans.

Section 10.07.  Successors and Assigns.  (c) This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns (including any Affiliate of a Fronting Bank that issues any Letter of Credit).  No Borrower may assign or transfer any of its rights or obligations hereunder without the prior written consent of all of the Lenders (in the case of Lyondell) or the Administrative Agent (in the case of any other Borrower).

(b)          Each Lender may assign all or a portion of its interests, rights and obligations under this Agreement (including all or a portion of its Commitment (if still in existence) and the Loans at the time owing to it); provided, however, that (i) except in the case of an assignment by a Lender to an Affiliate of such Lender, to another Lender or to a Related Fund of a Lender, the Borrowers and the Administrative Agent (and, in the case of an assignment of all or a portion of a Commitment or any Lenders obligations in respect of its LC Exposure or Swingline Exposure, regardless of the identity of the assignee, each Fronting Bank and the Swingline Lender) must consent to such assignment in writing (which consent may not be unreasonably withheld or delayed), (ii) each such assignment shall be of a constant, and not a varying, percentage of all the assigning Lenders rights and obligations under this Agreement as a Lender, (iii) after giving effect to any such assignment, (A) the aggregate amount of the Credit Exposure of the assigning Lender (together with its Related Funds and its Affiliates) shall be either (x) $0 or (y) $10,000,000 or more and (B) the aggregate amount of the Credit Exposure of the assignee Lender (together with its Related Funds and its Affiliates) shall be in the case of a Lender, $10,000,000 or more (or, in any case, any other smaller amount agreed upon by the Administrative Agent and the Borrowers); and (iv) the parties to each such assignment shall execute and deliver to the Administrative Agent for its acceptance and recording in the Register an Assignment and Acceptance, together with (except in the case of assignment to another Lender or an Affiliate or a Related Fund of a Lender) a processing and recordation fee of $3,500 (provided that only one such fee shall be required in the case of multiple assignments by a Lender on a single day to funds managed or advised by the same investment advisor if such funds are not Lenders hereunder); and provided, further, that any consent of the Borrowers otherwise required under this paragraph shall not be required if an Event of Default has occurred and is continuing.  The Credit Exposures held by or assigned to or by any Person and its Related Funds shall be aggregated for purposes of determining compliance with the amount thresholds specified in this Section.  Upon such execution, delivery, acceptance and recording, from and after the effective date specified in each Assignment and Acceptance, which effective date shall be (unless waived by the Administrative Agent) at least five (5) Business Days after the execution thereof, (A) the assignee thereunder shall be a party hereto, and, to the extent of the interest assigned by such Assignment and Acceptance, have the rights and obligations of a Lender under this Agreement, and (B) the assignor thereunder shall, to the extent of the interest assigned by such Assignment and Acceptance, be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all or the remaining portion of the assignors rights and obligations under this Agreement, the assignor shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.14, 2.16 and 10.05 as well as to any interest and Unused Commitment Fee accrued for its account hereunder and not yet paid).

124

(c)          By executing and delivering an Assignment and Acceptance, the assignor and the assignee thereunder shall be deemed to confirm to and agree with each other and the Borrowers as follows: (v) such assignor warrants that it is the legal and beneficial owner of the interest being assigned free and clear of any adverse claim; (vi) except as set forth in clause (i) above, the assignor makes no other representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement or any other instrument or document furnished pursuant hereto or thereto, or the execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement, or any other instrument or document furnished pursuant hereto or thereto, or the financial condition of the Borrowers or the performance or observance by the Borrowers of any of their Obligations under this Agreement or any other instrument or document furnished pursuant hereto or thereto; (vii) such assignee represents and warrants that it is legally authorized to enter into such Assignment and Acceptance; (viii) such assignee confirms that it has received a copy of this Agreement, together with copies of the financial statements described in Section 5.01 or the most recent financial statements delivered pursuant to Section 5.01, as applicable, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance; (ix) such assignee will independently and without reliance upon the assignor and based on such documents and information as it shall deem appropriate at the time continue to make its own credit decisions in taking or not taking action under this Agreement; (x) such assignee appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers under the Loan Documents, as are delegated to such Agent by the terms thereof, together with such powers as are reasonably incidental thereto; and (xi) such assignee agrees that it will, to the extent of the interest assigned to it, perform in accordance with their terms all the obligations which by the terms of this Agreement are required to be performed by the Lenders.

125

(d)          The Borrowers agree that each Lender may without notice to or the consent of the Borrowers, the Administrative Agent, any Fronting Bank or the Swingline Lender sell participations to one or more banks or other entities in all or a portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of its Commitment and the same portion of the Revolving Loans owing to it) and the Borrowers agree that any purchaser of a participation in such Loans so acquired may exercise any and all rights of bankers lien, setoff, counterclaim or otherwise with respect to any and all moneys owing by the Borrowers to such purchaser as fully as if such purchaser were a Lender acquiring such Loans hereunder in the amount of such participation so long as the Borrower is notified of the participants participation hereunder and such participant complies with Section 10.08 as if it were a Lender prior to such exercise; provided, however, that (xii) such selling Lenders obligations under this Agreement shall remain unchanged, (xiii) such Lender shall remain solely responsible to the Borrowers for the performance of its obligations hereunder, (xiv) the participating lenders or other entities shall be entitled to the benefit of the cost protection provisions contained in Sections 2.14, 2.16 and 2.19 to the same extent as if they were such Lender (but the amount claimed by any participating lender or other entity shall not exceed the amount that could have been claimed by the Lender from which it acquired its participation) and (xv) the Borrowers, the Agents, the Fronting Banks and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lenders rights and obligations under this Agreement, and such Lender shall retain the sole right to enforce the obligations of the Borrowers relating to the Loans and to approve, without the consent of or consultation with any participant, any amendment, modification or waiver of any provision of this Agreement (other than amendments, modifications or waivers with respect to Fees payable hereunder or an increase in the amount of principal of or a decrease in the rate at which interest is payable on the Loans, or an extension of the dates fixed for payments of principal of or interest on the Loans or payments of Fees).  Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrowers, maintain a register on which it enters the name and address of each participant and the amounts of each participants participation (the Participant Register).  The entries in the Participant Register shall be conclusive, absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary.

126

(e)          Any Lender may, in connection with any assignment or participation or proposed assignment or participation pursuant to this Section 10.07, disclose to the assignee or participant or proposed assignee or participant any information relating to Lyondell and its Subsidiaries furnished to the Lenders (including pursuant to Section 5.08) by or on behalf of Lyondell and its Subsidiaries, as applicable; provided that, prior to any such disclosure, each such assignee or participant or proposed assignee or participant shall execute an agreement whereby such assignee or participant shall agree (subject to customary exceptions) to preserve the confidentiality of any confidential information relating to Lyondell and its any Subsidiary received from the Agents or Lenders.

(f)          The Administrative Agent, acting solely for this purpose as an agent of the Borrowers, shall maintain at one of its offices in The City of New York a copy of each Assignment and Acceptance delivered to it and a register for the recordation of the names and addresses of the Lenders and the Commitment (if any) of, and the principal amount of the Loans and LC Disbursements owing to, each Lender pursuant to the terms hereof (the Register), and no such Assignment and Acceptance shall be effective until so recorded.  The entries in the Register shall be conclusive in the absence of manifest error and the Borrowers, the Agents, the Fronting Banks and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement.  The Register shall be available for inspection by the Borrowers at any reasonable time and from time to time upon reasonable prior notice.  Upon its receipt of an executed Assignment and Acceptance, together with any Note subject to such assignment, and the payment of any processing and registration fee, the Administrative Agent shall (xvi) accept such Assignment and Acceptance, (xvii) record the information contained therein in the Register and (xviii) give prompt notice thereof to the parties thereto.

(g)          Any Lender may at any time pledge all or any portion of its rights under the Loan Documents to secure obligations of such Lender, without the consent of any party, without notice to any party and without payment of fees, in accordance with applicable law, including without limitation any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge shall release any Lender from its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

127

(h)          Notwithstanding anything to the contrary contained herein, any Lender (a Granting Bank) may grant to a special purpose funding vehicle (an SPC) of such Granting Bank, identified as such in writing from time to time by the Granting Bank to the Administrative Agent and the Borrowers, the option to provide to the Borrowers all or any part of any Loan that such Granting Bank would otherwise be obligated to make to the Borrowers pursuant to Section 2.02, provided that (xix) nothing herein shall constitute a commitment to make any Loan by any SPC and (xx) if an SPC elects not to exercise such option or otherwise fails to provide all or any part of such Loan, the Granting Bank shall be obligated to make such Loan pursuant to the terms hereof.  The making of a Loan by an SPC hereunder shall be deemed to utilize the Commitments of all the Lenders to the same extent, and as if, such Loan were made by the Granting Bank.  Each party hereto hereby agrees that no SPC shall be liable for any payment under this Agreement for which a Lender would otherwise be liable, for so long as, and to the extent, the related Granting Bank makes such payment.  In furtherance of the foregoing, each party hereto hereby agrees that, prior to the date that is one (1) year and one (1) day after the payment in full of all outstanding senior indebtedness of any SPC, it will not institute against, or join any other Person in instituting against, such SPC any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or similar proceedings under the laws of the United States of America or any State thereof.  In addition, notwithstanding anything to the contrary contained in this Section 10.07, any SPC may assign all or a portion of its interests in any Loans to its Granting Bank or to any financial institutions providing liquidity and/or credit facilities to or for the account of such SPC to fund the Loans made by such SPC or to support the securities (if any) issued by such SPC to fund such Loans; provided, however, that except in the case of an assignment to a Granting Bank or a financial institution that is either an affiliate of such SPC or another Lender, the Administrative Agent and, unless an Event of Default has occurred and is continuing, the Borrowers must consent to such assignment in writing (which consent may not be unreasonably withheld). Each SPC shall execute an agreement whereby such SPC shall agree (subject to customary exceptions) to preserve the confidentiality of any confidential information relating to the Borrowers and their Affiliates received from the Agents or Lenders.

Section 10.08.  Right of Setoff.  (d) Upon the occurrence and during the continuation of any Event of Default each Lender is hereby authorized, in addition to any other right or remedy that any Lender may have by operation of law or otherwise, at any time and from time to time, without notice to the Borrowers except to the extent required by applicable law (any such notice being expressly waived by the Borrowers to the maximum extent possible under applicable law), and subject to any requirements or limitations imposed by applicable law, to exercise its bankers lien or right of setoff and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Lender or any of its Affiliates to or for the credit or the account of any Borrower against any and all the obligations of the Borrowers now or hereafter existing under any Loan Document, irrespective of whether or not such Lender or any of its Affiliates shall have made any demand under such Loan Agreement and although such obligations may be unmatured.

(b)          Each Lender agrees promptly to notify the Administrative Agent and the Borrowers after any such setoff and application; provided, however, that, to the extent permitted by applicable law, the failure to give any such notice shall not affect the validity of such setoff and application.

128

Section 10.09.  Severability.  In case any one or more of the provisions contained in the Loan Documents shall be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained therein shall not in any way be affected or impaired thereby.  The parties shall endeavor in good faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

Section 10.10.  Cover Page, Table of Contents and Section Headings.  The cover page, Table of Contents and Section headings used herein are for convenience of reference only, are not part of this Agreement and are not to affect the construction of or be taken into consideration in interpreting this Agreement.

Section 10.11.  Counterparts; Effectiveness.  This Agreement may be signed in any number of counterparts with the same effect as if the signatures thereon and hereon were upon the same instrument.  Delivery by telecopier, PDF or other electronic means of an executed counterpart of a signature page to this Agreement shall be effective as delivery of an original executed counterpart of this Agreement.  This Agreement shall become effective when copies hereof which, when taken together, bear the signatures of each of the parties hereto shall have been received by the Administrative Agent.

Section 10.12.  WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THE LOAN DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION

Section 10.13.  Entire Agreement.  This Agreement, the Collateral Documents, the agreements referred to in Section 2.07 and any promissory notes delivered pursuant hereto constitute the entire contract between the parties relative to the subject matter hereof.  Any previous agreement among the parties with respect to the subject matter hereof is superseded by the Loan Documents and such letter agreements, except to the extent expressly provided therein.  Nothing in the Loan Documents or such letter agreements or promissory notes, expressed or implied, is intended to confer upon any party other than the parties hereto and thereto and Indemnitees referred to in Section 10.05(b) any rights, remedies, obligations or liabilities under or by reason of the Loan Documents or such letter agreements or promissory notes.

129

Section 10.14.  Confidentiality.  Each of the Agents, each Fronting Bank, the Lenders and the SPCs (as defined in Section 10.07(h)) agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (e) to its and its Affiliates directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (f) to the extent required or requested by any regulatory authority, (g) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (h) to any other party to this Agreement, (i) in connection with the exercise of any remedies under any Loan Document or any suit, action or proceeding relating to any Loan Document or the enforcement of rights thereunder, (j) subject to obtaining a written agreement containing provisions substantially the same as those of this Section from the intended recipient of such Information, to any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement (including any assignee or any prospective assignee of an SPC of the type described in the last sentence of Section 10.07(h)), (k) with the consent of the Borrowers, (l) for purposes of Section 10.07(h) only, to any rating agency, (m) to the extent such Information (x) becomes publicly available other than as a result of a breach of this Section or (y) becomes available to any Fronting Bank or any Agent or Lender on a nonconfidential basis from a source other than the Borrowers or (n) to any direct or indirect contractual counterparty in any swap, hedge or similar agreement (or to such contractual counterpartys professional advisor) so long as the recipient of such Information agrees to be bound by the provisions of this Section.  For the purposes of this Section, Information means all information received from the Borrowers relating to the Borrowers and their Affiliates or their respective businesses, other than any such information that is available to any Fronting Bank or any Agent or Lender on a nonconfidential basis prior to disclosure by the Borrowers.  Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.  Notwithstanding anything herein to the contrary, Information shall not include, and each party hereto may disclose without limitation of any kind, any information with respect to the tax treatment and tax structure (in each case, within the meaning of Treasury Regulation Section 1.6011-4) of the transactions contemplated hereby and all materials of any kind (including opinions or other tax analyses) that are provided to such party relating to such tax treatment and tax structure.

Section 10.15.  Lender Action.  Each Lender agrees that it shall not take or institute any actions or proceedings, judicial or otherwise, for any right or remedy against any Loan Party or any other obligor under any of the Loan Documents (including the exercise of any right of setoff, rights on account of any bankers lien or similar claim or other rights of self-help), or institute any actions or proceedings, or otherwise commence any remedial procedures, with respect to any Collateral or any other property of any such Loan Party, without the prior written consent of the Administrative Agent.  The provision of this Section 10.15 are for the sole benefit of the Lenders and shall not afford any right to, or constitute a defense available to, any Loan Party.

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their duly authorized officers as of the day and year first above written.
 
 
LYONDELL CHEMICAL COMPANY
HOUSTON REFINING LP
EQUISTAR CHEMICALS, LP,
as Borrowers
   
 
By:
 /s/ Karen A. Twitchell 
   
Name:  Karen A. Twitchell
   
Title:    Authorized Representative

[Credit Agreement]
 
 
 
BASELL USA INC.,
as Borrower
   
 
By:
 /s/  Francesco Svelto
   
Name:  Francesco Svelto
   
Title:    Authorized Representative

[Credit Agreement]
 
 
CITIBANK, N.A.,
individually and as
Administrative Agent,
Collateral Agent and Fronting Bank
   
 
By:
 /s/ Mathew Paquin 
   
Name:  Mathew Paquin
   
Title:    Vice President

[Credit Agreement]
 
 
JPMORGAN CHASE BANK, N.A.,
as Fronting Bank
   
 
By:
 /s/ Stacey Haimes 
   
Name:  Stacey Haimes
   
Title:    Executive Director

[Credit Agreement]
 
 
CITIGROUP GLOBAL MARKETS INC.
   
 
By:
 /s/ Keith R. Geroing 
   
Name:  Keith R. Geroing
   
Title:    Director & Vice President

[Credit Agreement]
 
 
GOLDMAN SACHS CREDIT PARTNERS L.P.
   
 
By:
 /s/ Michael Marsh 
   
Name:  Michael Marsh
   
Title:    Vice President

[Credit Agreement]
 
 
MERRILL LYNCH CAPITAL CORPORATION
   
 
By:
 /s/ Anand Melvani 
   
Name:  Anand Melvani
   
Title:    VP

[Credit Agreement]
 
 
ABN AMRO BANK, N.V.
   
 
By:
 /s/ Erwin deJong                   /s/ Marko Kremer 
   
Name:  Erwin deJong    Marko Kremer
   
Title:    ED                               AD

[Credit Agreement]
 
UBS SECURITIES
Joint Lead Arrangers and Joint Bookrunner
   
 
By:
 /s/ Mary E. Evans 
   
Name:  Mary E. Evans
   
Title:    Associate Director
     
     
By:
 /s/ Irja R. Otsa
   
Name:  Irja R. Otsa
   
Title:    Associate Director
 
[Credit Agreement]
 
 
 
UBS LOAN FINANCE LLC
   
 
By:
 /s/ Mary E. Evans 
   
Name:  Mary E. Evans
   
Title:    Associate Director
     
     
 
By:
 /s/ Irja R. Otsa
   
Name:  Irja R. Otsa
   
Title:    Associate Director

[Credit Agreement]
 
Lloyds TSB Commerical Finance
   
By:
 /s/ Jeremy Harrison
   
Name:  Jeremy Harrison
   
Title:    ABL Director
     
    Address:  1251 Avenue of the Americas
                    39th Floor
                    New York, NY  10020
     
    Attention:  Jeremy Harrison 
     
    Telephone No.:  212 930 5025 
    Telecopier No.:  212 930 5098 
     
 
 
[Credit Agreement]
 
UPS CAPITAL CORPORATION
   
 
By:
 /s/ John P. Holloway
   
Name:  John P. Holloway
   
Title:    Director of Portfolio Management
 
 
 
[Credit Agreement]
 
SCHEDULE 2.01

LENDER'S COMMITMENTS

Lender
  
Commitment
Citigroup Global Markets Inc.
  
$200,000,000.00
Goldman Sachs Credit Partners L.P.
  
$200,000,000.00
Merrill Lynch Capital Corporation
  
$200,000,000.00
ABN AMRO Bank, N.V.
  
$200,000,000.00
UBS Loan Finance LLC
  
$200,000,000.00
Total Commitment
  
$1,000,000,000.00
 
 
 EX-4.6 10 lyo10k-032808ex46.htm SECURITY AGREEMENT DATED AS OF DECEMBER 20, 2007 lyo10k-022808ex46.htm
EXHIBIT 4.6

SECURITY AGREEMENT
 
dated as of December 20, 2007

among
 
LYONDELL CHEMICAL COMPANY
as Borrowers Agent
 
 
EQUISTAR CHEMICALS, LP
HOUSTON REFINING LP
BASELL USA INC.
 
THE OTHER LIEN GRANTORS FROM TIME TO TIME PARTY HERETO
 
as Lien Grantors
 
 
and
 
 
CITIBANK, N.A.,
as Administrative Agent
 
 
TABLE OF CONTENTS
 

 
Page
SECTION 1.  Definitions.
1
SECTION 2.  Grant of Transaction Liens
7
SECTION 3.  General Representations And Warranties
10
SECTION 4.  Further Assurances; General Covenants
11
SECTION 5.  Restricted Accounts.
13
SECTION 6.  Remedies upon Event of Default
16
SECTION 7.  Application of Proceeds
16
SECTION 8.  Fees and Expenses; Indemnification
18
SECTION 9.  Authority to Administer Collateral
19
SECTION 10.  Limitation on Duty in Respect of Collateral
20
SECTION 11.  General Provisions Concerning the Administrative Agent.
20
SECTION 12.  Termination of Transaction Liens; Release of Collateral.
21
SECTION 13.  Additional Lien Grantors
22
SECTION 14.  Notices
22
SECTION 15.  No Implied Waivers; Remedies Not Exclusive
22
SECTION 16.  Successors and Assigns
23
SECTION 17.  Amendments and Waivers
23
SECTION 18.  Choice of Law
23
SECTION 19.  Intercreditor Agreement
23


EXHIBITS:
  
Exhibit A
Perfection Certificate

 
SECURITY AGREEMENT
 
AGREEMENT (this Agreement) dated as of December 20, 2007 among Lyondell Chemical Company, a Delaware corporation, as Borrowers Agent; Equistar Chemicals, LP, a Delaware limited partnership, Houston Refining LP, a Delaware limited partnership, Basell USA, Inc., a Delaware corporation, and any other Lien Grantors party hereto; and Citibank, N.A. (Citibank), as Administrative Agent.
 
WHEREAS, the Borrowers (as this and other capitalized terms are defined in Section 1 hereof) have entered into the Credit Agreement as Borrowers, pursuant to which the Borrowers intend to borrow funds and obtain letters of credit for the purposes set forth therein;
 
WHEREAS, the Borrowers are willing to secure their obligations under the Credit Agreement, the other Loan Documents and certain cash management obligations, by granting Liens on certain of their assets to the Administrative Agent as provided in the Collateral Documents;
 
WHEREAS, the Lenders are willing to make loans and issue or participate in letters of credit under the Credit Agreement described in Section 1 hereof on the terms set forth therein if the foregoing obligations of the Borrowers are secured as described above;
 
WHEREAS, upon any foreclosure or other enforcement of the Collateral Documents, the net proceeds of the relevant Collateral are to be received by or paid over to the Administrative Agent and applied as provided in Section 7 hereof;
 
NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
 
SECTION 1.  Definitions.
 
(a)      Terms Defined in Credit Agreement.  Terms defined in the Credit Agreement and not otherwise defined in Section 1(b) or 1(c) have, as used herein, the respective meanings provided for therein.
 
(b)      Terms Defined in UCC.  As used herein, each of the following terms has the meaning specified in the UCC:
 
Term
  
UCC
Account
  
9-102
Authenticate
  
9-102
Cash Proceeds
  
9-102
Chattel Paper
  
9-102
Control
  
9-104
Deposit Account
  
9-102
General Intangibles
  
9-102
Instrument
  
9-102
Inventory
  
9-102
Record
  
9-102
Supporting Obligation
  
9-102

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(c)       Additional Definitions.  The following additional terms, as used herein, have the following meanings:
 
Additional Secured Obligations means the Secured Cash Management Obligations.
 
Administrative Agent means Citibank in its capacity as administrative agent under the Loan Documents, and its successors in such capacity.
 
Basell means Basell USA Inc., a Delaware corporation.
 
Borrowers means Lyondell, Equistar, HRLP, Basell and each other Borrower under the Credit Agreement.
 
Cash Collateral Account has the meaning set forth in Section 5.
 
Citibank shall have the meaning assigned to that term in the recital of the parties hereto.
 
Collateral shall have the meaning assigned to such term in Section 2.
 
Compliance Period means the period commencing on the Closing Date and ending 30 days thereafter (or such longer period as the Administrative Agent may, in the good faith exercise of its discretion, determine to be warranted).
 
Contracts means all contracts for the sale, lease, exchange or other disposition of Inventory or the performance of services, whether or not performed and whether or not subject to termination upon a contingency or at the option of any party thereto.
 
Credit Agreement means the Credit Agreement dated as of December 20, 2007 among the Borrowers, the Lenders party thereto, Citibank, as Collateral Agent and Administrative Agent and the other banks and financial institutions party thereto.
 
Equistar means Equistar Chemicals, LP, a Delaware limited partnership.
 
Estimated Liquidated Amount means, with respect to any Unliquidated Secured Obligation as of any date of determination, (i) in the case of any Letter of Credit, the maximum amount which may be drawn thereunder and (ii) in the case of any other Unliquidated Secured Obligation, the amount, if any, notified to the Administrative Agent and the Borrowers by the applicable Secured Party pursuant to Section 7(b) not more than two Business Days prior to such date as the maximum ascertainable amount of such Secured Obligation.
 
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HRLP means Houston Refining LP, a Delaware limited partnership.
 
Intellectual Property means the right to use any trademark, tradename, copyright, patent or other intellectual property, whether owned by or licensed to a Lien Grantor.
 
Inventory Concentration Account has the meaning set forth in Section 5.
 
Lien Grantor means each of Equistar, HRLP, Basell, and any other Borrower (other than Lyondell) under the Credit Agreement from time to time party hereto as Lien Grantor.  As contemplated by Section 1.05 of the Credit Agreement, Lyondell may at its election become a Lien Grantor hereunder by execution and delivery of an instrument to that effect reasonably satisfactory to the Administrative Agent.  It is acknowledged that as of the date hereof, Lyondell is the owner of all Equity Interests in LyondellBasell Receivables, so that none of such Equity Interests are Collateral.
 
Liquid Investment means (i) direct obligations of the United States or any agency thereof, (ii) obligations guaranteed by the United States or any agency thereof, (iii) time deposits and money market deposit accounts issued by or guaranteed by or placed with a financial institution reasonably acceptable to the Administrative Agent, and (iv) fully collateralized repurchase agreements for securities described in clause (i) or (ii) above entered into with a financial institution reasonably acceptable to the Administrative Agent, provided in each case that such Liquid Investment (x) matures within 30 days after it is first included in the Collateral and (y) is in a form, and is issued and held in a manner, that in the reasonable judgment of the Administrative Agent permits appropriate measures to have been taken to perfect security interests therein.
 
Liquidated Secured Obligation means, at any time, any Secured Obligation (or portion thereof) that is not an Unliquidated Secured Obligation at such time.
 
Lockbox Account has the meaning set forth in Section 5.
 
Lyondell means Lyondell Chemical Company, a Delaware corporation.
 
LyondellBasell Receivables means LyondellBasell Receivables I, LLC, a Delaware limited liability company.
 
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own refers to the possession of sufficient rights in property to grant a security interest therein as contemplated by UCC Section 9-203, and acquire refers to the acquisition of any such rights.
 
Perfection Certificate means a certificate substantially in the form of Exhibit A, completed and supplemented with the schedules contemplated thereby to the reasonable satisfaction of the Administrative Agent, and signed by an officer of each Lien Grantor.
 
Permitted Liens means (i) the Transaction Liens and (ii) any other Liens on the Collateral permitted to be created or assumed or to exist pursuant to the Credit Agreement, including Liens arising in connection with any Securitization Facility.
 
Pledged, when used in conjunction with any type of asset, means at any time an asset of such type that is included (or that creates rights that are included) in the Collateral at such time.  For example, Pledged Inventory means Inventory that is included in the Collateral at such time.
 
Post-Petition Interest means any interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency or reorganization of any Lien Grantor (or would accrue but for the operation of applicable bankruptcy or insolvency laws), whether or not such interest is allowed or allowable as a claim in any such proceeding.
 
Proceeds means all proceeds of, and all other profits, products, rents or receipts, in whatever form, arising from the collection, sale, lease, exchange, assignment, licensing or other disposition of, or other realization upon, any Collateral, including all claims of any Lien Grantor against third parties for loss of, damage to or destruction of, or for proceeds payable under, or unearned premiums with respect to, policies of insurance in respect of, any Collateral, and any condemnation or requisition payments with respect to any Collateral.
 
Receivables means all indebtedness (whether constituting Accounts or General Intangibles or Chattel Paper or otherwise) of any Person owing to a Lien Grantor under a Contract, and includes the right to payment of any interest or finance charges and other obligations of such Person with respect thereto.
 
Receivables Agent means Citibank, in its capacity as administrative agent under the 2007 Securitization Facility, and its successors in such capacity.
 
Receivables Concentration Account has the meaning set forth in Section 5.
 
Receivables Funding Account has the meaning set forth in Section 5.
 
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Related Documents means the Credit Agreement, any promissory notes issued pursuant to Section 2.09(d) of the Credit Agreement, the Collateral Documents and the documentation governing the Additional Secured Obligations.
 
Related Parties means, with respect to any specified Person, such Persons Affiliates and the respective directors, officers, employees, agents and advisors of such Person and its Affiliates.
 
Related Transferred Rights has the meaning specified in Section 2(c) hereof.
 
Release Conditions means the following conditions for terminating all the Transaction Liens:
 
(i)     all Commitments under the Credit Agreement shall have expired or been terminated;
 
(ii)    all Liquidated Secured Obligations shall have been paid in full; and
 
(iii)   no Specified Unliquidated Secured Obligation shall remain outstanding or the Lien Grantors shall have deposited with the Administrative Agent, in respect of each such Specified Unliquidated Secured Obligation, cash in an amount at least equal to 105% of the Estimated Liquidated Amount thereof (or such lesser amount satisfactory to the Administrative Agent and the related Secured Party), which cash may be invested in Liquid Investments.
 
Restricted Account means any of the Lockbox Accounts, the Receivables Concentration Account, the Receivables Funding Account, the Inventory Concentration Account and the Cash Collateral Account.
 
Secured Agreement, when used with respect to any Secured Obligation, refers collectively to each instrument, agreement or other document that sets forth obligations of the Lien Grantors and/or rights of the holder with respect to such Secured Obligation.
 
Secured Cash Management Obligations means obligations of one or more Loan Parties and their subsidiaries owing to the depositary bank which provides cash management services (including treasury, depositary, overdraft, electronic funds transfer, automated clearing house transfer, purchasing card and other cash management arrangements), provided that such depositary bank (i) is the depositary bank in relation to a Restricted Account or (ii) was a Lender (or an Affiliate of a Lender) at the time at which the instrument referred to in clause (x) below was delivered; provided further that (x) the relevant Lien Grantors and such depositary bank shall have expressly agreed in writing that such obligations constitute Secured Cash Management Obligations entitled to the benefits of the Collateral Documents and (y) such depositary bank shall have delivered to the Administrative Agent an instrument in form and substance satisfactory to the Administrative Agent to the effect set forth in clause (x) of this proviso, and acknowledging and agreeing to be bound by the terms of this Agreement with respect to such obligations.  Each depositary bank in respect of any Secured Cash Management Obligations shall report to the Administrative Agent from time to time as requested concerning the related exposures.
 
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Secured Loan Obligations means all principal of all Loans and LC Disbursements outstanding from time to time under the Credit Agreement, all interest (including Post-Petition Interest) on such Loans and LC Disbursements and all other amounts now or hereafter payable by the Borrowers pursuant to the Loan Documents.
 
Secured Obligations means the Secured Loan Obligations and the Additional Secured Obligations.
 
Secured Parties means the holders from time to time of the Secured Obligations, and Secured Party means any of them as the context may require.
 
Specified Unliquidated Secured Obligation means an Unliquidated Secured Obligation other than contingent general indemnification obligations (such as those in Section 10.05 of the Credit Agreement).
 
Sweep Account has the meaning set forth in Section 5.
 
Transaction Liens means the Liens granted by the Lien Grantors under the Collateral Documents.
 
Transferred Receivables means (i) any Receivables that have been sold, contributed or otherwise transferred to LyondellBasell Receivables pursuant to the 2007 RSA in connection with the 2007 Securitization Facility, (ii) any Receivables that have been sold, contributed or otherwise transferred to Basell Capital Corporation pursuant to the 2005 PCA in connection with the 2005 Securitization Facility, (iii) any other Receivables that have been sold, contributed or otherwise transferred to any purchaser of such Receivables in connection with any other Securitization Facility and (iv) any Excluded Receivables.
 
UCC means the Uniform Commercial Code as in effect from time to time in the State of New York; provided that, if perfection or the effect of perfection or non-perfection or the priority of any Transaction Lien on any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than New York, UCC means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or priority.
 
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Unliquidated Secured Obligation means, at any time, any Secured Obligation (or portion thereof) that is contingent in nature or unliquidated at such time, including any Secured Obligation that is:
 
(i)         an obligation to reimburse a bank for drawings not yet made under a letter of credit issued by it;
 
(ii)        any other obligation (including any guarantee) that is contingent in nature at such time; or
 
(iii)       an obligation to provide collateral to secure any of the foregoing types of obligations.
 
(d)    Terms Generally.  The definitions of terms herein (including those incorporated by reference to the UCC or to another document) apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun includes the corresponding masculine, feminine and neuter forms.  The words include, includes and including shall be deemed to be followed by the phrase without limitation.  The word will shall be construed to have the same meaning and effect as the word shall.  Unless the context requires otherwise, (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Persons successors and assigns, (c) the words herein, hereof and hereunder, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Sections, Exhibits and Schedules shall be construed to refer to Sections of, and Exhibits and Schedules to, this Agreement and (e) the word property shall be construed to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.
 
SECTION 2.  Grant of Transaction Liens.   (a) Each Lien Grantor, in order to secure the Secured Obligations, grants to the Administrative Agent for the benefit of the Secured Parties a continuing security interest in all the following property of such Lien Grantor, whether now owned or existing or hereafter acquired or arising and regardless of where located, subject to the exceptions set forth in Section 2(b) (collectively, the Collateral):
 
(i)         all Inventory;
 
(ii)        all Receivables;
 
(iii)       all Contracts;
 
(iv)       the Inventory Concentration Account, the Sweep Account and the Cash Collateral Account;
 
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(v)       (A) all rights under the 2007 Securitization Facility including, without limitation, all amounts payable by or for the account of LyondellBasell Receivables to or for the account of any Lien Grantor in connection with the 2007 Securitization Facility, (B) all rights under the 2005 Securitization Facility including, without limitation, all amounts payable by or for the account of Basell Capital Corporation to or for the account of any Lien Grantor in connection with the 2005 Securitization Facility and (C) all rights under any other Securitization Facility including, without limitation, all amounts payable to or for the account of any Lien Grantor in connection with such Securitization Facility;
 
(vi)      all Equity Interests in, and all indebtedness owed to a Lien Grantor by, (i) LyondellBasell Receivables and (ii) Basell Capital Corporation;
 
(vii)     all books and records (including customer lists, credit files, computer programs, printouts and other computer materials and records) of such Lien Grantor relating to any Collateral listed in clauses (i) through (vi) and (viii) of this Section; and
 
(viii)    all Proceeds which are either Cash Proceeds or property of the type described in the foregoing clauses (i) through (v) of the Collateral described in the foregoing clauses (i) through (vii).
 
(b)      The Collateral shall not include any Receivables effectively conveyed, sold, contributed or otherwise transferred under (i) the 2005 Securitization Facility or (ii) the 2007 Securitization Facility.
 
(c)       The Administrative Agent shall release (such release to be effected pursuant to the terms of Section 12 hereof) any security interest granted to it in the following property or rights (other than to the extent such property constitutes property described in Section 2(b) above):
 
(i)        all Transferred Receivables;
 
(ii)       all cash collections and other cash proceeds of such Transferred Receivables (including, without limitation, (x) all cash proceeds of items (iii) through (viii) below and (y) all cash collections and other cash proceeds deemed to have been received, and actually paid, pursuant to Section 2.03 of the 2007 RSA or Section 2.04 of the 2005 PCA);
 
(iii)      all security agreements, invoices or other Contracts that relate to any such Transferred Receivable;
 
(iv)      all goods (including returned goods (except as otherwise provided in the Intercreditor Agreement)), if any, relating to the sale which gave rise to any such Transferred Receivable;
 
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(v)      all other security interests or liens and property subject thereto from time to time purporting to secure payment of any such Transferred Receivable, whether pursuant to the invoice or other Contract relating to such Transferred Receivable or otherwise, together with all financing statements signed or authenticated by an obligor in respect of any such Transferred Receivable describing any collateral securing any such Transferred Receivable,
 
(vi)     all lock boxes and accounts  (other than the Inventory Concentration Account, the Sweep Account and the Cash Collateral Account) to which collections under item (ii) are sent and deposited, and all funds and investments therein;
 
(vii)    all supporting obligations, including all letter of credit rights, guaranties, insurance and other agreements or arrangements of whatever character from time to time supporting or securing payment of such Transferred Receivables, whether pursuant to the invoice or other Contract relating to any such Transferred Receivable or otherwise;
 
(viii)   all invoices, Contracts and other documents, books, records and other information (including, without limitation, computer programs, tapes, disks, data processing software and related property and rights) relating to such Transferred Receivables and the obligors thereon;
 
(ix)      all Cash Proceeds of the items described in items (i) through (viii), together with all of such transferees rights, remedies, powers and privileges with respect to such Transferred Receivables (preceding items (i) through (viii), collectively, the Related Transferred Rights); and
 
(x)       rights of any Lien Grantor in respect of any General Intangible to the extent such General Intangible by its terms, by the terms of any related agreement with a Person other than an Affiliate of such Lien Grantor or by the terms of any applicable law under which it arises (A) validly prohibits the creation of a security interest therein by any Lien Grantor, (B) validly requires the consent of any third party to the creation of a security interest therein or (C) validly gives rise to any right of termination or default remedy by reason of the creation of a security interest therein.
 
(d)      With respect to each right to payment or performance included in the Collateral from time to time, the Transaction Lien granted therein includes a continuing security interest in all right, title and interest of any Lien Grantor in and to (i) any Supporting Obligation that supports such payment or performance and (ii) any Lien that (x) secures such right to payment or performance or (y) secures any such Supporting Obligation.
 
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(e)       With respect to all Inventory included in the Collateral from time to time, each Lien Grantor hereby grants to the Administrative Agent an irrevocable, fully paid, non-exclusive, transferable license to use any Intellectual Property which is embodied in, or the use of which is necessary or appropriate in order to realize the value of, such Inventory, except to the extent that such grant of such license would be validly prohibited by the terms of an agreement relating to such Intellectual Property between the Lien Grantor and an unaffiliated Person.
 
(f)       The Transaction Liens are granted as security only and shall not subject the Administrative Agent or any other Secured Party to, or transfer or in any way affect or modify, any obligation or liability of any Lien Grantor with respect to any of the Collateral or any transaction in connection therewith.
 
SECTION 3.  General Representations And Warranties.  Each Lien Grantor represents and warrants that:
 
(a)     Such Lien Grantor is duly organized, validly existing and in good standing under the laws of the jurisdiction identified as its jurisdiction of organization in the Perfection Certificate.
 
(b)     Such Lien Grantor has good title to all its Collateral (subject to exceptions that are, in the aggregate, not material), free and clear of any Lien other than Permitted Liens.
 
(c)      Such Lien Grantor has not knowingly performed any acts that prevent the Administrative Agent from enforcing any of the provisions of the Collateral Documents or that would materially limit the Administrative Agent in any such enforcement.  No financing statement, security agreement, mortgage or similar or equivalent document or instrument covering all or part of the Collateral owned by such Lien Grantor is on file or of record in any jurisdiction in which such filing or recording would be effective to perfect or record a Lien on such Collateral, except (x) financing statements with respect to which duly executed termination statements shall have been delivered to the Administrative Agent not later than the Effective Date and (y) financing statements, mortgages or other similar or equivalent documents with respect to Permitted Liens.  After the Effective Date, no Collateral owned by such Lien Grantor will be in the possession or under the control of any other Person having a Lien thereon, other than a Permitted Lien.
 
(d)      The Transaction Liens on all Collateral owned by such Lien Grantor (i) have been validly created, (ii) will attach to each item of such Collateral on the Effective Date (or, if such Lien Grantor first obtains rights thereto on a later date, on such later date) and (iii) when so attached, will secure all the Secured Obligations.
 
(e)      Such Lien Grantor has delivered a counterpart to the Perfection Certificate to the Administrative Agent.
 
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(f)       When UCC financing statements describing the Collateral as set forth in the Perfection Certificate have been filed in the offices specified in the Perfection Certificate, the Transaction Liens will constitute perfected security interests in the Collateral owned by such Lien Grantor to the extent that a security interest therein may be perfected by filing pursuant to the UCC, prior to all Liens and rights of others therein except Permitted Liens.  Except for the filing of such UCC financing statements, no registration, recordation or filing with any governmental body, agency or official is required in connection with the execution or delivery of the Collateral Documents or is necessary for the validity or enforceability thereof or for the perfection of the Transaction Liens pursuant to the UCC or for the enforcement of the Transaction Liens pursuant to the UCC.
 
(g)      Such Lien Grantor has taken, and will continue to take, all actions necessary under the UCC to perfect its interest in any Receivables purchased or otherwise acquired by it, as against its assignors and creditors of its assignors.
 
(h)      Any Inventory produced by such Lien Grantor in the United States has or will have been produced in compliance, in all material respects, with the applicable requirements of the Fair Labor Standards Act, as amended.
 
(i)       Other than a Restricted Account, there is no deposit account owned by such Lien Grantor into which any collections or other payments or proceeds in respect of Collateral are to be deposited.
 
SECTION 4.  Further Assurances; General Covenants.  Each Lien Grantor covenants as follows:
 
(a)      Such Lien Grantor will, from time to time, at its own expense, execute, deliver, authorize, file and record any statement, assignment, instrument, document, agreement or other paper and take any other action that from time to time may be reasonably necessary, or that the Administrative Agent may reasonably request, in order to:
 
(i)        create, preserve, perfect, confirm or validate the Transaction Liens on the Collateral;
 
(ii)       enable the Administrative Agent and the other Secured Parties to obtain the full benefits of the Collateral Documents; or
 
(iii)      enable the Administrative Agent to exercise and enforce any of its rights, powers and remedies with respect to any of the Collateral.
 
To the extent permitted by applicable law, such Lien Grantor authorizes the Administrative Agent to execute and file such financing statements or continuation statements without the Lien Grantors signature appearing thereon, which financing statements may describe the Collateral in the same manner as described herein or may contain an indication or description of collateral that describes such property in any other manner as Administrative Agent may determine, in its reasonable discretion, is necessary or appropriate to ensure the perfection of the security interest in the Collateral granted to Administrative Agent herein, including, without limitation, describing such property as all assets, whether now owned or hereafter acquired or words of similar effect.  The Administrative Agent agrees to provide such Lien Grantor with copies of any such financing statements and continuation statements.  Such Lien Grantor constitutes the Administrative Agent its attorney-in-fact to execute and file all filings required or so requested for the foregoing purposes, all acts of such attorney being hereby ratified and confirmed; and such power, being coupled with an interest, shall be irrevocable until all the Transaction Liens granted by such Lien Grantor terminate pursuant to Section 12.  The Borrowers will pay the reasonable out-of-pocket costs of, or incidental to, any recording or filing of any financing or continuation statements or other documents recorded or filed pursuant hereto.
 
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(b)       [Reserved]
 
(c)       If any of its Collateral is in the possession or control of a warehouseman, bailee or agent at any time, such Lien Grantor will, promptly upon the request of the Administrative Agent made during a Sweep Period, (i)notify such warehouseman, bailee or agent of the relevant Transaction Liens and (ii) instruct such warehouseman, bailee or agent to hold all such Collateral for the Administrative Agents account subject to the Administrative Agents instructions (which shall permit such Collateral to be removed by such Lien Grantor in the ordinary course of business until the Administrative Agent notifies such warehouseman, bailee or agent that an Event of Default has occurred and is continuing).
 
(d)       Such Lien Grantor will not sell, lease, exchange, assign or otherwise dispose of, or grant any option with respect to, any of its Collateral; provided that such Lien Grantor may do any of the foregoing unless (i) doing so would breach a covenant in the Credit Agreement or(ii)an Event of Default shall have occurred and be continuing and the Administrative Agent, upon the instructions of the Required Lenders,  shall have notified such Lien Grantor that its right to do so is terminated, suspended or otherwise limited.
 
(e)       Such Lien Grantor will, promptly upon request, provide to the Administrative Agent all information and evidence concerning the Collateral that the Administrative Agent may reasonably request from time to time to enable it to enforce the provisions of the Collateral Documents.
 
SECTION 5.  Restricted Accounts. The Lien Grantors will at all times after the end of the Compliance Period cause to be maintained a system of deposit accounts complying with each of the requirements set forth below:
 
(a)       Lockbox Accounts.  All payments by or for the account of the account debtors under all Pledged Receivables and under all Transferred Receivables sold, contributed or otherwise transferred to LyondellBasell Receivables (except for certain wire transfers made directly from the account debtor to the Receivables Concentration Account) will be deposited directly upon receipt by a Lien Grantor or LyondellBasell Receivables to the credit of one or more lockbox deposit accounts in the name of LyondellBasell Receivables maintained with Bank of America, N.A. or another depositary bank approved in writing by the Administrative Agent (Lockbox Accounts).  No deposits from any other source will be made to the Lockbox Accounts by a Lien Grantor or LyondellBasell Receivables.  The depositary bank will be instructed to transfer all credit balances in each Lockbox Account to the Receivables Concentration Account not later than the close of business on each Business Day, and no other withdrawals shall be permitted.  Such instructions will be irrevocable without the prior written consent of the Administrative Agent.
 
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(b)      Receivables Concentration Account.  The Lien Grantors will cause LyondellBasell Receivables to maintain a deposit account in the name of LyondellBasell Receivables with Bank of America, N.A. or another depositary bank approved in writing by the Administrative Agent (the Receivables Concentration Account).  All amounts deposited to the credit of any Lockbox Account will be transferred to the Receivables Concentration Account as contemplated by subsection (a) above, and no deposits from any other source will be made by a Lien Grantor or LyondellBasell Receivables to the Receivables Concentration Account (except as noted in subsection (a) above).  The Receivables Concentration Account will be subject to the Control of the Receivables Agent.  Subject to the rights of the Receivables Agent, the depositary bank will be instructed to transfer all credit balances in the Receivables Concentration Account to the Receivables Funding Account not later than the close of business on each Business Day, and no other withdrawals shall be permitted.  Such instructions will be irrevocable without the prior written consent of the Administrative Agent.
 
(c)       Receivables Funding Account.  The Lien Grantors will cause LyondellBasell Receivables to maintain a deposit account in the name of LyondellBasell Receivables with Bank of America, N.A. or another depositary bank approved in writing by the Administrative Agent (the Receivables Funding Account).  Subject to the rights of the Receivables Agent, the depositary bank will be instructed to transfer all credit balances in the Receivables Funding Account, other than such portion of such credit balances that such depositary bank is instructed to remit to the Receivables Agent pursuant to the 2007 Securitization Facility, to the Inventory Concentration Account not later than the close of business on each Business Day, and no other withdrawals shall be permitted.  Such instructions will be irrevocable without the prior written consent of the Administrative Agent.
 
(d)      Inventory Concentration Account.  The Lien Grantors have established deposit accounts with Bank of America, N.A. in the name of the Lien Grantor set forth, and with such account numbers as set forth, under the heading Inventory Concentration Account in Schedule 11 to the Perfection Certificate (collectively, the Inventory  Concentration Account).  Except to the extent remitted to the Receivables Agent pursuant to the 2007 Securitization Facility, all amounts deposited to the credit of the Receivables Funding Account will be transferred to the Inventory Concentration Account as contemplated by subsection (c) above.  In addition, all (i) payments by LyondellBasell Receivables of the purchase price for Transferred Receivables pursuant to the 2007 Securitization Facility and (ii) other proceeds of sale or other disposition of Collateral will be deposited directly into the Inventory Concentration Account.  No deposits from any other source will be made to the Inventory Concentration Account.  The Inventory Concentration Account will be subject to the Control of the Administrative Agent.  Subject to the rights of the Administrative Agent, the depositary bank will be instructed to transfer all credit balances in the Inventory Concentration Account to such account or accounts as the Borrowers Agent may designate from time to time not later than the close of business on each Business Day.
 
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(e)       Sweep Account.  The Lien Grantors will maintain a deposit account with Citibank, N.A. in the name of the Lien Grantor set forth, and with such account number as set forth, under the heading Sweep Account in Schedule 11 to the Perfection Certificate (the Sweep Account), which shall be under the Control of the Administrative Agent.  During each Sweep Period, all amounts deposited to the credit of the Inventory Concentration Account will be transferred to the Sweep Account pursuant to instructions given by the Administrative Agent to the depositary bank for the Inventory Concentration Account.  In addition, during any Sweep Period, the Receivables Agent will cause all amounts received by it from the Receivables Concentration Account and otherwise required to be remitted to a Lien Grantor pursuant to the 2007 Securitization Facility to be deposited directly in the Sweep Account.  All amounts so deposited to the Sweep Account shall be applied pursuant to the instructions of the Administrative Agent as required under the terms of Section 2.08 of the Credit Agreement and, so long as no Default shall then be continuing, any balance remaining after such application shall be remitted to the Lien Grantors in accordance with the instructions of the Borrowers Agent to the Administrative Agent.  Any amounts not so applied or remitted shall be deposited in the Cash Collateral Account and released to the Borrowers in accordance with the final sentence of Section 2.08(b)(ii) of the Credit Agreement.
 
(f)        Cash Collateral  Account.  The Lien Grantors will maintain one or more deposit accounts with Citibank, N.A. in the name of those Lien Grantors set forth, and with such account numbers as set forth, under the heading Cash Collateral Accounts in Schedule 11 to the Perfection Certificate (collectively, the Cash Collateral Account), which shall be under the Control of the Administrative Agent.  The Borrowers may from time to time at their election cause monies to be deposited to the credit of the Cash Collateral Account and held therein as contemplated by the Credit Agreement.  Amounts on deposit in the Cash Collateral Account may be withdrawn therefrom upon request of the Borrowers Agent to the Administrative Agent, upon satisfaction of the applicable conditions specified in the Credit Agreement and as specified in the Intercreditor Agreement.
 
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(g)      Certain Remedies. If an Event of Default shall have occurred and be continuing, the Administrative Agent may (i) retain all cash and investments then held in the Cash Collateral Account, (ii) liquidate any or all investments held therein and/or (iii) withdraw any amounts held therein and apply such amounts as provided in Section 7(a).
 
(h)      Funds held in the Cash Collateral Account may, until withdrawn or otherwise applied pursuant hereto, be invested and reinvested in such Liquid Investments as the Borrowers Agent shall request from time to time; provided that, if an Event of Default shall have occurred and be continuing, the Administrative Agent may select such Liquid Investments.
 
(i)       If immediately available cash on deposit in the Cash Collateral Account is not sufficient to make any distribution or withdrawal to be made pursuant hereto, the Administrative Agent will cause to be liquidated, as promptly as practicable, such investments held in or credited to the Cash Collateral Account as shall be required to obtain sufficient cash to make such distribution or withdrawal and, notwithstanding any other provision hereof, such distribution or withdrawal shall not be made until such liquidation has taken place.
 
SECTION 6.  Remedies upon Event of Default.  (a) If an Event of Default shall have occurred and be continuing, the Administrative Agent may exercise (or cause its sub-agents to exercise) any or all of the remedies available to it (or to such sub-agents) under the Collateral Documents.
 
(b)      Without limiting the generality of the foregoing, if an Event of Default shall have occurred and be continuing, the Administrative Agent may exercise on behalf of the Secured Parties all the rights of a secured party under the UCC (whether or not in effect in the jurisdiction where such rights are exercised) with respect to any Collateral and, in addition, the Administrative Agent may, without being required to give any notice, except as herein provided or as may be required by mandatory provisions of law, withdraw all cash held in the Cash Collateral Account and apply such cash as provided in Section 7 and, if there shall be no such cash or if such cash shall be insufficient to pay all the Secured Obligations in full, sell, lease, license or otherwise dispose of the Collateral or any part thereof.  Notice of any such sale or other disposition shall be given to the Lien Grantors as required by Section 13.
 
SECTION 7.  Application of Proceeds.  (a)If an Event of Default shall have occurred and be continuing, the Administrative Agent may apply (i) any cash held in the Cash Collateral Account and (ii) the proceeds of any sale or other disposition of all or any part of the Collateral, in the following order of priorities:
 
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first,
 
to pay the expenses of such sale or other disposition, including reasonable compensation to agents of and counsel for the Administrative Agent, and all expenses, liabilities and advances incurred or made by the Administrative Agent in connection with the Collateral Documents, and any other amounts then due and payable to the Administrative Agent pursuant to Section 8 or to any Agent pursuant to the Credit Agreement;
 
second,
 
to pay ratably all interest (including Post-Petition Interest) on the Secured Obligations and all commitment and other fees payable under the Related Documents, until payment in full of all such interest and fees shall have been made;
 
third,
 
to pay ratably all (i) amounts required to be deposited in the Cash Collateral Account as cash collateral for the LC Exposure under the Credit Agreement and (ii) unpaid principal of Swingline Loans, until payment in full of all such amounts shall have been made;
 
fourth,
 
to pay the unpaid principal of the Revolving Loans ratably, until payment in full of the principal of all Revolving Loans shall have been made;
 
fifth,
 
to pay ratably all Secured Cash Management Obligations permitted under this Agreement (or provide for the payment thereof pursuant to Section 7(b)), until payment in full of all such Secured Cash Management Obligations shall have been made (or so provided for);
 
sixth,
 
to pay all other Secured Obligations ratably (or provide for the payment thereof pursuant to Section 7(b)), until payment in full of all such other Secured Obligations shall have been made (or so provided for); and
 
finally,
 
to pay to the relevant Lien Grantor, or as a court of competent jurisdiction may direct, any surplus then remaining from the proceeds of the Collateral owned by it.
 
The Administrative Agent may make such distributions hereunder in cash or in kind or, on a ratable basis, in any combination thereof.
 
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(b)      If at any time any portion of any monies collected or received by the Administrative Agent would, but for the provisions of this Section 7(b), be payable pursuant to Section 7(a) in respect of an Unliquidated Secured Obligation, the Administrative Agent shall not apply any monies to pay such Unliquidated Secured Obligation but instead shall request the holder thereof, at least ten days before each proposed distribution hereunder, to notify the Administrative Agent and the Borrowers as to the Estimated Liquidated Amount of such Unliquidated Secured Obligation.  If the holder of such Unliquidated Secured Obligation does not notify the Administrative Agent and the Borrowers of the Estimated Liquidated Amount thereof at least two Business Days before such distribution, such Unliquidated Secured Obligation will not be entitled to share in such distribution.  If such holder does so notify the Administrative Agent as to the Estimated Unliquidated Amount thereof, the Administrative Agent will allocate to such holder a portion of the monies to be distributed in such distribution, calculated as if such Unliquidated Secured Obligation were outstanding in the Estimated Liquidated Amount thereof.  However, the Administrative Agent will not apply such portion of such monies to pay such Unliquidated Secured Obligation, but instead will hold such monies or invest such monies in Liquid Investments.  All such monies and Liquid Investments and all proceeds thereof will constitute Collateral hereunder, but will be subject to distribution in accordance with this Section 7(b) rather than Section 7(a).  The Administrative Agent will hold all such monies and Liquid Investments and the net proceeds thereof in trust until all or part of such Unliquidated Secured Obligation becomes a Liquidated Secured Obligation, whereupon the Administrative Agent, at the request of the relevant Secured Party, will apply the amount so held in trust to pay such Liquidated Secured Obligation; provided that, if the other Secured Obligations theretofore paid pursuant to the same clause of Section 7(a) (i.e., clause second, fourth or fifth) were not paid in full, the Administrative Agent will apply the amount so held in trust to pay the same percentage of such Liquidated Secured Obligation as the percentage of such other Secured Obligations theretofore paid pursuant to the same clause of Section 7(a).  If (i) the holder of such Unliquidated Secured Obligation shall advise the Administrative Agent that no portion thereof remains in the category of an Unliquidated Secured Obligation and (ii)the Administrative Agent still holds any amount held in trust pursuant to this Section 7(b) in respect of such Unliquidated Secured Obligation (after paying all amounts payable pursuant to the preceding sentence with respect to any portions thereof that became Liquidated Secured Obligations), such remaining amount will be applied by the Administrative Agent in the order of priorities set forth in Section 7(a). 
 
(c)       All distributions made by the Administrative Agent pursuant to this Section shall be final (except in the event of manifest error) and the Administrative Agent shall have no duty to inquire as to the application by any Secured Party of any amount distributed to it.
 
SECTION 8.  Fees and Expenses; Indemnification.  Error! Bookmark not defined. Each Lien Grantor will, within ten Business Days of written demand therefor, pay to the Administrative Agent:
 
(i)        the amount of any taxes (other than Excluded Taxes) that the Administrative Agent has been required to pay by reason of the Transaction Liens or to free any Collateral from any Lien thereon in connection with the exercise of remedies hereunder; and
 
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(ii)       the amount of any and all reasonable out-of-pocket expenses incurred by the Administrative Agent, including reasonable fees, expenses, charges and disbursements of Davis Polk & Wardwell, special counsel for the Administrative Agent, and any local counsel retained by them, in connection with (x) the administration or enforcement of the Collateral Documents, including such reasonable out-of-pocket expenses as are incurred to preserve the value of the Collateral or the validity, perfection, rank or value of any Transaction Lien, (y) the collection, sale or other disposition of any Collateral or (z) the exercise by the Administrative Agent of any of its rights or powers under the Collateral Documents.
 
If any Lien Grantor shall default in the payment of any amounts required to be paid by it pursuant to this Section 8, such Lien Grantor shall pay interest on such amount in accordance with Section 2.11 of the Credit Agreement.
 
(b)          If any Other Tax is payable in connection with any transfer or other transaction provided for in the Collateral Documents, the relevant Lien Grantor will pay such tax to the relevant Governmental Authority in accordance with applicable law.
 
SECTION 9.  Authority to Administer Collateral.  Each Lien Grantor irrevocably appoints the Administrative Agent its true and lawful attorney, with full power of substitution, in the name of such Lien Grantor, any Secured Party or otherwise, for the sole use and benefit of the Secured Parties, but at such Lien Grantors expense, to the extent permitted by law to exercise, at any time and from time to time while an Event of Default shall have occurred and be continuing, all or any of the following powers with respect to all or any of the Collateral (to the extent necessary to pay the Secured Obligations in full):
 
(a)      to demand, sue for, collect, receive and give acquittance for any and all monies due or to become due upon or by virtue thereof;
 
(b)      to settle, compromise, compound, prosecute or defend any action or proceeding with respect thereto;
 
(c)       to sell, lease, license or otherwise dispose of the same or the proceeds or avails thereof, as fully and effectually as if the Administrative Agent were the absolute owner thereof;
 
(d)      to extend the time of payment of any or all thereof and to make any allowance or other adjustment with reference thereto; and
 
(e)       with respect to Equity Interests in LyondellBasell Receivables, to exercise all voting and other rights to which the owner thereof is entitled;
 
provided that, except in the case of Collateral that is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market, the Administrative Agent will give the relevant Lien Grantor at least ten days prior written notice of the time and place of any public sale thereof or the time after which any private sale or other intended disposition thereof will be made.  Any such notice shall (i) contain the information specified in UCC Section 9-613, (ii) be Authenticated and (iii) be sent to the parties required to be notified pursuant to UCC Section 9-611(c); provided that, if the Administrative Agent fails to comply with this sentence in any respect, its liability for such failure shall be limited to the liability (if any) imposed on it as a matter of law under the UCC.
 
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SECTION 10.  Limitation on Duty in Respect of Collateral.  Beyond the exercise of reasonable care in the custody and preservation thereof, the Administrative Agent will have no duty as to any Collateral in its possession or control or in the possession or control of any sub-agent or bailee or any income therefrom or as to the preservation of rights against prior parties or any other rights pertaining thereto.  The Administrative Agent will be deemed to have exercised reasonable care in the custody and preservation of the Collateral in its possession or control if such Collateral is accorded treatment substantially equal to that which it accords its own property, and will not be liable or responsible for any loss or damage to any Collateral, or for any diminution in the value thereof, by reason of any act or omission of any sub-agent or bailee selected by the Administrative Agent in good faith or by reason of any act or omission by the Administrative Agent pursuant to instructions from the Administrative Agent, except to the extent that such liability arises from the Administrative Agents bad faith, gross negligence or willful misconduct.
 
SECTION 11.  General Provisions Concerning the Administrative Agent.
 
(a)      The provisions of Article 8 of the Credit Agreement shall inure to the benefit of the Administrative Agent, and shall be binding upon all Lien Grantors and all Secured Parties, in connection with this Agreement and the other Collateral Documents.  Without limiting the generality of the foregoing, (i)the Administrative Agent shall not be subject to any fiduciary or other implied duties, regardless of whether an Event of Default has occurred and is continuing, (ii) the Administrative Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated by the Collateral Documents that the Administrative Agent is required in writing to exercise by the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 10.02 of the Credit Agreement), and (iii) except as expressly set forth in the Loan Documents, the Administrative Agent shall not have any duty to disclose, and shall not be liable for any failure to disclose, any information relating to any Borrower or its Affiliates that is communicated to or obtained by the bank serving as Administrative Agent or any of its Affiliates in any capacity.  The Administrative Agent shall not be responsible for the existence, genuineness or value of any Collateral or for the validity, perfection, priority or enforceability of any Transaction Lien, whether impaired by operation of law or by reason of any action or omission to act on its part under the Collateral Documents. The Administrative Agent shall be deemed not to have knowledge of any Event of Default unless and until written notice thereof is given to the Administrative Agent by the Borrowers Agent or a Secured Party.
 
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(b)      Sub-Agents and Related Parties.  The Administrative Agent may perform any of its duties and exercise any of its rights and powers through one or more sub-agents appointed by it.  The Administrative Agent and any such sub-agent may perform any of its duties and exercise any of its rights and powers through its Related Parties.  The exculpatory provisions of Section 10 and this Section shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent.
 
(c)       Information as to Secured Obligations and Actions by Secured Parties.  For all purposes of the Collateral Documents, including determining the amounts of the Secured Obligations and whether a Secured Obligation is a Contingent Secured Obligation or not, or whether any action has been taken under any Secured Agreement, the Administrative Agent will be entitled to rely on information from (i) its own records for information as to the Lenders, their Secured Obligations and actions taken by them, (ii) any Secured Party for information as to its Secured Obligations and actions taken by it, to the extent that the Administrative Agent has not obtained such information from its own records, and (iii)the Borrowers, to the extent that the Administrative Agent has not obtained information from the foregoing sources.
 
(d)       Refusal to Act.  The Administrative Agent may refuse to act on any notice, consent, direction or instruction from any Secured Parties or any agent, trustee or similar representative thereof that, in the Administrative Agents opinion, (i) is contrary to law or the provisions of any Security Document, (ii) may expose the Administrative Agent to liability (unless the Administrative Agent shall have been indemnified, to its reasonable satisfaction, for such liability by the Secured Parties that gave such notice, consent, direction or instruction) or (iii) is unduly prejudicial to Secured Parties not joining in such notice, consent, direction or instruction.
 
(e)      Copies of Certain Notices.  Within two Business Days after it receives or sends any notice referred to in this subsection, the Administrative Agent shall send to the Lenders and each Secured Party Requesting Notice, copies of any certificate designating additional obligations as Secured Obligations received by the Administrative Agent pursuant to Section 13 and any notice given by the Administrative Agent to any Lien Grantor, or received by it from any Lien Grantor, pursuant to Section 6, 7, 9 or 12. 
 
SECTION 12.  Termination of Transaction Liens; Release of Collateral.
 
(a)      The Transaction Liens shall terminate when all the Release Conditions are satisfied.
 
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(b)      The Transaction Liens (x) with respect to any Pledged Receivables shall terminate automatically when such Receivables have become Transferred Receivables and (y) with respect to any other Collateral shall terminate upon the sale of such Collateral to a Person other than Lyondell or an Affiliate of Lyondell in a transaction not prohibited by the Loan Documents.  In each case, such termination shall not require the consent of any Secured Party, and the Administrative Agent and any third party shall be fully protected in relying on a certificate of the Borrowers Agent as to whether any Pledged Receivables qualify as Transferred Receivables (including without limitation whether the transfer thereof is permitted under the Credit Agreement and this Agreement), as to whether the sale of any other Collateral is permitted by the Loan Documents and as to whether an Event of Default exists.
 
(c)       In the case of any Pledged Receivables, the Transaction Liens with respect to the Related Transferred Rights shall terminate automatically when such Pledged Receivables become Transferred Receivables.  Such termination shall not require the consent of any Secured Party.
 
(d)      At any time before the Transaction Liens terminate, the Administrative Agent may, at the written request of the Borrowers Agent, (i)release any Collateral (but not all or substantially all of the Collateral) with the prior written consent of the Required Lenders or (ii)release all or substantially all of the Collateral with the prior written consent of all the Lenders.
 
(e)       Upon any termination of a Transaction Lien or release of Collateral, the Administrative Agent will, at the expense of the relevant Lien Grantor, execute and deliver to the Borrowers Agent such documents as the Borrowers Agent shall reasonably request to evidence the termination of such Transaction Lien or the release of such Collateral, as the case may be.
 
SECTION 13.  Additional Lien Grantors.  Any U.S. Affiliate of Lyondell may become a party hereto upon the full execution and delivery to the Administrative Agent of a Borrower Designation substantially in the form of Exhibit G to the Credit Agreement, whereupon such Affiliate shall become a Borrower, and a Lien Grantor.
 
SECTION 14.  Notices.  Each notice, request or other communication given to any party hereunder shall be given in accordance with Section 10.01 of the Credit Agreement.
 
SECTION 15.  No Implied Waivers; Remedies Not Exclusive.  No failure by the Administrative Agent or any Secured Party to exercise, and no delay in exercising and no course of dealing with respect to, any right or remedy under any Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise by the Administrative Agent or any Secured Party of any right or remedy under any Loan Document preclude any other or further exercise thereof or the exercise of any other right or remedy.  The rights and remedies specified in the Loan Documents are cumulative and are not exclusive of any other rights or remedies provided by law.
 
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SECTION 16.  Successors and Assigns.  This Agreement is for the benefit of the Administrative Agent and the Secured Parties.  If all or any part of any Secured Partys interest in any Secured Obligation is assigned or otherwise transferred, the transferors rights hereunder, to the extent applicable to the obligation so transferred, shall be automatically transferred with such obligation.  This Agreement shall be binding on the parties hereto and their respective successors and assigns.
 
SECTION 17.  Amendments and Waivers.  Neither this Agreement nor any provision hereof may be waived, amended, modified or terminated except pursuant to an agreement or agreements in writing entered into by the Administrative Agent, with the consent of such Lenders as are required to consent thereto under Section 10.02 of the Credit Agreement.  No such waiver, amendment or modification shall (i) be binding upon any Lien Grantor, except with its written consent, or (ii) materially and adversely affect the rights of a Secured Party (other than a Lender) hereunder more adversely than it affects the comparable rights of the Lenders hereunder, without the consent of such Secured Party.
 
SECTION 18.  Choice of Law.  This Agreement shall be construed and interpreted in accordance with and governed by the laws of the State of New York.
 
SECTION 19.  Intercreditor Agreement.  Notwithstanding anything herein to the contrary, the liens and security interests granted to the Administrative Agent and the Secured Parties pursuant to this Agreement and the exercise of any right or remedy by the Administrative Agent hereunder, in each case, with respect to the Collateral are subject to the limitations and provisions of the Intercreditor Agreement.  In the event of any conflict between the terms of the Intercreditor Agreement and the terms of this Agreement with respect to the Collateral, (other than with respect to Section 2(a) and Section 2(b) hereof) the terms of the Intercreditor Agreement shall govern and control.
 
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.
 
 
LYONDELL CHEMICAL COMPANY,
   
   
 
By:
 /s/ Karen A. Twitchell 
   
Name:  Karen A. Twitchell
   
Title:    Authorized Representative
 
 
EQUISTAR CHEMICALS, LP
HOUSTON REFINING LP,
as Lien Grantors
   
   
 
By:
 /s/ Karen A. Twitchell 
   
Name:  Karen A. Twitchell
   
Title:    Authorized Representative

 
 
BASELL USA INC.
   
   
 
By:
 /s/ Francesco Svelto 
   
Name:  Francesco Svelto
   
Title:    Authorized Representative

 
 
CITIBANK, N.A.,
 
as Administrative Agent
   
   
 
By:
 /s/ Matthew Paquin 
   
Name:  Matthew Paquin
   
Title:    Vice President


EXHIBIT A
 
to Security Agreement
 
[PERFECTION CERTIFICATE]
 

 
 
 

 
December 20, 2007
 
Reference is hereby made to that certain Security Agreement dated as of December 20, 2007 (the “Security Agreement”), among Lyondell Chemical Company, as Borrower's Agent, the Lien Grantors party thereto and Citibank N.A., as Administrative Agent and Collateral Agent.  Capitalized terms used but not defined herein have the meanings assigned in the Security Agreement.
 
The undersigned hereby certify to the Administrative Agent as follows:
 
1.  
Names.
 
(a) The exact legal name of Borrower's Agent, each Lien Grantor, as such name appears in its respective certificate of incorporation or any other organizational document, is set forth in Schedule 1(a).  Each of Borrower's Agent and Lien Grantor is the type of entity disclosed next to its name in Schedule 1(a).  Also set forth in Schedule 1(a) is the organizational identification number, if any, of Borrower's Agent and each Lien Grantor and the jurisdiction of formation of Borrower's Agent and each Lien Grantor.
 
(b) Set forth in Schedule 1(b) hereto are any other corporate or organizational names Borrower's Agent and each Lien Grantor has had in the past five years, together with the date of the relevant change.
 
(c) Set forth in Schedule 1(c) is a list of all other names used by Borrower's Agent and each Lien Grantor, or any other business or organization to which Borrower's Agent and each Lien Grantor became the successor by merger, consolidation, acquisition, change in form, nature or jurisdiction of organization or otherwise, at any time in the past five years.  Also set forth in Schedule 1(c) is the information required by Section 1 of this certificate for any other business or organization to which Borrower's Agent and each Lien Grantor became the successor by merger, consolidation, acquisition, change in form, nature or jurisdiction of organization or otherwise, at any time in the past five years.  Except as set forth in Schedule 1(c), neither Borrower's Agent nor any Lien Grantor has changed its jurisdiction of organization at any time during the past four months.
 
2.  
Chief Executive Office.  The chief executive office of Borrower's Agent and each Lien Grantor is located at the address set forth in Schedule 2 hereto.
 
3.  
Prior Chief Executive Offices.  Set forth in Schedule 3 is the information required by Schedule 2 with respect to any chief executive office previously maintained by Borrower's Agent and each Lien Grantor at any time during the past five years.
 
4.  
Extraordinary Transactions.  Within the last five years, except for those purchases or acquisitions in excess of $100,000,000 and other transactions described on Schedule 4 attached hereto, all of the Collateral has been acquired by Borrower's Agent and each Lien Grantor in the ordinary course of business.
 
5.  
File Search Reports.  Attached hereto as Schedule 5 are the file search reports from the Uniform Commercial Code filing offices in each jurisdiction identified in Section 1(a) with respect to each legal name set forth in Section 1.
 
6.  
UCC Filings.  Financing statements in the form attached as Schedule 6 have been prepared for filing in the proper Uniform Commercial Code filing offices in the jurisdictions identified in Schedule 7 hereof.
 
7.  
Schedule of Filings.  Attached hereto as Schedule 7 is a schedule of the appropriate filing offices for the financing statements attached hereto as Schedule 6.
 
8.  
Termination Statements.  Attached hereto as Schedule 8 are the termination statements in the appropriate form for filing in each applicable jurisdiction.
 
9.  
Equity Interests.  Attached hereto as Schedule 9 is a list of all of the authorized, and the issued and outstanding Equity Interests of LyondellBasell Receivables I, LLC and the record and beneficial owners of such Equity Interests.
 
10.  
Instruments.  Attached hereto as Schedule 10 is a list of all promissory notes, instruments (other than checks to be deposited in the ordinary course of business) and other evidence of indebtedness and obligations owed by LyondellBasell Receivables I, LLC to Borrower's Agent and each Lien Grantor.
 
11.  
Accounts.  Attached hereto as Schedule 11 is the account number, type of account and name and address of the financial institution for each of the Inventory Concentration Account, the Sweep Account and the Cash Collateral Account.

[Signature Page Follows]

 
 
 

IN WITNESS WHEREOF, we have hereunto signed this Perfection Certificate as the day and year first above written.
 
LYONDELL CHEMICAL COMPANY, as
 
Borrower's Agent
 
 
By:
___________________________
 
 
Name:
 
 
Title: Authorized Officer
 
EQUISTAR CHEMICALS, LP, as
 
Lien Grantor
 
 
By:
____________________________
 
 
Name:
 
 
Title: Authorized Officer
 
 
HOUSTON REFINING LP, as Lien Grantor
 
 
By:
    
 
 
 
Name:
 
 
 
Title:
Authorized Officer
 
 
BASELL USA INC., as Lien Grantor
 
 
By:
    
 
 
 
Name:
 
 
 
Title:
Authorized Officer
 
 

 
 EX-4.7 11 lyo10k-032808ex47.htm SUBSIDIARY GUARANTY DATED AS OF DECEMBER 20, 2007 lyo10k-022808ex47.htm

Exhibit 4.7
 
SUBSIDIARY GUARANTY
 
SUBSIDIARY GUARANTY dated as of December 20, 2007 among each of the signatories listed on the signature pages hereto and each of the other entities that becomes a party hereto pursuant to Section 9 hereof (the “Guarantors” and individually, a “Guarantor”), in favor of Citibank, N.A., (“Citibank”) in its capacity as the administrative agent (the “Administrative Agent”) for the benefit of the Secured Parties (as defined in the Security Agreement (as defined below)).
 
WHEREAS, Lyondell Chemical Company, Equistar Chemicals, LP, Houston Refining LP, Basell USA Inc., and the other borrowers named therein (the “Borrowers”) have entered into that certain Credit Agreement dated December 20, 2007 among the Borrowers, the Lenders party thereto, Citibank, as collateral agent and administrative agent and the other banks and financial institutions party thereto (as the same may be amended, restated, supplemented or otherwise modified through the date hereof, the “Credit Agreement”, capitalized terms unless defined herein, shall have the meanings specified in the Credit Agreement)  pursuant to which, among other things, the Lenders have severally agreed to make loans and issue or participate in letters of credit under the Credit Agreement;
 
WHEREAS, each Borrower has entered into that certain security agreement dated December 20, 2007 among the Borrowers and the Administrative Agent (the “Security Agreement”) to secure their obligations under the Credit Agreement and other Loan Documents, as well as certain cash management obligations in favor of the Administrative Agent, on behalf of the Secured Parties;
 
WHEREAS, each Guarantor is a direct or indirect wholly-owned Subsidiary of one of the Borrowers; and
 
WHEREAS, in consideration of the financial and other support that the Secured Parties have provided, and such financial and other support as any Borrower may in the future provide, to the Guarantors, each Guarantor is willing to enter into this Subsidiary Guaranty.
 
NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each Guarantor agrees as follows:
 
1. The Subsidiary Guaranty.  Each Guarantor hereby, jointly and severally, unconditionally guarantees the full and punctual payment (whether at stated maturity, upon acceleration or otherwise) of each Guaranteed Obligation, as hereinafter defined.  Upon failure by any Borrower to pay punctually any Guaranteed Obligation, each Guarantor shall forthwith on demand pay the amount not so paid at the place and in the manner specified in the instrument evidencing such Guaranteed Obligation (or, in the case of any extension of time of payment or renewal of any Guaranteed Obligation, in accordance with the terms of such extension or renewal).  “Guaranteed Obligations” means (i) the “Obligations” (as defined in the Credit Agreement) payable by any Borrower from time to time pursuant to the Credit Agreement or any Secured Agreement (as defined in the Security Agreement) (including, without limitation, any interest (“Post-Petition Interest”) which accrues (or which would accrue but for such case, proceeding or action) after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency or reorganization of any Borrower (whether or not such interest is allowed or allowable as a claim in any such case, proceeding or other action) with respect to such amounts) and (ii) any renewals, refinancings or extensions of any of the foregoing (including Post-Petition Interest).
 
2. Guarantee Unconditional.  The obligations of each Guarantor hereunder shall be unconditional and absolute and, without limiting the generality of the foregoing, shall not be released, discharged or otherwise affected by:
 
(a) any extension, renewal, settlement, compromise, waiver or release in respect of any obligation of any Borrower under the Credit Agreement or any Secured Agreement, by operation of law or otherwise;
 
(b) any modification or amendment of or supplement to the Credit Agreement or any Secured Agreement;
 
(c) any release, impairment, non-perfection or invalidity of any direct or indirect security for any obligation of any Borrower under the Credit Agreement or any Secured Agreement;
 
(d) any change in the corporate existence, structure or ownership of any Borrower, or any insolvency, bankruptcy, reorganization or other similar proceeding affecting any Borrower or its assets or any resulting release or discharge of any obligation of any Borrower contained in the Credit Agreement or any Secured Agreement;
 
(e) the existence of any claim, set-off or other rights which any Guarantor may have at any time against any Borrower, the Administrative Agent or the Secured Parties or any other entity, whether in connection herewith or with any unrelated transactions, provided that nothing herein shall prevent the assertion of any such claim by separate suit or compulsory counterclaim;
 
(f) any invalidity or unenforceability relating to or against any Borrower for any reason of the Credit Agreement or any Secured Agreement, or any provision of applicable law or regulation purporting to prohibit the payment by any Borrower of any amounts payable pursuant to the Credit Agreement or any Secured Agreement; or
 
(g) any other act or omission to act or delay of any kind by any Borrower, the Administrative Agent, any Secured Party or any other person or any other circumstance whatsoever which might, but for the provisions of this paragraph, constitute a legal or equitable discharge of or defense to such Guarantor’s obligations hereunder.
 
3. Limit of Liability.  Each Guarantor shall be liable under this Subsidiary Guaranty only for amounts aggregating up to the largest amount that would not render its obligations hereunder subject to avoidance under Section 548 of the United States Bankruptcy Code or any comparable provision of any other applicable law.
 
4. Discharge Only Upon Payment in Full; Reinstatement In Certain Circumstances.  Each Guarantor’s obligations hereunder shall remain in full force and effect until all Guaranteed Obligations shall have been paid in full.  If at any time any payment of any Guaranteed Obligation is rescinded or must be otherwise restored or returned upon the insolvency, bankruptcy or reorganization of any Borrower or otherwise, such Guarantor’s obligations hereunder with respect to such payment shall be reinstated as though such payment had been due but not made at such time.
 
5. Waiver by Guarantors.  Each Guarantor irrevocably waives acceptance hereof, presentment, demand, protest and any notice not provided for herein, as well as any requirement that at any time any action be taken by any person or entity against such Guarantor, any Borrower or any other person or entity.
 
6. Subrogation.  Upon making full payment with respect to any obligation of any Borrower hereunder, such Guarantor shall be subrogated to the rights of the payee against such Borrower with respect to such obligation; provided that such Guarantor shall not enforce any payment by way of subrogation so long as any Guaranteed Obligation remains unpaid.
 
7. Stay of Acceleration.  If acceleration of the time for payment of any Guaranteed Obligation is stayed upon the insolvency, bankruptcy or reorganization of any Borrower, all such Guaranteed Obligations otherwise subject to acceleration under the terms of the Credit Agreement or any Secured Agreement, shall nonetheless be payable by each Guarantor hereunder forthwith on demand by the Administrative Agent, on behalf of the Secured Parties.
 
8. Representations and Warranties.  Each Guarantor represents and warrants to the Administrative Agent and each Secured Party that:
 
(a) such Guarantor is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization;
 
(b) the execution, delivery and performance by such Guarantor of this Subsidiary Guaranty are within such Guarantor’s corporate powers and have been duly authorized by all necessary corporate or other company action;
 
(c) this Subsidiary Guaranty constitutes a legal, valid and binding obligation of such Guarantor, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, and other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law;
 
(d) the execution, delivery and performance of this Subsidiary Guaranty (i) do not require any material approval, consent, exemption, authorization or other action by, or notice to, or filing with, any Governmental Authority or any other Person, except the approvals, consents, exemptions, authorizations, actions, notice and filings which have been duly obtained, taken, given or made and are in full force and effect, (ii) will not, (x) in any material way, conflict with or result in any breach or contravention of any contractual obligation to which such Guarantor is a party or affecting such Guarantor or the properties of such Guarantor or (y) contravene the terms of such Guarantor’s Organizational Documents, or  (iii) violate any material law in any material way except to the extent that such violation or default (except for clause (ii)) could not reasonably be expected to have a Material Adverse Effect; and
 
(e) there are no actions, suits, proceedings, claims or disputes pending or, to the knowledge of such Guarantor, threatened in writing or contemplated, at law, in equity, in arbitration or before any Governmental Authority, by or against such Guarantor or against any of its properties or revenues that could, individually or in the aggregate. reasonably be expected to have a Material Adverse Effect.
 
9. Additional Guarantors. Upon the execution and delivery by any Subsidiary of a Guaranty Supplement in substantially the form of Exhibit A hereto (each, a “Guaranty Supplement”), (a) such Person shall be referred to as an “Additional Guarantor” and shall become and be a Guarantor hereunder, and each reference in this Subsidiary Guaranty to a “Guarantor” shall also mean a reference to such Additional Guarantor, and each reference in any Loan Document to a “Guarantor” shall also mean and be a reference to such Additional Guarantor, and (b) each reference herein to “this Subsidiary Guaranty,” “hereunder,” “hereof” or words of like import referring to this Subsidiary Guaranty, and each reference in any other Loan Document to “the Subsidiary Guaranty,” “thereunder,” “thereof” or words of like import referring to this Subsidiary Guaranty, shall mean and be a reference to this Subsidiary Guaranty as supplemented by the Guaranty Supplement.
 
10. Taxes.   Any and all payments by or on account of any Guaranteed Obligation of each Guarantor hereunder shall be made free and clear of and without deduction for Indemnified Taxes or Other Taxes, in accordance with Section 2.19 of the Credit Agreement.
 
11. Notices.  Each notice, request or other communication given to any party hereunder shall be given in accordance with Section 10.01 of the Credit Agreement, and in the case of any such notice, request or other communication to any Guarantor, shall be given to it in care of the Borrowers’ Agent.
 
12. No Waiver.  No failure or delay by the Administrative Agent or any Secured Party in exercising any right, power or privilege under this Subsidiary Guaranty shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege.
 
13. Amendments and Waivers.  Any provision of this Subsidiary Guaranty may be amended or waived if, but only if, such amendment or waiver is in writing and is signed by the Administrative Agent (on behalf of the Secured Parties) and each Guarantor.
 
14. Successors and Assigns.  This Subsidiary Guaranty shall be binding upon each Guarantor and its successors and assigns, for the benefit of the Administrative Agent, the Secured Parties and their respective successors and assigns, except that no Guarantor may transfer or assign any or all of its rights or obligations hereunder without the prior written consent of the Lenders.
 
15. Governing Law; Jurisdiction.  (a)     This Subsidiary Guaranty shall be construed and interpreted in accordance with and governed by the law of the State of New York.
 
(b)            To the extent it may effectively do so under applicable law, each Guarantor (1) irrevocably submits to the nonexclusive jurisdiction of any New York State or Federal court sitting in the Borough of Manhattan, The City of New York, over any suit, action or proceeding arising out of or relating to this Subsidiary Guaranty or any other document contemplated thereby, and (2) irrevocably waives and agrees not to assert, by way of motion, as a defense or otherwise, any claim that it is not subject to the jurisdiction of any such court, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.
 
(c)            Each Guarantor agrees, to the fullest extent it may effectively do so under applicable law, that a judgment in any suit, action or proceeding of the nature referred to in paragraph (b) above brought in any such court shall be conclusive and binding upon such Guarantor and may be enforced in the courts of the United States of America or the State of New York (or any other courts to the jurisdiction of which such Guarantor is or may be subject) by a suit upon such judgment.
 
(d)            To the extent it may effectively do so under applicable law, each Guarantor consents to process being served in any suit, action or proceeding of the nature referred to in paragraph (b) by mailing a copy thereof by registered or certified mail, postage prepaid, return receipt requested, to the address of such Guarantor set forth or referred to in Section 11. To the extent it may effectively do so under applicable law, each Borrower agrees that such service (x) shall be deemed in every respect effective service of process upon such Borrower in any such suit, action or proceeding and (y) shall be taken and held to be valid personal service upon and personal delivery to such Guarantor.
 
(d)            Nothing in this Section 15 shall affect the right of any Agent or Lender to serve process in any manner permitted by law, or limit any right that any Agent or Lender may have to bring proceedings against any Guarantor in the courts of any jurisdiction or to enforce in any lawful manner a judgment obtained in one jurisdiction in any other jurisdiction.
 
16.            WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS SUBSIDIARY GUARANTY. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
 
17.            Guaranty Limitations in Respect of Millennium Chemicals Inc.Any amount that may be guaranteed by Millennium Chemicals Inc or any of its Subsidiaries, shall not exceed the amount permitted to be Incurred (as defined in the Millennium Indenture (as defined below)) as Funded Debt (as defined in the Millennium Indenture) as more fully set forth in Section 1009 of the Millennium Indenture; provided, however, that upon the refinancing in full of the Millennium America Inc. 7⅝ Senior Notes due 2026 (the “Millennium Notes”), this Section 17 shall cease to operate and have any force and effect as of the date of such refinancing. For purposes of this section, “ Millennium Indenture” means the indenture dated January 29, 1996 in respect of the Millennium Notes, as supplemented by a Supplemental Indenture dated February 15, 1996, December 1, 1997, December 3, 2000 and November 17, 2000, as in effect on the Closing Date (as defined therein).
 

 

[Signature Pages Follow]


IN WITNESS WHEREOF, the parties hereto have caused this Subsidiary Guaranty to be duly executed by their respective authorized officers as of the day and year first above written.
LYONDELL REFINING COMPANY LLC
LYONDELL HOUSTON REFINERY INC.
LYONDELL CHEMICAL NEDERLAND, LTD.
LYONDELL-EQUISTAR HOLDINGS PARTNERS
LYONDELL (PELICAN) PETROCHEMICAL L.P. 1, INC.
LYONDELL LP4 INC.
LYONDELL LP3 GP, LLC
MILLENNIUM PETROCHEMICALS PARTNRS, LP
MILLENNIUM US OP CO LLC
MILLENNIUM AMERICA INC.
MILLENNIUM AMERICA HOLDINGS INC.
MILLENNIUM WORLDWIDE HOLDINS I INC.
MILLENNIUM CHEMICALS INC.
MILLENNIUM PETROCHEMICALS GP LLC
LYONDELL CHEMICAL TECHNOLOGY MANAGEMENT, INC.
LYONDELL REFINING I, LLC
LYONDELL LP3 PARTNERS, LP
LYONDELL PETROCHEMICAL L.P. INC.
LYONDELL EUROPE HOLDINGS INC.
LYONDELL CHEMICAL PRODUCTS EUROPE, LLC
LYONDELL CHIMIE FRANCE LLC
MILLENNIUM SPECIALTY CHEMICALS INC.
MILLENNIUM PETROCHEMICALS INC.
LYONDELL CHEMICAL TECHNOLOGY, L.P.
LYONDELL CHEMICAL TECHNOLOGY 1, INC.
 
        By:
 /s/ Karen A. Twitchell 
 
Name:  Karen A. Twitchell
  
 
Title:    Authorized Representative
  
 


    Agreed to and accepted by:
 
    CITIBANK, N.A.
    as Administrative Agent

        By:
 /s/ Matthew Paquin 
 
Name:  Matthew Paquin
  
 
Title:    Vice President
  


Exhibit A
 
to Subsidiary Guaranty
 
 
GUARANTY SUPPLEMENT NO. [__] dated as of [________] between [NAME OF ADDITIONAL GUARANTOR] (a “Guarantor”) and Citibank, N.A., as Administrative Agent for the benefit of the Secured Parties.
 
A.            Reference is made to the Credit Agreement, dated as of December [20], 2007 (as the same may be amended, restated, supplemented or otherwise modified, refinanced or replaced from time to time, the “Credit Agreement”) among Lyondell Chemical Company, Equistar Chemicals, LP, Houston Refining LP, Basell USA Inc., the other borrowers named therein, the lenders party thereto, Citibank, N.A., as collateral agent and administrative agent and the other banks and financial institutions party thereto.
 
 
B.            Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Subsidiary Guaranty.
 
 
C.            The Guarantors have entered into the Subsidiary Guaranty in order to induce the Secured Parties, among other things, to extend loans and issue letters of credit and provide cash management services to the Borrowers.
 
 
D.            Section 5.03 of the Credit Agreement and Section 9 of the Subsidiary Guaranty provide that additional Subsidiaries may become Guarantors under the Subsidiary Guaranty by execution and delivery of an instrument in the form of this Guaranty Supplement. Each undersigned Subsidiary (each an “Additional Guarantor”) is executing this Guaranty Supplement in accordance with the requirements of the Credit Agreement to become a Guarantor under the Subsidiary Guaranty in order to induce the Secured Parties, among other things, to extend loans and issue letters of credit and provide cash management services to the Borrowers, and as consideration for such extensions of credit previously made to the Borrowers.
 
Accordingly, the Administrative Agent and each Additional Guarantor agree as follows:
 
SECTION 1.                                 In accordance with Section 9 of the Subsidiary Guaranty, each Additional Guarantor by its signature below becomes a Guarantor under the Subsidiary Guaranty with the same force and effect as if originally named therein as a Guarantor and each Additional Guarantor hereby (a) agrees to all the terms and provisions of the Subsidiary Guaranty applicable to it as a Guarantor thereunder and (b) represents and warrants that the representations and warranties made by it as a Guarantor thereunder are true and correct on and as of the date hereof (or, where such representations and warranties expressly relate to an earlier date, as of such earlier date). Each reference to a Guarantor in the Subsidiary Guaranty shall be deemed to include each Additional Guarantor. The Subsidiary Guaranty is hereby incorporated herein by reference.
 
SECTION 2.                                 Each Additional Guarantor represents and warrants to the Administrative Agent and the other Secured Parties that the execution, delivery and performance by it of this Guaranty Supplement are within such Guarantor’s corporate powers and have been duly authorized by all necessary corporate or other company action, and constitute its legal, valid and binding obligation, enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, and other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.
 
SECTION 3.                                 This Guaranty Supplement may be executed by one or more of the parties to this Guaranty Supplement on any number of separate counterparts (including by facsimile or other electronic transmission), and all of said counterparts taken together shall be deemed to constitute one and the same instrument. A set of the copies of this Guaranty Supplement signed by all the parties shall be lodged with the Borrowers’ Agent and the Administrative Agent.  This Guaranty Supplement shall become effective as to each Additional Guarantor when the Administrative Agent shall have received counterparts of this Guaranty Supplement that, when taken together, bear the signatures of such Additional Guarantor and the Administrative Agent.
 
SECTION 4.                                 Except as expressly supplemented hereby, the Subsidiary Guaranty shall remain in full force and effect.
 
SECTION 5.                                 THIS GUARANTY SUPPLEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
 
SECTION 6.                                 All notices, requests and demands pursuant hereto shall be made in accordance with Section 10.01 of the Credit Agreement. All communications and notices hereunder to each Additional Guarantor shall be given to it in care of the Borrowers’ Agent at its address set forth in Section 10.01 of the Credit Agreement.
 
[Signature Pages Follow]

 
2
 


IN WITNESS WHEREOF, each Additional Guarantor and the Administrative Agent have duly executed this Guaranty Supplement as of the day and year first above written.
 
 

as Guarantor
 
By:
Name:
Title:
 
CITIBANK, N.A., as Administrative Agent
 
By:
Name:
Title:


 
 EX-4.8 12 lyo10k-032808ex48.htm RECEIVABLES PURCHASE AGREEMENT DATED AS OF DECEMBER 20, 2007 lyo10k-022808ex48.htm
EXHIBIT 4.8
$1,150,000,000

RECEIVABLES PURCHASE AGREEMENT

Dated as of December 20, 2007

among

LYONDELLBASELL RECEIVABLES I, LLC, as the Seller,


LYONDELL CHEMICAL COMPANY, as the Servicer,


THE BANKS AND OTHER FINANCIAL INSTITUTIONS PARTY HERETO,
as Purchasers,


and


CITIBANK, N.A.,

as Administrative Agent and Asset Agent,



CITIGROUP GLOBAL MARKETS INC.
GOLDMAN SACHS CREDIT PARTNERS L.P.,
MERRILL LYNCH CAPITAL CORPORATION,
ABN AMRO INCORPORATED
and
UBS SECURITIES LLC,
as Joint Lead Arrangers
and Joint Bookrunners


TABLE OF CONTENTS

 
Page
   
   
EXHIBITS
1
   
SCHEDULES
2
   
RECEIVABLES PURCHASE AGREEMENT
1
   
PRELIMINARY STATEMENTS:
1
   
ARTICLE I Definitions
1
   
 
Section 1.1
Certain Defined Terms.
1
       
 
Section 1.2
Other Terms.
26
       
 
Section 1.3
Computation of Time Periods.
27
       
ARTICLE II Amounts and Terms of the Purchases
27
   
 
Section 2.1
Commitment.
27
       
 
Section 2.2
Making Purchases.
27
       
 
Section 2.3
Swing Purchases
28
       
 
Section 2.4
Termination or Reduction of the Commitments; Voluntary Reductions of Capital.
30
       
 
Section 2.5
Receivable Interest.
30
       
 
Section 2.6
Ordinary Settlement Procedures.
31
       
 
Section 2.7
Triggering Event Settlement Procedures.
32
       
 
Section 2.8
Liquidation Settlement Procedures.
34
       
 
Section 2.9
General Settlement Procedures.
35
       
 
Section 2.10
Payments and Computations, Etc.
36
       
 
Section 2.11
Yield and Fees.
36
       
 
Section 2.12
Special Provisions Governing Capital Investments at the Applicable LIBO Rate.
37
       
 
Section 2.13
Increased Capital.
39
       
 
Section 2.14
Taxes.
39
       
 
Section 2.15
Sharing of Payments, Etc.
41
       
 
Section 2.16
Conversion/Continuation Option.
41
       
 
Section 2.17
Duty to Mitigate; Assignment of Commitments Under Certain Circumstances.
42
       
 
Section 2.18
Restricted Accounts; Investment of Amounts in the Cash Assets Account.
43
       
 
Section 2.19
Optional Increase in Commitments.
43
       
ARTICLE III Conditions of Purchases
44

i

TABLE OF CONTENTS
(continued)

     
Page
       
       
 
Section 3.1
Conditions Precedent to the Effectiveness of this Agreement.
44
       
 
Section 3.2
Conditions Precedent to All Investment Events.
45
       
ARTICLE IV Representations and Warranties
46
   
 
Section 4.1
Representations and Warranties of the Seller.
46
       
 
Section 4.2
Representations and Warranties of the Servicer.
49
       
ARTICLE V General Covenants of the Seller and the Servicer
52
   
 
Section 5.1
Affirmative Covenants of the Seller.
52
       
 
Section 5.2
Reporting Requirements of the Seller.
55
       
 
Section 5.3
Negative Covenants of the Seller.
56
       
 
Section 5.4
Affirmative Covenants of the Servicer.
58
       
 
Section 5.5
Reporting Requirements of the Servicer.
61
       
 
Section 5.6
Negative Covenants of the Servicer.
64
       
ARTICLE VI Administration and Collection
65
   
 
Section 6.1
Designation of Servicer.
65
       
 
Section 6.2
Duties of Servicer.
65
       
 
Section 6.3
Rights of the Agent.
66
       
 
Section 6.4
Certain Responsibilities.
67
       
 
Section 6.5
Further Assurances.
67
       
ARTICLE VII Events of Termination
68
   
 
Section 7.1
Events of Termination.
68
       
ARTICLE VIII The Agent
71
   
 
Section 8.1
Authorization and Action.
71
       
 
Section 8.2
Agents Reliance, Etc.
71
       
 
Section 8.3
Citibank and Affiliates.
72
       
 
Section 8.4
Purchase Decisions.
72
       
 
Section 8.5
Indemnification.
72
       
 
Section 8.6
Successor Agent
73
       
 
Section 8.7
Posting of Approved Electronic Communications.
73
       
ARTICLE IX Assignment of Receivable Interests
74
   
 
Section 9.1
Purchasers Assignment of Rights and Obligations.
74
       
 
Section 9.2
The Register.
76

ii

TABLE OF CONTENTS
(continued)

     
Page
       
       
 
Section 9.3
Participations.
76
       
ARTICLE X Indemnification
77
   
 
Section 10.1
Indemnities.
77
       
ARTICLE XI Miscellaneous
79
   
 
Section 11.1
Amendments, Etc.
79
       
 
Section 11.2
Right of Set-off.
81
       
 
Section 11.3
Notices, Etc.
81
       
 
Section 11.4
Binding Effect; Assignability.
82
       
 
Section 11.5
Costs and Expenses.
82
       
 
Section 11.6
Confidentiality.
83
       
 
Section 11.7
Governing Law.
83
       
 
Section 11.8
Jurisdiction, Etc.
83
       
 
Section 11.9
Execution in Counterparts.
84
       
 
Section 11.10
Intent of the Parties.
84
       
 
Section 11.11
Entire Agreement.
84
       
 
Section 11.12
Severability of Provisions.
84
       
 
Section 11.13
Waiver of Jury Trial.
85

iii

EXHIBITS

EXHIBIT A
Form of Assignment and Acceptance
   
EXHIBIT B
Form of Seller Report
   
EXHIBIT C
Form of Lock-Box Agreement
   
EXHIBIT D
Form of Receivables Sale Agreement
   
EXHIBIT E
Form of Consent and Agreement
   
EXHIBIT F
Form of Notice of Purchase
   
EXHIBIT G
Form of Swing Purchase Request
   
EXHIBIT H
Form of Notice of Conversion or Continuation
   
EXHIBIT I-l
Form of Opinion of Skadden, Arps, Slate, Meagher & Flom LLP, Counsel to the Seller and each Originator
   
EXHIBIT I-2
Form of Opinion of Internal Counsel to the Seller and each Originator
   
EXHIBIT I-3
Form of Opinion of Skadden, Arps, Slate, Meagher & Flom LLP, Counsel to the Seller and each Originator (true sale and no substantive consolidation opinion)
   
EXHIBIT J
Form of Undertaking
   
EXHIBIT K-1
Form of Intercreditor Agreement
   
EXHIBIT K-2
Form of ABL Intercreditor Agreement
   
EXHIBIT K-3
Form of Basell Capital Intercreditor Agreement


SCHEDULES

SCHEDULE I
Agents Account, Cash Assets Account, Concentration Account, Seller Account, Sweep Account, Lock-Box Banks and Lock-Box Accounts
   
SCHEDULE II
Credit and Collection Policy
   
SCHEDULE III
Jurisdiction of Incorporation, Organizational Identification Number and Location of the Sellers Principal Place of Business, Chief Executive Office and Office Where Records are Kept
   
SCHEDULE IV
Financing Statements
   
SCHEDULE V
Approved Non-U.S./Canadian Jurisdictions
   
SCHEDULE VI
Certain Obligors
   
SCHEDULE X
Commitment Schedule


RECEIVABLES PURCHASE AGREEMENT

RECEIVABLES PURCHASE AGREEMENT dated as of December 20, 2007 (this Agreement) among LYONDELLBASELL RECEIVABLES I, LLC, a Delaware limited liability company (the Seller), LYONDELL CHEMICAL COMPANY (which is the surviving entity following its merger with BIL Acquisition Holdings Limited), a Delaware corporation, as the Servicer (as hereinafter defined), the banks and other financial institutions listed on Schedule X hereto as the Initial Purchasers (the Initial Purchasers) and CITIBANK, N.A., as Administrative Agent and Asset Agent.

PRELIMINARY STATEMENTS:

The Seller will from time to time purchase or otherwise acquire from the Originators, Pool Receivables in which the Seller intends to sell interests referred to herein as Receivable Interests.

The Purchasers may at any time and from time to time purchase Receivable Interests from the Seller.

Lyondell has been requested and is willing to act as the Servicer upon the terms and subject to the conditions set forth herein.

Citibank has been requested and is willing to act as the Agent upon the terms and subject to the conditions set forth herein.

Certain terms which are capitalized and used throughout this Agreement (in addition to those defined above) are defined in Article I of this Agreement.

NOW, THEREFORE, in consideration of the premises, the parties hereto agree as follows:

ARTICLE I

Definitions

Section 1.1           Certain Defined Terms.

As used in this Agreement, the following terms shall have the following meanings:

ABF Agreement means the Credit Agreement dated as of December 20, 2007 among Lyondell and its Subsidiaries and Affiliates party thereto, the lenders and agents party thereto and Citibank, as administrative agent and collateral agent.

ABF Collateral Availability means Collateral Availability as defined in the ABF Agreement.  For the avoidance of doubt, if the ABF Agreement ceases to be in effect, ABF Collateral Availability shall be deemed to be zero.

ABF Collateral Documents means the Collateral Documents as defined in the ABF Agreement.

ABF Excess Availability means Excess Availability as defined in the ABF Agreement.  For the avoidance of doubt, if the ABF Agreement ceases to be in effect, ABF Excess Availability shall be deemed to be zero.


Acquisition means the merger of BIL Acquisition into Lyondell pursuant to the Acquisition Agreement.

Acquisition Agreement means that certain Agreement and Plan of Merger, dated as of July 16, 2007, by and among the Company, BIL Acquisition and Lyondell.

Adjusted LIBO Rate means, with respect to any Yield Period for any Capital Investment, an interest rate per annum equal to the rate per annum obtained by dividing (a) the LIBO Rate by (b) a percentage equal to (i) 100% minus (ii) the reserve percentage applicable 2 Business Days before the first day of such Yield Period under regulations issued from time to time by the FRB for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) for a member bank of the Federal Reserve System in New York City with respect to liabilities or assets consisting of or including Eurocurrency Liabilities (or with respect to any other category of liabilities that includes deposits by reference to which the LIBO Rate is determined) having a term equal to such Yield Period.

Affiliate means, with respect to any specified Person, any other Person that directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such specified Person.  The term control means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise, controlling and controlled have meanings correlative of the foregoing; provided, however, that none of the Arrangers or their respective Affiliates shall be deemed an Affiliate of any Transaction Party.

Agent means Citibank, in its capacity as administrative agent for the Purchasers under the Transaction Documents, and its successors in such capacity.

Agents Account means the Deposit Account of the Agent identified in Schedule I hereto, or such other account as the Agent shall specify in writing to the Seller, the Servicer and the Purchasers.

Agents Fee means those agency fees attributable to the Agents role under the Transaction Documents set forth in the Fee Letter.

Alternate Base Rate means, for any period, a fluctuating interest rate per annum as shall be in effect from time to time, which rate per annum shall be equal at all times to the highest of the following:

(a)           the rate of interest announced publicly by Citibank in New York, New York, from time to time, as Citibanks base rate (or equivalent rate otherwise named);

(b)           the sum (adjusted to the nearest 0.25% or, if there is no nearest 0.25%, to the next higher 0.25%) of (i) 0.5% per annum, (ii) the rate per annum obtained by dividing (A) the latest three-week moving average of secondary market morning offering rates in the United States for three-month certificates of deposit of major United States money market banks, such three-week moving average being determined weekly on each Monday (or, if any such day is not a Business Day, on the next succeeding Business Day) for the three-week period ending on the previous Friday by Citibank on the basis of such rates reported by certificate of deposit dealers to and published by the Federal Reserve Bank of New York or, if such publication shall be suspended or terminated, on the basis of quotations for such rates received by Citibank from 3 New York certificate of deposit dealers of recognized standing selected by Citibank, by (B) a percentage equal to 100% minus the average of the daily percentages specified during such three-week period by the FRB for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) for Citibank in respect of liabilities consisting of or including (among other liabilities) three-month U.S. dollar nonpersonal time deposits in the United States and (iii) the average during such three-week period of the maximum annual assessment rates estimated by Citibank for determining the then current annual assessment payable by Citibank to the Federal Deposit Insurance Corporation (or any successor) for insuring Dollar deposits in the United States; and

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(c)           0.5% per annum plus the Federal Funds Rate.

Anti-Terrorism Laws means:
 
(a)           the Executive Order No. 13224 of September 23, 2001 - Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten To Commit, or Support Terrorism;

(b)           the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56 (commonly known as the USA Patriot Act);

(c)           the Money Laundering Control Act of 1986, Public Law 99-570;

(d)           the International Emergency Economic Powers Act, 50 U.S.C. 1701 et seq, the Trading with the Enemy Act, 50 U.S.C. App. 1 et seq, any Executive Order or regulation promulgated thereunder and administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury; and

(e)           any similar law enacted in the United States of America subsequent to the date of this Agreement.

Anti-Terrorism Party means  any person listed:

(a)           in the Annex to Executive Order No. 13224 on Terrorist Financing, effective September 2001;

(b)           on the "Specially Designated Nationals and Blocked Persons" list maintained by the Office of Foreign Assets Control of the U.S. Department of the Treasury;

(c)           in any successor list to either of the foregoing; or

(d)           any person or entity that commits, threatens or conspires to commit or supports "terrorism" as defined in Executive Order No. 13224 on Terrorist Financing, effective September 2001.

Applicable Base Rate for any period for any Capital Investment, an interest rate per annum equal to the sum of (a) the Alternate Base Rate in effect from time to time plus (b) the Applicable Margin.

Applicable LIBO Rate for any Yield Period for any Capital Investment, an interest rate per annum equal to the sum of (a) the Adjusted LIBO Rate for such Yield Period plus (b) the Applicable Margin.

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Applicable Margin means (a) for the initial period commencing on the Closing Date and ending on the last day of the calendar month in which the Agent receives unaudited financial statements of the Company and its consolidated subsidiaries as of, and for the fiscal quarter ending, June 30, 2008 in accordance with and satisfying the requirements of Section 5.5(b), in the case of Capital Investments having a Yield determined with reference to the Alternate Base Rate, 0.75% per annum and, in the case of Capital Investments having a Yield determined with reference to the Adjusted LIBO Rate, 1.75% per annum; and (b) thereafter, as of any date of determination, a per annum rate equal to the rate set forth below opposite the then applicable Average Monthly Excess Availability (determined as of the last day of the most recently concluded calendar month):

Average Monthly Excess Availability
Alternate Base Rate
Adjusted LIBO Rate
Greater than or equal to $1,500,000,000
0.50%
1.50%
Less than $1,500,000,000 and greater than or equal to $500,000,000
0.75%
1.75%
Less than $500,000,000
1.00%
2.00%


provided, however, that upon the occurrence and during the continuance of an Event of Termination, the Applicable Margin shall be the sum of the otherwise applicable rate set forth in the table above for Alternate Base Rate or Adjusted LIBO Rate, as the case may be, plus 2.00% per annum.  Changes in the Applicable Margin resulting from a change in the Average Monthly Excess Availability for any calendar month shall become effective as to all Capital Investments on the first day of the next calendar month.

Applicable Reserve means, at any date, an amount equal to (NRPB x RP) plus such reserves as agreed upon by the Agent and the Seller, with adjustments effective upon at least five Business Days notice by the Agent, where:

NRPB = the Net Receivables Pool Balance at the close of business of the Servicer on such date.

RP = the Reserve Percentage at the close of business of the Servicer on such date.

Applicable Unused Commitment Fee Rate means (i) for the initial period commencing on the Closing Date and ending on the last day of the calendar month in which the Agent receives unaudited financial statements of the Company and its consolidated subsidiaries as of, and for the fiscal quarter ending, June 30, 2008 in accordance with and satisfying the requirements of Section 5.5(b), 0.25% per annum, and (ii) thereafter, as of any date of determination, a per annum rate equal to the rate set forth below opposite the then applicable Average Monthly Excess Availability (determined as of the last day of the most recently concluded calendar month):

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Average Monthly Excess Availability
Applicable Unused Commitment Fee Rate
Greater than or equal to $1,500,000,000
0.30%
Less than $1,500,000,000 and greater than or equal to $500,000,000
0.25%
Less than $500,000,000
0.25%


Changes in the Applicable Unused Commitment Fee Rate resulting from a change in the Average Monthly Excess Availability for any calendar month shall become effective on the first day of the next calendar month.

Applicable Yield means (a) for any Capital Investment (other than in respect of Swing Purchases), at the Sellers election upon written notice to the Agent, given not later than 11:00 A.M. (New York time) on the third Business Day preceding (in the case of the Applicable LIBO Rate) or the Business Day of (in the case of the Applicable Base Rate) the applicable Investment Event, the Applicable LIBO Rate or the Applicable Base Rate, as the case may be and (b) for any Capital Investment in respect of a Swing Purchase, and for each other Obligation hereunder, the Applicable Base Rate.

Approved Electronic Communications means each notice, demand, communication, information, document and other material that the Seller or Servicer is obligated to, or otherwise chooses to, provide to the Agent pursuant to any Transaction Document or the transactions contemplated therein, including any financial statement, financial and other report, notice, request, certificate and other information material; provided, however, that Approved Electronic Communication shall, unless otherwise agreed by the Agent, exclude (x) any Notice of Purchase, Swing Purchase Request, Notice of Conversion or Continuation, and any other notice, demand, communication, information, document and other material relating to a request for a new, or a conversion of an existing, Purchase, (ii) any notice relating to the payment due under any Transaction Document prior to the scheduled date therefor, (iii) any notice of any Potential Event of Termination or Event of Termination and (iv) any notice, demand, communication, information, document and other material required to be delivered to satisfy any of the conditions set forth in Articxle III or any other condition to any Purchase or other Investment Event.

Approved Electronic Platform has the meaning specified in Section 8.7.

Approved Fund means any fund that, in the ordinary course of its business, invests in bank loans and financial assets of a type similar to the Receivable Interests and that is advised or managed by (a) a Purchaser, (b) an Affiliate of a Purchaser or (c) a Person or an Affiliate of a Person that administers or manages a Purchaser.

Arrangers means Citigroup Global Markets Inc., Goldman Sachs Credit Partners, L.P., Merrill Lynch Capital Corporation, ABN AMRO Incorporated and UBS Securities LLC.

Asset Agent means Citibank in its capacity as asset agent under the Transaction Documents.

Assignee means in the case of any assignment of any rights and obligations pursuant to Section 9.1, any assignee of such rights and obligations.

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Assignment and Acceptance means an assignment and acceptance, in substantially the form of Exhibit A hereto, entered into by any Purchaser and an Assignee pursuant to Section 9.1.

Available Capital means, at any time (a) the Maximum Capital minus (b) the aggregate Capital outstanding at such time.

Average Monthly Excess Availability means, for any calendar month, the sum, without duplication, of (i) the average daily Total Excess Availability plus (ii) the average daily unrestricted cash of the Originators and their respective Subsidiaries (as determined by Lyondell from treasury records on a non-GAAP basis), in each case for such calendar month.

Bankruptcy Code means title 11, United States Code.

BIL Acquisition means BIL Acquisition Holdings Limited, a Delaware corporation and Wholly Owned Subsidiary of the Company.

Business Day means any day which is not a Saturday, Sunday or legal holiday in the State of New York or the State of Texas on which banks are open for business in New York City and Houston, provided, however, that when used in connection with the Adjusted LIBO Rate, the term Business Day shall also exclude any day on which banks are not open for dealings in deposits in United States dollars in the London interbank market.

Capital means, at any time, the sum of all Capital Investments outstanding of all Purchasers and the Swing Purchaser at such time.

Capital Investment means, with respect to any Purchaser, or Swing Purchaser, as the case may be, and in respect of any Receivable Interest, the original amount paid to the Seller for such Receivable Interest at the time of its acquisition by such Purchaser or Swing Purchaser, as the case may be, pursuant to Section 2.1, 2.2 or 2.3, reduced from time to time by such Purchasers Ratable Portion of Collections received and distributed on account of such Capital pursuant to Section 2.6, 2.7 or 2.8 or, with respect to the Swing Purchaser, any amounts received pursuant to Section 2.3(e); provided, however, that if such Capital Investment in respect of such Receivable Interest shall have been reduced by any distribution of any portion of Collections and thereafter such distribution is rescinded or must otherwise be returned for any reason, such Capital Investment in respect of such Receivable Interest shall be increased by the amount of such distribution, all as though such distribution had not been made.

Capitalized Lease Obligations of any Person means obligations of such Person and its consolidated subsidiaries to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real and/or personal property, which obligations are accounted for as a capital lease on the consolidated balance sheet of such Person, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

Cash Assets Account means, collectively, the Deposit Account of the Seller identified on Schedule I hereto, or such other account as the Seller and the Agent may agree.

Cash Assets means any cash on deposit in, and Liquid Investments held in, the Cash Assets Account.

Cash Management Obligation means any direct or indirect liability, contingent or otherwise, of the Seller in respect of cash management services (including treasury, depository, overdraft, electronic funds transfer and other cash management arrangements) provided after the date hereof (regardless of whether these or similar services were provided prior to the date hereof by the Agent, any Purchaser or any Affiliate or any of them) by the Agent or the Asset Agent in connection with this Agreement or any other Transaction Document, including obligations for the payment of fees, interest, charges, expenses, reasonable attorneys fees and disbursements in connection therewith.

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Change of Control means the occurrence of any of the following:

(1)           the Sponsor (as defined in the Senior Facility Credit Agreement) ceases to hold legally and beneficially:

(a)           issued share capital having the right to cast at least 51% (or, following a Listing, at least 35%) of the votes capable of being cast in general meetings of the Company; or

(b)           before a Listing, the right to determine the composition of the majority of the board of directors or equivalent body of the Company;

(2)           following a Listing, any Person or group of Persons acting in concert (other than the Sponsor) owns, directly or indirectly, a greater percentage of the issued share capital or issued share capital with voting rights of the Company than the Sponsor or, at any time, otherwise acquires control of the Company; or

(3)           the replacement of a majority of the Board of Directors of the Company over a two-year period from the directors who constituted the Board of Directors of the Company at the beginning of such period, and such replacement shall not have been approved by a vote of at least a majority of the Board of Directors of the Company then still in office who either were members of such Board of Directors at the beginning of such period or whose election as a member of such Board of Directors was previously so approved; or

(4)           the adoption by the stockholders of the Company of a plan or proposal for the liquidation or dissolution of the Company, other than, in each case, a transaction complying with the covenant described in Section 7.04 of the Senior Facility Credit Agreement; or

(5)           the Company shall cease to own, directly or indirectly, 100% of the Equity Interests in (x) the Seller or (y) any Originator unless such Originator ceases to be an Originator in accordance with Section 7.03 of the Receivables Sale Agreement.

Citibank means Citibank, N.A., a national banking association, and its successors.

Closing Date means December 20, 2007.

Code means the Internal Revenue Code of 1986, as amended from time to time.

Collections means, with respect to any Pool Receivable, all cash collections and other cash proceeds of such Pool Receivable, including (i) all cash proceeds of the Related Security with respect to such Pool Receivable and (ii) any amounts in respect of such Pool Receivable deemed to have been received, and actually paid, pursuant to Section 2.9(b) or Section 2.9(c).

Commitment means (i) in respect of each Initial Purchaser, the commitment of such Purchaser to make Purchases and acquire other Capital Investments in the aggregate amount set forth as the Commitment next to the name of such Initial Purchaser on Schedule X hereto and (ii) in respect of each other Purchaser that became a Purchaser by entering into an Assignment and Acceptance, the amount set forth as the Commitment for such Purchaser in the Register maintained by the Agent pursuant to Section 9.2, in each case, as such amount may be reduced from time to time as the result of any assignment of any Commitment or any portion thereof pursuant to Section 9.1 or as such amount may be reduced from time to time pursuant to Section 2.4(a).

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Commitment Termination Date means the fifth anniversary of the Closing Date.

Company means Basell AF S.C.A. (to be renamed LyondellBasell Industries AF S.C.A), a company existing under the laws of the Grand Duchy of Luxembourg.

Compliance Period means the period commencing on the Closing Date and ending 30 days thereafter (or such longer period as the Agent may, in the good faith exercise of its discretion, determine to be warranted).

Concentration Account means the Deposit Account of the Seller identified on Schedule I hereto, or such other account as the Seller and the Agent may agree.

Consent and Agreement means a consent and agreement dated the Closing Date, in substantially the form of Exhibit E hereto, with respect to the Receivables Sale Agreement, duly executed by the Seller and each Originator.

Continuation means a continuation of a Capital Investment bearing Yield at the Applicable LIBO Rate for an additional Yield Period as permitted under Section 2.16.

Contract means a written agreement between any Originator and an Obligor, or, in the case of any open account agreement, as evidenced by an invoice (x) setting forth the amount payable, the payment due date and other relevant terms of payment and a description, in reasonable detail, of the goods or services covered thereby or (y) otherwise approved by the Agent in its Discretion from time to time (which approval shall not be unreasonably withheld), in each case pursuant to or under which such Obligor shall be obligated to pay for goods or services from time to time.

Conversion means (i) any conversion of Capital Investments bearing Yield at the Applicable LIBO Rate to Capital Investments bearing Yield at the Applicable Base Rate and (ii) any conversion of Capital Investments bearing Yield at the Applicable Base Rate to Capital Investments bearing Yield at the Applicable LIBO Rate.

Credit and Collection Policy means those credit and collection policies and practices in effect on the date hereof relating to Contracts and Pool Receivables and described in Schedule II hereto, as modified from time to time in compliance with Section 5.3(f) and Section 5.6(a).

Debt of any Person means, without duplication, (a) the outstanding principal amounts of all obligations of such Person for borrowed money (including repurchase obligations), (b) the outstanding principal amounts of all obligations of such Person evidenced by bonds, debentures, notes or similar instruments or letters of credit in support of bonds, notes, debentures or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Person to pay the deferred purchase price of property or services under any conditional sale or other title retention agreement, (e) all obligations of such Person issued or assumed as the deferred purchase price of property or services (other than accounts payable to suppliers and accrued liabilities (i) that are incurred in the ordinary course of business and paid within 90 days after the date due or (ii) that are being contested in good faith by appropriate proceedings and for which appropriate reserves have been established in accordance with GAAP), (f) all Capitalized Lease Obligations of such Person, (g) all obligations of such Person to reimburse any bank or other Person in respect of amounts paid under a letter of credit or similar instrument, (h) all Equity Interests of such Person which are subject to redemption otherwise than at the sole option of such Person, (i) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property or assets owned or acquired by such Person, whether or not the obligations secured thereby have been assumed and (j) all Guarantees of such Person.

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Debtor Relief Laws means the Bankruptcy Code of the United States, the Dutch Bankruptcy Act (Faillissementswet), the German Insolvency Law, the Luxembourg insolvency laws and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, faillissement, surseance van betaling, onderbewindstelling, ontbinding, or similar debtor relief Laws of the United States, The Netherlands, Luxembourg or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally (including, in the case of Transaction Parties incorporated or organized in England, Wales or Hong Kong, administration, administrative receivership, voluntary arrangement and schemes of arrangement).

Deposit Account has the meaning set forth in Article 9 of the UCC.

Discretion refers to the Agents good faith exercise of its discretion in a manner consistent with its customary credit policies for receivables purchase or receivables-based credit facilities.  Except where a different standard of conduct is expressly provided for in the proviso to clause (d) of the definition of Eligible Receivable, actions by the Agent in respect of the determination of Eligible Receivables or the Net Receivables Pool Balance or the Applicable Reserve or in connection with any approval by the Agent of Contracts or other matters relating to the Pool Receivables and Related Security shall be taken by the Agent in its Discretion.

Eligible Receivable means each Pool Receivable arising out of the sale of inventory or the performance of services in the ordinary course of business by an Originator to a Person that is not an Affiliate of any Originator; provided, however, that a Pool Receivable shall not be an Eligible Receivable if any of the following shall be true:

(a)           any warranty contained in Section 4.1(h) of this Agreement with respect to such specific Receivable is not true and correct with respect to such Receivable; or

(b) the Obligor on such Receivable has disputed liability or made any claim with respect to such Receivable or any other Receivable due from such Obligor to the Seller or any Originator but only to the extent of such dispute or claim; or

(c)           [Reserved;]

(d)           the transaction represented by such Receivable is to an Obligor which, if a natural person, is not a resident of the United States or, if not a natural person, is organized under the laws of a jurisdiction outside the United States or has its chief executive office outside the United States (it being understood for purposes of this clause (d) that a territory of the United States that has enacted Revised Article 9 of the Uniform Commercial Code and Puerto Rico are considered to be part of the United States), unless (i) such Receivable is backed by a letter of credit acceptable to the Agent, in its reasonable discretion and (x) such letter of credit names the Agent (for the benefit of itself and each Purchaser) as the beneficiary or (y) the issuer of such letter of credit has consented to the assignment of the proceeds thereof to the Agent, (ii) such Obligor is, if a natural person, a resident of Canada or, if not a natural person, is organized under the laws of Canada or a province thereof and has its chief executive office in Canada and such Receivable is denominated in U.S. Dollars or (iii) such Receivable is backed by insurance reasonably acceptable to the Agent and the relevant insurance policy names the Agent (for the benefit of itself and each Purchaser) as additional insured and loss payee; provided, however, that the Receivables of any Obligor located in a jurisdiction outside the United States or Canada approved by the Agent in its sole discretion, which jurisdiction shall be listed in Schedule V hereto as and when approved by the Agent, and which Obligor is listed on Schedule VI-A hereto (as of the date hereof and as such Schedule may be updated from time to time by the Originators upon five Business Days prior written notice to the Agent), shall be Eligible Receivables pursuant to this clause (d) to the extent that (A) such Receivables are denominated in U.S. Dollars and arise from sales of inventory shipped from the United States and (B) the aggregate Outstanding Balance of all such Receivables does not exceed 15% of the Outstanding Balance of all Eligible Receivables; or

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(e)           the sale to such Obligor represented by such Receivable is not a final sale (e.g., such sale is on a bill-and-hold, guaranteed sale, sale-and-return or sale-on-approval basis or, until billed, a consignment basis); or

(f)           such Receivable is subject to any Lien other than a Permitted Lien described in clause (i) or (ii) of the definition thereof; or

(g)           such Receivable is subject to any deduction, offset, counterclaim, return privilege or other conditions (other than (i) sales discounts given in the ordinary course of the Originators business and reflected in the amount of such Receivable as set forth in the invoice or other supporting material therefor or (ii) an offset or counterclaim of a nature specifically addressed in another clause of this definition) but only to the extent of the amount of such deduction, offset, counterclaim, return privilege or other condition being asserted by the Obligor; or

(h)           the Obligor on such Receivable is located in any State of the United States requiring the holder of such Receivable, as a precondition to commencing or maintaining any action in the courts of such State either to (i) receive a certificate of authorization to do business in such State or be in good standing in such State or (ii) file a Notice of Business Activities Report with the appropriate office or agency of such State, in each case unless (x) the holder of such Receivable has received such a certificate of authority to do business, is in good standing or, as the case may be, has duly filed such a notice in such State or (y) such failure to receive such certificate or to file such notice is capable of being remedied without any material delay or material cost; or

(i)            the Obligor on such Receivable is a Governmental Authority, unless the applicable Originator and the Seller have each assigned its rights to payment of such Receivable to the Agent pursuant to the Assignment of Claims Act of 1940, as amended, in the case of a federal Governmental Authority, and pursuant to applicable law, if any, in the case of any other Governmental Authority, and such assignment has been accepted and acknowledged by the appropriate government officers; or

(j)            50% or more of the Outstanding Balance of the Receivables of the Obligor are not Eligible Receivables by reason of clause (b) or (g) above or clause (o) below; provided that Receivables that are determined not to be Eligible Receivables, solely as a result of the provisions of clause (n) below, shall be excluded in calculating such percentage; or

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(k)            the payment obligation represented by such Receivable is denominated in a currency other than U.S. Dollars; or

(l)            such Receivable is not evidenced by an invoice that would be a Contract or by other supporting material acceptable to the Agent, in its Discretion; provided, however, that this clause (l) shall not render ineligible Unbilled Receivables that would otherwise constitute Eligible Receivables under other clauses of this definition; or

(m)           any Originator, the Seller or any other Person, in order to be entitled to collect such Receivable, is required to deliver any additional goods or merchandise to, perform any additional service for, or perform or incur any additional obligation to, the Person to whom or to which it was made; or

(n)           the total Receivables of such Obligor to the Originators (taken as a whole) represent more than 15% (or such lesser percentage with respect to certain Obligors as the Agent may determine in its Discretion) of the Outstanding Balance of the Eligible Receivables of the Originators (taken as a whole) at such time, but only to the extent of such excess; or

(o)           such Receivable (or any portion thereof) remains unpaid for more than (i) 60 days from the original payment due date, or (ii) if such Receivable arises from the sale of inventory, 90 days from the original invoice date thereof or, in the case of any such Receivable from an Obligor listed, and with the payment terms described, in Schedule VI-B hereto (as of the date hereof and as such Schedule may be updated from time to time by the Originators upon five Business Days prior written notice to the Agent), 120 days from the original invoice date thereof, provided that such Receivables from such Obligors listed in Schedule VI-B shall be Eligible Receivables under this clause (o) only to the extent that the Outstanding Balance of all such Receivables does not exceed 10% of the Outstanding Balance of all Eligible Receivables; or

(p)           the Obligor on such Receivable (i) has (A) pending, by or against such Obligor, a petition for bankruptcy or any other relief under the Bankruptcy Code or any other law relating to bankruptcy, insolvency, reorganization or relief of debtors, (B) an assignment for the benefit of creditors, (C) any other application for relief under the Bankruptcy Code or any such other law or (D) the appointment of a receiver or a trustee for all or a substantial part of its assets or affairs or (ii) has, while such Receivable remains outstanding, failed, suspended business operations, become insolvent or called a meeting of its creditors for the purpose of obtaining any financial concession or accommodation; or

(q)           consistent with the Credit and Collection Policy, such Receivable is or should be written off the Sellers or any Originators books as uncollectible; or

(r)           such Receivable is not payable into a Lock-Box Account, or that Lock-Box Account is not, following the Compliance Period, the subject of a Lock-Box Agreement; or

(s)           such Receivable does not arise under a Contract which has been duly authorized and which, together with such Receivable, is in full force and effect and constitutes the legal, valid and binding obligation of the Obligor of such Receivable enforceable against such Obligor in accordance with its terms; or

(t)            such Receivable, together with the Contract related thereto, contravenes in any material respect any laws, rules or regulations applicable thereto (including, without limitation, laws, rules and regulations relating to usury, consumer protection, truth in lending, fair credit billing, fair credit reporting, equal credit opportunity, fair debt collection practices and privacy) or with respect to which the applicable Originator is in violation of any such law, rule or regulation in any material respect; or

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(u)           such Receivable does not satisfy the requirements of the Credit and Collection Policy in all material respects; or

(v)           such Receivable does not constitute an account within the meaning of Section 9-102(a)(2) of the UCC of the jurisdiction the law of which governs the perfection of the interest created by a Receivable Interest; or

(w)           the sale to such Obligor on such Receivable is on a F.O.B. customer basis but only for so long as the inventory giving rise to such Receivable has not yet arrived at its destination and possession thereof has not been taken by the Obligor; or

(x)           such Receivable (i) is subject to an unsecured claim in favor of a surety or (ii) arises under a Contract that is not governed by the laws of the United States or a State thereof; or

(y)           such Receivable is an Unbilled Receivable; provided, however, that Unbilled Receivables in respect of inventory that have been shipped shall be Eligible Receivables under this clause (y) to the extent that the Outstanding Balance of all such Receivables does not exceed 25% (or, if such determination is being made at any time other than as of the last day of any calendar month, 35%) of the Outstanding Balance of all Eligible Receivables; provided, further, however, that any Unbilled Receivable as to which an invoice has not been issued to the relevant Obligor more than 31 days after the date of the sale of goods by the relevant Originator giving rise to such Receivable shall not be an Eligible Receivable; or

 (z)           there is a chargeback represented by the unpaid portion of such Receivable as to which less than full payment was made; or

(aa)          such Receivable is billed in advance of the relevant shipment of inventory or performance of services; or

(bb)         such Receivable arises under a Contract that (i) specifies a fixed price and fixed volume for 90 or more days and (ii) provides for material liquidated damages; or

(cc)          (i) such Receivable does not comply with such other reasonable criteria and requirements (other than those relating to the collectibility of such Receivable) as the Agent, in its Discretion, may from time to time specify to the Seller upon 30 days notice, or (ii) the Agent, based upon such credit and collateral considerations as it may deem appropriate, in the exercise of its Discretion, and upon at least five Business Days notice, notifies the Seller of its determination that such Receivable might not be paid or is otherwise ineligible, in which event such Receivable shall not be an Eligible Receivable on the effective date of ineligibility specified in such notice.

For the avoidance of doubt, it is acknowledged and agreed that any calculation of ineligibility made pursuant to more than one clause above shall be made without duplication.

Equistar means Equistar Chemicals, LP, a Delaware limited partnership.

Equity Interest means, with respect to any Person, all of the capital stock of such Person and all warrants, options or other rights to acquire the capital stock of such Person including any contribution from shareholders without any issuance of shares (but excluding any debt security that is convertible into, or exchangeable for, such capital stock).

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ERISA means the Employee Retirement Income Security Act of 1974, as amended from time to time.

ERISA Affiliate means any trade or business (whether or not incorporated) that is under common control with any Transaction Party within the meaning of Section 414 of the Code or Section 4001 of ERISA.

ERISA Event means (a) a Reportable Event with respect to a Pension Plan; (b) with respect to a Pension Plan, the failure to satisfy the minimum funding standard of Section 412 of the Code and Section 302 of ERISA, whether or not waived; (c) the failure to make by its due date a required contribution under Section 412(m) of the Code (or Section 430(j) of the Code, as amended by the Pension Protection Act of 2006) with respect to any Pension Plan or the failure to make any required contribution to a Multiemployer Plan; (d ) a withdrawal by a Transaction Party, any Subsidiary or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (e) a complete or partial withdrawal by a Transaction Party, any Subsidiary or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (f) the filing of a notice of intent to terminate, the treatment of a Plan amendment as a termination under Section 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan or the occurrence of any event or condition which could reasonably be expected to constitute grounds under ERISA for the termination of or the appointment of a trustee to administer any Pension Plan, in each case where Pension Plan assets are not sufficient to pay all Plan liabilities; (g) an event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; (h) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon a Transaction Party, any Subsidiary or any ERISA Affiliate; or (i) the occurrence of a nonexempt prohibited transaction (within the meaning of Section 4975 of the Code or Section 406 of ERISA) which could reasonably be expected to result in liability to a Transaction Party or any Restricted Subsidiary.

Eurocurrency Liabilities has the meaning assigned to that term in Regulation D of the FRB.

Events of Termination has the meaning specified in Section 7.1.

Exchange Act means the Securities Exchange Act of 1934, as amended, or any successor statute or statutes thereto.

Existing Programs means (i) the receivables securitization facility established pursuant to the receivables sale agreement dated as of December 17, 2003, as amended, among Equistar, as seller, Equistar Receivables II, LLC as buyer, and Equistar, as buyers servicer, and the Receivables Purchase Agreement dated as of December 17, 2003, as amended, among Equistar Receivables II, LLC and the purchasers and agents party thereto and (ii) the receivables securitization facility established pursuant to the receivables sale agreement dated as of December 17, 2003, as amended, among Lyondell as seller, Lyondell Funding II, LLC as buyer, and Lyondell, as the buyers servicer, and the Receivables Purchase Agreement dated as of December 17, 2003, as amended, among Lyondell Funding II, LLC and the purchasers and agents party thereto.

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Federal Funds Rate means, for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for such day on such transactions received by the Agent from three Federal funds brokers of recognized standing selected by it.

Fee Letter means the Fee Letter dated October 29, 2007 among the Company and the financial institutions party thereto.

Fiscal Year means each twelve-month period ending on December 31.

Foreign Plan means any employee benefit plan, program, policy, arrangement or agreement maintained or contributed to by, or entered into with, a Transaction Party or any Subsidiary with respect to employees employed outside the United States.

FRB means the Board of Governors of the Federal Reserve System of the United States.

GAAP means generally accepted accounting principles in the United States of America as in effect from time to time as adopted by the Company; provided that the Company may make a one-time election to switch to IFRS, if permitted to do so by the SEC in its filings with the SEC, and following such election and the notification in writing to the Administrative Agent by the Company thereof, GAAP shall mean IFRS. After such election, the Company cannot subsequently elect to report under U.S. generally accepted accounting principles. If at any time the Company or the Servicer notifies the Agent in writing that the Company wishes to eliminate the effect of any change in GAAP on any provision of this Agreement, then such provision shall be applied on the basis of GAAP as in effect immediately before the relevant change in GAAP became effective until either such notice is withdrawn or such provision is amended in a manner satisfactory to the Servicer and the Required Purchasers.

Governmental Authority means any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, court, administrative tribunal, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

Guarantee of or by any Person means any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Debt of any other Person (the primary obligor) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Debt or to purchase (or to advance or supply funds for the purchase of) any security for the payment of such Debt, (b) to purchase property, securities or services for the purpose of assuring the owner of such Debt of the payment of such Debt or (c) to maintain working capital, equity capital or other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Debt.

Holding Company means, in relation to a company, corporation or other legal entity, any other company, corporation or other legal entity in respect of which the former company, corporation or other legal entity is a subsidiary.

HRLP means Houston Refining LP, a Delaware limited partnership.

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Increasing Purchaser has the meaning specified in Section 2.19.

Indebtedness has the meaning specified in the Undertaking.

Indemnified Amounts has the meaning specified in Section 10.1.

Indemnified Party means the Agent, the Asset Agent, each Purchaser and each of their respective Affiliates, and each of the directors, officers, employees, agents, representative, attorneys, consultants and advisors of or to any of the foregoing.

Intercreditor Agreement shall mean, collectively, (i) the Intercreditor Agreement dated as of December 20, 2007 by and among Citibank, as Agent, Citibank, as Lender Agent, Seller, as Transferor, Lyondell, as Originator, as Initial Servicer and as Borrower, and the other Originators and Loan Parties from time to time party thereto, (ii) the Intercreditor Agreement dated as of December 20, 2007 among Citicorp North America, Inc. as Receivables Agent (as such term is defined therein), Citibank, N.A. as ABL Agent (as such term is defined therein), Basell Capital Corporation as Transferor (as defined therein), Basell USA as Originator, Receivables Servicer and Borrower (as defined therein), and the other originators and borrowers party thereto and (iii) the Intercreditor Agreement dated as of December 20, 2007 by and among Citibank, in its capacity as Senior Agent (as defined therein), Security Agent (as defined therein) and ABL Agent (as defined therein), the Interim Facility Agent (as defined therein), the High Yield Notes Trustee (as defined therein), the Arco Notes Trustee (as defined therein), the Equistar Notes Trustee (as defined therein), the Company, the subsidiaries of the Company specified therein and the other parties thereto from time to time, as amended, substantially in the forms of Exhibit K-1, K-2 and K-3.

Investment means, with respect to any Person, (a) all investments by such Person in another Person (including an Affiliate of such Person) in the form of direct or indirect loans, advances or extensions of credit to such other Person (including any Guarantee by such Person of Debt or capital stock of such other Person) or capital contributions or purchases or other acquisitions for consideration of Debt, Equity Interests or other securities of such other Person, together with all items that are or would be classified as investments of such investing Person on a balance sheet prepared in accordance with GAAP, and (b) any purchase by such Person of all or a significant part of the assets of a business conducted by any other Person, or all or substantially all of the assets constituting the business of a division, branch or other unit operation of any other Person; provided that (i) trade credit and accounts receivable in the ordinary course of business and (ii) commissions, loans, advances, fees and compensation paid in the ordinary course of business to officers, directors and employees.

Investment Event means any Purchase, Conversion and any Continuation.

Legal Reservations means;

(a)           the principle that equitable remedies may be granted or refused at the discretion of a court;

(b)           the limitation of enforcement by law relating to insolvency, reorganization, penalties and other laws generally affecting the rights of creditors;

(c)           the time barring of claims under the statutes of limitation;

(d)           the possibility that an undertaking to assume liability for or indemnify a person against the non-payment of UK stamp duty may be void;

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(e)           defenses or set-off or counterclaim; and

(f)           principles which are set out in the qualifications as to matters of law in any legal opinion delivered on the Closing Date in connection with this Agreement.

LIBO Rate means, with respect to any Yield Period for any Capital Investment as to which Yield is based on the Applicable LIBO Rate, the rate appearing on Page 3750 of the MoneyLine Telerate Markets (or on any successor or substitute page of such service) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Yield Period, as the rate for Dollar deposits with a maturity comparable to such Yield Period.  In the event that such rate is not available at such time for any reason, then the LIBO Rate shall be the rate at which Dollar deposits in an amount approximately equal to the Capital Investment of Citibank and for a period comparable to such Yield Period are offered by the principal office of Citibank in London to prime banks in the London interbank market at approximately 11:00 a.m. (London time) two Business Days prior to the commencement of such Yield Period.

Lien means any mortgage, deed of trust, pledge, hypothecation, assignment, transfer for security purposes, deposit arrangement, encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or preferential arrangement, of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any easement, right of way or other encumbrance on title to Real Property and any Capitalized Lease having substantially the same economic effect as any of the foregoing).

Liquid Investments has the meaning set forth in Section 2.18(b).

Liquidation Cost has the meaning set forth in Section 2.12.

Liquidation Day means, for any Receivable Interest, each Business Day that occurs on or after the Termination Date.

Listing means a listing of all or any of the share capital of the Company or any of its Subsidiaries or any Holding Company or any of its Subsidiaries (excluding the Sponsor as defined in the Senior Facility Credit Agreement (to the extent not a Subsidiary of the Company) and any such Holding Company of the Company or any of its Subsidiaries, but in each case only if a majority of the investments of such company are not constituted by the Company or any of its Subsidiaries) on any investment exchange or any other sale or issue by way of flotation or public offering or any equivalent circumstances in relation to the Company or any of its Subsidiaries or any Holding Company of the Company or any of its Subsidiaries (excluding the Sponsor (to the extent not a Subsidiary of the Company) and any such Holding Company of the Company or any of its Subsidiaries, but in each case only if a majority of the investments of such company are not constituted by the Company or any of its Subsidiaries) in any jurisdiction or county.

Lock-Box Account means a Deposit Account (including, without limitation, any concentration account) maintained at a Lock-Box Bank for the purpose of receiving Collections and, following the end of the Compliance Period, subject to a valid Lock-Box Agreement.

Lock-Box Agreement means an agreement, in substantially the form of Exhibit C hereto (with such modifications thereto as consented to by the Agent), between any Originator or the Seller, as the case may be, the Agent, and a Lock-Box Bank.

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Lock-Box Bank means any of the banks specified on Schedule I hereof and any other bank specified as a Lock-Box Bank in accordance with this Agreement, in each case holding one or more Lock-Box Accounts.

Lyondell means Lyondell Chemical Company (to be the surviving entity with and into which BIL Acquisition Holdings Limited will merge), a Delaware corporation.

Material Adverse Effect means (a) a material adverse effect on the business, operations, assets, liabilities (actual or contingent) or financial condition of the Company and its Restricted Subsidiaries taken as a whole, (b) material impairment of the ability of the Transaction Parties to perform any of their obligations under the Transaction Documents, (c) material impairment of the collectibility of the Pool Receivables generally or of any material portion of the Pool Receivables or the ability of the Servicer (if the Servicer is an Originator or an Affiliate of an Originator) to collect Pool Receivables or (d) material impairment of the rights of or benefits available to the Agent or the Purchasers under the Transaction Documents; provided, however, that a downgrade in any debt rating of any Transaction Party shall not, by itself, constitute a Material Adverse Effect.

Material Subsidiary has the meaning specified in the Senior Facility Credit Agreement.

Maximum Capital means, at any time, the lesser of (a) the Total Commitments and (b)(i) the Net Receivables Pool Balance minus (ii) the Applicable Reserve in effect at such time.

Millennium Holdings Group has the meaning specified in Article VII.

Multiemployer Plan means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which any Transaction Party, any Subsidiary or any ERISA Affiliate makes or is obligated to make contributions, during the preceding five plan years, has made or been obligated to make contributions or otherwise could reasonably be expected to incur liability.

Net Receivables Pool Balance means, at any time, the Outstanding Balance of the Eligible Receivables in the Receivables Pool as at such time reduced by (a) Unapplied Cash and Credits (to the extent not already deducted in determining the Outstanding Balance), (b) the Yield and Fee Reserve at such time and (c) to the extent not already deducted in determining Eligible Receivables, (i) amounts accrued or recorded by the Originators as a reserve in respect of volume rebates or other offsetting deductions, or in respect of credits in past due and (ii) such dilution reserves and other reductions as the Agent in its Discretion deems appropriate and as notified by the Agent to the Seller at least five Business Days prior to the effectiveness thereof.

New Purchaser has the meaning specified in Section 2.19.

Notice of Conversion or Continuation has the meaning specified in Section 2.16(a).

Notice of Purchase has the meaning specified in Section 2.2(a).

Obligations means, with respect to any Transaction Party, the obligations of such Transaction Party under the Transaction Documents (as the same may hereafter be amended, restated, extended, supplemented or otherwise modified from time to time) with respect to the due and punctual payment, whether at maturity, by acceleration or otherwise, of all monetary obligations of such Transaction Party, whether for fees, costs, indemnification or otherwise (other than Capital), including, with respect to the Seller, Yield, amounts payable as deemed Collections pursuant to Section 2.9(b) or 2.9(c), the Agents Fee, the Unused Commitment Fee, the Servicer Fee, Cash Management Obligations and amounts payable by the Seller pursuant to Section 2.12, 2.13, 2.14, 10.1 and 11.5.

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Obligor means a Person obligated to make payments pursuant to a Contract.

Organization Documents means (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the certificate or articles of formation, association or organization and operating agreement; and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.

Originator means any of Lyondell, Equistar and HRLP, and any other wholly owned subsidiary of the Company or Lyondell from time to time party to the Receivables Sale Agreement as a Seller thereunder.

Other Taxes has the meaning specified in Section 2.14(b).

Outstanding Balance of any Receivable at any time means the then outstanding principal balance thereof.

Parent means BI S..r.l., a socit responsabilit limite incorporated under the laws of the Grand Duchy of Luxembourg.

Participant Register shall have the meaning specified in Section 9.3.

Payment Date means (a) in respect of Yield, the Unused Commitment Fee and the Servicer Fee, (i) the second Business Day of each calendar month, commencing on the first such day following the Closing Date and (ii) if not previously paid in full, the Termination Date, and (b) with respect to all other Obligations of the Seller hereunder, the date such Obligation is due or otherwise on demand by the Agent from and after the time such Obligation becomes due and payable (whether by acceleration or otherwise).

PBGC means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor thereto.

Pension Plan means any employee pension benefit plan (as such term is 1819 defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA or to the minimum funding standards under Section 412 of the Code or Section 302 of ERISA and is sponsored or maintained by any Transaction Party, any Subsidiary or any ERISA Affiliate or to which any Transaction Party, any Subsidiary or any ERISA Affiliate contributes or has an obligation to contribute, or in the case of a multiple employer or other plan described in Section 4064(a) of ERISA, has made contributions at any time during the immediately preceding five (5) plan years or with respect to which a Transaction Party, Subsidiary or ERISA Affiliate could reasonably be expected to incur liability (including under Section 4063 or 4069 of ERISA).

Permitted Lien means (i) an inchoate tax, PBGC Lien or other Lien arising solely by operation of law, (ii) a Lien created by the Transaction Documents, (iii) a Lien in favor of a Lock-Box Bank in respect of a Lock-Box Amount or (iv) a Lien in favor of a securities intermediary in respect of any securities account, or any securities entitlement therein, under the control (within the meaning of Section 9-104 of the UCC) of the Agent.

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Person means any natural Person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

Plan means any employee benefit plan (as such term is defined in Section 3(3) of ERISA) established by any Transaction Party or Subsidiary or, with respect to any such plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA Affiliate.

Pool Receivable means a Receivable in the Receivables Pool.

Potential Event of Termination means any event that, with the giving of notice or the passage of time or both, would constitute an Event of Termination.

Principal Financial Officer of any Person means the chief financial officer, the treasurer or the principal accounting officer of such Person (including any Person designated by the board of directors or other governing body as a Principal Financial Officer for purposes of this Agreement or any other Transaction Document).  Any action taken or document delivered by a Principal Financial Officer pursuant to the Transaction Documents shall be taken or delivered in his capacity as such.

Purchase means a purchase by the Purchasers or the Swing Purchaser of a Receivable Interest from the Seller pursuant to Article II.

Purchasers means the Initial Purchasers and each Assignee that shall become a party hereto pursuant to Section 9.1.

Ratable Portion or ratably means, with respect to any Purchaser, the percentage obtained by dividing (a) the Commitment of such Purchaser by (b) the Total Commitments (or, at any time after the Termination Date, the percentage obtained by dividing the aggregate Capital Investments then owing to such Purchaser by the Capital then owing).

Receivable means the indebtedness (whether constituting accounts or general intangibles or chattel paper or otherwise) of any Obligor under a Contract, and includes the right to payment of any interest or finance charges and other obligations of such Obligor with respect thereto.

Receivable Asset Availability means, at any time, (i) the sum of (x) the Net Receivables Pool Balance minus the Applicable Reserve in effect at such time, plus (y) Cash Assets at such time, minus (ii) the aggregate Capital outstanding at such time.

Receivables Excess Availability means, at any time, the sum of (i) Available Capital plus (ii) Cash Assets, determined as of the close of business on each Business Day giving effect to all changes in Cash Assets and in aggregate Capital outstanding during such Business Day.

Receivable Interest means, at any time, an undivided percentage ownership interest at such time in (a) all then outstanding Pool Receivables arising prior to the time of the most recent computation or recomputation of such undivided percentage interest pursuant to Section 2.5, (b) all Related Security with respect to such Pool Receivables and (c) all Collections with respect to, and other proceeds of, such Pool Receivables.  Such undivided percentage interest for such Receivable Interest shall be computed as:

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C + AR
NRPB

where:

C  = the outstanding Capital Investments made by the Purchasers or the Swing Purchasers, as the case may be, in connection with such Receivable Interest at such time;

AR  = the Purchasers or Swing Purchasers (as the case may be) Ratable Portion of the aggregate Applicable Reserve at such time; and

NRPB  = the Net Receivables Pool Balance at such time;

provided, however, that upon the occurrence of the Termination Date, the Receivable Interests then outstanding under this Agreement, if more than one Receivable Interest, shall be combined into one Receivable Interest hereunder (such one Receivable Interest, whether the one Receivable Interest then outstanding or the one Receivable Interest resulting from such combination of Receivable Interests, being the Special Receivable Interest) and such Special Receivable Interest shall be senior and prior to any undivided percentage ownership interest held by the Seller in (and, for the avoidance of doubt, while the Special Receivable Interest is greater than zero, the Seller shall not be entitled to assert or enforce any claim in respect of such retained undivided percentage ownership interest in) (i) all then outstanding Pool Receivables arising prior to the Termination Date, (ii) all Related Security with respect to such Pool Receivables and (iii) all Collections with respect to, and other proceeds of, such Pool Receivables.

Each Receivable Interest shall be determined from time to time pursuant to the provisions of Section 2.5.

Receivables Pool means at any time the aggregation of all then outstanding Receivables sold or otherwise transferred by the Originators to the Seller.

Receivables Sale Agreement means the Receivables Sale Agreement, dated as of the Closing Date, in substantially the form of Exhibit D hereto, among each Originator, as seller and, if applicable, as buyers servicer, and the Seller, as buyer.

Records means, with respect to any Receivable, all Contracts and other documents, books, records and other information (including, without limitation, computer programs, tapes, disks, data processing software and related property and rights) relating to such Receivable and the related Obligor.

Register has the meaning specified in Section 9.2.

Regulation U means Regulation U of the FRB, as the same is from time to time in effect, and all official rulings and interpretations thereunder or thereof.

Regulation X means Regulation X of the FRB, as the same is from time to time in effect, and all official rulings and interpretations thereunder or thereof.

Related Security means with respect to any Receivable:

  (i)               all right, title and interest of the Seller in, under and to all security agreements and other Contracts that relate to such Receivable;

         (ii)               all of the Sellers interest in the goods (including returned goods), if any, relating to the sale which gave rise to such Receivable;

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(iii)               all supporting obligations including all other security interests or liens and property subject thereto from time to time purporting to secure payment of such Receivable, whether pursuant to the Contract relating to such Receivable or otherwise, together with all financing statements authorized by an Obligor describing any collateral securing such Receivable;

(iv)               all letter of credit rights, guarantees, insurance and other agreements or arrangements of whatever character from time to time supporting or securing payment of such Receivable, whether pursuant to the Contract relating to such Receivable or otherwise;
 
 (v)               all Records relating to such Receivable (subject, in the case of Records consisting of computer programs, data processing software and other intellectual property under license from third parties, to restrictions imposed by such license on the sublicensing or transfer thereof);

(vi)              all of the Sellers right, title and interest in and to the following: (x) the Receivables Sale Agreement, including, without limitation, (A) all rights to receive moneys due and to become due under or pursuant to the Receivables Sale Agreement, (B) all rights to receive proceeds of any indemnity, warranty or guaranty with respect to the Receivables Sale Agreement, (C) claims for damages arising out of or for breach of or default under the Receivables Sale Agreement, and (D) the right to perform under the Receivables Sale Agreement and to compel performance and otherwise exercise all remedies thereunder; and (y) all lock-boxes to which Collections are sent or deposited and all Restricted Accounts, and all funds and investments therein, and
 
   (vii)               all cash proceeds of any and all of the foregoing.

Reportable Event means any of the events set forth in Section 4043(c) of ERISA or the regulations issued thereunder, other than events for which the thirty (30) day notice period has been waived.

Required Net Receivables Pool Balance means, at any time, the sum of (i) the Capital at such time plus (ii) the aggregate Applicable Reserve at such time.

Required Purchasers means, at any time, Purchasers holding more than 50% of the aggregate Total Commitments or, after the Termination Date, more than fifty percent (50%) of the aggregate Capital at such time.

Requirement of Law means, with respect to any Person, the common law and all federal, state, local and foreign laws, rules and regulations, orders, judgments, decrees and other determinations of any Governmental Authority or arbitrator, applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

Reserve Percentage means, as of the Closing Date, 15%, provided that the Reserve Percentage may, upon five Business Days notice by the Agent to the Seller and the Servicer, be increased or, subject to Section 11.1, decreased by the Agent at any time in its Discretion.

Responsible Officer means the chief executive officer, president, any vice president, chief financial officer, treasurer or assistant treasurer or other similar officer of a Transaction Party and, as to any document delivered on the Closing Date, any secretary of such Transaction Party or anyone granted a power of attorney by the board of directors or other governing body of a Transaction Party.  Any document delivered hereunder that is signed by a Responsible Officer of a Transaction Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Transaction Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Transaction Party.

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Restricted Accounts means the Sellers Account, the Lock-Box Accounts, the Concentration Account, the Sweep Account and the Cash Assets Account.

Restricted Subsidiary has the meaning specified in the Senior Facility Credit Agreement.

Seller has the meaning specified in the preamble to this Agreement.

Seller Party means the Seller or the Servicer.

Seller Report means a report, in substantially the form of Exhibit B hereto, furnished by the Servicer to the Agent for the benefit of each Purchaser pursuant to Section 5.5(e).

Sellers Account means the Deposit Account of the Seller identified on Schedule I hereto.

Senior Facility Credit Agreement means the Credit Agreement dated as of December 20, 2007 among the Company, BIL Acquisition Holdings Limited (to be merged with and into Lyondell), Basell Holdings B.V., Basell Finance Company B.V., Basell Germany Holdings GmbH, the other non-U.S. borrowers and the subsidiary guarantors party thereto from time to time, Citicorp North America, Inc., as administrative agent, a swing line lender, collateral agent and issuing bank thereunder and each lender from time to time party thereto.

Servicer has the meaning specified in Section 6.1.

Servicer Fee has the meaning specified in Section 2.11.

Shortfall Condition exists on any day if the aggregate Receivable Interests on such day would exceed 100% (after giving effect to any calculated reduction of Capital by an amount equal to the amount on deposit in the Cash Assets Account as of the close of business on such day pursuant to Section 2.6(a)(iii) or 2.7(a)(iii), as applicable).

Solvent means, with respect to any Person on any date of determination, that on such date (a) the fair value of the property of such Person is greater than the total amount of liabilities, including contingent liabilities, of such Person, (b) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Persons ability to pay such debts and liabilities as they mature and (d) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Persons property would constitute an unreasonably small capital. The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

Special Receivable Interest has the meaning specified in the definition of Receivable Interest contained in this Section 1.1.

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Subordinated Note has the meaning specified in the Receivables Sale Agreement.

Subsidiary means any subsidiary of any Transaction Party.

subsidiary means with respect to any Person, (1) a corporation a majority of the voting Equity Interests of which are at the time, directly or indirectly, owned by such Person; and (2) any other Person (other than a corporation), including, a partnership, limited liability company, business trust or joint venture, in which such Person, at the time thereof, directly or indirectly, has at least a majority ownership interest entitled to vote in the election of directors, managers or trustees thereof (or other Person performing similar functions).  For the purposes of this Agreement, references to subsidiaries of under this Agreement shall be deemed to include Lyondell and its subsidiaries after giving effect to the Acquisition.

Super Majority Purchasers means at any time Purchasers holding more than 66 2/3% of the aggregate Total Commitments or, after the Termination Date, more than 66 2/3% of the aggregate Capital outstanding at such time.

Sweep Account means the Deposit Account of the Seller identified on Schedule I hereto, or such other account as the Seller and the Agent may agree.

Swing Purchase has the meaning specified in Section 2.3.

Swing Purchase Request has the meaning specified in Section 2.3(b).

Swing Purchase Sublimit means, at any time, $75,000,000.

Swing Purchaser means Citibank or any other Purchaser that becomes the Agent or agrees, with the approval of the Agent and the Seller, to act as the Swing Purchaser hereunder, in each case in its capacity as the Swing Purchaser hereunder.

Taxes has the meaning specified in Section 2.14(a).

Termination Date means the earlier of (i) the Commitment Termination Date, and (ii) the date of termination in whole of the aggregate Commitments pursuant to Section 2.4 or 7.1.

Threshold Amount means $100,000,000.

Threshold Indebtedness has the meaning specified in Section 7.1.

Total Asset Availability means, at any time, the sum of (i) Receivable Asset Availability plus (ii) ABF Collateral Availability, in each case at such time.

Total Commitments means the aggregate of all Commitments of all Purchasers, as such amount may be reduced from time to time pursuant to Section 2.4 or increased from time to time pursuant to Section 2.19. On the Closing Date, the Total Commitments aggregate $1,150,000,000.

Total Excess Availability means, at any time, the sum of (i) Receivables Excess Availability plus (ii) ABF Excess Availability at such time.  Total Excess Availability shall be determined, on a pro forma basis, based on the borrowing base certificate delivered pursuant to 5.12 of the ABF Agreement and the first monthly Seller Report delivered pursuant to Section 5.5(e), to the extent required to be determined in respect of days prior to the Closing Date.

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Transaction Documents means this Agreement, the Receivables Sale Agreement, each Subordinated Note, the Undertaking, the Lock-Box Agreements, the Consent and Agreement, the Intercreditor Agreement, and each additional security or control documentation delivered or required to be delivered pursuant to any of the foregoing to evidence the interests of the Seller and of Agent and the Purchasers, as applicable, in and to the Restricted Accounts, Receivables, Related Security, Collections and proceeds thereof.

Transaction Parties means the Seller, each Originator and the Servicer (if an Originator or an Affiliate of an Originator is the Servicer).

Triggering Event means any of the following events:  (i) the Termination Date, (ii) the occurrence of an Event of Termination, (iii) Total Asset Availability being less than $225,000,000 on each Business Day during any period of five consecutive Business Days, (iv) Total Excess Availability being less than $200,000,000 on each Business Day during any period of five consecutive Business Days unless on each Business Day during such period both (x) Total Asset Availability is greater than or equal to $275,000,000 and (y) Total Excess Availability is greater than or equal to $150,000,000 or (v) Total Asset Availability being less than $200,000,000 on any Business Day; provided that if, following a Triggering Event described in clause (iii), (iv) or (v), Total Asset Availability subsequently equals or exceeds $250,000,000 on each Business Day during a period of 20 consecutive Business Days, such Triggering Event shall cease to exist upon the first day following such 20-Business Day period (unless the Seller otherwise elects by notice to the Agent); and provided, further, that if, following a Triggering Event described in clause (ii), the related Event of Termination ceases to exist, such Triggering Event shall cease to exist.  For the avoidance of doubt, the cessation of an existing Triggering Event does not preclude the occurrence of a subsequent Triggering Event.

UCC means, at any time, the Uniform Commercial Code as from time to time in effect in the State of New York at such time; provided, however, that in the event that, by reason of mandatory provisions of law, the perfection, effect of perfection or non-perfection or priority of the interests of the Agent or the Purchasers in the Pool Receivables, Related Security and Collections created by the Transaction Documents is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, the term UCC shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or priority.

Unapplied Cash and Credits means, at any time, the aggregate amount of Collections or other cash or credits then held by or for the account of the Servicer, any Originator or the Seller in respect of the payment of Pool Receivables, but not yet applied or reinvested pursuant to Section 2.6 or Section 2.7 or applied pursuant to Section 2.8.

Unbilled Receivable means a Receivable for which, at the time of determination, an invoice or other evidence of an Obligors payment obligation for the purchase of goods from the Originator has not been rendered.

Undertaking means the Undertaking Agreement dated as of the Closing Date, in substantially the form of Exhibit J hereto, by the Servicer and each Originator in favor of the Agent and the Purchasers.

United States and U.S. each means United States of America.

Unused Commitment Fee has the meaning specified in Section 2.11.

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U.S. Dollars and $ each means the lawful currency of the United States.

Welfare Plan means a welfare plan, as defined in Section 3(1) of ERISA.

Wholly Owned means, with respect to a Person, a subsidiary of such Person all of the outstanding Equity Interests of which (other than (x) directors qualifying shares and (y) shares issued to third parties, in each case in a de minimis amount and to the extent required by applicable Law) are owned by such Person and/or by one or more wholly owned subsidiaries of such Person.

Withdrawal Liability means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.

Yield means (a) for each Capital Investment made at the Applicable LIBO Rate, for any Yield Period:
 
 
AR x C x ED
+
LC
  
 
360
      


where:

AR
=
     the Applicable LIBO Rate for such Capital Investment for such Yield Period;

C
=
the amount of such Capital Investment;

ED
=
the actual number of days elapsed during such Yield Period; and

LC
=
all Liquidation Costs, if any, for such Receivable Interest for such Yield Period; and

(b) for each Capital Investment made at the Applicable Base Rate for any period of time:

 
AR x C x ED
or
AR x C x ED
  
 
365
366
  


where:

AR
=
the Applicable Base Rate from time to time;

C
=
the amount of such Capital Investment; and

ED
=
the actual number of days elapsed;

provided, that no provision of this Agreement shall require the payment or permit the collection of Yield in excess of the maximum permitted by applicable law; provided, further, that Yield for any Capital Investment shall not be considered paid by any distribution to the extent that at any time all or a portion of such distribution is rescinded or must otherwise be returned for any reason.

Yield and Fee Reserve means, as of any date of determination an amount in U.S. Dollars equal to the sum of  (A) the Servicer Fee accrued and unpaid through such date, (B) the aggregate Yield, Unused Commitment Fee and Agents Fee accrued and unpaid through such date and (C) the aggregate of any other Obligations then accrued and owing hereunder by the Seller to the Purchasers or the Agent.

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Yield Period means, in the case of any Capital Investment made at the Adjusted LIBO Rate, (a) initially, the period commencing on the date such Capital Investment is made or on the date of conversion of a Capital Investment made at the Alternate Base Rate to a Capital Investment made at the Adjusted LIBO Rate and ending on the seventh day thereafter (if at the time of the relevant Notice of Purchase, all Purchasers participating therein agree to make a seven-day Yield Period available) or one, two, three or six months thereafter, as selected by the Seller in its Notice of Purchase and (b) thereafter, if such Capital Investment is continued, in whole or in part, as a Capital Investment made at the Adjusted LIBO Rate, a period commencing on the last day of the immediately preceding Yield Period therefor and ending on the seventh day thereafter (if at the time of the relevant Notice of Conversion or Continuation, all Purchasers participating therein agree to make a seven-day Yield Period available) or one, two, three, six, nine or twelve (if at the time of the relevant Notice of Purchase, all Purchasers participating therein agree to make a nine or twelve month Yield Period available) months thereafter, as selected by the Seller in its Notice of Conversion or Continuation given to the Agent; provided, however, that all of the foregoing provisions relating to Yield Periods in respect of Capital Investment made at the Adjusted LIBO Rates are subject to the following:

(a)           if any Yield Period would otherwise end on a day that is not a Business Day, such Yield Period shall be extended to the next succeeding Business Day, unless the result of such extension would be to extend such Yield Period into another calendar month, in which event such Yield Period shall end on the immediately preceding Business Day;

(b)           any Yield Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Yield Period) shall end on the last Business Day of a calendar month;

(c)           the Seller may not select any Yield Period that ends after the Commitment Termination Date; and

(d)           there shall be outstanding at any one time no more than 10 Yield Periods in the aggregate.

Section 1.2            Other Terms.

(a)           All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP, except as otherwise specifically prescribed herein.

(b)           Except where the context requires otherwise, the definitions in Section 1.1 shall apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  The words include, includes and including shall be deemed to be followed by the phrase without limitation.  Unless otherwise stated, references to Sections, Articles, Schedules and Exhibits made herein are to Sections, Articles, Schedules or Exhibits, as the case may be, of this Agreement.  Writing, written and comparable terms refer to printing, typing and other means of reproducing words in a visible form.  References to any agreement or contract are to such agreement or contract as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof.  References to any Person include the successors and permitted assigns of such Person.

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(c)           All terms used in Article 9 of the UCC in the State of New York and not specifically defined herein are used herein as defined in such Article 9.

Section 1.3    Computation of Time Periods.

Unless otherwise stated in this Agreement, in the computation of a period of time from a specified date to a later specified date, the word from means from and including, the words to and until each means to but excluding and the word through means through and including.

ARTICLE II

Amounts and Terms of the Purchases

Section 2.1    Commitment.

On the terms and conditions herein set forth, each Purchaser severally agrees to make Purchases (i) on the Closing Date and from time to time thereafter on any Business Day during the period from the Closing Date to the Termination Date and (ii) in an aggregate amount for such Purchaser not to exceed at any time outstanding such Purchasers Commitment; provided, however, that no Purchaser shall be obligated to make any Purchase to the extent that, after giving effect to such Purchase, the Capital then outstanding would exceed the Maximum Capital.  Purchases shall be made by the Purchasers simultaneously and ratably in accordance with their respective Commitments.

Section 2.2    Making Purchases.

(a)    Each Purchase of a Receivable Interest by the Purchasers shall be made on notice from the Seller to the Agent, given not later than 12:30 p.m. (New York time) (i) on the third Business Day before the date of such Purchase in the case of the Purchase of any Receivable Interest initially bearing Yield at the Applicable LIBO Rate and (ii) on the Business Day of such Purchase in the case of the Purchase of any Receivable Interest initially bearing Yield at the Applicable Base Rate. Each such notice of a proposed Purchase of a Receivable Interest (a Notice of Purchase) shall be by telephone (confirmed promptly thereafter in writing), facsimile or by electronic mail (or similar means), in substantially the form of Exhibit F hereto, and shall specify the requested aggregate amount of such Purchase to be paid to the Seller and the requested Business Day of such Purchase.  Each Purchase of any Receivable Interest under this Section 2.2 shall be in an aggregate amount which is an integral multiple of $1,000,000 and which is not less than the lesser of $10,000,000 and the remaining available balance of the Commitments.

(b)    The Agent shall give each Purchaser prompt notice of such Notice of Purchase, the date of such Purchase, and the amount of such Purchasers Capital Investment in connection with such Purchase, by telephone or telefax.  On the date of such Purchase, each Purchaser shall, upon satisfaction of the applicable conditions set forth in Section 3.2, make available to the Agent its Ratable Portion of the aggregate amount of such Purchase by deposit of such Ratable Portion in same day funds to the Agents Account, and, after receipt by the Agent of such funds, the Agent shall cause such funds to be made immediately available to the Seller at the Sellers Account.

(c)            Each Notice of Purchase delivered pursuant to Section 2.2(a) shall be irrevocable and binding on the Seller.

(d)            Unless the Agent shall have received notice from a Purchaser prior to the date of any Purchase that such Purchaser will not make available to the Agent such Purchasers Ratable Portion of such Purchase, the Agent may assume that such Purchaser has made such Ratable Portion available to the Agent on the date of such Purchase in accordance with Section 2.2(b), and the Agent may, in reliance upon such assumption, make available to the Seller on such date a corresponding amount.  However, if the Agent has received such notice from such Purchaser, the Agent may not make such assumption and may not make available to the Seller on such date such corresponding amount.  If and to the extent that such Purchaser (other than a Purchaser that has delivered to the Agent a notice of the type described in the two immediately preceding sentences) shall not have made such Ratable Portion available to the Agent and the Agent has made such Ratable Portion available to the Seller, such Purchaser and the Seller severally agree to pay (to the extent not repaid by the Seller or such Purchaser, respectively) to the Agent promptly on demand such corresponding amount together with interest thereon, for each day from the date such amount is made available to the Seller until the date such amount is repaid to the Agent, at (i) in the case of the Seller, the Yield applicable to such amount and (ii) in the case of such Purchaser, the Federal Funds Rate.  If such Purchaser shall repay to the Agent such corresponding amount, such amount so repaid shall constitute such Purchasers Ratable Portion of such Purchase for purposes of this Agreement.

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(e)           The failure of any Purchaser to make available such Purchasers Ratable Portion of any Purchase shall not relieve any other Purchaser of its obligation, if any, hereunder to make available such other Purchasers Ratable Portion of such Purchase on the date of such Purchase, but no Purchaser shall be responsible for the failure of any other Purchaser to make available such other Purchasers Ratable Portion of such Purchase on the date of any Purchase.  Nothing herein shall prejudice any rights that the Seller may have against any Purchaser as a result of any default by such Purchaser hereunder.

Section 2.3    Swing Purchases

(a)            On the terms and subject to the conditions contained in this Agreement, the Swing Purchaser agrees to make, in U.S. Dollars, Purchases (each a Swing Purchase) otherwise committed to the Seller hereunder from time to time on any Business Day during the period from the Closing Date until the Termination Date representing an aggregate Capital Investment at any time outstanding (together with the aggregate outstanding Capital Investment relating to any other Purchase made by the Swing Purchaser hereunder in its capacity as the Swing Purchaser) not to exceed the Swing Purchase Sublimit; provided, however, that at no time shall the Swing Purchaser make any Swing Purchase to the extent that, after giving effect to such Swing Purchase, the Capital then outstanding would exceed the Maximum Capital.

(b)    In order to request a Swing Purchase, the Seller may telephone the Agent (to be promptly confirmed thereafter in writing) or send the Agent by telecopy (or by electronic mail or similar means) a duly completed request in substantially the form of Exhibit G, setting forth the requested amount and date of such Swing Purchase (a Swing Purchase Request), to be received by the Agent not later than 12:30 p.m. (New York time) on the day of the proposed purchase.  The Agent shall promptly notify the Swing Purchaser of the details of the requested Swing Purchase.  Subject to the terms of this Agreement, the Swing Purchaser may make the Capital Investment in connection with such Swing Purchase available to the Agent and, in turn, the Agent shall make such amounts available to the Seller on the date of the relevant Swing Purchase Request. The Swing Purchaser shall not make any Swing Purchase in the period commencing on the first Business Day after it receives written notice from the Agent or any Purchaser that one or more of the conditions precedent contained in Section 3.2 shall not on such date be satisfied, and ending when such conditions are satisfied.  The Swing Purchaser shall not otherwise be required to determine that, or take notice whether, the conditions precedent set forth in Section 3.2 have been satisfied in connection with the making of any Swing Purchase.  The Capital Investment relating to each Swing Purchase shall be in an aggregate amount of not less than $100,000.

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(c)           The Swing Purchaser shall notify the Agent in writing (which writing may be a telecopy or electronic mail) weekly, by no later than 10:00 a.m. (New York time) on the first Business Day of each week, of the aggregate amount of its Capital Investments at such time in respect of Swing Purchases.

(d)           The Swing Purchaser may demand at any time that each Purchaser pay to the Agent, for the account of the Swing Purchaser, in the manner provided in clause (e) below, such Purchasers Ratable Portion of all or a portion of the Swing Purchasers Capital Investments at such time in respect of Swing Purchases, which demand shall be made through the Agent, shall be in writing and shall specify the amount of the Capital Investments demanded to be so reduced; provided that if the aggregate amount of the Swing Purchasers Capital Investments in respect of Swing Purchases on the last Business Day of any week exceeds $5,000,000, then the Swing Purchaser shall make such demand to the Agent on such last Business Day of such week and require each Purchaser to pay to the Agent, for the account of the Swing Purchaser, on such last Business Day of such week such Purchasers Ratable Portion of the Swing Purchasers Capital Investments in respect of Swing Purchases then outstanding.

(e)    The Agent shall forward each notice referred to in clause (c) above and each demand referred to in clause (d) above to each Purchaser on the day such notice or such demand is received by the Agent (except that any such notice or demand received by the Agent after 2:00 p.m. (New York time) on any Business Day or any such demand received on a day that is not a Business Day shall not be required to be forwarded to the Purchasers by the Agent until the next succeeding Business Day), together with a statement prepared by the Agent specifying the amount of each Purchasers Ratable Portion of the aggregate amount of the Capital Investments in respect of Swing Purchases stated to be outstanding in such notice or demanded to be paid pursuant to such demand, and, notwithstanding whether or not the conditions precedent set forth in Section 3.2 and Section 2.1 shall have been satisfied (which conditions precedent the Purchasers hereby irrevocably waive), each Purchaser shall, before 12:00 noon (New York time) on the Business Day next succeeding the date of such Purchasers receipt of such notice or demand, make available to the Agent, in immediately available funds, for the account of the Swing Purchaser, the amount specified in such statement; provided, however, that notwithstanding anything to the contrary in the foregoing, no Purchaser shall be obligated to purchase a Ratable Portion of, or otherwise pay any sum in respect of, the Capital Investments in respect of a Swing Purchase to the extent that the purchase by such Purchaser of a Ratable Portion of, or payment of other sum in respect of, the Capital Investments in respect of such Swing Purchase would cause such Purchasers aggregate Capital Investment to exceed its Commitment.  Upon such purchase by a Purchaser, such Purchaser shall, except as provided in clause (f), be deemed to have made a Purchase with a Capital Investment equal to the amount actually paid by such Purchaser.  The Agent shall use such funds to reduce the Swing Purchasers Capital Investments in respect of Swing Purchases.

(f)            Upon the occurrence of an Event of Termination under Section 7.1(f), each Purchaser shall acquire, without recourse or warranty, an undivided participation in the Swing Purchasers Capital Investments in respect of each Swing Purchase otherwise required to be repaid by such Purchaser pursuant to clause (e) above, which participation shall be in an amount equal to such Purchasers Ratable Portion of the Swing Purchasers Capital Investments in respect of such Swing Purchase, by paying to the Swing Purchaser on the date on which such Purchaser would otherwise have been required to make a payment in respect of such Swing Purchasers Capital Investments pursuant to clause (e) above, in immediately available funds, an amount equal to such Purchasers Ratable Portion of such Swing Purchasers Capital Investments.  If all or part of such amount is not in fact made available by such Purchaser to the Swing Purchaser on such date, the Swing Purchaser shall be entitled to recover any such unpaid amount on demand from such Purchaser together with interest accrued from such date at the Federal Funds Rate for the first Business Day after such payment was due and thereafter at the Applicable Base Rate.

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(g)           From and after the date on which any Purchaser (i) is deemed to have made a Purchase pursuant to clause (e) above with respect to any Swing Purchase or (ii) purchases an undivided participation interest in the Swing Purchasers Capital Investments in respect of a Swing Purchase pursuant to clause (f) above, the Swing Purchaser shall promptly distribute to such Purchaser such Purchasers Ratable Portion of all payments in respect of Capital Investments and Yield received by the Swing Purchaser on account of such Swing Purchase other than those received from a Purchaser pursuant to clause (e) or (f) above.

Section 2.4    Termination or Reduction of the Commitments; Voluntary Reductions of Capital.

(a)            The Seller may, upon at least 3 Business Days notice to the Agent, and so long as, after giving effect to a proposed reduction, no Event of Termination or Potential Event of Termination, would exist, terminate in whole or reduce in part, the unused portions of the Commitments of the Purchasers; provided, however, that for purposes of this Section 2.4, the unused portions of the Commitments of the Purchasers shall be computed as (a) the Total Commitments immediately prior to giving effect to such termination or reduction less (b) the outstanding Capital at the time of such computation; provided, further, that each such partial reduction of the unused portions of the Commitments (x) shall be in an amount equal to at least $10,000,000 and shall be an integral multiple of $1,000,000 in excess thereof, (y) shall be made ratably among the Purchasers Commitments according to each Purchasers Ratable Portion and (z) shall reduce the Total Commitments in an amount equal to each such reduction.

(b)            The Seller may, upon at least 3 Business Days notice to the Agent or upon 1 Business Days notice to the Agent in the case of reductions in outstanding Capital bearing Yield solely at the Applicable Base Rate, reduce the outstanding Capital in whole or in part; provided that each such partial reduction of Capital shall be in a minimum amount of $10,000,000 and an integral multiple of $1,000,000.

Section 2.5    Receivable Interest.

(a)           On the date of Purchase of any Receivable Interest, such Receivable Interest shall be initially computed, after giving effect to such Purchase, as of the close of business of the Servicer on such date.  Thereafter until the Termination Date, such Receivable Interest shall be automatically recomputed as of the close of business of the Servicer on each day (other than a Liquidation Day).

(b)           Such Receivable Interest shall remain constant from the time as of which any such computation or recomputation is made until the time as of which the next such recomputation, if any, shall be made.  Each Receivable Interest, as computed as of the day immediately preceding the Termination Date, shall remain constant at all times on and after the Termination Date; and any Special Receivable Interest, as computed as of the Termination Date, shall remain constant at all times on and after the Termination Date.

(c)           Such Receivable Interest shall become zero at such time as the Purchasers of such Receivable Interest shall have received the accrued Yield for such Receivable Interest, shall have recovered the Capital Investment of such Receivable Interest, and shall have received payment of all other amounts payable by the Seller to such Purchasers, and the Servicer shall have received the accrued Servicer Fee for such Receivable Interest.

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Section 2.6    Ordinary Settlement Procedures.

(a)    On each Business Day (other than a Liquidation Day or a day on which a Triggering Event exists) the Servicer shall, out of Collections of Pool Receivables received on such Business Day:
 
  (i)               first, pay to the Servicer (if the Servicer is not an Originator or an Affiliate of an Originator) or the Agent and the Purchasers, as applicable, an amount in U.S. Dollars equal to the Servicer Fee, the Yield, the Unused Commitment Fee, the Agents Fee and any other Obligations of the Seller due and payable on such day;

 
 (ii)               second, distribute to the Agent for the account of the Swing Purchaser an amount in U.S. Dollars equal to that amount, if any, then required to be applied to reduce the Swing Purchasers Capital Investments in respect of Swing Purchases to zero;

 (iii)      third, if such day is the second Business Day following the date on which a Seller Report is or is required to be delivered, a Shortfall Condition exists as of the last day of the period covered by such Seller Report, and the Agent does not receive an updated Seller Report demonstrating that a Shortfall Condition does not exist on such second Business Day, distribute to the Agent for the account of the Purchasers an amount in U.S. Dollars equal to that amount, if any, which would be required to reduce Capital so that the aggregate Receivable Interests would not, after giving effect to such application and the Collections of Pool Receivables and the addition of new Pool Receivables on such day and the resulting automatic recomputation of such Receivable Interests pursuant to SectionSection 2.5 as of the end of such day, exceed 100%; provided that (x) the Agent shall apply such amount, first, to reduce all Capital Investments as to which Yield is determined on the basis of the Adjusted Base Rate and (y) second, to reduce all Capital Investments as to which Yield is determined on the basis of the Adjusted LIBO Rate; provided that in lieu of immediately reducing the Capital Investments as to which Yield is determined on the basis of the Adjusted LIBO Rate, the Agent, at the direction of the Seller, may transfer such amount to the Cash Assets Account and such amount shall be deemed to reduce Capital by the amount so held pending application thereof to reduce Capital Investments as to which Yield is calculated on the basis of the Adjusted LIBO Rate on the last day of each Yield Period applicable thereto (occurring in chronological order); provided, further, however, that if the Agent subsequently receives a request from the Servicer for a withdrawal of all or a portion of such amounts that are then held in the Cash Assets Account and a Seller Report demonstrating that a Shortfall Condition, after giving effect to such requested withdrawal, does not exist, then the Agent shall release such amounts to the Servicer for further application under this Section 2.6(a);

(iv)       fourth, distribute to the Agent for the account of the Purchasers of each Receivable Interest an amount in U.S. Dollars equal to that amount, if any, then required to be applied to reduce the Capital Investment of such Receivable Interest pursuant to the notice of the Seller delivered under Section 2.4(b);

 (v)               fifth, distribute to the Agent for deposit into the Cash Assets Account such amount as the Seller, at its option, has specified to the Agent, which amount shall be deemed to reduce Capital by a corresponding amount; provided, however, that if the Agent subsequently receives a request from the Servicer for a withdrawal of all or a portion of such amounts that are then held in the Cash Assets Account and a Seller Report demonstrating that a Shortfall Condition, after giving effect to such requested withdrawal, does not exist, then the Agent shall release such amounts to the Servicer for further application under this Section2.6(a).
31
 
(vi)               sixth, distribute to the Servicer (if the Servicer is an Originator or an Affiliate of an Originator) the accrued Servicer Fee to the extent then due and payable; and

   (vii)              seventh, reinvest the remainder of such Collections, for the benefit of the Purchasers, which reinvestment shall result in (x) an automatic recomputation of the undivided percentage interest represented by such Receivable Interest pursuant to Section 2.5 as of the end of such day and (y) the payment of such remainder to the Seller; provided, however, that to the extent the Agent or any Purchaser shall be required for any reason to pay over any amount representing Collections which have been previously reinvested for the benefit of such Purchaser pursuant hereto, such amount shall be deemed not to have been so reinvested but rather to have been retained by the Seller and paid over for the account of such Purchaser and, notwithstanding any provision herein to the contrary, such Purchaser shall have a claim for such amount;
 
provided, however, that if sufficient funds are not available to fund all payments to be made in respect of any amounts described in any of clauses  first, second, third, fourth, fifth and sixth above, the available funds being applied with respect to any such amounts (unless otherwise specified in such clause) shall be allocated to the payment of the amounts referred to in such clause ratably, based on the proportion of the Servicers, the Agents or the Purchasers interest in the aggregate outstanding amounts described in such clause.

(b)           Subject to Section 2.7 and Section 2.8, all amounts in the Concentration Account shall be automatically transferred to the Sellers Account, and payments and distributions by the Servicer pursuant to Section 2.6(a) shall be made from funds so transferred to the Sellers Account.  Payments to the Seller under clause (vii) of Section 2.6(a) shall be made, solely for administrative convenience as requested by the Seller so as to effect payment on behalf of the Seller of amounts payable by the Seller to the Originators for so long as the ABF Agreement is in effect, to the Inventory Concentration Account (as defined in the ABF Collateral Documents).

Section 2.7            Triggering Event Settlement Procedures.

(a)         On each Business Day (other than a Liquidation Day) on which a Triggering Event exists, the Agent (and not the Servicer) shall, out of Collections of Pool Receivables received on such Business Day:

  (i)               first, pay to the Servicer (if the Servicer is not an Originator or an Affiliate of an Originator), the Agent and the Purchasers, as applicable, an amount in U.S. Dollars equal to the Servicer Fee, the Yield, the Unused Commitment Fee, the Agents Fee and any other Obligations of the Seller due and payable on such day;

 (ii)               second, distribute to the Swing Purchaser an amount in U.S. Dollars equal to that amount, if any, then required to be applied to reduce the Swing Purchasers Capital Investments in respect of Swing Purchases to zero;

(iii)       third, if such day is the second Business Day following the date on which a Seller Report is or is required to be delivered, a Shortfall Condition exists as of the last day of the period covered by such Seller Report, and the Agent does not receive an updated Seller Report demonstrating that a Shortfall Condition does not exist on such second Business Day, distribute to the Purchasers an amount in U.S. Dollars equal to that amount, if any, which would be required to reduce Capital so that the aggregate Receivable Interests would not, after giving effect to such application and the Collections of Pool Receivables and the addition of new Pool Receivables on such day and the resulting automatic recomputation of such Receivable Interests pursuant to Section 2.5 as of the end of such day, exceed 100%; provided that (x) the Agent shall apply such amount, first, to reduce all Capital Investments as to which Yield is determined on the basis of the Adjusted Base Rate and (y) second, to reduce all Capital Investments as to which Yield is determined on the basis of the Adjusted LIBO Rate; provided that in lieu of immediately reducing the Capital Investments as to which Yield is determined on the basis of the Adjusted LIBO Rate, the Agent, at the direction of the Seller, may transfer such amount to the Cash Assets Account and such amount shall be deemed to reduce Capital by the amount so held pending application thereof to reduce Capital Investments as to which Yield is calculated on the basis of the Adjusted LIBO Rate on the last day of each Yield Period applicable thereto (occurring in chronological order); provided, further, however, that if the Agent subsequently receives a request from the Servicer or the Seller for a withdrawal of all or a portion of such amounts that are then held in the Cash Assets Account and a Seller Report demonstrating that a Shortfall Condition does not exist and certifying that either (x) the conditions to an Investment Event would be satisfied or (y) a Triggering Event ceases to exist, in each case after giving effect to such requested withdrawal, then the Agent shall release such amounts for further application under this Section 2.7(a);

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(iv)       fourth, distribute to the Purchasers of each Receivable Interest an amount in U.S. Dollars equal to that amount, if any, then required to be applied to reduce the Capital Investment of such Receivable Interest pursuant to the notice of the Seller delivered under Section 2.4(b);

 (v)               fifth, deposit into the Cash Assets Account such amount as the Seller, at its option, has specified to the Agent, which amount shall be deemed to reduce Capital by a corresponding amount; provided, however, that if the Agent subsequently receives a request from the Servicer or the Seller for a withdrawal of all or a portion of such amounts that are then held in the Cash Assets Account and a Seller Report demonstrating that a Shortfall Condition does not exist and certifying that either (x) the conditions to an Investment Event would be satisfied or (y) a Triggering Event ceases to exist, in each case after giving effect to such requested withdrawal, then the Agent shall release such amounts for further application under this Section 2.7(a);

(vi)               sixth, distribute to the Servicer (if the Servicer is an Originator or an Affiliate of an Originator) the accrued Servicer Fee to the extent then due and payable; and

   (vii)              seventh, reinvest the remainder of such Collections, for the benefit of the Purchasers, which reinvestment shall result in (x) the automatic recomputation of the undivided percentage interest represented by such Receivable Interest pursuant to Section 2.5 as of the end of such day and (y) the payment of such remainder to the Seller; provided, however, that (A) to the extent the Agent or any Purchaser shall be required for any reason to pay over any amount representing Collections which have been previously reinvested for the benefit of such Purchaser pursuant hereto, such amount shall be deemed not to have been so reinvested but rather to have been retained by the Seller and paid over for the account of such Purchaser and, notwithstanding any provision herein to the contrary, such Purchaser shall have a claim for such amount and (B) either (I) if Total Excess Availability is less than $125,000,000 on any such day or (II) if the conditions to an Investment Event would not be satisfied on such day, such reinvestment and payment shall not be made and instead such remainder shall be applied to reduce all Capital Investments as follows: (1) first, to reduce all Capital Investments as to which Yield is determined on the basis of the Adjusted Base Rate and (2) second, to reduce all Capital Investments as to which Yield is determined on the basis of the Adjusted LIBO Rate; provided that in lieu of immediately reducing the Capital Investments as to which Yield is determined on the basis of the Adjusted LIBO Rate, the Agent, at the direction of the Seller, may transfer such amount to the Cash Assets Account and such amount shall be deemed to reduce Capital by the amount so held pending application thereof to reduce Capital Investments as to which Yield is calculated on the basis of the Adjusted LIBO Rate on the last day of each Yield Period applicable thereto (occurring in chronological order); provided, further, however, that if the Agent subsequently receives a request from the Servicer or the Seller for a withdrawal of all or a portion of such amounts that are then held in the Cash Assets Account and either (I) the Agent receives a Seller Report demonstrating that a Shortfall Condition does not exist and certifying that either the conditions to an Investment Event would be satisfied or a Triggering Event does not exist, in each case after giving effect to such requested withdrawal, or (II) the aggregate Capital is zero, then the Agent shall release such amounts for reinvestment and payment to the Seller;

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provided, however, that if sufficient funds are not available to fund all payments to be made in respect of any amounts described in any of clauses first, second, third, fourth, fifth and sixth above, the available funds being applied with respect to any such amounts (unless otherwise specified in such clause) shall be allocated to the payment of the amounts referred to in such clause ratably, based on the proportion of the Servicers, the Agents or the Purchasers interest in the aggregate outstanding amounts described in such clause.

(b)           On each Business Day during which a Triggering Event exists (other than on a Liquidation Day), all amounts in the Concentration Account shall be automatically transferred to the Sweep Account, and payments and distributions by the Agent pursuant to Section 2.7(a) shall be made from funds in the Sweep Account.  Payments to the  Seller under clause (vii) of Section 2.7(a) shall be made, solely for administrative convenience as requested by the Seller so as to effect payment on behalf of the Seller of amounts payable by the Seller to the Originators for so long as the ABF Agreement is in effect, to the Sweep Account as defined in the ABF Agreement.

Section 2.8             Liquidation Settlement Procedures.

On each Liquidation Day, the Agent shall transfer to the Sweep Account the Collections of Pool Receivables received on such day, and the Agent shall apply such Collections, and all amounts held in the Cash Assets Account, as follows:

  (i)               first, to pay Obligations of the Seller to the Agent under any Transaction Document in respect of any expense reimbursements, Cash Management Obligations or indemnities then due to the Agent;

 (ii)               second, to pay Obligations of the Seller to the Purchasers under any Transaction Document in respect of any expense reimbursements or indemnities then due to such Persons;

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(iii)               third, to the Servicer (if the Servicer is not an Originator or an Affiliate of an Originator) in payment of the accrued Servicer Fee then due and payable, and to the Purchasers in payment of the accrued Unused Commitment Fees then due and payable;

(iv)               fourth, to the Purchasers in payment of the accrued Yield then due and payable;

 (v)               fifth, to the Purchasers in reduction (to zero) of the Capital Investments in respect of each Receivable Interest;

(vi)               sixth, to the Purchasers or the Asset Agent in ratable payment of any other Obligations owed by the Seller hereunder or under any other Transaction Document (except for the Servicer Fee);

   (vii)               seventh, to the Servicer (if the Servicer is an Originator or an Affiliate of an Originator) in payment of the accrued Servicer Fee then due and payable; and

  (viii)               to the extent of any remainder, to the Seller;

provided, however, that if sufficient funds are not available to fund all payments to be made in respect of any amounts described in any of clauses first, second, third, fourth, fifth, sixth and seventh above, the available funds being applied with respect to any such amounts (unless otherwise specified in such clause) shall be allocated to the payment of the amounts referred to in such clause ratably, based on the proportion of the Servicers, the Agents or the Purchasers interest in the aggregate outstanding amounts described in such clause.  Payments to the Seller under clause (viii) of Section 2.8 shall be made, solely for administrative convenience as requested by the Seller so as to effect payment on behalf of the Seller of amounts payable by the Seller to the Originators for so long as the ABF Agreement is in effect, to the Sweep Account as defined in the ABF Agreement.

Section 2.9    General Settlement Procedures.

(a)    Except as set forth in clauses (b) and (c) below or as otherwise required by law or the underlying Contract, all Collections received from an Obligor of any Pool Receivable shall be applied to Pool Receivables then outstanding of such Obligor in the order of the age of such Pool Receivables, starting with the oldest such Pool Receivable, except if payment is designated by such Obligor for application to specific Pool Receivables.

(b)    If, on any day, the Outstanding Balance of a Pool Receivable is either (x) reduced as a result of any defective, rejected or returned goods or services, any discount, or any adjustment by the Seller or any Originator, or (y) reduced or cancelled as a result of a setoff in respect of any claim by the Obligor thereof against the Seller or any Originator (whether such claim arises out of the same or a related transaction or an unrelated transaction), the Seller shall be deemed to have received on such day a Collection of such Receivable in the amount of such reduction or cancellation and shall make the payment required to be made by it in connection with such Collection on the day required by, and otherwise pursuant to, Section 5.1(i).

(c)    If on any day (x) any of the representations or warranties in Section 4.1 is no longer true with respect to any Pool Receivable or (y) it is discovered that any Receivable that was included in the Net Receivables Pool Balance as an Eligible Receivable was not an Eligible Receivable at the time of such inclusion, the Seller shall be deemed to have received on such day a Collection in full of such Pool Receivable and shall make the payment required to be made by it in connection with such Collection on the day required by, and otherwise pursuant to, Section 5.1(i).

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Section 2.10          Payments and Computations, Etc.

(a)           All amounts to be paid or deposited by the Seller or the Servicer hereunder shall be paid or deposited in accordance with the terms hereof no later than 12:30 p.m. (New York time) on the day when due in U.S. Dollars in same day funds to the Agents Account.  The Servicer or the Agent, as applicable, shall promptly thereafter cause to be distributed (i) like funds relating to the payment out of Collections in respect of Capital, Yield, Servicer Fee or other Obligations payable out of Collections, to the Purchasers (according to each Purchasers Ratable Portion) and the Servicer in accordance with the provisions of Section 2.6, 2.7, or 2.8, as applicable, and (ii) like funds relating to the payment by the Seller of other Obligations payable by the Seller hereunder, to the parties hereto for whose benefit such funds were paid (and if such funds are insufficient, such distribution shall be made, subject to Section 2.6, 2.7 or 2.8, as applicable, ratably in accordance with the respective amounts thereof).  Upon the Agents acceptance of an Assignment and Acceptance and recording of the information contained therein in the Register pursuant to Section 9.2, from and after the effective date specified in such Assignment and Acceptance, the Agent shall make all payments hereunder in respect of the interest assigned thereby to the Assignee thereunder, and the parties to such Assignment and Acceptance shall make all appropriate adjustments in such payments for periods prior to such effective date directly between themselves.

(b)           The Seller shall, to the extent permitted by law, pay to the Agent interest on all amounts not paid or deposited when due hereunder (except for those amounts with respect to which Yield accrues) at 2.00% per annum above the Alternate Base Rate in effect from time to time, payable on demand, provided, however, that such interest rate shall not at any time exceed the maximum rate permitted by applicable law.  Such interest shall be for the account of, and distributed by the Agent to, the applicable Purchasers ratably in accordance with their respective interests in such overdue amount.

(c)           All computations of interest and all computations of Yield based on the Applicable LIBO Rate, all Unused Commitment Fee and all other per annum fees hereunder shall be made on the basis of a year of 360 days for the actual number of days (including the first but excluding the last day) elapsed.  All computations of Yield based on the Applicable Base Rate shall be made on the basis of a year of 365 or 366 days, as applicable, for the actual number of days (including the first but excluding the last day) elapsed.

(d)           Unless the Agent shall have received notice from the Servicer or the Seller prior to the date on which any payment is due to the Purchasers hereunder that the Servicer or the Seller, as the case may be, will not make such payment in full, the Agent may assume that the Servicer or the Seller, as the case may be, has made such payment in full to the Agent on such date and the Agent may, in reliance upon such assumption, cause to be distributed to each Purchaser on such due date an amount equal to the amount then due such Purchaser.  If and to the extent the Servicer or the Seller, as the case may be, shall not have so made such payment in full to the Agent, each Purchaser shall repay to the Agent promptly on demand such amount distributed to such Purchaser together with interest thereon, for each day from the date such amount is distributed to such Purchaser until the date such Purchaser repays such amount to the Agent, at the Federal Funds Rate.

Section 2.11          Yield and Fees.

(a)           All Capital Investments and the outstanding amount of all other Obligations hereunder shall bear a Yield, in the case of Capital Investments, on the amount thereof from the date such Capital Investments are made and, in the case of such other Obligations, from the date such other Obligations are due and payable until, in all cases, paid in full, at the Applicable Yield.  Accrued Yield shall be payable on each Payment Date.

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(b)           The Seller shall pay to each Facility Agent such fees as are set forth in the Fee Letter to which such Facility Agent is a party.

(c)           The Seller shall pay to the Agent for remittance to the Servicer a fee (the Servicer Fee) of 0.50% per annum on the average daily aggregate Outstanding Balance of the Pool Receivables for the most recently completed month, from the date of the initial Purchase hereunder until the later of the Termination Date or the date on which Capital is reduced to zero, payable in arrears on the applicable Payment Date; provided, however, that, if at any time, the Servicer is not an Originator or an Affiliate of an Originator, the Servicer shall be paid, as such fee, the greater of (i) such amount and (ii) 120% of its reasonable out-of-pocket costs and expenses incurred by it in servicing, administering and collecting the Pool Receivables; and, provided further, that such fee shall be payable only from Collections pursuant to, and subject to the priority of payment set forth in, Sections Sections 2.6, 2.7 and 2.8.

(d)           The Seller agrees to pay to each Purchaser an unused commitment fee on the actual daily amount by which the Commitment of such Purchaser exceeds such Purchasers Capital Investments (the Unused Commitment Fee) from the date hereof through the Termination Date at the Applicable Unused Commitment Fee Rate, payable in arrears (x) on the second  Business Day of each calendar month, commencing on the first such Business Day following the Closing Date and (y) on the Termination Date.

Section 2.12          Special Provisions Governing Capital Investments at the Applicable LIBO Rate.

(a)    Increased Costs.  If, due to either (i) a change after the date hereof in Regulation D of the FRB (to the extent any cost incurred pursuant to such regulation is not included in the calculation of Adjusted LIBO Rate), (ii) the introduction of or any change after the date, with respect to each Purchaser, such Purchaser became a party hereto, in or in the interpretation of any law or regulation (other than any law or regulation relating to taxes, as to which Section 2.14 shall govern) or (iii) the compliance with any guideline or request issued or made after the date, with respect to each Purchaser, such Purchaser became a party hereto, from any central bank or other Governmental Authority (whether or not having the force of law), there shall be any increase in the cost to (or, in the case of Regulation D of the FRB there shall be imposed a cost on) any Purchaser of agreeing to make or making any Purchase or maintaining any Receivable Interest (or interest therein) hereunder, then the Seller shall from time to time, within five Business Days following demand and delivery to the Seller of the certificate referred to in the third-to-last sentence of this Section 2.12(a) by such Purchaser (or by the Agent for the account of such Purchaser) (with a copy of such demand and certificate to the Agent), pay to the Agent for the account of such Purchaser additional amounts sufficient to compensate such Purchaser for such increased or imposed cost.  Each Purchaser agrees to use reasonable efforts promptly to notify the Seller of any event referred to in clause (i), (ii) or (iii) above, provided that the failure to give such notice shall not affect the rights of any Purchaser under this Section 2.12(a) ; provided, however, that no Purchaser shall be entitled to compensation under this Section 2.12(a) for any costs incurred more than 90 days prior to the date on which it shall have requested compensation therefor; provided further, that if the change in law or regulation or in the interpretation or administration thereof that shall give rise to any such costs or reductions shall be retroactive, then the 90-day period referred to above shall be extended to include the period of retroactive effect thereof.  A certificate in reasonable detail as to the basis for and the amount of such increased cost, submitted to the Seller and the Agent by such Purchaser (or by the Agent for the account of such Purchaser) shall be conclusive and binding for all purposes, absent manifest error.  Notwithstanding any other provision of this Section 2.12(a), no Purchaser shall demand compensation for any cost or reduction referred to above if it shall not at the time be the general policy or practice of such Purchaser to demand such compensation in similar circumstances under comparable provisions of other receivables purchase agreements or credit agreements, if any.  If any Purchaser shall receive as a refund any moneys from any source that it has listed on the certificate provided pursuant to the second preceding sentence as an increased cost, to the extent that the Seller has previously paid such increased cost to such Purchaser, such Purchaser shall promptly forward such refund to the Seller without interest.

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(b)           Interest Rate Unascertainable, Inadequate or Unfair.  In the event that (i) the Agent determines that adequate and fair means do not exist for ascertaining the applicable interest rates by reference to which the Adjusted LIBO Rate then being determined is to be fixed or (ii) the Required Purchasers notify the Agent that the Adjusted LIBO Rate for any Yield Period will not adequately reflect the cost to the Purchasers of making a Capital Investment or maintaining such Capital Investment for such Yield Period, the Agent shall forthwith so notify the Seller and the Purchasers, whereupon the Applicable Yield for such Capital Investment shall automatically, on the last day of the current Yield Period for such Capital Investment, convert into the Applicable Base Rate and the obligations of the Purchasers to make a Capital Investment or maintain a Capital Investment at the Applicable LIBO Rate shall be suspended until the Agent shall notify the Seller that the Required Purchasers have determined that the circumstances causing such suspension no longer exist.

(c)    Illegality.  Notwithstanding any other provision of this Agreement, if any Purchaser determines that the introduction of, or any change in or in the interpretation of, any law, treaty or governmental rule, regulation or order after the date of this Agreement shall make it unlawful, or any central bank or other Governmental Authority shall assert that it is unlawful, for any Purchaser to make a Capital Investment or maintain a Capital Investment at the Applicable LIBO Rate, then, on notice thereof and demand therefor by such Purchaser to the Seller through the Agent, (i) the obligation of such Purchaser to make a Capital Investment or maintain a Capital Investment at the Applicable LIBO Rate shall be suspended, and each such Purchaser shall make Capital Investments at the Applicable Base Rate and (ii) if the affected Capital Investments at the Applicable LIBO Rate are then outstanding, the Seller shall immediately convert each such Capital Investment into a Capital Investment at the Applicable Base Rate.  If, at any time after a Purchaser gives notice under this Section 2.12(c), such Purchaser determines that it may lawfully make Capital Investments at the Applicable LIBO Rate, such Purchaser shall promptly give notice of that determination to the Seller and the Agent, and the Agent shall promptly transmit the notice to each other Purchaser.  The Sellers right to request, and such Purchasers obligation, if any, to make Capital Investments at the Applicable LIBO Rate shall thereupon be restored.

(d)           Liquidation Costs.  In addition to all amounts required to be paid by the Seller hereunder, the Seller shall compensate each Purchaser, within five Business Days following demand therefor, for all losses, expenses and liabilities (including any loss or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Purchaser to fund or maintain such Purchasers Capital Investments at the Applicable LIBO Rate but excluding any loss of the Applicable Margin on the relevant Capital Investments) (each, a Liquidation Cost) that such Purchaser may sustain, and any customary fees that such Purchaser may impose, (i) if for any reason a proposed Capital Investment, conversion into Capital Investments at the Applicable LIBO Rate or Continuation does not occur on a date specified therefor in a Notice of Purchase given by the Seller or in a telephonic request by it for Purchase or a successive Yield Period does not commence after notice therefor is given hereunder, (ii) if for any reason any Capital Investment at the Applicable LIBO Rate is reduced (including mandatorily pursuant to Section 2.7 or Section 2.8) on a date that is not the last day of the applicable Yield Period, (iii) as a consequence of a required conversion of a Capital Investment at the Applicable LIBO Rate to Capital Investment at the Applicable Base Rate as a result of any of the events indicated in Section 2.12(c) above or (iv) as a consequence of any failure by the Seller to reduce Capital Investment at the Applicable LIBO Rate when required by the terms hereof.  The Purchaser making demand for such compensation shall deliver to the Seller concurrently with such demand a written statement as to such losses, expenses and liabilities and fees, and this statement shall be conclusive as to the amount of compensation due to such Purchaser, absent manifest error.

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Section 2.13          Increased Capital.

If any Purchaser determines that either the introduction of or any change in or in the interpretation of any law or regulation after the date such Purchaser becomes a party hereto or the compliance with any guideline or request issued or made after the date such Purchaser becomes a party hereto from any central bank or other Governmental Authority (whether or not having the force of law) affects or would affect the amount of capital required or expected to be maintained by such Purchaser or any corporation controlling such Purchaser and that the amount of such capital is increased by or based upon the existence of such Purchasers commitment, if any, to purchase any Receivable Interest (or interest therein), or to maintain such Receivable Interest (or interest therein) hereunder, then, within five Business Days following demand and delivery to the Seller of the certificate referred to in the third-to-last sentence of this Section 2.13 by such Purchaser (or by the Agent for the account of such Purchaser) (with a copy of such demand and certificate to the Agent) the Seller shall pay to the Agent for the account of such Purchaser from time to time, as specified by such Purchaser, additional amounts sufficient to compensate such Purchaser or such corporation in the light of such circumstances, to the extent that such Purchaser reasonably determines such increase in capital to be allocable to the existence of any such commitment.  Each Purchaser agrees to use reasonable efforts promptly to notify the Seller of any event referred to in the first sentence of this Section 2.13, provided that the failure to give such notice shall not affect the rights of any Purchaser under this Section 2.13; provided, however, that no Purchaser shall be entitled to compensation under this Section 2.13 for any change in capital requirements incurred more than 90 days prior to the date on which it shall have requested compensation therefor; provided, further, that if the change in law or regulation or in the interpretation or administration thereof that shall give rise to any such change shall be retroactive, then the 90-day period referred to above shall be extended to include the period of retroactive effect thereof.  A certificate in reasonable detail as to the basis for, and the amount of, such compensation submitted to the Seller and the Agent by such Purchaser (or by the Agent for the account of such Purchaser) shall be conclusive and binding for all purposes, absent manifest error.  Notwithstanding any other provision of this Section 2.13, no Purchaser shall demand compensation under this Section 2.13 if it shall not at the time be the general policy or practice of such Purchaser to demand such compensation in similar circumstances under comparable provisions of other receivables purchase agreements or credit agreements, if any.  If any Purchaser shall receive as a refund any moneys from any source that it has listed on the certificate provided pursuant to the second preceding sentence, to the extent that the Seller has previously paid such amounts to such Purchaser, such Purchaser shall promptly forward such refund to the Seller without interest.

Section 2.14          Taxes.

(a)    Any and all payments by the Seller hereunder or deposits from Collections hereunder shall be made, in accordance with Section 2.10, free and clear of and without deduction for any and all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, excluding, in the case of each Indemnified Party, (i) taxes that are imposed on its overall net income by the United States, (ii) taxes that are imposed on its overall net income, assets or net worth (and franchise taxes imposed in lieu thereof) by the state or foreign jurisdiction under the laws of which such Indemnified Party is organized or qualified to do business or in which such Indemnified Party holds any asset in connection with this Agreement or, in each case, any political subdivision thereof, and (iii) branch profits tax imposed by the United States of America or any similar tax imposed by any other jurisdiction in which any Indemnified Party is located and (iv) United States backup withholding taxes (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities in respect of payments hereunder or deposits from Collections hereunder being hereinafter referred to as Taxes).  If the Seller or the Servicer or the Agent shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder or deposit from Collections hereunder to any Indemnified Party, (i) the sum payable shall be increased as may be necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 2.14) such Indemnified Party receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Seller or the Servicer or the Agent shall make such deductions and (iii) the Seller or the Servicer or the Agent shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law.

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(b)    In addition, the Seller shall pay any present or future sales, stamp, documentary, excise, property or similar taxes, charges or levies that arise from any payment made hereunder or deposit from Collections hereunder or from the execution, delivery or registration of, performing under, or otherwise with respect to, this Agreement, the Receivables Sale Agreement or any other Transaction Document (hereinafter referred to as Other Taxes).

(c)           The Seller shall indemnify each Indemnified Party for and hold it harmless against the full amount of Taxes and Other Taxes (including, without limitation, taxes of any kind imposed by any jurisdiction on amounts payable under this Section 2.14) imposed on or paid by such Indemnified Party and any liability (including penalties, additions to tax, interest and expenses) arising therefrom or with respect thereto whether or not such Taxes or Other Taxes were correctly or legally asserted.  This indemnification shall be made within five Business Days from the date such Indemnified Party makes written demand therefor (with a copy to the Agent).

(d)           Within 30 days after the date of any payment of Taxes, the Seller shall furnish to the Agent and each applicable Purchaser, at its address referred to in Section 11.3, the original or a certified copy of a receipt evidencing such payment or a certificate executed by a Responsible Officer of the Seller stating that such Taxes have been paid, together with evidence of such payment reasonably satisfactory to the Agent.

(e)    Each Purchaser organized under the laws of a jurisdiction outside the United States shall, on or prior to the date of its execution and delivery of this Agreement in the case of each Initial Purchaser, and on the date of the Assignment or the Assignment and Acceptance pursuant to which it became a Purchaser in the case of each other Purchaser, and from time to time thereafter as requested in writing by the Seller (but only so long thereafter as such Purchaser remains lawfully able to do so), provide each of the Agent and the Seller with 2 original Internal Revenue Service forms W-8ECI or W-8BEN, as appropriate, or any successor or other form prescribed by the Internal Revenue Service, certifying that such Purchaser is exempt from or entitled to a reduced rate of United States withholding tax on payments pursuant to this Agreement. If the forms provided by a Purchaser at the time such Purchaser first becomes a party to this Agreement indicate a United States interest withholding tax rate in excess of zero, withholding tax at such rate shall be considered excluded from Taxes unless and until such Purchaser provides the appropriate form certifying that a lesser rate applies, whereupon withholding tax at such lesser rate only shall be considered excluded from Taxes for periods governed by such form; provided, however, that if, at the effective date of the Assignment or the Assignment and Acceptance pursuant to which an Assignee becomes an Purchaser hereunder, the Purchaser assignor was entitled to payments under subsection (a) of this Section 2.14 (after taking into account subsections (e) and (f) of this Section 2.14) in respect of United States withholding tax with respect to amounts paid hereunder at such date, then, to such extent, the term Taxes shall include (in addition to withholding taxes that may be imposed in the future or other amounts otherwise includable in Taxes) United States withholding tax, if any, applicable with respect to such Assignee on such date.  If any form or document referred to in this subsection (e) requires the disclosure of information, other than information necessary to compute the tax payable and information required on the date hereof by Internal Revenue Service form W-8ECI or W-8BEN or any successor or other form prescribed by the Internal Revenue Service, that the Purchaser reasonably considers to be confidential, the Purchaser shall give notice thereof to the Seller and shall not be obligated to include in such form or document such confidential information.  Each Purchaser and Agent that is a United States person (within the meaning of Section 7701(a)(30) of the Code shall provide an IRS Form W-9 to the Agent and Seller at the times and in the manners described above with respect to the other withholding forms; provided, however, that a Person that the Seller may treat as an exempt recipient (within the meaning of Treasury Regulations Section 1.6049-4(c) (without regard to the third sentence thereof) shall not be required to deliver an IRS Form W-9, except to the extent necessary to avoid U.S. withholding taxes under Treasury Regulations Section 1.1441-1.

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(f) For any period with respect to which an Purchaser has failed to provide the Seller with the appropriate form described in subsection (e) of this Section 2.14 (other than if such failure is due to a change in law occurring after the date on which a form originally was required to be provided or if such form otherwise is not required under subsection (e) of this Section 2.14), such Purchaser shall not be entitled to indemnification under subsection (a) or (c) of this Section 2.14 with respect to Taxes imposed by the United States by reason of such failure; provided, however, that should any Purchaser become subject to Taxes because of its failure to deliver a form required hereunder, the Seller shall take such steps as such Purchaser shall reasonably request to assist such Purchaser (at such Purchasers expense) to recover such Taxes.

Section 2.15          Sharing of Payments, Etc.

If any Purchaser shall obtain any payment (whether voluntarily, involuntarily, through the exercise of any right of set-off or otherwise) on account of the Purchases made by it (other than with respect to payments due to such Purchaser pursuant to Section 2.12, 2.13 or 2.14) in excess of its Ratable Portion of payments on account of the Purchases obtained by all the Purchasers, such Purchaser shall forthwith purchase from the other Purchasers such interests in the Receivable Interests purchased by them as shall be necessary to cause such Purchaser to share the excess payment ratably with each of them; provided, however, that if all or any portion of such excess payment is thereafter recovered from such Purchaser, such purchase from each other Purchaser shall be rescinded and such other Purchaser shall repay to the Purchaser the purchase price to the extent of such recovery together with an amount equal to such other Purchasers Ratable Portion (according to the proportion of (a) the amount of such other Purchasers required repayment to (b) the total amount so recovered from the Purchaser) of any interest or other amount paid or payable by the Purchaser in respect of the total amount so recovered.  The Seller agrees that any Purchaser so purchasing an interest in Receivable Interests from another Purchaser pursuant to this Section 2.15 may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of set-off) with respect to such interest in Receivable Interests as fully as if such Purchaser were the direct creditor of the Seller in the amount of such interest in Receivable Interests.

Section 2.16          Conversion/Continuation Option.

(a)             The Seller may elect (i) at any time on any Business Day, to convert Capital Investments bearing Yield at the Applicable Base Rate (other than Swing Purchases) or any portion thereof to Capital Investments bearing Yield at the Applicable LIBO Rate and (ii) at the end of any applicable Yield Period, to convert Capital Investments bearing Yield at the Applicable LIBO Rate or any portion thereof into Capital Investments bearing Yield at the Applicable Base Rate or to continue such Capital Investments bearing Yield at the Applicable LIBO Rate or any portion thereof for an additional Yield Period; provided, however, that the aggregate amount of the Capital Investments bearing Yield at the Applicable LIBO Rate for each Yield Period must be in an amount of at least $10,000,000 or an integral multiple of $1,000,000 in excess thereof.  Each Conversion or Continuation shall be allocated among the Capital Investments of each Purchaser in accordance with such Purchasers Receivable Interest.  Each such election shall be in substantially the form of Exhibit H (a Notice of Conversion or Continuation) and shall be made by giving the Agent at least 3 Business Days prior written notice specifying (A) the amount and type of Capital Investment being converted or continued, (B) in the case of a conversion to Capital Investments bearing Yield at the Applicable LIBO Rate or a Continuation, the applicable Yield Period and (C) in the case of a Conversion, the date of such Conversion.

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(b)           The Agent shall promptly notify each Purchaser of its receipt of a Notice of Conversion or Continuation and of the options selected therein.  Notwithstanding the foregoing, no conversion in whole or in part of Capital Investments bearing Yield at the Applicable Base Rate to Capital Investments bearing Yield at the Applicable LIBO Rate and no Continuation upon the expiration of any applicable Yield Period shall be permitted at any time at which (i) an Event of Termination shall have occurred and be continuing or (ii) the continuation of, or conversion into, a Capital Investment bearing Yield at the Applicable LIBO Rate would violate any provision of Section 2.12.  If, within the time period required under the terms of this Section 2.16, the Agent does not receive a Notice of Conversion or Continuation from the Seller containing a permitted election to continue any Capital Investments bearing Yield at the Applicable LIBO Rate for an additional Yield Period or to convert any such Capital Investments, then, upon the expiration of the applicable Yield Period, such Capital Investments shall, subject to Section 3.2, be automatically continued as Capital Investments bearing Yield at the Applicable LIBO Rate with a Yield Period of one month.  Each Notice of Conversion or Continuation shall be irrevocable.

Section 2.17          Duty to Mitigate; Assignment of Commitments Under Certain Circumstances.

(a)           If any Purchaser claims any additional amounts payable pursuant to Section 2.12 or Section 2.13 or if the Seller is required to pay any additional amount to any Purchaser or any Governmental Authority for the account of any Purchaser pursuant to Section 2.14, then such Purchaser shall use reasonable efforts (consistent with legal and regulatory restrictions) to file any certificate or document, including, without limitation, any such certificate or document reasonably requested by the Seller, or to change the jurisdiction of the applicable office through which it holds or maintains its interest in the applicable Receivable Interest or to take other actions (including the filing of certificates or documents) known to it to be available if the making of such a filing or change or the taking of such other action would avoid the need for or reduce the amount of any such additional amounts which may thereafter accrue or avoid the circumstances giving rise to such exercise and would not, in the sole determination of such Purchaser, be otherwise disadvantageous to such Purchaser or its Receivable Interest.

(b)           In the event that any Purchaser shall have delivered a notice or certificate pursuant to Section 2.12 or 2.13, or the Seller shall be required to make additional payments to any Purchaser under Section 2.14, the Seller shall have the right, at its own expense (which shall include the processing and recordation fee referred to in Section 9.1(a)), upon notice to such Purchaser and the Agent, to require the related Purchaser to transfer and assign without recourse (in accordance with and subject to the restrictions contained in Section 9.1) all its interests, rights and obligations hereunder to another financial institution approved by the Agent and the Swing Purchaser (which approval shall not be unreasonably withheld) which shall assume such obligations (which assignee may be another Purchaser, if a Purchaser accepts such assignment); provided, however, that (i) no such assignment shall conflict with any law, rule or regulation or order of any Governmental Authority and (ii) the assignee or the Seller shall pay to the affected Purchaser in immediately available funds on the date of such assignment the amounts of its Capital Investments, including any interest in Receivable Interests relating to Swing Purchases, accrued Yield thereon and all other Obligations accrued for its account or owed to it hereunder (including the additional amounts asserted and payable pursuant to Section 2.12, 2.13 or 2.14, if any).

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Section 2.18          Restricted Accounts; Investment of Amounts in the Cash Assets Account.

(a)    Following the end of the Compliance Period, the Agent shall have control (within the meaning of Section 9-104 of the UCC) of each of the Restricted Accounts.

(b)    Funds held in the Cash Assets Account may, until withdrawn or otherwise applied pursuant hereto, be invested and reinvested in such Liquid Investments as the Seller may request from time to time; provided that, if an Event of Termination shall have occurred and be continuing, the Agent may select such Liquid Investments.  Liquid Investments means (i) direct obligations of the United States or any agency thereof, (ii) obligations guaranteed by the United States or any agency thereof, (iii) time deposits and money market deposit accounts issued by or guaranteed by or placed with a financial institution reasonably acceptable to the Agent, and (iv) fully collateralized repurchase agreements for securities described in clause (i) or (ii) above entered into with a financial institution reasonably acceptable to the Agent, provided in each case that such Liquid Investment (x) matures within 30 days and (y) is in a form, and is issued and held in a manner, that in the reasonable judgment of the Agent permits appropriate measures to have been taken to perfect security interests therein.

Section 2.19          Optional Increase in Commitments.

At any time the Seller, may, if it so elects, increase the aggregate amount of the Commitments, either by designating a financial institution not theretofore a Purchaser (a New Purchaser) to become a Purchaser (such designation to be effective only with the prior written consent of the Agent, which consent will not be unreasonably withheld or delayed), or by agreeing with an existing Purchaser that such Purchasers Commitment shall be increased. Upon execution and delivery by the Seller and such Purchaser or other financial institution of an instrument in form reasonably satisfactory to the Agent, such existing Purchaser shall have a Commitment as therein set forth or such other financial institution shall become a Purchaser with a Commitment as therein set forth and all the rights and obligations of a Purchaser with such a Commitment hereunder; provided:

(a)           that the Seller shall provide prompt notice of such increase to the Agent, who shall promptly notify the Purchasers;

(b)           that any such increase shall be in an amount greater than or equal to $50,000,000;

(c)           that immediately after such increase is made, the aggregate amount of increases in the Commitments pursuant to this Section 2.19, when combined with the aggregate amount of increases in the commitments under the ABF Agreement pursuant to Section 2.21 thereof, shall not exceed $600,000,000; and

(d)           that the Sellers may elect to increase the aggregate amount of the Commitments pursuant to this Section 2.19 no more than four times in total.

On the effective date of any increase in the aggregate amount of the Commitments pursuant to this Section 2.19, (i) each New Purchaser shall pay to the Agent an amount equal to its pro rata share of the aggregate outstanding Capital Investments and (ii) any Purchaser (an Increasing Purchaser) whose Commitment has been increased shall pay to the Agent an amount equal to the increase in its pro rata share of the aggregate outstanding Capital Investments, in each case such payments shall be for the account of each other Purchaser.  Upon receipt of such amount by the Agent, (i) each other Purchaser shall be deemed to have ratably assigned that portion of its outstanding Capital Investments that is being reduced to the New Purchasers and the Increasing Purchasers in accordance with such Purchasers new Commitment or the increased portion thereof as applicable, and (ii) the Agent shall promptly distribute to each other Purchaser its ratable share of the amounts received by the Agent pursuant to this paragraph.

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ARTICLE III

Conditions of Purchases

Section 3.1            Conditions Precedent to the Effectiveness of this Agreement.

The effectiveness of this Agreement is subject to the satisfaction (or substantially simultaneous satisfaction) or waiver of the following conditions precedent:

(a)    The Agent shall have received all fees and expenses (including, but not limited to, reasonable fees and expenses of counsel to the Agent) required to be paid on the Closing Date, pursuant to the terms of this Agreement and each Fee Letter and the Annex thereto.

(b)    The Agent shall have received on or before the Closing Date, the following, each (unless otherwise indicated) dated as of the Closing Date (unless otherwise specified), in form and substance reasonably satisfactory to the Agent:

  (i)               This Agreement, duly executed and delivered by the Seller and the Servicer;

 (ii)               The Receivables Sale Agreement, duly executed by the Seller and each Originator, together with:

(A)    Proper financing statements naming each Originator as debtor, the Seller as secured party and the Agent, as assignee, to be filed under the UCC of all jurisdictions that the Agent may deem necessary in order to perfect the Sellers interests created or purported to be created by the Receivables Sale Agreement;

(B)    Proper financing statement terminations or releases, if any, necessary to release all security interests and other rights of any Person in the Receivables, Related Security, Collections or Contracts previously granted by any Originator;

(C)    The Consent and Agreement, duly executed by the Seller and each Originator; and

(D)    The Subordinated Notes, in substantially the form of Exhibit B to the Receivables Sale Agreement, payable to the order of each Originator, and duly executed by the Seller;

(iii)               The Undertaking, duly executed and delivered by each party thereto;

(iv)               [Reserved];

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 (v)               The Intercreditor Agreement duly executed by each party thereto;

(vi)               Favorable opinions of (A) Gerald A. OBrien, Deputy General Counsel of Lyondell, in substantially the form of Exhibit I-2 hereto and as to such other matters as the Agent may reasonably request, (B) Skadden, Arps, Slate, Meagher & Flom LLP, counsel to the Transaction Parties, in substantially the forms of Exhibit I-1 and I-3 hereto as to such other matters as the Agent may reasonably request, including without limitation (1) a true sale opinion with respect to the sale of Receivable Assets under and as defined in the Receivables Sale Agreement from each Originator to the Seller, (2) an opinion with respect to the non-substantive consolidation of the Seller with each other Transaction Party or any of its Affiliates in a case under the Bankruptcy Code, and (3) an opinion relating to the enforceability of the Transaction Documents, compliance with all laws and regulations (including Regulation U of the FRB), the perfection of all ownership and other interests purported to be granted under the Transaction Documents and (C) special counsel to the Agent, as the Agent may reasonably request.

(c)    (i) All obligations for outstanding capital, accrued and unpaid yield and fees and other amounts then due and payable under the Existing Programs shall have been concurrently satisfied, (ii) the Existing Programs shall have been concurrently terminated on terms reasonably satisfactory to the Agent and (iii) the Agent shall have received evidence of such termination in form and substance reasonably satisfactory to the Agent.

(d)           The Agent shall be satisfied with the results of a field examination of the Originators conducted by Citibanks internal auditors no more than 3 months prior to the Closing Date.

(e)    Total Excess Availability (after giving effect to the effectiveness of this Agreement and the ABF Agreement) shall be at least $500,000,000 on the Closing Date.

The Agent shall promptly notify the Seller, the Servicer and the Purchasers of the Closing Date, and such notice shall be conclusive and binding on all parties hereto.

Section 3.2            Conditions Precedent to All Investment Events.

Each Investment Event (including the initial Purchase by each Purchaser) shall be subject to the further conditions precedent that on the date of such Investment Event the following statements shall be true (and the acceptance by the Seller of the proceeds of the Purchase or reinvestment, as applicable, being made on the date of such Investment Event shall constitute a representation and warranty by the Servicer, or the Seller, as the case may be, that on the date of such Investment Event, such statements are true):

  (i)               the representations and warranties applicable to such Transaction Party contained in Article IV of this Agreement and in Article III of the Receivables Sale Agreement are correct in all material respects on and as of the date of such Investment Event, before and after giving effect to such Investment Event and to the application of the proceeds from the Purchase or reinvestment, as applicable, being made on the date thereof, as though made on and as of such date, except (1) in the case of a Investment Event consisting solely of any Conversion or any Continuation, (2) to the extent such representations and warranties expressly relate to an earlier date, which representations and warranties shall be true and correct in all material respects on and as of such earlier date, (3) any representation and warranty that is qualified as to materiality, Material Adverse Effect or similar language shall be true and correct in all respects on the relevant date, and (4) in the case of the initial Investment Event, only the representations and warranties set forth in Sections 4.1(c), (d) and (o) and Sections 4.2(b), (d) and (l) need be true and correct;

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 (ii)              at the time of the Investment Event (except in the case of the initial Purchase by each Purchaser or an Investment Event consisting solely of a conversion of a Capital Investment bearing Yield at the Applicable LIBO Rate to a Capital Investment bearing Yield at the Applicable Base Rate), no event has occurred and is continuing, or would result from such Investment Event or from the application of the proceeds from the Purchase or reinvestment, as applicable, being made on the date of such Investment Event, which constitutes an Event of Termination or (except in the case of a Continuation or a Conversion) a Potential Event of Termination; and

(iii)               the Purchase or reinvestment, as applicable, being made on the same date as such Investment Event shall not violate any Requirement of Law and shall not be enjoined, temporarily, preliminarily or permanently.

ARTICLE IV

Representations and Warranties

Section 4.1             Representations and Warranties of the Seller.

The Seller represents and warrants as follows:

(a)           The Seller is a limited liability company duly organized, validly existing and in good standing under the laws of the jurisdiction indicated at the beginning of this Agreement, has the requisite power and authority under its Organization Documents and applicable law to own its property and assets and to carry on its business as now conducted and proposed to be conducted after the Closing Date and is duly qualified to do business, and is in good standing, in every jurisdiction where such qualification or authorization is required, except to the extent that any failure to be so qualified or in good standing as a foreign entity could not reasonably be expected to have a Material Adverse Effect.

  i.
The Seller has no Subsidiaries. All of the outstanding membership interests of the Seller are owned by Lyondell.

(b)           The Seller has the power and authority under its Organization Documents and applicable law to execute, deliver and carry out the provisions of the Transaction Documents to which it is a party, and all such actions have been duly and validly authorized by all necessary proceedings on its part under its Organization Documents and applicable law.

(c)           The execution, delivery and performance by the Seller of the Transaction Documents to which it is a party, and the transactions contemplated hereby and thereby, including the Sellers use of the proceeds of Purchases and reinvestments, are within the Sellers powers, have been duly authorized and delivered by all necessary action on its part, do not (i) violate (x) any provision of the Sellers Organization Documents or any other agreement governing its organization and/or scope of power and authority or  any applicable law, rule, regulation (including Regulation U or X) or order, writ, judgment, injunction, decree, determination or award of any Governmental Authority binding upon it, (ii) result in a breach of or constitute (alone or with notice or lapse of time or both) a default under any indenture or any agreement or other instrument to which it is a party, or by which it or any of its properties or assets are bound, or (iii) except for the Liens created by the Transaction Documents, result in or require the creation or imposition of any Lien upon any of its property or assets.

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(d)    This Agreement is, and the other Transaction Documents to which the Seller is or will be a party when delivered will be, the legal, valid and binding obligations of the Seller enforceable against the Seller in accordance with their respective terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the rights of creditors generally and by general principles of equity, including implied obligations of good faith and fair dealing.

(e)            No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority is or will be required for the due execution, delivery and performance by the Seller of any Transaction Document to which it is a party or any transaction contemplated hereby or thereby, except for the filings of the financing statements referred to in Article III.

(f)            Since the date of the Sellers formation, there has not occurred any development or event affecting, or any change in the business, assets, results of operations or financial condition of the Seller which has resulted or could reasonably be expected to result in a Material Adverse Effect.

(g)           There is no action, suit, investigation, litigation or proceeding at law or in equity or by or before any Governmental Authority now pending or, to the knowledge of the Seller, threatened against or affecting the Seller or its business, assets or rights (i) as to which there is a reasonable likelihood of an adverse decision and which, if adversely determined, could, individually or, in the aggregate, reasonably be expected to have a Material Adverse Effect or (ii) that in any manner draws into question the validity or enforceability of any Transaction Document.

(h)

i.
 
Immediately prior to the time of the initial creation of an interest hereunder in any Pool Receivable, the Seller is the legal and beneficial owner of such Pool Receivable and Related Security and Collections with respect thereto, in each case free and clear of any Lien (other than Permitted Liens).

ii.
 
Upon each Purchase or reinvestment, the Seller shall transfer to the Purchaser making such Purchase or reinvestment (and such Purchaser shall acquire) a valid interest to the extent of the pertinent Receivable Interest in each Pool Receivable then existing or thereafter arising and in the Related Security and Collections with respect thereto, free and clear of any Lien (other than Permitted Liens), which ownership interest or security interest shall be a perfected first priority ownership interest or security interest upon the filing of the financing statements referred to in Section 3.1(b)(xii).

iii.
 
With respect to each transfer to it of any Pool Receivables, the Seller has either (i) purchased such Pool Receivables from an Originator in exchange for payment (made by the Seller to an Originator in accordance with the provisions of the Receivables Sale Agreement) in an amount which constitutes fair consideration and approximates fair market value for such Pool Receivables and in a sale the terms and conditions of which (including, without limitation, the purchase price thereof) reasonably approximate an arms-length transaction between unaffiliated parties or (ii) acquired such Pool Receivables from an Originator as a capital contribution in accordance with the provisions of the Receivables Sale Agreement.  No such sale, and no such contribution, has been made for or on account of an antecedent debt owed by any Originator to the Seller and no such sale or contribution is or may be voidable or subject to avoidance under any section of the Bankruptcy Code.

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(i)             The jurisdiction of incorporation, organizational identification number (if any), and the address(es) of the principal place of business and chief executive office of the Seller and the office where the Seller keeps its Records concerning the Receivable Assets, are as set forth in Schedule III hereto (or, by notice to the Agent in accordance with Section 5.1(e), at such other locations in jurisdictions, within the United States, where all requested actions under Section 6.5(a) have been taken and completed).

(j)             The names and addresses of all the Lock-Box Banks, together with the lock-box numbers related to, and the account numbers and owners of, the Lock-Box Accounts at such Lock-Box Banks, are specified in Schedule I hereto (or such other Lock-Box Banks and/or such other Lock-Box Accounts as have been notified to the Agent in accordance with Section 5.3(m).  Except pursuant to the Lock-Box Agreements, the Seller has not granted any Person dominion or control of any Lock-Box Account, or the right to take dominion or control over any Lock-Box Account at a future time or upon the occurrence of a future event.

(k)            Since the date of its formation, the Seller has not engaged in any activity other than as contemplated by the Transaction Documents or entered into any commitment or incurred any Debt other than pursuant to, or as permitted under, the Transaction Documents.

(l)             The Seller has not maintained, contributed to or incurred or assumed any obligation with respect to any Plan, Multiemployer Plan or Welfare Plan, except such obligation or contingent obligation that arises as a matter of law solely as a result of an ERISA Affiliates sponsorship of a Plan, Multiemployer Plan or Welfare Plan.

(m)           The Seller has complied with the Credit and Collection Policy in all material respects and since the date of this Agreement there has been no change in the Credit and Collection Policy except as permitted hereunder.  The Seller has not extended or modified the terms of any Pool Receivable or the Contract under which any such Pool Receivable arose, except in accordance with the Credit and Collection Policy.

(n)            The Seller has filed, or caused to be filed or be included in, all tax reports and returns (federal, state, local and foreign), if any, required to be filed by it and paid, or caused to be paid, all amounts of taxes, including interest and penalties, required to be paid by it, except for such taxes (i) as are being contested in good faith by proper proceedings and (ii) against which adequate reserves shall have been established in accordance with and to the extent required by GAAP, but only so long as the proceedings referred to in clause (i) above would not subject the Agent or any other Indemnified Party to any civil or criminal penalty or liability or involve any material risk of the loss, sale or forfeiture of any property, rights or interests included in the Pool Receivables, Related Security, Collections, Restricted Accounts or proceeds thereof.

(o)    The Seller is not an investment company as defined in the Investment Company Act of 1940, as amended.

(p)            Both before and after giving effect to (i) each Purchase to be made on the Closing Date or such other date as Purchases requested hereunder are made, (ii) the disbursement of the proceeds of any Capital Investment, (iii) the consummation of each other transaction contemplated by the other Transaction Documents and (iv) the payment and accrual of all transaction costs in connection with the foregoing, the Seller is Solvent.

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Section 4.2    Representations and Warranties of the Servicer.

The Servicer represents and warrants as follows:

(a)            Existence, Qualification and Power; Compliance with Laws.  Subject to the Legal Reservations, each of the Servicer and its Material Subsidiaries (a) is a Person duly organized or formed, validly existing and in good standing, in each case where such concept exists, under the laws of the jurisdiction of its incorporation or organization, (b) has all requisite constitutional, corporate or other similar power and authority to (i) own or lease its material assets and carry on its business substantially  as currently conducted and (ii) execute, deliver and perform its obligations under the Transaction Documents to which it is a party, (c) is duly qualified and in good standing, in each case where such concept exists, under the laws of each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification, (d) is in compliance with all laws, orders, writs and injunctions and (e) has all requisite governmental licenses, authorizations, consents and approvals to operate its business as currently conducted; except in each case referred to in clause (c), (d) or (e), to the extent that failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(b)            Authorization; No Contravention.  The execution, delivery and performance by each of the Servicer and its Subsidiaries of each Transaction Document to which such Person is a party, and the consummation of the transactions contemplated thereby, are within such Persons corporate or other powers, have been duly authorized by all necessary corporate or other organizational action, and do not and will not (a) contravene the terms of any of such Persons Organization Documents; (b) in any material way, conflict with or result in any breach or contravention of, or the creation of any Lien under (other than as permitted by Section 4.01 of the Undertaking), or require any payment to be made under (i) except payments as set forth in the funds flow memorandum dated the Closing Date and delivered to the Agent, any contractual obligation to which such Person is a party or affecting such Person or the properties of such Person or any of its subsidiaries or (ii) any order in any material way, injunction, writ or decree of any Governmental Authority or any arbitral award to which such Person or its property is subject in any material way; or (c) violate any material law in any material way; except with respect to any conflict, breach or contravention or payment (but not creation of Liens) referred to in clause (b)(i), to the extent that such conflict, breach, contravention or payment could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(c)            Governmental Authorization; Other Consents.  Subject to the Legal Reservations, no material approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required of a Transaction Party in connection with the execution, delivery or performance by, or enforcement against, the Servicer and its Subsidiaries of this Agreement or any other Transaction Document, or for the consummation of any transaction contemplated thereby, except for (i) the UCC filings contemplated by the Transaction Documents, (ii) the approvals, consents, exemptions, authorizations, actions, notices and filings which have been duly obtained, taken, given or made and are in full force and effect (or, with respect to consummation of the transactions contemplated by the Transaction Documents, will be duly obtained, taken, given or made and will be in full force and effect, in each case within the time period required to be so obtained, taken, given or made) and (iii) those approvals, consents, exemptions, authorizations or other actions, notices or filings, the failure of which to obtain or make could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

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(d)            Binding Effect.  This Agreement and each other Transaction Document dated on or prior to the date this representation is made constitutes a legal, valid and binding obligation of such Transaction Party, enforceable against each such Transaction Party that is a party thereto in accordance with its terms, except as such enforceability may be limited by (i) Debtor Relief Laws and by general principles of equity, and (ii) the need for filings and registrations necessary to perfect any Liens created by the Transaction Documents.

(e)             Financial Statements; No Material Adverse Effect.

  (i)               The unaudited pro forma consolidated balance sheet of the Servicer and its Subsidiaries as of September 30, 2007 (including the notes thereto) and the related pro forma consolidated statement of income of the Servicer and its Subsidiaries for the twelve months ended September 30, 2007, a copy of each of which has been furnished to the Agent for distribution to the Purchasers, have been prepared in good faith, based on assumptions believed by the Servicer to be reasonable as of the date of delivery thereof, and present fairly in all material respects on a pro forma basis the estimated financial position of the Servicer and its Subsidiaries as of September 30, 2007 and their estimated results of operations for the period covered thereby, assuming that the Acquisition had actually occurred at such date or at the beginning of the period covered thereby.

 (ii)               On the Closing Date, the audited consolidated financial statements of the Servicer and its consolidated subsidiaries as of December 31, 2006 which have been furnished to the Agent prior to the Closing Date, present in all material respects the financial condition of the Servicer and its Subsidiaries as of the dates thereof and their results of operations for the period covered thereby in accordance with GAAP consistently applied throughout the periods covered thereby, except as otherwise expressly noted therein.  During the period from December 31, 2006 to and including the Closing Date, there has been (i) no sale, transfer or other disposition by the Servicer or any of its Subsidiaries of any material part of the business or property of the Servicer or any of its Subsidiaries, taken as a whole (other than the sale of Lyondells worldwide inorganic chemicals business in May, 2007), and (ii) no purchase or other acquisition by the Servicer or any of its Subsidiaries of any business or property (including any Equity Interests of any other Person) material in relation to the consolidated financial condition of the Company and its Subsidiaries, in each case, which is not reflected in the foregoing financial statements or in the notes thereto or has not otherwise been disclosed in writing to the Purchasers prior to the Closing Date.

(iii)               The forecasts of consolidated balance sheets, income statements and cash flow statements of the Servicer and its Subsidiaries which have been furnished to the Agent prior to the Closing Date have been prepared in good faith on the basis of the assumptions stated therein, which assumptions were believed to be reasonable at the time of preparation of such forecasts, it being understood that actual results may vary from such forecasts and that such variations may be material.

(iv)               There has been no event or circumstance since December 31, 2006, that either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

(f)     Litigation.  There are no actions, suits, proceedings, claims or disputes pending or, to the knowledge of the Servicer, threatened in writing or contemplated, at law, in equity, in arbitration or before any Governmental Authority, by or against the Servicer or any of its Subsidiaries or against any of their properties or revenues that could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

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(g)            [Reserved].

(h)            [Reserved]

(i)             Taxes.  Except as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (a) each of the Servicer and each of its Subsidiaries has (i) timely filed all tax returns required to be filed and all such tax returns are true and correct, (ii) timely paid all taxes levied or imposed upon it or its properties (whether or not shown on a tax return), and (iii) satisfied all of its tax withholding obligations; (b) there are no current, pending or threatened audits, examinations or claims with respect to Taxes of any Transaction Party or any of their respective Subsidiaries and (c) the Servicer and each of its Subsidiaries has never participated in a listed transaction within the meaning of Treasury Regulation Section 1.6011-4.

(j)             ERISA Compliance.  (a) Except as could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect, each Plan is in compliance with the applicable provisions of ERISA, the Code and other Federal or state Laws.

(b) (i) No ERISA Event has occurred or is reasonably expected to occur and (ii) neither the Servicer nor any of its Subsidiaries nor any ERISA Affiliate has engaged in a transaction that could be subject to Section 4069 or 4212(c) of ERISA, except, with respect to each of the foregoing clauses of this Section 5.11(b), as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect..

(c) Except where noncompliance could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect, (i) each Foreign Plan has been maintained in compliance with its terms and with the requirements of any and all applicable laws, statutes, rules, regulations and orders and has been maintained, where required, in good standing with applicable regulatory authorities, and (ii) neither any Transaction Party nor any Subsidiary has incurred any obligation in connection with the termination of or withdrawal from any Foreign Plan.

(k)            [Reserved].

(l)     Margin Regulations; Investment Company Act.  The Servicer and each of its Subsidiaries is not engaged nor will it engage, principally or as one of its important activities, in the business of purchasing or carrying margin stock (within the meaning of Regulation U issued by the FRB), or extending credit for the purpose of purchasing or carrying margin stock.  None of the Servicer or any of its Affiliates is or is required to be registered as an investment company under the Investment Company Act of 1940.

(m)           Disclosure.  As of the Closing Date, to the best of the Servicers knowledge, no report, financial statement, certificate or other written information furnished by or on behalf of the Servicer or any of its Subsidiaries to any Agent or Purchaser in connection with the transactions contemplated hereby and the negotiation of this Agreement or delivered hereunder or any other Transaction Document (as modified or supplemented by other information so furnished) when taken as a whole contains any material misstatement of fact or, as of the Closing Date only, omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not materially misleading; provided that, with respect to projected financial information and pro forma financial information, the Servicer represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time of preparation; it being understood that such projections may vary from actual results and that such variances may be material.

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(n)            [Reserved].

(o)            Anti-Terrorism Laws.  

(a)           To the best knowledge of the Servicer, no Transaction Party organized in the United States nor any subsidiary thereof: (i) is, or is controlled by or is acting on behalf of, an Anti-Terrorism Party; (ii) has received funds or other property from an Anti-Terrorism Party; or (iii) is in breach of or is the subject of any action or investigation under any Anti-Terrorism Law.

(b)           To the best of the Servicers knowledge, each of the Transaction Parties organized in the United States and each subsidiary thereof has taken reasonable measures to ensure compliance with the Anti-Terrorism Laws.

(p)            Lock-Box Banks.  The names and addresses of all the Lock-Box Banks, together with the lock-box numbers related to, and the account numbers and owners of, the Lock-Box Accounts at such Lock-Box Banks, are specified in Schedule I hereto (or such other Lock-Box Banks and/or such other Lock-Box Accounts as have been notified to the Agent in accordance with Section 5.3(m)).  Except under the Lock-Box Agreements, the Servicer has not granted any Person dominion or control of any Lock-Box Account, or the right to take dominion or control over any Lock-Box Account at a future time or upon the occurrence of a future event.

(q)            Credit and Collection Policy.  The Servicer has complied with the Credit and Collection Policy in all material respects and since the date of this Agreement there has been no change in the Credit and Collection Policy except as permitted hereunder.  The Servicer has not extended or modified the terms of any Pool Receivable or the Contract under which any such Pool Receivable arose, except in accordance with the Credit and Collection Policy and in accordance with Section 6.2(b).

(r)             Contracts, Pool Receivables, Related Security and Collections.  No effective financing statement or other instrument similarly in effect covering any Contract or any Pool Receivable or Related Security or Collections with respect thereto is on file in any recording office, except those set forth on Schedule IV hereto and those filed in favor of the Agent relating to this Agreement or in favor of the Seller and the Agent relating to the Receivables Sale Agreement.

ARTICLE V

General Covenants of the Seller and the Servicer

Section 5.1    Affirmative Covenants of the Seller.

Until the later of (i) the Termination Date and (ii) the date upon which no Capital shall be outstanding and no Yield or other Obligations (other than contingent indemnification obligations) of the Seller remain unpaid under this Agreement, the Seller will:

(a)            Compliance with Laws, Etc.  Comply in all material respects with all applicable laws, rules and regulations, and all orders of any Governmental Authority applicable to it and all Pool Receivables and related Contracts, Related Security and Collections with respect thereto.

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(b)           Preservation of Existence.  Preserve and maintain its existence, rights, franchises and privileges in the jurisdiction of its organization, and qualify and remain qualified in good standing as a foreign entity in each jurisdiction where the failure to preserve and maintain such qualification would materially adversely affect the interests of the Purchasers or the Agent hereunder or in the Pool Receivables and Related Security, or the ability of the Seller or the Servicer to perform their respective obligations under the Transaction Documents.

(c)            Payment of Taxes.  Pay and discharge before the same shall become delinquent, all lawful governmental claims, taxes, assessments, charges and levies, except where contested in good faith, by proper proceedings and adequate reserves therefor have been established on the books of the Seller in conformity with GAAP.

(d)            Compliance with Organization Documents.  Comply with, and cause compliance with, the provisions of the Organization Documents of the Seller delivered to the Agent pursuant to Section 4.1 as the same may, from time to time, be amended, supplemented or otherwise modified with the prior written consent of the Agent (such consent not to be unreasonably withheld or delayed).

(e)            Offices, Records and Books of Accounts.

i.
 
Keep its principal place of business and chief executive office and the offices where it keeps its Records concerning the Pool Receivables at the address of the Seller referred to in Section 4.1(i) or, upon at least 5 days prior written notice to the Agent, at any other location in a jurisdiction where all requested actions under Section 6.5(a) shall have been taken;

ii.
 
Maintain and implement administrative and operating procedures (including, without limitation, an ability to recreate, in all material respects, records evidencing Pool Receivables in the event of the destruction of the originals thereof), and keep and maintain all documents, books, records and other information reasonably necessary or advisable for the collection of all Pool Receivables (including, without limitation, records adequate to permit the daily identification of each Pool Receivable, the Outstanding Balance of each Pool Receivable and the dates which payments are due thereon and all Collections of and adjustments to each existing Pool Receivable).

iii.
 
Keep, or cause to be kept, proper books of record and account, which shall be maintained or caused to be maintained by the Seller and shall be separate and apart from those of any Affiliate of the Seller, in which entries that are full and correct in all material respects shall be made of all financial transactions and the assets and business of the Seller in accordance with GAAP;

iv.
 
To the extent Records are in written form, segregate such Records in file cabinets or storage containers and appropriately label such file cabinets or storage containers to reflect that the Receivable Interests have been conveyed to the Purchasers; and

v.
 
To the extent such Records constitute computer programs and other non-written Records, appropriately legend such Records to reflect that the Receivable Interests have been conveyed to the Purchasers.

(f)             Examination of Records; Audits.

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i.
 
From time to time upon ten (10) Business Days (or, during the continuance of a Triggering Event of the type described in clause (iii), (iv) or (v) of the definition of Triggering Event, five (5) Business Days) prior notice (except that during the continuance of a Potential Event of Termination or Event of Termination, no such notice shall be required) and during regular business hours as requested by the Agent and at the expense of the Agent, if a Potential Event of Termination or Event of Termination does not exist, and otherwise at the expense of the Seller, permit the Agent, or its agents or representatives, (A) to examine and make copies of and abstracts from all Records in the possession or under the control of the Seller, or the agents of the Seller, relating to Pool Receivables and the Related Security, including, without limitation, the related Contracts, and (B) to visit the offices and properties of the Seller, or the agents of the Seller, for the purpose of examining such materials described in clause (A) above, and to discuss matters relating to Pool Receivables and the Related Security or the Sellers performance hereunder or under the Contracts with any of the officers or employees of the Seller having knowledge of such matters and designated by the Seller to discuss such matters with the Agent or its agents or representatives.  Unless a Potential Event of Termination or Event of Termination is continuing, the Agent agrees to combine any request for any such examinations and visits with any request being made under Section 5.4(f).

ii.
 
The Seller shall furnish to the Agent any information that the Agent may reasonably request regarding the determination and calculation of the Net Receivables Pool Balance including copies of any invoices, underlying agreements, instruments or other documents and the identity of all Obligors in respect of Receivables referred to therein.

(g)            Performance and Compliance with Contracts and Credit and Collection Policy.  At its expense, (i) perform, or cause to be performed, and comply in all material respects with, or cause to be complied with in all material respects, in a timely manner all provisions, covenants and other promises (if any) required to be observed by it under the Contracts related to the Pool Receivables, and comply in all material respects and in a timely manner with the Credit and Collection Policy in regard to the Pool Receivables and the related Contracts and (ii) as beneficiary of any Related Security, enforce such Related Security as reasonably requested by the Agent.

(h)            Transaction Documents.  At its expense, require each Originator and the Servicer to timely and fully perform and comply in all material respects with all provisions, covenants and other promises required to be observed by them under each of the Transaction Documents, maintain each of the Transaction Documents to which it is a party in full force and effect, enforceable in accordance with its terms, take all such action to such end as may be from time to time reasonably requested by the Agent, and make to any party to each of such Transaction Documents such demands and requests for information and reports or for action as the Seller is entitled to make thereunder and as may be from time to time reasonably requested by the Agent.

(i)             Deposits to Lock-Box Accounts.  Instruct, or cause the Servicer to instruct, all Obligors to make payments in respect of Pool Receivables to a Lock-Box Account and, if the Seller or any Originator shall otherwise receive any Collections (including, without limitation, any Collections deemed to have been received by the Seller pursuant to Section 2.9), segregate and hold in trust such Collections and deposit such Collections, or cause such Collections to be deposited, to a Lock-Box Account within 2 Business Days following such receipt.

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(j)             Maintenance of Separate Existence.  Do all things necessary to maintain its existence separate and apart from each Originator and other Affiliates of the Seller, including, without limitation, (i) maintaining proper limited liability company records and books of account separate from those of such Affiliates; (ii) maintaining its assets, funds and transactions separate from those of such Affiliates, reflecting such assets, funds and transactions in financial statements separate and distinct from those of such Affiliates, and evidencing such assets, funds and transactions by appropriate entries in the records and books referred to in clause (i) above, and providing for its own operating expenses and liabilities from its own assets and funds other than certain expenses and liabilities relating to basic corporate overhead which may be allocated between the Seller and such Affiliates; (iii) holding such appropriate meetings or obtaining such appropriate consents of its Board of Managers as are necessary to authorize all the Sellers actions required by law to be authorized by its Board of Managers, keeping minutes of such meetings and of meetings of its members and observing all other necessary organizational formalities (and any successor Seller shall observe similar procedures in accordance with its governing documents and applicable law); (iv) at all times entering into its contracts and otherwise holding itself out to the public under the Sellers own name as a legal entity separate and distinct from such Affiliates; and (v) conducting all transactions and dealings between the Seller and such Affiliates on an arms-length basis.

(k)            Purchase of Pool Receivables from Originators.  With respect to each Pool Receivable acquired from any Originator by the Seller other than as a capital contribution, pay to such Originator (in accordance with the Receivables Sale Agreement) an amount which constitutes fair consideration and approximates fair market value for such Pool Receivable and in a sale the terms and conditions of which (including, without limitation, the purchase price thereof) reasonably approximates an arms-length transaction between unaffiliated parties.

Section 5.2             Reporting Requirements of the Seller.

Until the later of (i) the Termination Date and (ii) the date upon which no Capital shall be outstanding and no Yield or other Obligations (other than contingent indemnification obligations) of the Seller remain unpaid under this Agreement, the Seller will furnish to the Agent for distribution to the Purchasers:

(a)            AnnualReports.  Within 100 days (one hundred and twenty (120) days in the case of the fiscal year ending December 31, 2007) after the end of each Fiscal Year, financial statements (which shall include a balance sheet and income statement, as well as statements of members equity and cash flow) showing the financial condition and results of operations of the Seller as of the end of and for such Fiscal Year, in each case certified by a Responsible Officer (excepting any Responsible Officer who is a Responsible Officer solely by virtue of a power of attorney) of the Seller as presenting fairly, in all material respects, the financial position and results of operation of the Seller and as having been prepared in accordance with GAAP, together with a certificate of such Responsible Officer stating that such financial statements present fairly, in all material respects, the financial position of the Seller as at the dates indicated and the results of their operations and cash flow for the periods indicated in conformity with GAAP applied on a basis consistent with prior years (except for changes that shall have been disclosed in the notes to the financial statements).

(b)            NoticeofEventofTermination.  Promptly and in any event within 2 Business Days after a Responsible Officer (excepting any Responsible Officer who is a Responsible Officer solely by virtue of a power of attorney) of the Seller first becomes aware of each Event of Termination or Potential Event of Termination continuing on the date of such statement, a statement of a Responsible Officer of the Seller (excepting any Responsible Officer who is a Responsible Officer solely by virtue of a power of attorney) setting forth details of such Event of Termination or Potential Event of Termination and the action which the Seller has taken and proposes to take with respect thereto.

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(c)            Other. Promptly, from time to time, such other information, documents, records or reports respecting this Agreement or the other Transaction Documents, the Receivables, the Related Security, the Contracts, the Restricted Accounts or the condition or operations, financial or otherwise, of the Seller as the Agent may from time to time reasonably request.

Section 5.3             Negative Covenants of the Seller.

Until the later of (i) the Termination Date and (ii) the date upon which no Capital shall be outstanding and no Yield or other Obligations (other than contingent indemnification obligations) of the Seller remain unpaid under this Agreement, the Seller will not:

(a)    Debt.  Except as otherwise provided herein or in the Receivables Sale Agreement, create, incur, assume or suffer to exist any Debt, other than (i) Debt of the Seller representing fees, expenses and indemnities arising hereunder or under the Receivables Sale Agreement for the purchase price of the Receivables under the Receivables Sale Agreement, (ii) the Subordinated Notes and (iii) other Debt of the Seller incurred in the ordinary course of its business in an amount not to exceed $10,500 at any time outstanding.

(b)    Sales, Liens, Etc.  Except as otherwise provided herein, sell, lease, transfer, assign (by operation of law or otherwise) or otherwise dispose of, or grant any option with respect to, or create or suffer to exist any Lien, other than Permitted Liens, upon or with respect to any of its properties or assets, whether now owned or hereafter acquired, including, but not limited to, its undivided interest in any Pool Receivable or Related Security or Collections in respect thereof, or upon or with respect to any related Contract or any Deposit Account to which any Collections of any Pool Receivable are sent (including, without limitation, any Lock-Box Account), or assign any right to receive income in respect thereof.

(c)    Investments.  Except as otherwise provided herein or in the Receivables Sale Agreement, directly or indirectly make or maintain any Investment.

(d)    RestrictedPayments. Directly or indirectly, declare, order, pay, make or set apart any sum for any redemption, retirement or cancellation of the Sellers Equity Interests or any Subordinated Note other than pursuant to or in accordance with the Transaction Documents.

(e)    Merger, Etc. Consolidate with or merge into any other Person, acquire all or substantially all of the Equity Interests of any Person, acquire all or substantially all of the assets of any Person or all or substantially all of the assets constituting the business of a division, branch or other unit operation of any Person, enter into any joint venture or partnership with any Person or acquire or create any subsidiary.

(f)     Change in Credit and Collection Policy. Make any changes in the Credit and Collection Policy that would be reasonably likely to impair the collectibility of the Pool Receivables.

(g)    Organizational Documents; Change of Name, Etc.

  (i)       Amend, supplement or otherwise modify any of its Organization Documents without the consent of the Agent (not to be unreasonably withheld or delayed).

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 (ii)               Change its name, identity, form of legal structure or jurisdiction of organization, unless, prior to the effective date of any such change, the Seller delivers to the Agent (x) UCC financing statements necessary to reflect such change and to continue the perfection of the ownership interests in the Receivable Interests contemplated by this Agreement and (y) if the identity or structure of the Seller has changed and such change adversely affects the rights of the Agent under then existing Lock-Box Agreements and other control agreements with the Seller to take control of the Lock-Box Accounts and other Restricted Accounts pursuant to Section 6.3(a), new Lock-Box Agreements and other control agreements executed by the Seller and the relevant banks, to the extent necessary to reflect such changes and to continue to enable the Agent to exercise such rights.

(h)           Accounting.  Account for (including for accounting and tax purposes) or otherwise treat the transactions contemplated by the Receivables Sale Agreement in any manner other than as sales of Receivables by any Originator to the Seller, or account for (other than for tax purposes) or otherwise treat the transactions contemplated by this Agreement in any manner other than as sales of Receivable Interests by the Seller to the Agent for the account of the Purchasers.

(i)             AffiliateTransactions. Except as contemplated or permitted by the Transaction Documents, enter into any other transaction directly or indirectly with or for the benefit of any Affiliate of the Seller.

(j)             ERISA.  Adopt, maintain, contribute to or incur or assume any obligation with respect to any Plan, Multiemployer Plan or Welfare Plan, except such obligation or contingent obligation that arises as a matter of law solely as a result of an ERISA Affiliates sponsorship of a Plan, Multiemployer Plan or Welfare Plan.

(k)            LeaseObligations.  Create, incur, assume or suffer to exist any obligations as lessee for the rental or lease of real or personal property, other than for the lease or rental of an office space or office equipment for use by the Seller in the ordinary course of its business.

(l)             Extension or Amendment of Receivables.  Except as otherwise permitted in Section 6.2, extend, amend or otherwise modify the terms of any Pool Receivable, or amend, modify or waive any term or condition of any Contract related thereto.

(m)           Change in Payment Instructions to Obligors.  Add or terminate any bank as a Lock-Box Bank or any Deposit Account as a Lock-Box Account from those listed in Schedule I, or make any change in the instructions to Obligors regarding payments to be made to any Lock-Box Account, unless the Agent shall have received at least 20 days prior written notice of such addition, termination or change and shall have received, with respect to each new Lock-Box Account, a Lock-Box Agreement executed by the Lock-Box Bank that maintains such Lock-Box Account and the Seller or any Originator, as applicable.

(n)            Deposits to Lock-Box Accounts.  Deposit or otherwise credit, or cause or grant any permission to be so deposited or credited, to any Lock-Box Account cash or cash proceeds other than Collections of Pool Receivables.

(o)            Receivables Sale Agreement.  (i) Cancel or terminate the Receivables Sale Agreement or consent to or accept any cancellation or termination thereof, (ii) amend, supplement or otherwise modify any term or condition of the Receivables Sale Agreement or give any consent, waiver or approval thereunder, (iii) waive any default under or breach of the Receivables Sale Agreement or (iv) take any other action under the Receivables Sale Agreement not required by the terms thereof that would impair the value of any Receivable Assets (as defined therein) or the rights or interests of the Seller thereunder or of the Agent or any Purchaser or Indemnified Party hereunder or thereunder.

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Section 5.4             Affirmative Covenants of the Servicer.

Until the later of (i) the Termination Date and (ii) the date upon which no Capital shall be outstanding and no Yield or other Obligations (other than contingent indemnification obligations) of the Seller remain unpaid under this Agreement, the Servicer shall:

(a)    Existence. Do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence.

(b)    Compliance with Laws, Etc. Comply with all applicable laws, rules, and regulations and all orders of any Governmental Authority applicable to it and all Pool Receivables and related Contracts, Related Security and Collections with respect thereto to the extent noncompliance could reasonably be expected to result in a Material Adverse Effect.

(c)    Business and Properties.  Except to the extent the failure to do so, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect, at all times (a) do or cause to be done all things reasonably necessary to preserve, renew and keep in full force and effect the rights, licenses, permits, franchises, patents, copyrights, trademarks and trade names material to the conduct of its business; and (b) maintain, preserve and protect all property material to the conduct of such business.

(d)    Payment of Taxes.  Pay and discharge all material taxes, assessments and governmental charges or levies imposed upon it or upon its income or profits or in respect of its property before the same shall become delinquent or in default, as well as all lawful material claims for labor, materials and supplies or otherwise, which, if unpaid, might give rise to liens or charges upon such properties or any part thereof, unless and to the extent that any such tax, assessment, charge, levy or claim is being contested in good faith by appropriate proceedings and adequate reserves are being maintained on its books with respect thereto to the extent required by GAAP.

(e)    Books of Accounts.

  (i)               To the extent Records are (A) in written form, segregate such Records in file cabinets or storage containers and appropriately label such file cabinets or storage containers to reflect that the Receivable Interests have been conveyed to the Purchasers, or (B) constitute computer programs and other non-written Records, appropriately legend such Records to reflect that the Receivable Interests have been conveyed to the Purchasers.

 (ii)               Maintain and implement administrative and operating procedures (including, without limitation, an ability to recreate, in all material respects, records evidencing Pool Receivables in the event of the destruction of the originals thereof), and keep and maintain all documents, books, records and other information reasonably necessary or advisable for the collection of all Pool Receivables (including, without limitation, records adequate to permit the daily identification of each Pool Receivable, the Outstanding Balance of each Pool Receivable and the dates which payments are due thereon and all Collections of and adjustments to each existing Pool Receivable).

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(f)     Examination of Records; Audits.

  (i)               From time to time upon ten (10) Business Days (or, during the continuance of a Triggering Event of the type described in clause (iii), (iv) or (v) of the definition of Triggering Event, five (5) Business Days) prior notice (except that during the continuance of a Potential Event of Termination or Event of Termination, no such notice shall be required) and during regular business hours as requested by the Agent and at the expense of the Agent, if a Potential Event of Termination or Event of Termination does not exist, and otherwise at the expense of the Servicer, permit the Agent, or its agents or representatives, (A) to examine and make copies of and abstracts from all Records in the possession or under the control of any Originator, the Servicer or their respective Affiliates or the agents of such Originator, the Servicer or their respective Affiliates, relating to Pool Receivables and the Related Security, including, without limitation, the related Contracts, and (B) to visit the offices and properties of any Originator, the Servicer, their respective Affiliates (other than the Seller) or the agents of such Originator, the Servicer or their respective Affiliates, for the purpose of examining such materials described in clause (a) above, and to discuss matters relating to Pool Receivables and the Related Security or the Servicers performance hereunder or under the Contracts with any of the officers or employees of the Servicer having knowledge of such matters and designated by the Servicer to discuss such matters with the Agent or its agents or representatives. Unless a Potential Event of Termination or Event of Termination is continuing, the Agent agrees to combine any request for any such examinations and visits with any request being made under Section 5.1(f).

 (ii)               The Agent may (at its own election or at the request of the Required Purchasers), at the Servicers sole cost and expense, make test verifications and other evaluations of the Receivables in any manner and through any medium that the Agent considers advisable, and the Servicer shall furnish all such assistance and information as the Agent may require in connection therewith; provided that, unless a Potential Event of Termination or an Event of Termination has occurred and is continuing, the Agent shall conduct no more than four such evaluations pursuant to this Section during any calendar year ;provided further that, unless Total Excess Availability is less than $200,000,000 on each Business Day during any period of five consecutive Business Days within any twelve-month period, the Agent shall conduct no more than two such evaluations pursuant to this Section during such twelve-month period.  The Servicer shall pay the documented fees and expenses of employees or other representatives of the Agent in connection with such evaluations.  In-house examination charges shall be limited to an amount up to $1,000 per day per examiner (employee or representative) plus such examiners reasonable out-of-pocket expenses, including travel expenses, incurred in connection with such evaluation.  The Agent shall furnish to each Purchaser a copy of the final written report prepared in connection with any such evaluation and shall provide the Servicer and the Seller with a summary of the analysis of the Receivables contained in any such final written report not less than two Business Days prior to delivery thereof to the Purchasers.

 (iii)               The Servicer shall furnish to the Agent any information that the Agent may reasonably request regarding the determination and calculation of the Net Receivables Pool Balance including correct and complete copies of any invoices, underlying agreements, instruments or other documents and the identity of all Obligors in respect of Receivables referred to therein.

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(g)    Performance and Compliance with Contracts and Credit and Collection Policy.  At its own expense, timely and fully (i) perform, or cause to be performed, and comply in all material respects with, or cause to be complied with in all material respects, all provisions, covenants and other promises required to be observed by it under the Contracts related to the Pool Receivables, and timely and fully comply in all material respects with the Credit and Collection Policy in regard to the Pool Receivables and the related Contracts and (ii) as beneficiary of any Related Security, enforce and cause each other Originator to enforce such Related Security as reasonably requested by the Agent.

(h)    Transaction Documents.  At its expense, maintain each of the Transaction Documents to which it is a party in full force and effect, enforce in accordance with its terms, take all such action to such end as may be from time to time reasonably requested by the Agent, and make to any party to each of such Transaction Documents such demands and requests for information and reports or for action as it is entitled to make thereunder and as may be from time to time reasonably requested by the Agent.

(i)     Deposits to Lock-Box Accounts. Instruct all Obligors to make payments in respect of Pool Receivables to a Lock-Box Account and, if the Servicer shall otherwise receive any Collections (including, without limitation, any Collections deemed to have been received by the Seller pursuant to Section 2.9), segregate and hold in trust such Collections and deposit such Collections, or cause such Collections to be deposited, to a Lock-Box Account within 2 Business Days following such receipt.

(j)             ERISA.  (i) Comply in all material respects with the applicable provisions of ERISA, except where noncompliance could not reasonably be expected to result in a Material Adverse Effect, and (ii) furnish to the Agent (x) as soon as possible, and in any event within 30 days after any Responsible Officer of the Servicer knows that any Reportable Event has occurred that alone or together with any other Reportable Event could reasonably be expected to result in liability of the Servicer or any Subsidiary to the PBGC in an amount that could reasonably be expected to result in a Material Adverse Effect, a statement of a Principal Financial Officer setting forth details as to such Reportable Event and the action proposed to be taken with respect thereto, together with a copy of the notice, if any, of such Reportable Event given to the PBGC, (y) promptly after receipt thereof, a copy of any notice that the Servicer or any Subsidiary may receive from the PBGC of an intent to terminate any Plan or Plans (other than a Plan maintained by an ERISA Affiliate that is considered an ERISA Affiliate only pursuant to subsection (m) or (o) of Section 414 of the Code) or to appoint a trustee to administer any Plan or Plans if such event could reasonably be expected to result in a Material Adverse Effect and (z) promptly and in any event within 30 days after receipt thereof by the Servicer or any ERISA Affiliate from the sponsor of a Multiemployer Plan, a copy of each notice concerning (A) the imposition of any Withdrawal Liability in an amount that could reasonably be expected to result in a Material Adverse Effect or (B) a determination that a Multiemployer Plan is, or is expected to be, terminated or in reorganization, both within the meaning of Title IV of ERISA, which, in each case, is expected to result in an increase in annual contributions of the Servicer or any Subsidiary to such Multiemployer Plan in an amount that could reasonably be expected to result in a Material Adverse Effect.

(k)            Control Agreements.  Not later than the end of the Compliance Period, cause to be delivered to the Agent (x) a Lock-Box Agreement with each Lock-Box Bank, executed by such Lock-Box Bank, the Agent and the Seller, the Servicer or an Originator, as applicable, and (y) a control agreement, in form and substance reasonably satisfactory to the Agent, with each depository bank maintaining any other Restricted Account, executed by such depository bank, the Agent, the Seller and the Servicer, as applicable.

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Section 5.5     Reporting Requirements of the Servicer.

Until the later of (i) the Termination Date and (ii) the date upon which no Capital Investment shall be outstanding and no Yield or other Obligations of the Seller remain unpaid under this Agreement, the Servicer shall furnish to the Agent for distribution to the Purchasers:

(a)    Monthly Reports.  During the existence of a Triggering Event, within 30 days after the end of each of the first two fiscal months in each fiscal quarter of Lyondell, unaudited consolidated financial statements (which shall include a balance sheet and income statement, as well as statements of partners equity and cash flow) showing the financial condition and results of operation of Lyondell and its consolidated subsidiaries as of the end of and for such fiscal month and that portion of the current Fiscal Year ending as of the close of such month, in each case certified by a Principal Financial Officer of Lyondell as being the same monthly financial statements generated in accordance with Lyondells normal procedures and submitted to management of Lyondell.  The Agent and the Purchasers acknowledge that any monthly unaudited consolidated financial statements furnished pursuant to this Section 5.5(a) will not be accompanied by the footnotes and other disclosures that would be necessary for fair presentation in accordance with GAAP.

(b)    Quarterly Reports.  Subject to the last two unlettered paragraphs of this Section 5.5, as soon as available, but in any event within forty-five (45) days (sixty (60) days in the case of the first three quarters of the fiscal year ending December 31, 2008) (or such earlier date on which the Company is required to make any public filing of such information), after the end of each of the first three (3) fiscal quarters of each fiscal year of the Company, (1) a consolidated balance sheet of the Company and its Subsidiaries as at the end of such fiscal quarter, and the related consolidated statements of income and cash flows, each for such fiscal quarter and the portion of the fiscal year then ended, setting forth in each case in comparative form the figures for the corresponding fiscal quarter of the previous fiscal year and the corresponding portion of the previous fiscal year, all certified (subject to normal year-end adjustments) as to fairness of presentation and consistency by a Responsible Officer (excepting any Responsible Officer who is a Responsible Officer solely by virtue of a power of attorney) of the Company as fairly presenting in all material respects the financial condition, results of operations and cash flows of the Company and its Subsidiaries in accordance with GAAP, subject only to normal year-end audit adjustments and the absence of footnotes and (2) promptly, any other information, documents and other reports which the Company or any Subsidiary is (when registered) required to file with the SEC pursuant to Section 13(a) or 15(d) of the Exchange Act;

(c)    Annual Reports.  Subject to the last two unlettered paragraphs of this Section 5.5, as soon as available, but in any event within ninety (90) days (one-hundred and twenty (120) days in the case of the fiscal year ending December 31, 2007) (or such earlier date on which the Company is required to make any public filing of such information) after the end of each fiscal year of the Company beginning with the fiscal year ending December 31, 2007, a consolidated balance sheet of the Company and its Subsidiaries as at the end of such fiscal year, and the related consolidated statements of income and retained earnings and of cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on without material qualification (including any going concern or like qualification) by an independent registered public accounting firm of nationally recognized standing.

(d)            Principal Financial Officers Certification.  Concurrently with (c) and (b) above, a certificate of a Principal Financial Officer of the Servicer,

  (i)               certifying that to the best knowledge of such Principal Financial Officer no Potential Event of Termination or Event of Termination has occurred and is continuing or, if a Potential Event of Termination or Event of Termination has occurred and is continuing, specifying the nature and extent thereof and any corrective action taken or proposed to be taken with respect thereto; and

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 (ii)               solely in the case of (b) above, certifying that except as previously notified to the Agent pursuant to Section 5.3(g) or Section 5.6(b) since the Closing Date or the date of the most recently delivered Principal Financial Officers Certification, as applicable there has been no change in any Transaction Partys name, form of organization, jurisdiction of organization and organizational number or Federal Taxpayer Identification Number.

(e)    Seller Report. On or prior to (x) the Closing Date and (y) the tenth Business Day of each calendar month thereafter:

  (i)               a Seller Report relating to each Receivable Interest, as of the close of business of the Servicer on the last day of the immediately preceding calendar month;

 (ii)               a listing of the ten Obligors owing the greatest dollar amount of Pool Receivables, together with a report setting forth (A) the name of such Obligor, (B) the balance of the Pool Receivables owing by such Obligor as of such date, and (C) a summary of credit terms applicable to such Pool Receivables under the applicable Contract;

(iii)               a listing by Obligor of all Pool Receivables, together with an analysis as to the aging of such Receivables, as of such last day; and

(iv)               such other information as shall be reasonably requested from time to time by the Agent or by the Agent at the request of the Required Purchasers;

provided that during the existence of a Triggering Event, on the second Business Day of each calendar week, the Servicer shall deliver a Seller Report relating to each Receivable Interest as of the close of business on the last day of the immediately preceding calendar week, except that, to the extent the information otherwise required to be set forth in a monthly Seller Report is not generally available to the Servicer on a weekly basis, the Seller Report shall be prepared on the basis of the aggregate amount of Collections from the Pool Receivables received by or on behalf of the Servicer as of the end of the immediately preceding calendar week and the aggregate of sales and billings of each Originator as of the end of the immediately preceding calendar week and otherwise on the basis of the applicable information contained in the most recent monthly Seller Report received by the Agent.

(f)     Net Receivables Pool Balance Report. As soon as possible and in any event within 2 Business Days after a Responsible Officer of the Servicer first becomes aware that any of the following is true: (i) the Net Receivables Pool Balance is less than 75% of the Net Receivables Pool Balance reflected in the most recent Seller Report delivered pursuant to clause (e) above, or (ii) the Net Receivables Pool Balance is less than 105% of the Required Net Receivables Pool Balance (giving effect to any calculated reduction in Capital by an amount equal to the amount on deposit in the Cash Assets Account that is available for application therefor pursuant to Section 2.6(a)(iii) or (iv) or Section 2.7(a)(iii) or (iv), as applicable, as of the close of business on the relevant day of determination), or (iii) the outstanding Capital exceeds the Net Receivables Pool Balance as a result of a decrease therein, a statement of a Responsible Officer of the Servicer setting forth details of such event and, in the case of clause (iii) such notice shall also include the amount of such excess.

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(g)    Litigation, etc.  Give the Agent prompt written notice (which the Agent shall promptly deliver to the Purchasers) after any Responsible Officer learns of the following:

  (i)               the issuance by any Governmental Authority of any injunction, order, decision or other restraint prohibiting, or having the effect of prohibiting, the transactions contemplated by the Transaction Documents, including the making of the Capital Investments, or having the effect of invalidating any provision of this Agreement or any other Transaction Document or the initiation of any litigation or similar proceeding seeking any such injunction, order, decision or other restraint;

 (ii)               the filing or commencement of any action, suit or proceeding against any Transaction Party or any Subsidiary, whether at law or in equity or by or before any Governmental Authority or any arbitrator, as to which action, suit or proceeding there is a reasonable possibility of an adverse determination and which, if determined adversely to such Transaction Party or any Subsidiary, could reasonably be expected to result in a Material Adverse Effect;

(iii)               the occurrence of any development or event which could reasonably be expected to result in a Material Adverse Effect; and

(iv)               the existence of (i) any Triggering Event or (ii) any Potential Event of Termination or Event of Termination, specifying the nature and extent thereof and the action (if any) which is proposed to be taken with respect thereto.

(h)    Information Regarding the Servicer.  Give the Agent written notice at least 10 days prior to (in the case of (ii) or (iii)) and within 20 days after (in any other case) change in the Servicers (i) name, (ii) form of organization, (iii) jurisdiction of organization, (iv) organizational number or (v) Federal Taxpayer Identification Number.

(i)     Other. Promptly, from time to time, such other information, documents, records or reports respecting this Agreement or the other Transaction Documents, the Receivables, the Related Security, the Contracts, the Restricted Accounts or the condition or operations, financial or otherwise, of any Transaction Party as the Agent may from time to time reasonably request.

Notwithstanding the foregoing, the obligations to deliver financial statements pursuant to clauses (b) and (c) of this Section 5.5 will be satisfied with respect to financial information of the Company by furnishing (A) the applicable financial statements of the Company or (B) the Companys Form 10-K or 10-Q, as applicable, filed with the SEC; provided that, with respect to each of clauses (A) and (B), to the extent such information is in lieu of information required to be provided under Section 5.5(b), all such materials are to be reported on without material qualification (including any going concern or like qualification) by an independent registered public accounting firm of nationally recognized standing.

Documents required to be delivered pursuant to clauses (c) and (b) of this Section 5.5 may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which the Company (or any direct or indirect parent of the Company) posts such documents, or provides a link thereto on the website on the Internet at the website address listed on Schedule 5.5; or (ii) on which such documents are posted on the Companys behalf on IntraLinks/IntraAgency or another website identified in the notice provided pursuant to clause (z) immediately below, if any, to which each Purchaser and the Agent have access (whether a commercial, third-party website or whether sponsored by the Agent); provided that: (y) upon written request by the Agent or any Purchaser, the Servicer shall deliver paper copies of the information referred to in clauses (c) and (bg) of this Section 5.5 as requested by the Agent or Purchaser (as applicable) and (z) the Servicer shall notify (which may be by facsimile or electronic mail) the Agent of the posting of any such documents.  Each Purchaser shall be solely responsible for timely accessing posted documents or requesting delivery of paper copies of such documents from the Agent and maintaining its copies of such documents.

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Section 5.6     Negative Covenants of the Servicer.

Until the later of (i) the Termination Date and (ii) the date upon which no Capital shall be outstanding and no Yield or other Obligations (other than contingent indemnification obligations) of the Seller remain unpaid under this Agreement, the Servicer shall not:

(a)    Change in Business Lines or Credit and Collection Policy.  Make any change in the character of its business or in the Credit and Collection Policy that would, in either case, be reasonably likely to impair the collectibility of the Pool Receivables.

(b)    Organizational Documents; Change of Name, Etc.

  (i)               Amend, supplement or otherwise modify the Organization Documents of the Seller without the consent of the Agent (not to be unreasonably withheld or delayed).

 (ii)               Change, or cause any other Transaction Party to change, its name, form of organization or jurisdiction of organization, unless, prior to the effective date of any such change, if such change adversely affects the rights of the Agent under then existing Lock-Box Agreements or other control agreements with such Transaction Party to take control of the Lock-Box Accounts and other Restricted Accounts pursuant to Section 6.3(a), the Servicer delivers to the Agent new Lock-Box Agreements and other control agreements executed by such Transaction Party and the relevant banks, to the extent necessary to reflect such changes and to continue to enable the Agent to exercise such rights.

(c)    Accounting.  Cause or permit the Seller to account for (including for accounting and tax purposes) or otherwise treat the transactions contemplated by the Receivables Sale Agreement in any manner other than as sales of Receivables by any Originator to the Seller, or to account for (other than for tax purposes) or otherwise treat the transactions contemplated by this Agreement in any manner other than as sales of Receivable Interests by the Seller to the Agent for the account of the Purchasers.

(d)    Extension or Amendment of Receivables. Except as otherwise permitted in Section 6.2, extend, amend or otherwise modify the terms or Outstanding Balance of any Pool Receivable, or extend, amend, modify or waive any term or condition of any Contract related thereto.

(e)    Change in Payment Instructions to Obligors. Add or terminate any bank as a Lock-Box Bank or any Deposit Account as a Lock-Box Account from those listed in Schedule I, or make any change in the instructions to Obligors regarding payments to be made to any Lock-Box Account, unless the Agent shall have received at least 20 days prior written notice of such addition, termination or change and shall have received, with respect to each new Lock-Box Account, a Lock-Box Agreement executed by the Lock-Box Bank that maintains such Lock-Box Account and the Seller or any Originator, as applicable.

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(f)     Deposits to Lock-Box Accounts. Deposit or otherwise credit, or cause or grant permission to be so deposited or credited, to any Lock-Box Account cash or cash proceeds other than Collections of Pool Receivables.

(g)    Voluntary Petitions.  Cause the Seller to file a voluntary petition under the Bankruptcy Code or any other bankruptcy or insolvency laws so long as the Seller is not insolvent within the meaning of the Bankruptcy Code, and unless, and only unless, such filing has been authorized in accordance with the Sellers Organization Documents.

(h)    Maintenance of Sellers Separate Existence.  Take any action, or omit to take any action, if the effect is to cause the Seller to fail to perform or observe in any material respect the covenants contained in Section 5.1(d) and Section 5.1(j) above or to otherwise cause the Seller not to be considered as legal entity separate and distinct from any Originator or any other Affiliates.

ARTICLE VI

Administration and Collection

Section 6.1     Designation of Servicer.

(a)           The Pool Receivables shall be serviced, administered and collected by the Person (the Servicer) designated to do so from time to time in accordance with this Section 6.1.  Until the Agent designates a new Servicer in accordance with Section 6.1(c), Lyondell is hereby designated as, and hereby agrees to perform the duties and obligations of, the Servicer pursuant to the terms hereof.

(b)           The Servicer may subcontract with each Originator to service, administer or collect the Pool Receivables that any Originator creates, and may, with the prior consent of the Agent (such consent not to be unreasonably withheld or delayed), subcontract with any other Person to service, administer or collect the Pool Receivables, provided that such other Originator or other Person with whom the Servicer so subcontracts shall not become the Servicer hereunder and the Servicer shall remain liable for the performance of the duties and obligations of the Servicer pursuant to the terms hereof.

(c)            The Agent may at any time following the occurrence of an Event of Termination designate as Servicer any Person (including itself) to succeed the initial or any successor Servicer, if such Person (other than itself) shall agree in writing to perform the duties and obligations of the Servicer pursuant to the terms hereof.

Section 6.2     Duties of Servicer.

(a)           The Servicer shall take or cause to be taken all such commercially reasonable actions as may be necessary or advisable to collect each Pool Receivable from time to time, all in accordance with applicable laws, rules and regulations, with reasonable care and diligence, and in accordance with the Credit and Collection Policy.  Each of the Seller, the Purchasers and the Agent hereby appoints as its agent the Servicer, from time to time designated pursuant to Section 6.1, to enforce its respective rights and interests in and under the Pool Receivables, the Related Security and the related Contracts.

(b)    Unless an Event of Termination shall have occurred and be continuing, the Servicer may, in accordance with the Credit and Collection Policy, (i) extend the maturity or adjust the Outstanding Balance of any Receivable as the Servicer may determine to be appropriate to maximize Collections thereof, (ii) extend the term of any Contract and (iii) amend, modify or waive any other terms and conditions of any Contract.

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(c)           The Servicer shall administer the Collections in accordance with the procedures described herein and in Sections 2.6, 2.7, 2.8 and 2.9.  The Servicer shall as soon as practicable following receipt, turn over to the Seller any cash collections or other cash proceeds received with respect to Receivables not constituting Pool Receivables.

(d)           The Servicer shall hold in trust for the Seller and each Purchaser, in accordance with their respective interests, all Records that evidence or relate to the Pool Receivables.  The Servicer shall, upon the occurrence and during the continuance of any Event of Termination, and at the request of the Agent, provide to the Agent the Records with respect to the Pool Receivables, provided that, in the case of Records consisting of computer programs, data processing software and any other intellectual property under license from third parties, the Servicer will make available such Records only to the extent that the license for such property so permits.

Section 6.3     Rights of the Agent.

(a)    The Seller and the Servicer each hereby transfer to the Agent the exclusive dominion and control of (x) the Lock-Box Accounts to which the Obligors of Pool Receivables shall make payments and (y) the other Restricted Accounts, and shall take any further action that the Agent may reasonably request to effect such transfer, including ..

(b)            At any time during the continuance of an Event of Termination:

  (i)               The Agent may notify, at the Sellers expense, the Obligors of Pool Receivables, or any of them, of the ownership of Receivable Interests by the Purchasers.

 (ii)               The Agent may direct the Obligors of Pool Receivables, or any of them, to make payment of all amounts due or to become due to the Seller under any Pool Receivable directly to the Agent or its designee.

(iii)               The Seller and the Servicer each shall, at the Agents request and at the Sellers and the Servicers expense, give notice of such ownership to such Obligors and direct them to make such payments directly to the Agent or its designee.

(iv)              The Seller and the Servicer each shall, at the Agents request, (A) assemble, and make available to the Agent at a place reasonably selected by the Agent or its designee, all of the Records which evidence or relate to the Pool Receivables, and the related Contracts and Related Security, or which are otherwise necessary or desirable to collect the Pool Receivables, provided that, in the case of Records consisting of computer programs, data processing software and any other intellectual property under license from third parties, the Servicer will make available such Records only to the extent that the license for such property so permits, and provided, further, that during the continuance of an Event of Termination, the Seller and the Servicer each shall, at the Agents request, commence the process of assembling such Records, and (B) segregate all cash, checks and other instruments received by it from time to time constituting Collections or other proceeds of Pool Receivables in a manner reasonably acceptable to the Agent and shall, promptly upon receipt, remit all such cash, checks and instruments, duly endorsed or with duly executed instruments of transfer, to the Agent or its designee.

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 (v)               The Agent may take any and all commercially reasonable steps in the Sellers or the Servicers name and on behalf of the Seller and the Purchasers necessary or desirable, in the determination of the Agent, to collect all amounts due under any and all Pool Receivables, including, without limitation, endorsing the Sellers, or the Servicers name on checks and other instruments representing Collections or other proceeds of Pool Receivables, enforcing such Pool Receivables and the related Contracts, and adjusting, settling or compromising the amount or payment thereof, in the same manner and to the same extent as the Seller or the Servicer might have done.

(c)           At any time during the continuance of a Triggering Event, the Agent may, upon the instructions of the Required Purchasers and at the Sellers expense, request any of the Obligors of Pool Receivables to confirm the Outstanding Balance of such Obligors Pool Receivables.

Section 6.4    Certain Responsibilities.

Anything herein to the contrary notwithstanding:

(a)           The Seller, the Servicer and each Originator shall perform all of its obligations (if any) under the Contracts related to the Pool Receivables to the same extent as if Receivable Interests had not been sold hereunder and the exercise by the Agent of its rights hereunder shall not release the Seller or the Servicer from such obligations or its obligations with respect to Pool Receivables or under the related Contracts; and

(b)           Neither the Agent nor the Purchasers shall have any obligation or liability with respect to any Pool Receivables or related Contracts, nor shall any of them be obligated to perform any of the obligations of the Seller or any Originator thereunder.

Section 6.5    Further Assurances.

(a)    The Seller and the Servicer each agrees that from time to time, at its expense, it will promptly execute and deliver all further instruments and documents, and take all further action, that may be necessary, or that the Agent may reasonably request, in order to perfect, protect or more fully evidence or maintain the validity and effectiveness of the Receivable Interests purchased by the Purchasers hereunder, to carry out more effectively the purposes of the Transaction Documents and to enable any of them or the Agent to exercise and enforce any of their respective rights and remedies under the Transaction Documents. Without limiting the generality of the foregoing, the Seller and the Servicer each will upon the request of the Agent, in order to perfect, protect or evidence such Receivable Interests: (i) file or cause to be filed such financing or continuation statements, or amendments thereto or assignments thereof, and such other instruments or notices, as may be necessary, or as the Agent may reasonably request; (ii) from and after April 1, 2008, mark conspicuously each invoice evidencing each Pool Receivable with a legend stating that such Pool Receivable and related Contract has been sold, transferred and assigned to the Seller; and (iii) mark its master data processing records evidencing such Pool Receivables and related Contracts with such legend. The Servicer also agrees to provide to the Agent, from time to time upon request, evidence reasonably satisfactory to the Agent as to the perfection and priority of the Liens created or intended to be created by the Transaction Documents.

(b)           The Seller hereby authorizes the Agent to file one or more financing or continuation statements, and amendments thereto and assignments thereof, relating to all or any of the Contracts, or Pool Receivables and the Related Security and Collections with respect thereto, now existing or hereafter arising, without the signature of the Seller where permitted by law.  A photocopy or other reproduction of this Agreement or any financing statement covering all or any of the Contracts, or Pool Receivables and the Related Security and Collections with respect thereto shall be sufficient as a financing statement where permitted by law.

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(c)           If the Servicer or the Seller fails to perform any agreement contained herein, then after notice to the Servicer or the Seller, as applicable, the Agent may itself perform, or cause performance of, such agreement, and the reasonable costs and expenses of the Agent incurred in connection therewith shall be payable by the Seller under Section 10.1 or Section 11.5, as applicable.

ARTICLE VII

Events of Termination

Section 7.1     Events of Termination.

If any of the following events (Events of Termination) shall occur and be continuing:

(a)           Non-Payment.  The Seller or Servicer fails to make any payment or deposit when and as required to be made herein and, except for deposits in respect of Capital, such failure continues for at least five (5) consecutive Business Days; or

(b)           Specific Covenants.  (i) The Seller or Servicer fails to perform or observe any term, covenant or agreement contained in Sections 5.1(b), 5.2(b), 5.3, 5.4(a), 5.5(e), 5.6, 11.1 of this Agreement, (ii) any Originator fails to perform or observe any term, covenant or agreement contained in Sections 4.01(a), 4.03, 8.01 of the Receivables Sale Agreement or (iii) the Servicer or any Originator fails to perform or observe any term, covenant or agreement contained in Sections 3.01, 3.03, Article IV and 6.03 of the relevant Undertaking; or

(c)           Other Defaults.  Any Transaction Party fails to perform or observe any other covenant or agreement (not specified in Section 7.01(a) or (b) above) contained in any Transaction Document on its part to be performed or observed and such failure continues for thirty (30) days, or solely with respect to a failure (i) of the Servicer to comply with clauses 5.5(b) and (c) of this Agreement, ten (10) Business Days, after notice thereof by the Agent to the Servicer; provided, however, that a default under Section 5.3(b) shall not constitute an Event of Termination under this Section 7.1(c) if such default relates to a specific Pool Receivable and gives rise to an obligation of the Seller to make a payment under Section 2.9(c) in respect of the affected Pool Receivable and the Seller has made such payment in accordance with Section 2.9(c) and, after giving effect to such payment and, if applicable, any calculated reduction in Capital by an amount on deposit in the Cash Assets Account that is available for application therefor pursuant to Section 2.6 or 2.7, as applicable, the aggregate Receivable Interests would not exceed 100%; or

(d)           Representations and Warranties.  Any representation, warranty, certification or statement of fact made or deemed made by or on behalf of any Transaction Party herein, in any other Transaction Document, or in any document required to be delivered in connection herewith or therewith  (or any certification by a Company Financial Officer or the Borrowers Agent expressly contemplated by this Agreement) shall be incorrect or misleading in any material respect when made or deemed made; provided, however, that any such breach of a representation or warranty or any such inaccuracy that relates to a specific Pool Receivable shall not constitute an Event of Termination under this Section 7.1(d) if such breach or inaccuracy gives rise to an obligation of the Seller to make a payment under Section 2.9(c) in respect of the affected Pool Receivable and the Seller has made such payment in accordance with Section 2.9(c) and, after giving effect to such payment and, if applicable, any calculated reduction in Capital by an amount on deposit in the Cash Assets Account that is available for application therefor pursuant to Section 2.6 or 2.7, as applicable, the aggregate Receivable Interests would not exceed 100%; or

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(e)    Cross-Default.  Any Transaction Party or any Restricted Subsidiary (i) fails to make any payment beyond the applicable grace period with respect thereto, if any (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise) in respect of any Indebtedness (other than Indebtedness hereunder) having an aggregate principal amount of not less than the Threshold Amount, or (ii) fails to observe or perform any other agreement or condition relating to any such Indebtedness of not less than the Threshold Amount (any such Indebtedness, the Threshold Indebtedness), or any other event occurs (other than, with respect to Indebtedness consisting of Swap Contracts, termination events or equivalent events pursuant to the terms of such Swap Contracts), the effect of which default or other event is to cause, or to permit the holder or holders of such Indebtedness (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause, with the giving of notice if required, such Indebtedness to become due or to be repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an offer to repurchase, prepay, defease or redeem such Indebtedness to be made, prior to its Stated Maturity; provided that this clause (e)(ii) shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness, if such sale or transfer is permitted hereunder and under the documents providing for such Indebtedness; provided, further that such failure is unremedied and is not waived by the holders of such Indebtedness; or (iii) an Event of Default shall exist under (as defined in) the ABF Agreement; or a Receivables Termination Notice shall have been delivered under (and as defined in) the Intercreditor Agreement; or

(f)     Insolvency Proceedings, Etc.  Any of the Company, a Transaction Party or any Material Subsidiary to the fullest extent permitted under applicable mandatory provisions of law institutes or consents to the institution of any proceeding under any Debtor Relief Law or files for the opening of insolvency proceedings or a third person files for the opening of insolvency proceedings, or makes an assignment for the benefit of creditors; or applies for or consents to the appointment of any receiver, trustee (not being a custodian), custodian, conservator, liquidator (not being a bewindvoerder), rehabilitator, administrator, administrative receiver or similar officer for it or for all or any material part of its property under any applicable Debtor Relief Laws; or any receiver, trustee, custodian, conservator, liquidator, rehabilitator, administrator, administrative receiver or similar officer is appointed without the application or consent of such Person and the appointment continues undischarged or unstayed for sixty (60) calendar days; or any proceeding under any Debtor Relief Law relating to any such Person or to all or any material part of its property is instituted without the consent of such Person and continues undismissed or unstayed for sixty (60) calendar days, or an order for relief is entered in any such proceeding; or

(g)            Inability to Pay Debts; Attachment.  (i) Any of the Company, any Transaction Party or any Material Subsidiary  becomes unable or admits in writing its inability or fails generally to pay its debts in excess of the Threshold Amount as they become due, or (ii) any writ or warrant of attachment or execution or similar process is issued or levied against all or any material part of the property of the Transaction Parties and the Restricted Subsidiaries taken as a whole, and is not released, vacated or fully bonded within sixty (60) days after its issue or levy; or

(h)    Judgments.  There is entered against any Transaction Party or any Restricted Subsidiary a final judgment or order for the payment of money in an aggregate amount exceeding the Threshold Amount (to the extent not covered by independent third-party insurance as to which the insurer has been notified of such judgment or order and has not denied  coverage) and such judgment or order shall not have been satisfied, vacated, discharged or stayed or bonded pending an appeal for a period of sixty (60) consecutive days; or

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(i)             Invalidity of Transaction Documents. Any material portion of any material Transaction Document, at any time after its execution and delivery and for any reason other than as expressly permitted hereunder or thereunder or as a result of acts or omissions by the Agent or Asset Agent or any Purchaser, ceases to be in full force and effect; or any Transaction Party contests in writing the validity or enforceability of any provision of any Transaction Document; or any Transaction Party denies in writing that it has any or further liability or obligation under any Transaction Document (other than as a result of repayment in full of the Capital), or purports in writing to revoke or rescind any Transaction Document; or it becomes unlawful for any Transaction Party to perform any of its Obligations under the Transaction Documents; or

(j)             Change of Control.  There occurs or shall exist any Change of Control; or

(k)    Ownership Interests.  Any Purchase shall for any reason (other than pursuant to the terms hereof) cease to create, or any Receivable Interest shall for any reason cease to be, a valid and perfected first priority undivided percentage ownership interest or security interest to the extent of the pertinent Receivable Interest in each applicable Pool Receivable and the Related Security and Collections with respect thereto, except by reason of action taken voluntarily by the Agent, or the failure by the Agent to take action required to be taken by it under the Transaction Documents; provided, however, that any such event that relates to a specific Pool Receivable shall not constitute an Event of Termination under this Section 7.01(k) if the occurrence of such event gives rise to an obligation of the Seller to make a payment under Section 2.9(c) in respect of the affected Pool Receivable and the Seller has made such payment in accordance with Section 2.9(c) and, after giving effect to such payment and, if applicable, any calculated reduction in Capital by an amount held in the Cash Assets Account that is available for application therefor pursuant to Section 2.6 or 2.7, as applicable, the aggregate Receivable Interests would not exceed 100%; or

(l)             ERISA.  An ERISA Event occurs which, together with all other ERISA Events that have occurred, has resulted or could reasonably be expected to result in a Material Adverse Effect; or

(m)             [Reserved]

(n)    Net Receivables Pool Balance. The Net Receivables Pool Balance shall be less than the Required Net Receivables Pool Balance (giving effect to any calculated reduction in Capital by an amount equal to the amount on deposit in the Cash Assets Account that is available for application therefor pursuant to Section 2.6 or 2.7, as applicable, as of the close of business on the relevant day of determination) for a period of 2 consecutive Business Days or more; or

(o)    Total Excess Availability.  Total Excess Availability shall for a period of two (2) consecutive Business Days be less than $100,000,000;

notwithstanding the foregoing, Events of Termination under Section 7.1(e) or (h), shall not apply with respect to Millennium Holdings LLC or any Person that is a subsidiary of Millennium Holdings LLC as of the Closing Date (collectively, the Millennium Holdings Group) so long as none of the forementioned is an Originator, if, at the time of determination, (x) the event that would otherwise give rise to such an Event of Termination is excluded from the corresponding provision in all other Threshold Indebtedness or would otherwise not give rise to an event of termination thereunder in accordance with the terms of such Threshold Indebtedness and (y) the Millennium Holdings Group, taken as a whole, is not a Material Subsidiary;

then, and in any such event, the Agent shall, at the request, or may with the consent, of the Required Purchasers, by notice to the Seller and the Servicer declare the Termination Date to have occurred, whereupon the Termination Date shall forthwith occur; provided, that (x) automatically upon the second Business Day following the effectiveness of a Receivables Termination Notice delivered in accordance with (and as defined in) the Intercreditor Agreement, the Termination Date shall occur and (y) automatically upon the occurrence of any event (without any requirement for the passage of time or the giving of notice, or both) described in subsection (f) of this Section 7.1, the Termination Date shall occur, and the Agent may replace the Servicer pursuant to 0.  Upon any such occurrence of the Termination Date, the Agent and each Purchaser shall have, in addition to all other rights and remedies under this Agreement or otherwise, all other rights and remedies provided under any and all applicable laws, which rights shall be cumulative.

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ARTICLE VIII

The Agent

Section 8.1    Authorization and Action.

(a)            Each Purchaser hereby appoints Citibank as the Agent hereunder and each Purchaser authorizes the Agent to take such action as agent on its behalf and to exercise such powers under this Agreement and the other Transaction Documents as are delegated to the Agent under such agreements and to exercise such powers as are reasonably incidental thereto.  Without limiting the foregoing, each Purchaser hereby authorizes the Agent to execute and deliver, and to perform its obligations under, each of the Transaction Documents to which the Agent is a party, to exercise all rights, powers and remedies that the Agent may have under such Transaction Documents.

(b)           As to any matters not expressly provided for by this Agreement and the other Transaction Documents (including enforcement or collection), the Agent shall not be required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the instructions of the Required Purchasers, and such instructions shall be binding upon all Purchasers; provided, however, that the Agent shall not be required to take any action that (i) the Agent in good faith believes exposes it to personal liability unless the Agent receives an indemnification satisfactory to it from the Purchasers with respect to such action or (ii) is contrary to this Agreement or applicable law.  The Agent agrees to give to each Purchaser prompt notice of each notice given to it by the Seller, any Originator or the Servicer pursuant to the terms of this Agreement or the other Transaction Documents.

(c)            In performing its functions and duties hereunder and under the other Transaction Documents, the Agent is acting solely on behalf of the Purchasers and its duties are entirely administrative in nature.  The Agent does not assume and shall not be deemed to have assumed any obligation other than as expressly set forth herein and in the other Transaction Documents or any other relationship as the agent, fiduciary or trustee of or for any Purchaser or holder of any other obligation under any Transaction Document.  The Agent may perform any of its duties under any Transaction Document by or through its agents or employees.

(d)            The Asset Agent shall have no responsibility, obligation or liability whatsoever under the Transaction Documents, or in respect of the transactions thereunder, in such capacity (other than Section 11.6).

Section 8.2    Agents Reliance, Etc.

Neither the Agent nor any of its directors, officers, agents or employees shall be liable for any action taken or omitted to be taken by it or them as Agent under or in connection with this Agreement or any other Transaction Document or any other instrument or document delivered pursuant hereto (including, without limitation, the Agents servicing, administering or collecting Pool Receivables as Servicer pursuant to Section 6.1), or in respect of the transactions thereunder, except for its or their own gross negligence or willful misconduct.  Without limiting the generality of the foregoing, except as otherwise agreed by the Agent and any Purchaser, the Agent: (i) may consult with legal counsel (including counsel for the Seller, the Servicer or any Originator), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts; (ii) makes no warranty or representation to any Purchaser and shall not be responsible to any Purchaser for any statements, warranties or representations (whether written or oral) made in or in connection with this Agreement or any other Transaction Document or any other instrument or document delivered pursuant hereto; (iii) shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of this Agreement or any other Transaction Document or any other instrument or document delivered pursuant hereto on the part of the Seller or any Originator or to inspect the property (including the books and records) of the Seller or any Originator; (iv) shall not be responsible to any Purchaser for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other Transaction Document or any other instrument or document furnished pursuant hereto, or the perfection, priority or value of any ownership interest or security interest created or purported to be created hereunder or under the Receivables Sale Agreement; and (v) shall incur no liability under or in respect of this Agreement or any other Transaction Document or any other instrument or document delivered pursuant hereto by acting upon any notice (including notice by telephone), consent, certificate or other instrument or writing (which may be by telecopier, telegram, cable or telex) reasonably believed by it to be genuine and signed or sent by the proper party or parties.

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Section 8.3    Citibank and Affiliates.

With respect to any Capital or any Receivable Interest owned by it, Citibank shall have the same rights and powers under this Agreement as any other Purchaser and may exercise the same as though it were not the Agent.  Citibank and its Affiliates may generally engage in any kind of business with the Seller or any Originator or any Obligor, any of their respective Affiliates and any Person who may do business with or own securities of the Seller or any Originator or any Obligor or any of their respective Affiliates, all as if Citibank were not the Agent and without any duty to account therefor to the Purchasers.

Section 8.4     Purchase Decisions.

Each Purchaser acknowledges that it has, independently and without reliance upon the Agent or any of its Affiliates or any other Purchaser and based on such documents and information as it has deemed appropriate, made its own evaluation and decision to enter into this Agreement and to purchase undivided ownership interests in Pool Receivables hereunder.  Each Purchaser also acknowledges that it shall, independently and without reliance upon the Agent, any of its Affiliates or any other Purchaser and based on such documents and information as it shall deem appropriate at the time, continue to make its own decisions in taking or not taking action under this Agreement.

Section 8.5     Indemnification.

The Purchasers agree to indemnify the Agent (to the extent not promptly reimbursed by the Seller or the Servicer), ratably according to their Ratable Portion from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever that may be imposed on, incurred by, or asserted against the Agent in any way relating to or arising out of this Agreement or any other Transaction Document or any other instrument or document furnished pursuant hereto or any action taken or omitted by the Agent under this Agreement or any other Transaction Document or any such instrument or document; provided that no Purchaser shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the Agents gross negligence or willful misconduct.  Without limitation of the foregoing, the Purchasers agree to reimburse the Agent, ratably according to their Ratable Portion, promptly upon demand for any costs and expenses (including, without limitation, reasonable fees and disbursements of counsel) payable by the Seller to the Agent under Section 11.5, to the extent that the Agent is not promptly reimbursed for such costs and expenses by the Seller.

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Section 8.6     Successor Agent

The Agent may resign at any time by giving written notice thereof to the Purchasers and the Seller.  Upon any such resignation, the Required Purchasers shall have the right to appoint a successor Agent with the consent of the Seller, such consent not to be unreasonably withheld.  If no successor Agent shall have been so appointed by the Required Purchasers, and shall have accepted such appointment, within 30 days after the retiring Agents giving of notice of resignation, then the retiring Agent may, on behalf of the Purchasers, appoint a successor Agent, selected from among the Purchasers.  In either case, such appointment shall be subject to the prior written approval of the Seller (which approval may not be unreasonably withheld and shall not be required upon the occurrence and during the continuance of an Event of Termination).  Upon the acceptance of any appointment as Agent by a successor Agent, such successor Agent shall succeed to, and become vested with, all the rights, powers, privileges and duties of the retiring Agent, and the retiring Agent shall be discharged from its duties and obligations under this Agreement and the other Transaction Documents.  Prior to any retiring Agents resignation hereunder as Agent, the retiring Agent shall take such action as may be reasonably necessary to assign to the successor Agent its rights as Agent under the Transaction Documents.  After such resignation, the retiring Agent shall continue to have the benefit of this Article VIII as to any actions taken or omitted to be taken by it while it was Agent under this Agreement and the other Transaction Documents.

Section 8.7     Posting of Approved Electronic Communications.

(a)    Subject to certain limited exceptions in respect of which the Servicer or the Seller has delivered prior written notice to the Agent, each of the Purchasers, the Servicer and the Seller agree that the Agent may, but shall not be obligated to, make the Approved Electronic Communications available to the Purchasers by posting such Approved Electronic Communications on IntraLinks(tm) or a substantially similar electronic platform chosen by the Agents to be their electronic transmission system (the "Approved Electronic Platform").

(b)           Although the primary web portal is secured with a dual firewall and a user ID/password authorization system and the Approved Electronic Platform is secured through a single-user-per-deal authorization method whereby each user may access the Approved Electronic Platform only on a deal-by-deal basis, each of the Purchasers, the Servicer and the Seller acknowledges and agrees that the distribution of material through an electronic medium is not necessarily secure and that there are confidentiality and other risks associated with such distribution.  In consideration for the convenience and other benefits afforded by such distribution and for the other consideration provided hereunder, the receipt and sufficiency of which is hereby acknowledged, each of the Purchasers, the Servicer and the Seller hereby approves, and the Servicer shall cause each Originator to approve, distribution of the Approved Electronic Communications through the Approved Electronic Platform and understands and assumes the risks of such distribution.

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(c)    The Approved Electronic Communications and the Approved Electronic Platform are provided as is and as available.  None of the Agent or any of its Affiliates or any of their respective officers, directors, employees, agents, advisors or representatives (the Agent Affiliates) warrants the accuracy, adequacy or completeness of the Approved Electronic Communications and the Approved Electronic Platform and each expressly disclaims liability for errors or omissions not committed by it or in the absence of its gross negligence or willful misconduct in the Approved Electronic Communications and the Approved Electronic Platform.  No warranty of any kind, express, implied or statutory (including, without limitation, any warranty of merchantability, fitness for a particular purpose, non-infringement of third party rights or freedom from viruses or other code defects) is made by the Agent Affiliates in connection with the Approved Electronic Platform.

ARTICLE IX

Assignment of Receivable Interests

Section 9.1     Purchasers Assignment of Rights and Obligations.

(a)    Each Purchaser may assign all or a portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of its Commitment and the Receivable Interests owned by it); provided, however, that (i) each such assignment shall be a constant, and not a varying, percentage of such Purchasers rights and obligations under this Agreement and the Receivable Interests owned by it, (ii) in the case of any assignment by any Purchaser that is not assigning pursuant thereto all of its right and obligations under this Agreement, (A) the amount of the Commitment (determined as of the date of the applicable Assignment and Acceptance) being assigned pursuant to each such assignment shall be at least $10,000,000, or (B) the aggregate amount of all Commitments (determined as of the date of the applicable Assignments and Acceptances) being assigned by such Purchaser on such date to two or more Assignees that are Approved Funds of such Purchaser or are Affiliates of each other shall be at least $10,000,000 (or, in the case of (A) or (B), any smaller amount agreed upon by the Agent and the Seller), (iii) the parties to each such assignment shall execute and deliver to the Agent, for its acceptance and recording in the Register, an Assignment and Acceptance, together with (except in the case of an assignment to another Purchaser or an Affiliate or an Approved Fund of such Purchaser) a processing and recording fee of $3,500 (provided that only one such fee shall be required in the case of multiple assignments by a Purchaser on a single day to funds that invest in bank loans and financial assets of a type similar to the Receivable Interests that are advised by the same investment adviser if such funds are not Approved Funds) and (iv) except in the case of an assignment by a Purchaser to an Affiliate of such Purchaser, to another Purchaser or to an Approved Fund of such Purchaser), the consent of the Agent (and, in the case of an assignment of all or a portion of a Commitment, regardless of the identity of the assignee, the Swing Purchaser) and, unless an Event of Termination has occurred and is continuing, the Seller shall first have been obtained (which consent may not be unreasonably withheld); and provided, further, that any assignment to an Approved Fund of a Purchaser that is a collateralized debt obligation vehicle shall permit a pledge by such Assignee of the assigned rights and obligations in favor of an indenture trustee for the securities issued by such Assignee.  Upon such execution, delivery and acceptance, from and after the effective date specified in each Assignment and Acceptance, which effective date shall be the later of (x) the date the Agent receives the executed Assignment and Acceptance and (y) the date of such Assignment and Acceptance, (1) the Assignee thereunder shall be a party hereto and shall have all the rights and obligations of a Purchaser hereunder and (2) the assigning Purchaser shall, to the extent that rights and obligations hereunder have been assigned by it pursuant to such assignment and acceptance, relinquish its rights and be released from its obligations under this Agreement.

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(b)            By executing and delivering an Assignment and Acceptance, the assigning Purchaser and the Assignee thereunder confirm to and agree with each other and the other parties hereto as follows: (i) other than as provided in such Assignment and Acceptance, the assigning Purchaser makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement or any other Transaction Document or any other instrument or document furnished pursuant hereto or the execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other Transaction Document or any other instrument or document furnished pursuant hereto, or the perfection, priority or value of any ownership interest or security interest created or purported to be created hereunder or under the Receivables Sale Agreement; (ii) the assigning Purchaser makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Seller, the Servicer or any Originator or the performance or observance by the Seller, the Servicer or any Originator of any of their respective obligations under this Agreement or any other Transaction Document or any other instrument or document furnished pursuant hereto; (iii) such Assignee confirms that it has received copies of this Agreement and the other Transaction Documents, together with such other documents and information as it has deemed appropriate to make its own analysis and decision to enter into such Assignment and Acceptance; (iv) such Assignee will, independently and without reliance upon the Agent, any of its Affiliates, the assigning Purchaser or any other Purchaser and based on such documents and information as it shall deem appropriate at the time, continue to make its own decisions in taking or not taking action under this Agreement and the other Transaction Documents and the other instruments and documents furnished pursuant hereto; (v) such Assignee appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers and discretion under this Agreement and the other Transaction Documents and the other instruments and documents furnished pursuant hereto as are delegated to the Agent by the terms hereof and thereof, together with such powers and discretion as are reasonably incidental thereto; (vi) such Assignee appoints as its agent the Servicer from time to time designated pursuant to Section 6.1 to enforce its respective rights and interests in and under the Pool Receivables and the Related Security and Collections with respect thereto and the related Contracts; and (vii) such Assignee agrees that it will perform in accordance with their terms all of the obligations which by the terms of this Agreement are required to be performed by it as a Purchaser.

(c)            Upon its receipt of an Assignment and Acceptance executed by any assigning Purchaser and an Assignee, the Agent shall, if such Assignment and Acceptance has been completed and is in substantially the form of Exhibit A hereto, (i) accept such Assignment and Acceptance, (ii) record the information contained therein in the Register, and (iii) give prompt notice thereof to the Seller and the Servicer.

(d)           Any Purchaser may, in connection with any assignment or proposed assignment pursuant to Section 9.1, disclose to the assignee or proposed assignee any information relating to any Transaction Party or any Subsidiary furnished to the Purchasers by or on behalf of such Transaction Party or such Subsidiary, as applicable; provided that, prior to any such disclosure, each such assignee or proposed assignee shall execute an agreement whereby such assignee or proposed assignee shall agree (subject to customary exceptions) to preserve the confidentiality of any confidential information relating to the Transaction Parties and any Subsidiary received from the Agent or the Purchasers.

(e)    Notwithstanding anything to the contrary contained herein, any Purchaser (a Granting Purchaser) may grant to a special purpose funding vehicle (an SPC) of such Granting Purchaser, identified as such in writing from time to time by the Granting Purchaser to the Agent and the Seller, the option to provide to the Seller all or any part of any Purchase that such Granting Purchaser would otherwise be obligated to make to the Seller pursuant to Section 2.2, provided that (i) nothing herein shall constitute a commitment to make any Purchase by any SPC and (ii) if an SPC elects not to exercise such option or otherwise fails to provide all or any part of such Purchase, the Granting Purchaser shall be obligated to make such Purchase pursuant to the terms hereof.  The making of a Purchase by an SPC hereunder shall be deemed to utilize the Commitments of all the Purchasers to the same extent, and as if, such Purchase were made by the Granting Purchaser.  Each party hereto hereby agrees that no SPC shall be liable for any payment under this Agreement for which a Purchaser would otherwise be liable, for so long as, and to the extent, the related Granting Purchaser makes such payment.  In furtherance of the foregoing, each party hereto hereby agrees that, prior to the date that is one year and one day after the payment in full of all outstanding senior indebtedness of any SPC, it will not institute against, or join any other Person in instituting against, such SPC any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or similar proceedings under the laws of the United States of America or any State thereof.  In addition, notwithstanding anything to the contrary contained in this Section 9.1, any SPC may assign all or a portion of its interests in any Receivable Interests to its Granting Purchaser or to any financial institutions providing liquidity and/or credit facilities to or for the account of such SPC to fund the Purchases made by such SPC or to support the securities (if any) issued by such SPC to fund such Purchases; provided, however, that except in the case of an assignment to a Granting Purchaser or a financial institution that is either an affiliate of such SPC or another Purchaser, the Agent and, unless an Event of Termination has occurred and is continuing, the Seller must consent to such assignment in writing (which consent may not be unreasonably withheld). Each SPC shall execute an agreement whereby such SPC shall agree (subject to customary exceptions) to preserve the confidentiality of any confidential information relating to the Transaction Parties and its Affiliates received from the Agent or Purchasers.

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Section 9.2     The Register.

The Agent, acting solely for this purpose as an agent of the Seller, shall maintain at its office referred to in Section 11.3 a copy of each Assignment and Acceptance delivered to and accepted by it and a register (the Register) for the recordation of the names and addresses of the Purchasers and the Commitment of, and each Receivable Interest owned by, each Purchaser from time to time, which Register shall be available for inspection by the Seller or any Purchaser (but, in the case of any Purchaser, only with respect to the entries in the Register applicable to such Purchaser and the names of any other Purchasers) at any reasonable time upon reasonable prior notice.  The entries in the Register shall be conclusive and binding for all purposes, absent manifest error, and the parties hereto shall treat each Person whose name is recorded in the Register as a Purchaser hereunder for all purposes of this Agreement.  No Assignment and Acceptance shall be effective until it is entered in the Register.

Section 9.3     Participations.

With the prior written consent of the Agent, each Purchaser may sell participations to one or more Persons in or to all or a portion of its rights and obligations under the Transaction Documents (including all its rights and obligations with respect to Receivable Interests).  The terms of such participation shall not, in any event, require the participants consent to any amendments, waivers or other modifications of any provision of any Transaction Documents, the consent to any departure by any Transaction Party therefrom, or to the exercising or refraining from exercising any powers or rights such Purchaser may have under or in respect of the Transaction Documents (including the right to enforce the obligations of any Transaction Party), except if any such amendment, waiver or other modification or consent would reduce the amount, or postpone any date fixed for, any amount (whether of Capital, Yield or fees) payable to such participant under the Transaction Documents, to which such participant would otherwise be entitled under such participation.  In the event of the sale of any participation by any Purchaser, (w) such Purchasers obligations under the Transaction Documents shall remain unchanged, (x) such Purchaser shall remain solely responsible to the other parties for the performance of such obligations, (y) such Purchaser shall remain the holder of such Capital for all purposes of this Agreement and (z) the Seller, the Agent and the other Purchasers shall continue to deal solely and directly with such Purchaser in connection with such Purchasers rights and obligations under this Agreement.  Each participant shall be entitled to the benefits of Sections 2.12(a), 2.13 and 2.14 as if it were a Purchaser; provided, however, that anything herein to the contrary notwithstanding, the Seller shall not, at any time, be obligated to make under Section 2.12(a), 2.13 or 2.14 to the participants in the rights and obligations of any Purchaser (together with such Purchaser) any payment in excess of the amount the Seller would have been obligated to pay to such Purchaser in respect of such interest had such participation not been sold.  Any Purchaser may, in connection with any participation or proposed participation pursuant to Section 9.3, disclose to the participant or proposed participant any information relating to any Transaction Party or any Subsidiary furnished to the Purchasers by or on behalf of such Transaction Party or such Subsidiary, as applicable; provided that, prior to any such disclosure, each such participant or proposed participant shall execute an agreement whereby such participant or proposed participant shall agree (subject to customary exceptions) to preserve the confidentiality of any confidential information relating to the Transaction Parties and any Subsidiary received from the Agent or the Purchasers.  Each Purchaser that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Seller, maintain a register on which it enters the name and address of each participant and the amounts of each participants participation (the Participant Register).  The entries in the Participant Register shall be conclusive, absent manifest error, and such Purchaser shall treat each such Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary.

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ARTICLE X

Indemnification

Section 10.1          Indemnities.

Without limiting any other rights that any Indemnified Party may have hereunder or under applicable law, and whether or not any of the transactions contemplated hereby are consummated, (A) the Seller hereby agrees, severally and not jointly, to indemnify each Indemnified Party from and against, and hold each thereof harmless from, any and all claims, losses, liabilities, costs and expenses of any kind whatsoever (including, without limitation, reasonable attorneys fees and expenses) (all of the foregoing being collectively referred to as Indemnified Amounts) arising out of, or resulting from, in whole or in part, one or more of the following: (a) this Agreement or any other Transaction Document (other than the Undertaking or the Servicers activities as Servicer) to which it is a party; (b) the use of proceeds of any Purchase or reinvestment; (c) the interest of any Purchaser in any Receivable, any Contract or any Related Security; or (d) any transaction contemplated by this Agreement or any other Transaction Document (other than the Undertaking) to which it is a party; and (B) the Servicer hereby agrees, severally and not jointly, to indemnify each Indemnified Party for Indemnified Amounts arising out of or resulting from the Undertaking or the Servicers activities as Servicer or Buyers Servicer hereunder or under the other Transaction Documents; excluding, however, in all of the foregoing instances under clauses (A) and (B) above, Indemnified Amounts (1) to the extent resulting from (x) the gross negligence or willful misconduct on the part of such Indemnified Party or, (y) the failure to collect amounts in respect of a Pool Receivable, to the extent such failure results from a discharge of the Obligor with respect thereto in a proceeding in respect of such Obligor under applicable bankruptcy laws or otherwise results from the Obligors financial inability to pay such amounts or (2) that are subject to the exclusions from reimbursement or payment therefor under Section 2.14.  Without limiting or being limited by the foregoing and whether or not any of the transactions contemplated hereby are consummated, the applicable Seller Party shall pay within five Business Days after demand to each Indemnified Party any and all amounts necessary to indemnify such Indemnified Party from and against any and all Indemnified Amounts which relate to or result from, or which would not have occurred but for, one or more of the following:

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  (i)               any Receivable becoming a Pool Receivable which is stated to be, but is not, an Eligible Receivable;

 (ii)               any representation or warranty or statement made or deemed made by such Seller Party (or any of its officers) under or in connection with this Agreement or any other Transaction Document or any Seller Report or other document delivered or to be delivered in connection herewith or with any other Transaction Document being incorrect in any material respect when made or deemed made or delivered;

(iii)               the failure by such Seller Party to comply with any applicable law, rule or regulation with respect to any Pool Receivable or the related Contract or any Related Security with respect thereto; or the failure of any Pool Receivable or the related Contract or any Related Security with respect thereto to conform to any such applicable law, rule or regulation;

(iv)              the failure to vest in the Purchaser of a Receivable Interest a first priority perfected undivided percentage ownership interest, to the extent of such Receivable Interest, in each Receivable in, or purported to be in, the Receivables Pool and the Related Security and Collections in respect thereof, free and clear of any Lien (except for Liens created pursuant to the Transaction Documents and Permitted Liens); or the failure of the Seller to have obtained a first priority perfected ownership interest in the Pool Receivables and the Related Security and Collections with respect thereto transferred or purported to be transferred to the Seller under the Receivables Sale Agreement, free and clear of any Lien (except for Liens created pursuant to the Transaction Documents);

 (v)               the failure of such Seller Party to have filed, or any delay by such Seller Party in filing, financing statements or other similar instruments or documents under the UCC of any applicable jurisdiction or other applicable laws with respect to any Receivable in, or purported to be in, the Receivables Pool and the Related Security and Collections in respect thereof, whether at the time of any Purchase or reinvestment or at any subsequent time unless such failure results directly and solely from the Agents failure to take appropriate action;

(vi)              any dispute, claim, offset or defense (other than discharge in bankruptcy of the Obligor) of any Obligor to the payment of any Receivable in, or purported to be in, the Receivables Pool (including, without limitation, any defense based on the fact or allegation that such Receivable or the related Contract is not a legal, valid and binding obligation of such Obligor enforceable against it in accordance with its terms), or any other claim resulting from the sale of the goods or services related to such Receivable or the furnishing or failure to furnish such goods or services;

(vii)               any failure of such Seller Party to perform its duties or obligations in accordance with the provisions of this Agreement or any other Transaction Document or to perform its duties or obligations under any Contract;

(viii)              any product liability, personal injury, copyright infringement, theft of services, property damage, or other breach of contract, antitrust, unfair trade practices or tortious claim arising out of or in connection with the subject matter of any Contract or out of or in connection with any transaction contemplated by this Agreement, any other Transaction Document or any other instrument or document furnished pursuant hereto or such Contract;

78

 (ix)               the commingling by such Seller Party of Collections of Pool Receivables at any time with other funds;

  (x)              any action or omission by such Seller Party reducing or impairing the rights of any Purchaser of a Receivable Interest under this Agreement, any other Transaction Document or any other instrument or document furnished pursuant hereto or thereto or with respect to any Pool Receivable;

 (xi)              any cancellation or modification of a Pool Receivable, the related Contract or any Related Security, whether by written agreement, verbal agreement, acquiescence or otherwise, unless such cancellation or modification was made by or with the express consent of the Agent or a Servicer that is not an Originator or an Affiliate of an Originator; provided that in no event shall Indemnified Amounts include any unpaid portion of a Pool Receivable effected by any such cancellation or modification;

(xii)              any investigation, litigation or proceeding related to or arising from this Agreement, any other Transaction Document or any other instrument or document furnished pursuant hereto or thereto, or any transaction contemplated by this Agreement or any Contract or the use of proceeds from any Purchase or reinvestment pursuant to this Agreement, or the ownership of, or other interest in, any Receivable, the related Contract or Related Security;

   (xiii)               the existence of any Lien (except for Liens created pursuant to the Transaction Documents and Permitted Liens) against or with respect to any Restricted Account or any Pool Receivable, the related Contract or the Related Security or Collections with respect thereto;

   (xiv)              any failure by such Seller Party to pay when due any taxes, including without limitation sales, excise or personal property taxes, payable by such Seller Party in connection with any Receivable or the related Contract or any Related Security with respect thereto;

(xv)              any claim brought by any Person other than an Indemnified Party arising from any activity of such Seller Party in servicing, administering or collecting any Pool Receivable; or

   (xvi)              any failure by any Lock-Box Bank or other depositary bank at which a Restricted Account is maintained to comply with the terms of the Transaction Document governing such Restricted Account to which it is a party.

ARTICLE XI

Miscellaneous

Section 11.1   Amendments, Etc.

No amendment or waiver of any provision of this Agreement or the Intercreditor Agreement, and no consent to any departure by the Seller or the Servicer therefrom, shall be effective unless in a writing signed by the Agent and the Required Purchasers and, in the case of any such amendment, the Seller and the Servicer and then such amendment, waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no amendment, waiver or consent shall:

79

(a)           without the prior written consent of each Purchaser,

  (i)               amend the definitions ofEligible Receivable, Net Receivables Pool Balance,Required Net Receivables Pool Balance or Super Majority Purchasers, Required Purchasers; or

 (ii)               amend, modify or waive any provision of this Agreement in any way which would

(A)    reduce the amount of a Capital Investment or Yield that is payable on account of any Receivable Interest or delay any scheduled date for payment thereof or reduce the Applicable Margin or change the order of application of Collections to the payment thereof, or

(B)    impair any rights expressly granted to such Purchaser under this Agreement, or

(C)    reduce fees payable by the Seller to or for the account of such Purchaser hereunder or delay the dates on which such fees are payable, or

 (iii)              amend or waive the Event of Termination contained in Section 7.1(f) relating to the bankruptcy of any Transaction Party, or amend or waive the Event of Termination contained in Section 7.1(n) relating to the Net Receivables Pool Balance, or

     (iv)              change the percentage of Commitments, or the number of Purchasers or Purchasers, which shall be required for the Purchasers or any of them to take any action hereunder, or

 (v)               amend this Section 1.11, or

(vi)               extend the Commitment Termination Date, or

   (vii)               increase the amount of the Total Commitment, or

  (viii)               reduce the Reserve Percentage, or amend the definition of Reserve Percentage, in each case such that the Reserve Percentage is reduced, below 15%;

(b)           without the consent of the applicable Purchaser, increase the Commitment of such Purchaser, subject such Purchaser to any additional obligations, or decrease the Receivable Interest of such Purchaser; and

(c)           without the consent of the Super Majority Purchasers, amend the definitions of Receivable Asset Availability, Receivables Excess Availability, Total Asset Availability or Total Excess Availability or amend, or waive any Event of Termination or Potential Event of Termination arising under, Section 7.1(o) hereof;

provided, however, that the Agent shall not, without the prior written consent of the Required Purchasers, either agree to any amendment or waiver of any other provision of the Undertaking or any provision of the Intercreditor Agreement or other Transaction Document or consent to any departure from the Undertaking or the Intercreditor Agreement or other Transaction Document by any party thereto, and provided further, that (x) no amendment, waiver or consent shall, unless in writing and signed by the Agent in addition to the Purchasers required above to take such action, affect the rights or duties of the Agent under this Agreement or the other Transaction Documents, and (y) no amendment, waiver or consent shall, unless in writing and signed by the Swing Purchaser in addition to the Purchasers required above to take such action, affect the rights or duties of the Swing Purchaser under this Agreement or the other Transaction Documents.

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If, in connection with any proposed amendment, modification, waiver or termination requiring the consent of all affected Purchasers, the consent of the Required Purchasers is obtained but the consent of other Purchasers whose consent is required is not obtained (any such Purchaser whose consent is not obtained being referred to as a Non-Consenting Purchaser), then, so long as the Purchaser that is the same entity as the Agent is not a Non-Consenting Purchaser, at the Sellers request, the Agent (in its sole discretion) or an Assignee with the Agents consent (not to be unreasonably withheld) shall have the right (but shall have no obligation) to purchase from such Non-Consenting Purchaser, and such Non-Consenting Purchaser agrees that it shall, upon the Agents request, sell and assign to the Purchaser that is the same entity as the Agent or to such Assignee, all of the Commitment and Receivable Interest of such Non-Consenting Purchaser for an amount equal to the outstanding Capital represented by the Receivable Interest of the Non-Consenting Purchaser plus all accrued Yield and fees with respect thereto through the date of sale less unamortized upfront fees, such purchase and sale to be consummated pursuant to an executed Assignment and Acceptance.

It is understood that the operation of Section 2.19 in accordance with its terms is not an amendment subject to this Section 11.1.

No failure on the part of any Purchaser or the Agent to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right.

Section 11.2          Right of Set-off.

Each Purchaser is hereby authorized by the Seller upon the occurrence and during the continuance of an Event of Termination, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Purchaser to or for the credit or the account of the Seller against any and all of the obligations of the Seller now or hereafter existing under this Agreement to such Purchaser, irrespective of whether or not any formal demand shall have been made under this Agreement and although such obligations may be unmatured.  Each Purchaser agrees promptly to notify the Seller after any such setoff and application; provided, however, that the failure to give such notice shall not affect the validity of such setoff and application.  The rights of each Purchaser under this Section 11.2 are in addition to other rights and remedies (including, without limitation, other rights of setoff) which such Purchaser may have.

Section 11.3          Notices, Etc.

All notices and other communications hereunder shall, unless otherwise stated herein, be given in writing or by any telecommunication device capable of creating a written record (including, with respect to Approved Electronic Communications and other notices and communications described below, electronic mail), (i) to each of the Seller, the Servicer, the Agent and the Initial Purchasers, at its address set forth under its name on the signature pages hereof, (ii) to each Purchaser other than the Initial Purchasers, at its address specified on the Assignment and Acceptance pursuant to which it became a Purchaser hereunder or (iii) to any party hereto at such other address as shall be designated by such party in a notice to the other parties hereto given as provided herein.

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All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt if delivered by hand or overnight courier service or sent by telecopy equipment of the sender, or on the date five Business Days after dispatch by certified or registered mail if mailed, in each case delivered, sent or mailed (properly addressed) to such party as provided in this Section 11.3 or in accordance with the latest unrevoked direction from such party given in accordance with this Section 11.3.

Notices and other communications to the Purchasers hereunder not constituting Approved Electronic Communications may be delivered or furnished by electronic communications pursuant to procedures approved by the Agent; provided that the foregoing shall not apply to notices pursuant to Article II or III unless otherwise agreed by the Agent and the applicable Purchaser.  Each of the Agent, the Seller and the Servicer may, in its discretion, agree to accept notices and other communications to it hereunder or under any other Transaction Document that do not constitute Approved Electronic Communications, by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.

Section 11.4          Binding Effect; Assignability.

This Agreement shall be binding upon and inure to the benefit of each party hereto and their respective successors and assigns, except that neither the Seller, any Originator nor the Servicer shall have the right to assign its rights or obligations hereunder or any interest herein without the prior written consent of all Purchasers.  This Agreement shall create and constitute the continuing obligation of the parties hereto in accordance with its terms, and shall remain in full force and effect until such time, after the Termination Date, as no Capital or any other obligation of the Seller, any Originator or the Servicer under any Transaction Document shall be outstanding; provided, however, that rights and remedies with respect to the provisions of Sections 2.12, 2.13, 2.14, 10.1, 11.5, 11.6, and 11.8 shall be continuing and shall survive any termination of this Agreement.

Section 11.5          Costs and Expenses.

The Seller shall pay (i) all reasonable out-of-pocket expenses incurred by the Agent, including the reasonable fees, charges and disbursements of Davis Polk & Wardwell, special counsel for the Agent and any local counsel retained by them, in connection with the syndication of the receivables facilities provided for herein, the preparation and administration of the Transaction Documents or any amendments, modifications or waivers of the provisions thereof (whether or not the transactions contemplated hereby or thereby shall be consummated) and (ii) all out-of-pocket expenses incurred by the Agent or any Purchaser, including the fees, charges and disbursements of any counsel for the Agent or any Purchasers, in connection with the enforcement or protection of its rights in connection with any Transaction Document, including its rights under this Section, or in connection with the Receivable Interests, including all such out-of-pocket expenses incurred during any workout or restructuring in respect of such Receivable Interests.  It is understood that reimbursement of the Agent in respect of matters covered by Section5.1(f) and Section5.4(f) of this Agreement is subject to the applicable limitations specified herein.

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Section 11.6          Confidentiality.

Each of the Agent, the Asset Agent, the Purchasers and the SPCs (as defined in Section 9.1(e)) agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent required or requested by any regulatory authority, (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any other party to this Agreement, (e) in connection with the exercise of any remedies under any Transaction Document or any suit, action or proceeding relating to any Transaction Document or the enforcement of rights thereunder, (f) subject to obtaining a written agreement containing provisions substantially the same as those of this Section from the intended recipient of such Information, to any assignee of or participant in, or any prospective assignee of or participant in, any of its rights or obligations under this Agreement (including any assignee or any prospective assignee of an SPC of the type described in the last sentence of Section 9.1(e)), (g) with the consent of the Seller or any other Transaction Party, (h) for purposes of Section 9.1(e) only, to any rating agency (it being understood that, prior to any such disclosure, such rating agency shall undertake to preserve the confidentiality of any Information relating to the Transaction Parties and their Subsidiaries received by it from such Purchaser), (i) to the extent such Information (x) becomes publicly available other than as a result of a breach of this Section or (y) becomes available to the Agent or any Purchaser on a nonconfidential basis from a source other than the Transaction Parties or (j) to any direct or indirect contractual counterparty in any swap, hedge or similar agreement (or to such contractual counterpartys professional advisor) so long as the recipient of such Information agrees to be bound by the provisions of this Section.  For the purposes of this Section, Information means all information received from the Transaction Parties relating to the Transaction Parties and their Affiliates or their respective businesses, other than any such information that is available to the Agent or any Purchaser on a nonconfidential basis prior to disclosure by any Transaction Party.  Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

Notwithstanding any other provision herein, each Purchaser and the Agent (and each employee, representative or other agent of such party) may disclose to any and all Persons, without limitation of any kind, any information with respect to the tax treatment and tax structure (in each case, within the meaning of Treasury Regulation Section 1.6011-4) of the transactions contemplated by the Transaction Documents and all materials of any kind (including opinions or other tax analyses) that are provided to the Agent or such Purchaser relating to such tax treatment and tax structure.

Section 11.7          Governing Law.

This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York.

Section 11.8          Jurisdiction, Etc.

(a)           Any legal action or proceeding with respect to this Agreement or any other Transaction Document may be brought in the courts of the State of New York sitting in the Borough of Manhattan, the City of New York, or of the United States of America for the Southern District of New York, and, by execution and delivery of this Agreement, each party hereto hereby accepts for itself and in respect of its property, generally and unconditionally, the jurisdiction of the aforesaid courts.  The parties hereto hereby irrevocably waive any objection, including any objection to the laying of venue or based on the grounds of forum non conveniens, that any of them may now or hereafter have to the bringing of any such action or proceeding in such respective jurisdictions.

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(b)           Each of the parties hereto hereby irrevocably consents to the service of any and all legal process, summons, notices and documents in any suit, action or proceeding brought in the United States of America arising out of or in connection with this Agreement or any other Transaction Document by the mailing (by registered or certified mail, postage prepaid) or delivering of a copy of such process to such party, as the case may be, at its address specified in Section 11.3.  Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

(c)           Nothing contained in this Section 11.8 shall affect the right of the parties hereto to serve process in any other manner permitted by law or commence legal proceedings or otherwise proceed against any other party hereto in any other jurisdiction.

Section 11.9          Execution in Counterparts.

This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement.  Delivery by telecopier, pdf or other electronic means of an executed counterpart of a signature page to this Agreement shall be effective as delivery of an original executed counterpart of this Agreement.

Section 11.10        Intent of the Parties.

It is the intention of the parties hereto that each Purchase and reinvestment shall convey to each Purchaser, to the extent of its Receivable Interests, an undivided ownership interest in the Pool Receivables, and the Related Security and Collections in respect thereof and that such transaction shall constitute a purchase and sale and not a secured loan for all purposes other than for federal income tax purposes.  If, notwithstanding such intention, the conveyance of the Receivable Interests from the Seller to any Purchaser shall ever be recharacterized as a secured loan and not a sale, it is the intention of the parties hereto that this Agreement shall constitute a security agreement under applicable law, and the Seller hereby grants to the Agent for the benefit of itself and each such Purchaser a security interest in all of the Sellers right, title and interest in, to and under the Pool Receivables and the Related Security and Collections in respect thereof, the Restricted Accounts and all proceeds thereof and any Cash Assets and any cash collateral under this Agreement free and clear of Liens (except for Permitted Liens).

Section 11.11        Entire Agreement.

This Agreement and the other Transaction Documents contain a final and complete integration of all prior expressions by the parties hereto with respect to the subject matter hereof and shall constitute the entire agreement and understanding among the parties hereto with respect to the subject matter hereof and supersede all prior agreements and understandings, written or oral, relating to the subject matter hereof.

Section 11.12        Severability of Provisions.

Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction.

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Section 11.13       Waiver of Jury Trial.

Each of the parties hereto irrevocably waives all right to trial by jury in any action, proceeding or counterclaim (whether based on contract, tort or otherwise) arising out of or relating to this Agreement or any of the other Transaction Documents, the Purchases or the actions of the Agent or any Indemnified Party in the negotiation, administration, performance or enforcement hereof or thereof.

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date above written.

 
LYONDELLBASELL RECEIVABLES I, LLC, as Seller
  
       
       
       
 
By:
 /s/ Karen A. Twitchell   
   
Name:  Karen A. Twitchell 
  
   
Title:    Vice President and Treasurer
  
       
       
 
 
Address:  1221 McKinney, Suite 700
                   Houston, TX 77010
  
       
       
   
Attention:
   Assistant Treasurer   
         
         
 
                Telephone No.:  713/652-7200
  
 
                Telecopier No.:  713/652-4598
  
 
[Receivables Purchase Agreement]

 
LYONDELL CHEMICAL COMPANY, as Servicer
  
       
       
 
By:
 /s/ Karen A. Twitchell   
   
Name:  Karen A. Twitchell 
  
   
Title:    Vice President and Treasurer
  
       
       
 
 
Address:  1221 McKinney, Suite 700
                   Houston, TX 77010
  
       
       
   
Attention:
   Assistant Treasurer   
         
         
 
                Telephone No.:  713/652-7200
  
 
                Telecopier No.:  713/652-4598
 
 
 
 
[Receivables Purchase Agreement]

 
 
CITIBANK, N.A.,
  
 
as Administrative Agent and as Asset Agent
  
     
     
     
 
By:
 /s/ Matthew Paquin   
   
Name:  Matthew Paquin
  
   
Title:    Vice President
  
       
 
Address:
388 Greenwich Street
  
   
19th Floor
  
   
New York, New York 10013
  
       
   
Attention:  David Jaffe
  
       
 
Telephone No.:  (212) 816-2329
  
 
Telecopier No.:  (212) 816-2613
  
 
[Receivables Purchase Agreement]

JOINT LEAD ARRANGERS AND JOINT BOOKRUNNERS
 
CITIGROUP GLOBAL MARKETS INC.
  
 
as Joint Lead Arranger and Joint Bookrunner
  
     
     
     
 
By:
 /s/ Keith R. Gerding   
   
Name:  Keith R. Gerding
  
   
Title:    Director & Vice President
  
       
 
Address:
388 Greenwich Street
  
   
19th Floor
  
   
New York, New York 10013
  
       
   
Attention:  David Jaffe
  
       
 
Telephone No.:  (212) 816-2329
  
 
Telecopier No.:  (212) 816-2613
 
[Receivables Purchase Agreement]



 
GOLDMAN SACHS CREDIT PARTNERS L.P.,
   as Joint Lead Arranger and Joint Bookrunner
  
       
       
       
 
By:
 /s/ Michael Marsh   
   
Name:  Michael Marsh
  
   
Title:    Vice President
  
       
       
 
 
Address:  85 Broad Street
          New York
          NY 10004
  
       
       
   
Attention:  David Wright
  
       
       
 
Telephone No.:  +44 20 7774 6990
  
 
Telecopier No.:  +44 20 7552 7070
  
 
[Receivables Purchase Agreement]

 
 
MERRILL LYNCH CAPITAL CORPORATION,
  as Joint Lead Arranger and Joint Bookrunner
  
       
       
       
 
By:
 /s/ Amand] Melani   
   
Name:  Amand Melani
  
   
Title:    VP
  
       
       
 
Address:
    
       
       
   
Attention:
  
       
       
 
Telephone No.:
  
 
Telecopier No.:
  
 
[Receivables Purchase Agreement]

 
 
ABN AMRO BANK, N.V.
  
       
       
       
 
By:
 /s/ [not legible]                  /s/ [not legible]   
   
Name:[not legible]            [not legible]
  
   
Title:  Executive Director        Assistant Director
  
       
       
 
Address:
    
       
       
   
Attention:
  
       
       
 
Telephone No.:
  
 
Telecopier No.:
  
 
[Receivables Purchase Agreement]
 
 EX-4.9 13 lyo10k-032808ex49.htm UNDERTAKING AGREEMENT DATED AS OF DECEMBER 20, 2007 lyo10k-022808ex49.htm
EXHIBIT 4.9
 
UNDERTAKING AGREEMENT

dated as of

December 20, 2007


by


LYONDELL CHEMICAL COMPANY
EQUISTAR CHEMICALS, LP
HOUSTON REFINING LP


TABLE OF CONTENTS 


   
Page
     
ARTICLE 1
DEFINITIONS
     
Section 1.01.
Definitions
2
Section 1.02.
Accounting Terms
16
Section 1.03.
Terms Generally
16
     
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
     
Section 2.01.
Environmental and Safety Matters
17
Section 2.02.
Ownership of Properties
18
Section 2.03.
Subsidiaries
18
Section 2.04.
Insurance
18
Section 2.05.
Labor Matters
18
Section 2.06.
Solvency
19
Section 2.07.
Anti-Terrorism Laws.
19
     
ARTICLE 3
AFFIRMATIVE COVENANTS
     
Section 3.01.
Notices
19
Section 3.02.
Payment of Obligations
19
Section 3.03.
Preservation of Existence, Etc
20
Section 3.04.
Maintenance of Properties
20
Section 3.05.
Maintenance of Insurance
20
Section 3.06.
Compliance with Laws
20
Section 3.07.
Compliance with Environmental Laws; Environmental Reports
20
Section 3.08.
Books and Records.
21
Section 3.09.
Inspection Rights
21
Section 3.10.
ERISA.
21
Section 3.11.
Know Your Customer Requests
22
     
ARTICLE 4
NEGATIVE COVENANTS
     
Section 4.01.
Liens
23
Section 4.02.
Investments
27
Section 4.03.
Indebtedness
30
Section 4.04.
Fundamental Changes
34

i

Section 4.05.
Dispositions
35
Section 4.06.
Restricted Payments
36
Section 4.07.
Change in Nature of Business
38
Section 4.08.
Transactions with Affiliates
39
Section 4.09.
Burdensome Agreements
40
Section 4.10.
Anti-Money Laundering
42
Section 4.11.
Capital Expenditures.
42
Section 4.12.
Accounting Changes
43
Section 4.13.
Fixed Charge Coverage Ratio
43
     
ARTICLE 5
UNDERTAKING AS TO SERVICER
     
Section 5.01.
Unconditional Undertaking
43
Section 5.02.
Obligations Absolute
44
Section 5.03.
Waivers and Acknowledgments
46
Section 5.04.
Subrogation.
46
     
ARTICLE 6
MISCELLANEOUS
     
Section 6.01.
Notices
47
Section 6.02.
No Waivers
48
Section 6.03.
Amendments and Waivers
48
Section 6.04.
Continuing Agreement; Assignments under Receivables Purchase Agreement
48
Section 6.05.
Successors
48
Section 6.06.
Governing Law; Submission to Jurisdiction
49
Section 6.07.
Counterparts; Effectiveness
49
Section 6.08.
WAIVER OF JURY TRIAL
49
     
SCHEDULE 2.01 Environmental Matters  
SCHEDULE 2.03 -Subsidiaries
SCHEDULE 2.04 Insurance  
SCHEDULE 4.01(b) Existing Liens  
SCHEDULE 4.02(e) Investments  
SCHEDULE 4.05(k) Permitted Dispositions  
SCHEDULE 4.08(c) Transactions With Affiliates  
SCHEDULE 4.09 Burdensome Agreements  


ii

UNDERTAKING AGREEMENT dated as of December 20, 2007 by each of LYONDELL CHEMICAL COMPANY (Lyondell), as Servicer and as Originator, EQUISTAR CHEMICALS, LP (Equistar), as Originator, HOUSTON REFINING LP (HRLP), as Originator and any additional Originator (Lyondell, Equistar, HRLP and any additional Originator, collectively, the Originators) from time to time party hereto, in favor of the Purchasers (as defined in the Receivables Purchase Agreement referred to below) and Citibank, N.A. (Citibank), as administrative agent and asset agent thereunder (the Agent).

RECITALS

LyondellBasell Receivables I, LLC (the Seller), as buyer, and the Originators, as sellers (and, in the case of Lyondell, as buyers servicer), have entered into a Receivables Sale Agreement dated as of the date hereof (the Receivables Sale Agreement), pursuant to which the Originators sell and transfer all Seller Receivables (as defined in the Receivables Sale Agreement) originated by such Originator, together with certain related assets (including collections), to the Seller.

The Seller and Lyondell, as initial Servicer, have entered into the Receivables Purchase Agreement dated as of the date hereof among the Seller, Lyondell as Servicer, the Agent and the other banks and financial institutions party thereto (the Receivables Purchase Agreement).  Pursuant to the Receivables Purchase Agreement, the Seller may sell to one or more of the Purchasers, as the case may be, undivided percentage ownership interests in Receivables and related assets that were acquired by the Seller from the Originators.

The Agent and the Purchasers have requested that the Servicer and each Originator  provide, and each such party is willing to provide, certain additional assurances, as set forth herein, as to the ability of each such party to perform its obligations, as Originator or as Servicer, as applicable, under the Transaction Documents, and it is therefore a condition precedent to the effectiveness of the Receivables Purchase Agreement that the Servicer and each Originator shall have executed and delivered this Agreement.

NOW, THEREFORE, in consideration of the premises, and the substantial direct and indirect benefits to each Restricted Party from the financing arrangements contemplated by the Receivables Purchase Agreement and the Receivables Sale Agreement and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each Originator hereby agrees as follows:

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ARTICLE 1

Definitions

Section 1.01.  Definitions.  (a) Terms defined in the Receivables Purchase Agreement and not otherwise defined in Section 1.01(b), have, as used herein, the respective meanings provided for therein. 
 
(b)   The following terms, as used herein, have the following meanings:

ABF Loan Document shall mean a Loan Document as defined in the ABF Agreement.

ABF Loan Party shall mean a Loan Party as defined in the ABF Agreement.

ABF Restricted Party shall mean a Restricted Party as defined in the ABF Agreement.

Acquisition means the merger of BIL Acquisition Holdings Limited into Lyondell pursuant to the Acquisition Agreement.
 
Acquisition Agreement means that certain Agreement and Plan of Merger, dated as of July 16, 2007, by and among the Company, BIL Acquisition Holdings Limited and Lyondell.

Anti-Terrorism Laws means:
 
(a)            the Executive Order No. 13224 of September 23, 2001 blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten To Commit, or Support Terrorism;

(b)            the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56 (commonly known as the USA Patriot Act);

(c)            the Money Laundering Control Act of 1986, Public Law 99-570;

(d)            the International Emergency Economic Powers Act, 50 U.S.C. 1701 et seq, and the Trading with the Enemy Act, 50 U.S.C. App. 1 et seq, and any Executive Order or regulation promulgated thereunder and administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury; and

(e)            any similar law enacted in the United States of America subsequent to the date of this Agreement.

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Anti-Terrorism Party means  any person listed:
 
(a)            in the Annex to Executive Order No. 13224 on Terrorist Financing, effective September 2001;

(b)            on the "Specially Designated Nationals and Blocked Persons" list maintained by the Office of Foreign Assets Control of the U.S. Department of the Treasury;

(c)            in any successor list to either of the foregoing; or

(d)            any person or entity that commits, threatens or conspires to commit or supports "terrorism" as defined in Executive Order No. 13224 on Terrorist Financing, effective September 2001.

Attributable Indebtedness means, on any date, in respect of any Capitalized Lease of any Person, the capitalized amount thereof of any liability that would be required to appear on a balance sheet of such Person prepared as of such date in accordance with GAAP.

Capital Expenditures has the meaning specified in the Senior Facility Credit Agreement.

Capitalized Leases means all leases which, in accordance with GAAP, are recorded as capitalized leases; provided that for all purposes hereunder the amount of principal obligations under any Capitalized Lease shall be the Attributable Indebtedness related thereto.

Carry-Forward Amount has the meaning specified in Section 4.11.

Cash Equivalents means any of the following types of Investments, to the extent owned by any Restricted Party:
 
(a) time deposits or demand deposits in local currencies held by it from time to time in the ordinary course of business;

(b) an obligation, maturing within two years after the date of its acquisition, issued or guaranteed by the United States of America, Australia, Switzerland, Japan, Canada or any state which was a member state of the European Union, on December 31, 2003 or an instrumentality or agency thereof,

(c) a certificate of deposit or bankers acceptance, maturing within one year after the date of its acquisition, issued by any Lender, or a U.S. national or state bank or trust company or a European, Canadian, Australian, Swiss or Japanese bank, in each case having capital, surplus and undivided profits of at least $100,000,000 and whose long-term unsecured debt has a rating of A or better by S&P or A2 or better by Moodys or the equivalent rating by any other nationally recognized rating agency,

(d) commercial paper, maturing within one year after the date of its acquisition, which has a rating of A1 or better by S&P or P1 or better byMoodys, or the equivalent rating by any other nationally recognized rating agency,

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(e)  repurchase agreements and reverse repurchase agreements with an outstanding term not in excess of one year after the date of its acquisition with any financial institution which has been elected as a primary government securities dealer by the Federal Reserve Board or in respect of instruments set forth in clauses (c) or (d) above of the credit quality set forth in such applicable clause,

(f)  Money Market preferred stock maturing within six months after the date of its acquisition or municipal bonds issued by a corporation organized under the laws of any state of the United States, Australia, Japan, Canada, Switzerland or any state which was a member state of the European Union on December 31, 2003 or an instrumentality or agency thereof, which has a rating of A or better by S&P or Moodys or the equivalent rating by any other nationally recognized rating agency,

(g) tax exempt floating rate option tender bonds backed by letters of credit issued by a national or state bank whose long-term unsecured debt has a rating of AA or better by S&P or Aa2 or better by Moodys or the equivalent rating by any other nationally recognized rating agency, and

(h) shares of any fund holding assets consisting (except for de minimis amounts) of the type specified in clauses (b) through (g) above.
     
     CERCLA means the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as subsequently amended.
 
     Change in Law means, the introduction of, or any change in or in the interpretation of, any law, treaty or governmental rule, regulation or order or the compliance with any guideline, request or directive from any Governmental Authority (whether or not having the force of law).

     Consolidated EBITDA means, with respect to the Company and its Restricted Subsidiaries, for any Test Period, the sum, without duplication, of:
 
(1) Consolidated Net Income, and

(2) to the extent such Consolidated Net Income has been reduced thereby,
 
(a)            all income taxes paid or accrued (other than income taxes attributable to extraordinary gains or losses),
 
(b)            Consolidated Interest Expense,
    
(c)            Consolidated Non-cash Charges,
                
(d)            the amount of net loss resulting from the payment of any premiums, fees or similar amounts that are required to bepaid under the terms of the instrument(s) governing any Indebtedness upon the repayment or other extinguishment of such Indebtedness in accordance with the terms of such Indebtedness,

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(e)            nonrecurring costs and expenses paid that are related to any expense or cost reductions that have occurred or are associated with the good faith projected cost savings described in clause (3) below;
 
(f)            management fees and merger and acquisition advisory fees paid to the Sponsor,
 
(g)            any inventory write-up in connection with purchase accounting in respect of acquisitions (including the Acquisition); and

(3) the amount of net cost savings projected by the Company in good faith to be realized by specified actions taken prior to or during such period; provided that (x) such cost savings are reasonably identifiable and factually supportable, (y) such actions have been taken or are to be taken within twelve months of the date or determination to take such action and the benefit is expected to be realized within twelve months of taking such action, and (z) the aggregate amount of such cost savings added pursuant to this clause (3) shall not exceed $150,000,000 during such Test Period.

Consolidated Interest Expense means, with respect to the Company and its Restricted Subsidiaries and for any period, the sum of, without duplication:
 
(1)            the interest expense (including yield expense in the case of any Securitization Transaction) in respect of Financial Indebtedness, including:
    
         (a)            any amortization of debt discount,
 
                 (b)            all capitalized interest, and

 (c)            the interest portion of any deferred payment obligation,

 but excluding, in each case, any amortization or write-off of deferred financing costs and fees incurred in connection with the incurrence of any Indebtedness or Securitization Transactions; plus

(2)            the net amount paid (or deducting the net amount received) by the Company and its Restricted Subsidiaries in respect he relevant period under any Obligations in respect to Swap Contracts consisting of interest rate hedging arrangements or the interest rate component of currency hedging arrangements, plus


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(3)            the interest component of Capitalized Leases paid, accrued and/or scheduled to be paid or accrued during such period,
lessinterest income.
 
Consolidated Net Income shall have the meaning specified in the Senior Facility Credit Agreement.

Consolidated Net Tangible Assets means, as of any date, the total amount of assets (less applicable reserves and other properly deductible items) of the Company and its Restricted Subsidiaries, as of the last day of the then most recently ended fiscal year for which financial statements have been delivered pursuant to Section 5.5 of the Receivables Purchase Agreement, after deducting therefrom (1) all current liabilities (excluding any thereof which are by their terms extendible or renewable at the option of the obligor thereon to a time more than 12 months after the time as of which the amount thereof is being computed and excluding current maturities of long term debt), and (2) all goodwill, IP Rights, unamortized debt discount and other like intangible assets.

Consolidated Non-cash Charges shall have the meaning specified in the Senior Facility Credit Agreement.

Contractual Obligation has the meaning specified in the Senior Facility Credit Agreement.

Disposition or Dispose means the sale, transfer, license, lease or other disposition (including any sale and leaseback transaction and any sale or issuance of Equity Interests) of any property by any Person, including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith.

Disqualified Equity Interests means that portion of any Equity Interest which, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event, matures or is mandatorily redeemable (other than redeemable only for Equity Interests of such Person that is not itself a Disqualified Equity Interest), pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof, on or prior to the date that is ninety-one (91) days after the Commitment Termination Date, provided, however, that any Equity Interest that would not constitute a Disqualified Equity Interest but for provisions thereof giving holders thereof the right to require such Person to purchase or redeem such Equity Interest upon the occurrence of a change of control occurring prior to the date that is ninety-one (91) days after the Commitment Termination Date shall not constitute a Disqualified Equity Interest.

Notwithstanding the preceding sentence, only the portion of such Equity Interest which so matures or is mandatorily redeemable or is so convertible orexchangeable prior to the date that is ninety-one (91) days after the Commitment Termination Date shall be so deemed a Disqualified Equity Interest.  The amount of any Disqualified Equity Interest that does not have a fixed redemption, repayment or repurchase price will be calculated in accordance with the terms of such Disqualified Equity Interest as if such Disqualified Equity Interest were redeemed, repaid, converted or repurchased on any date on which the amount of such Disqualified Equity Interest is to be determined pursuant hereto; provided, however, that if such Disqualified Equity Interest could not be required to be redeemed, repaid, converted or repurchased at the time of such determination, the redemption, repayment or repurchase price will be the book value of such Disqualified Equity Interest as reflected in the most recent financial statements of such Person.

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Environmental Laws means the common law and any and all Federal, state, local, and foreign statutes, Laws, regulations, ordinances, rules, judgments, orders, decrees, permits, licenses, agreements or governmental restrictions relating to pollution, the protection of the environment, the generation, treatment, storage, transport, distribution, handling or recycling of Hazardous Materials or the presence, Release or threat of Release of Hazardous Materials and, to the extent relating to exposure to Hazardous Materials, human health and to workplace health and safety.

Environmental Permits means any permit, approval, identification number, license or other authorization required under any Environmental Law.

Excluded Capital Expenditures has the meaning specified in the Senior Facility Credit Agreement.

Existing Notes means, collectively, the $615,000,000 8⅜% Senior Notes due 2015 of the Company, the 500,000,000 8⅜% Senior Notes due 2015 of the Company and the $300,000,000 8.10% Guaranteed Notes due 2027 of Basell Finance, the 10% Senior Secured Notes due 2013 of Lyondell, the 8% Senior Unsecured Notes due 2014 of Lyondell, the 8% Senior Unsecured Notes due 2016 of Lyondell, the 6.875% Senior Unsecured Notes due 2017 of Lyondell, the 10% Debentures due 2010 of Lyondell, the 9.8% Debentures due 2020 of Lyondell, the 10⅝% Senior Unsecured Notes due 2008 of Equistar, the 101/8% Senior Unsecured Notes due 2011 of Equistar, the 7.55% Debentures due 2026 of Equistar, the 7⅝% Senior Notes due 2026 of Millennium America Inc. and the 8% Unsecured Notes due 2009 of Equistar, in each case to the extent outstanding on the Closing Date and the 4% Convertible Debentures due 2023 of Millennium Chemicals Inc. (to the extent not converted on the Closing Date).

FCC Period shall have the meaning specified in Section 4.13..

Financial Indebtedness shall have the meaning specified in the Senior Facility Credit Agreement.

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Fixed Charge Coverage Ratio means, with respect to any FCC Period, the ratio of (A) Consolidated EBITDA for such FCC Period minus Capital Expenditures made during such FCC Period to (B):

(x)    Consolidated Interest Expense; plus

(y)    the sum of
 
(a)    the amount of all dividend payments on any series of preferred stock (other than dividends paid in Qualified Equity Interests and other than dividends paid to the Company or to a Restricted Subsidiary) paid or accrued, plus

(b)    tax actually paid in cash by the Company or any Restricted Subsidiary and attributable to the items referred to in paragraph (a) of this clause (y), plus

(z)                  the principal amount of all scheduled amortization payments on all Financial Indebtedness (including the principal component of all Capitalized Leases);

provided that the Fixed Charge Coverage Ratio shall be calculated for the FCC Period ending (i) March 31, 2008 based on the Consolidated Interest Expense and amortization payments referred to in clauses (x) and (z) above for each full fiscal quarter ending after the Closing Date multiplied by four, (ii) June 30, 2008 based on the sum of the Consolidated Interest Expense and amortization payments referred to in clauses (x) and (z) above for each full fiscal quarter ending after the Closing Date multiplied by two and (iii) September 30, 2008 based on the sum of the Consolidated Interest Expense and amortization payments referred to in the clauses (x) and (z) above for each full fiscal quarter ending after the Closing Date multiplied by 4/3.

Guarantee means, as to any Person, without duplication, (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other monetary obligation payable or performable by another Person (the primary obligor) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other monetary obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other monetary obligation of the payment or performance of such Indebtedness or other monetary obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other monetary obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness or other monetary obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part), or (b) any Lien on any assets of such Person securing any Indebtedness or other monetary obligation of any other Person, whether or not such Indebtedness or monetary other obligation is assumed by such Person (or any right, contingent or otherwise, of any holder of such Indebtedness to obtain such Lien); provided that the term Guarantee shall not include endorsements for collection or deposit, in either case in the ordinary course of business, or customary and reasonable indemnity obligations in effect on the Closing Date or entered into in connection with any acquisition or disposition of assets permitted under this Agreement (other than such obligations with respect to Indebtedness).  The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith.  The term Guarantee as a verb has a corresponding meaning.

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Hazardous Materials means all materials, chemicals, substances, wastes, pollutants, contaminants, constituents and compounds of any nature or in any form, including petroleum or petroleum distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas or mold that are regulated pursuant to, or can give rise to liability under, any applicable Environmental Law.

Holding Company means, in relation to a company, corporation or other legal entity, any other company, corporation or other legal entity in respect of which the former company, corporation or other legal entity is a Subsidiary.

Indebtedness means, as to any Person at any time, without duplication, all of the following:
 
        (a)  all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;
       
        (b)  the maximum amount (after giving effect to any prior drawings or reductions which may have been reimbursed) of all outstanding letters of credit (including standby and commercial), bankers acceptances, bank guaranties, surety bonds, performance bonds and similar instruments issued or created by or for the account of such Person;
        
        (c)  net obligations of such Person under any Swap Contract;
       
        (d)  all obligations of such Person issued or assumed as the deferred purchase price of property that is due more than six months after taking delivery of such property, all conditional sale obligations and all obligations under any title retention agreement (but excluding trade accounts payable and other accrued liabilities arising in the ordinary course of business that are not overdue by 90 days or more or are being contested in good faith by appropriate proceedings promptly instituted and diligently conducted);

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        (e)  all obligations of any third party of the type referred to in clauses (a), (b), (c), (d), (f) and (h) of this definition which are secured by any lien on any property or asset of such Person, the amount of such obligation being deemed to be the lesser of the fair market value of such property or asset or the amount of the obligation so secured;
 
        (f)  all Receivables Financings, Securitization Transactions and obligations under Asset Backed Credit Facilities (each as defined under the Senior Facility Credit Agreement);
 
        (g)  all Disqualified Equity Interests issued by such Person or preferred stock issued by a Restricted Subsidiary of such Person with the amount of Indebtedness represented by such Disqualified Equity Interests or preferred stock being equal to the greater of its voluntary or involuntary liquidation preference and its maximum fixed repurchase price, but excluding accrued dividends, if any. For purposes hereof, the maximum fixed repurchase price of any Disqualified Equity Interests or preferred stock which do not have a fixed repurchase price shall be calculated in accordance with the terms of such Disqualified Equity Interests or preferred stock as if such Disqualified Equity Interests or preferred stock were purchased on any date on which Indebtedness shall be required to be determined pursuant to the this Agreement, and if such price is based upon, or measured by, the fair market value of such Disqualified Equity Interests or preferred stock, such fair market value shall be determined reasonably and in good faith by the Board of Directors of the issuer of such Disqualified Equity Interests or preferred stock; and
       
        (h)  all Capitalized Leases of such Person;
 
if and to the extent that the foregoing would constitute indebtedness or a liability in accordance with GAAP; and

        (i)  to the extent not otherwise included above, all Guarantees of any third partys Indebtedness in respect of any of the foregoing clauses.

Notwithstanding the foregoing, Indebtedness shall not include:

        (1)  advances paid by customers in the ordinary course of business for services or products to be provided or delivered in the future,

        (2)  deferred taxes,

        (3)  unsecured indebtedness of such Person incurred to finance insurance premiums in a principal amount not in excess of the insurance premiums to be paid by such Person and its Restricted Subsidiaries for a three-year period beginning on the date of any incurrence of such indebtedness,
 
        (4)  Indebtedness owed or incurred by any Restricted Subsidiary whose activities are limited to holding shares in Joint Venture(s) (but only to the extent that (a) the creditors under the relevant agreement have no recourse tothe Company other than such Restricted Subsidiary; and (b) the recourse those creditors have to such Restricted Subsidiary is limited to the proceeds (if any) of dividends received by such Restricted Subsidiary in respect of such Restricted Subsidiarys investment in such Joint Venture),

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        (5)  non-recourse Indebtedness permitted by Section 4.03(s) collateralized by any Limited Recourse Stock Pledge or any non-recourse guarantee given solely to support such pledge,

        (6)  any Indebtedness which has been defeased in accordance with GAAP or defeased pursuant to the deposit of cash or government obligations (in an amount sufficient to satisfy all such Indebtedness at the stated maturity thereof or redemption, as applicable, and all payments of interest and premium, if any) in a trust or account created or pledged for the sole benefit of the holders of such Indebtedness, and subject to no other Liens, and other applicable terms of the instrument governing such Indebtedness or

        (7)  Indebtedness for which irrevocable notice of redemption has been duly given and for which redemption money in the necessary amount has been irrevocably deposited with the applicable trustee or paying agent in trust for the holders of such Indebtedness.

Notwithstanding the foregoing, any accrual of interest, accrual of dividends, the accretion of value, the obligation to pay commitment fees and the payment of interest in the form of Indebtedness shall not be Indebtedness for the purposes of Section 4.03 only.

Indemnified Parties has the meaning specified in Section 5.01.

Investment means, with respect to any Person, any direct or indirect loan or other extension of credit (including a guarantee) or capital contribution (with respect to such loan, extension of credit or capital contribution, by means of any transfer of cash or other property to others or any payment for property or services for the account or  use of others), or any purchase or acquisition by such Person of any Equity Interest, bonds, notes, debentures or other securities or other Indebtedness issued by, any other Person.  Investment excludes (i) extensions of trade credit, (ii) commissions, loans, advances, fees and compensation paid in the ordinary course of business to officers, directors and employees, and (iii) reimbursement or payment obligations in respect of letters of credit and tender, bid, performance, government contract, surety and appeal bonds, in each case solely with respect to obligations of any Restricted Party or any ABF Restricted Party in accordance with the normal trade practices of such Restricted Party or ABF Restricted Party.  For the purposes of Section 4.06,
 
        (1)  Investment shall include and be valued at the fair market value of the net assets of any Restricted Subsidiary of a Transaction Party or ABF Loan Party at the time that such Restricted Subsidiary is designated an Unrestricted Subsidiary and shall exclude the fair market value of the net assets of any Unrestricted Subsidiary at the time that such UnrestrictedSubsidiary is designated a Restricted Subsidiary of a Transaction Party or ABF Loan Party; and 
       
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        (2)  the amount of any Investment in any Person is the original cost of such Investment plus the cost of all additional Investments therein by the Restricted Parties, without any adjustments for increases or decreases in value, or write-ups, write-downs or write-offs with respect to such Investment, reduced by the payment of dividends or distributions in connection with such Investment or any other amounts received in respect of such Investment;
        
        provided that no such payment of dividends or distributions or receipt of any such other amounts shall reduce the amount of any Investment if such payment of dividends or distributions or receipt of any such amounts would be included in Consolidated Net Income (as defined in the Senior Facility Credit Agreement).

        If any Restricted Party sells or otherwise disposes of any voting Equity Interests of any direct or indirect Restricted Subsidiary of an Originator such that, after giving effect to any such sale or disposition, the Originators do not own, directly or indirectly, greater than 50% of the outstanding common Equity Interests of such Restricted Subsidiary, such Restricted Party will be deemed to have made an Investment on the date of any such sale or disposition equal to the fair market value of the voting Equity Interests of such Restricted Subsidiary not sold or disposed of.

        IP Rights  has the meaning specified in the Senior Facility Credit Agreement.

        Joint Venture means any joint venture entity, whether a company, unincorporated firm, association, partnership or any other entity which, in each case, is not a Subsidiary of a Restricted Party or an ABF Restricted Party but in which a Restricted Party or an ABF Restricted Party has a direct or indirect equity or similar interest.

        Junior Financing has the meaning specified in the Senior Facility Credit Agreement.

        JV Investor has the meaning specified in Section 4.03.

        Laws means, as to any Person, collectively, all international, foreign, federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case binding on such Person or to which such Person or any of its property or assets is subject.

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        Limited Recourse Stock Pledge means the pledge of the Equity Interests in any joint venture or any Subsidiary (the Pledged Subsidiary) to secure non-recourse debt of such joint venture or such Pledged Subsidiary, the activities of which are solely limited to making and managing Investments, and owning Equity Interests, in such joint venture or Pledged Subsidiary, but only for so long as its activities are so limited.

        Management Agreement means the Management Agreement dated as of December 11, 2007 between, among others, the Company and certain of its Subsidiaries and Nell Limited, as in effect on the Closing Date.

        Material Adverse Effect means (a) a material adverse effect on the business, operations, assets, liabilities (actual or contingent) or financial condition of the Company and its Restricted Subsidiaries (taken as a whole), (b) a material adverse effect on the ability of the Transaction Parties (taken as a whole) to perform their respective payment obligations under any Transaction Document to which any Transaction Party is a party or (c) a deficiency in the rights and remedies of the Purchasers under the Transaction Documents (taken as a whole) which is materially adverse to the Purchasers.

        Moodys means Moodys Investors Service, Inc. and any successor thereto.

        Obligations has the meaning set forth in Section 5.01 hereof.

        Parent means BI S..r.l., a Socit responsabilit limite incorporated under the laws of the Grand Duchy of Luxembourg.

        PBGC Settlement means the settlement agreement between Lyondell and the Pension Benefit Guaranty Corporation (or any successor entity) as amended, modified, restated or replaced from time to time.

        Permitted Acquisition has the meaning set forth in Section 4.02(g) hereof.
       
        Permitted Business means any business which is the same, similar, related or complementary to the businesses in which the Restricted Parties or ABF Restricted Parties were engaged on the Closing Date (including, for the avoidance of doubt, following consummation of the Acquisition), except to the extent that after engaging in any new business, the Restricted Parties and the ABF Restricted Parties, taken as a whole, remain substantially engaged in similar or related lines of business as were conducted by them on the Closing Date.

        Permitted Joint Venture means (1) any person that is not a Subsidiary of an Originator or an ABF Loan Party that such Originator or an ABF Loan Party has a direct or indirect ownership interest in that is engaged in a Permitted Business or (2) any entity through which an Originator or an ABF Loan Party has an ownership interest as described in clause (1), in the case of (1) and (2), for which the Sponsor (as defined in the Senior Facility Credit Agreement) does nothold an ownership interest (other than through its ownership interest in the Originator or an ABF Loan Party).

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        Qualified Equity Interests means any Equity Interest that is not a Disqualified Equity Interest.

        Real Property means, collectively, all right, title and interest (including any leasehold, easement, mineral or other estate) in and to any and all parcels of or interests in real property owned, leased or operated by any Person, whether by lease, license or other means, together with, in each case, all easements, hereditaments and appurtenances relating thereto, all improvements and appurtenant fixtures and equipment, all general intangibles and contract rights and other property and rights incidental to the ownership, lease or operation thereof.

        Release means any spilling, leaking, seepage, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, disposing, depositing, dispersing or migrating in, into, onto or through the Environment.

        Restricted Party means each Originator and each of its Restricted Subsidiaries.

        Restricted Payment means

(1)              a declaration or payment of any dividend or the making of any distribution, other than dividends or distributions payable in Qualified Equity Interests of the Company and dividends or distributions payable solely to the Company or a Restricted Subsidiary, and other than pro rata dividends or other distributions made by a Subsidiary that is not a wholly-owned Subsidiary to minority shareholders (or owners of an equivalent interest in the case of a Subsidiary that is an entity other than a corporation), on or in respect of shares of a Persons Equity Interests to holders of such Equity Interests,

(2)            the purchase, redemption or other acquisition or retirement for value of any Equity Interests of any Person or any warrants, rights or options to purchase or acquire shares of any class of such Equity Interests, or

(3)            any Investment other than an Investment permitted by Section 4.02.

S&P means Standard & Poors Ratings Services, a division of The McGraw-Hill Companies, Inc., and any successor thereto.

Securitization Transaction shall mean any financing transaction in which any Transaction Party sells or otherwise transfers accounts receivable (a) to one or more third party purchasers or (b) to a special purpose entity that borrowsagainst such accounts receivable or sells such accounts receivable to one or more third party purchasers.

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Solvent and Solvency mean, with respect to any Person on any date of determination, that on such date (a) the fair value of the property of such Person is greater than the total amount of liabilities, including contingent liabilities, of such Person, (b) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Persons ability to pay such debts and liabilities as they mature and (d) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Persons property would constitute an unreasonably small capital.  The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

Specified Joint Venture means Al-Waha Petrochemical Company and Saudi Ethylene and Polyethylene Company.

Sponsorshall have the meaning specified in the Senior Facility Credit Agreement.

Successor Originator has the meaning specified in Section 4.04(d).

Swap Contract means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, emission rights, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a Master Agreement), including any such obligations or liabilities under any Master Agreement.

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Taxes means all present or future taxes, duties, levies, imposts, deductions, withholdings, assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto, whether disputed or not.

Test Period shall have the meaning specified in the Senior Facility Credit Agreement.

Total Collateral Availabilityshall mean, at any time, the sum of (i) Collateral Availability plus(ii) SF Asset Availability, in each case at such time.

Transaction has the meaning specified in the Senior Facility Credit Agreement.

Treasury Services Agreement has the meaning specified in the Senior Facility Credit Agreement.

Unrestricted Subsidiary has the meaning specified in the Senior Facility Credit Agreement.

Wholly Owned means, with respect to a Subsidiary of a Person, a Subsidiary of such Person all of the outstanding Equity Interests of which (other than (x) directors qualifying shares and (y) shares issued to third parties, in each case in a de minimis amount and to the extent required by applicable Law) are owned by such Person and/or by one or more wholly owned Subsidiaries of such Person.

Section 1.02.  Accounting Terms.  All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP, except as otherwise specifically prescribed herein.

Section 1.03.  Terms Generally.  Except where the context requires otherwise, the definitions in Section 1.01 shall apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  The words include, includes and including shall be deemed to be followed by the phrase without limitation.  Unless otherwise stated, references to Sections, Articles and Schedules made herein are to Sections, Articles or Schedules, as the case may be, of this Agreement.  Writing, written and comparable terms refer to printing, typing and other means of reproducing words in a visible form.  References to any agreement or contract are to such agreement or contract as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof.  References to any Person includethe successors and permitted assigns of such Person.  References from or through any date mean, unless otherwise specified, from and including or through and including, respectively.
 
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ARTICLE 2
Representations and Warranties

Each Originator represents and warrants that:

Section 2.01.  Environmental and Safety Matters. In each case, except as set forth on Schedule 2.01:
       
    (a)         There are no claims, actions, suits, proceedings, demands, notices or, to the knowledge of any Originator and each of its Subsidiaries, investigations alleging actual or potential liability of any Originator or its Subsidiaries under or for violation of, or otherwise relating to, any Environmental Law that could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
 
    (b)         Except for items that could not reasonably be expected to have , individually or in the aggregate, a Material Adverse Effect, (i) each Originator and each of their respective Subsidiaries and each of their Real Property, other assets and operations are in compliance with all applicable Environmental Laws, including all Environmental Permits; (ii) none of the properties currently or, to the knowledge of any Originator or any of its Subsidiaries, formerly, owned, leased or operated by any Originator or any of its Subsidiaries is listed or formally proposed for listing on the National Priority List under CERCLA, or any analogous list maintained pursuant to any Environmental Law; (iii) all asbestos or asbestos-containing material on, at or in any property or facility currently owned, leased or operated by any Originator or any of its Subsidiaries is in compliance with Environmental Laws; and (iv) there has been no Release of Hazardous Materials by any Person on, at, under or from any property or facility currently or formerly owned, leased or operated by any Originator or any of its Subsidiaries and there has been no Release of Hazardous Materials by any Originator or any of its Subsidiaries at any other location.
 
                (c)         The properties and facilities owned, leased or operated by such Originator and its Subsidiaries do not contain any Hazardous Materials in amounts or concentrations which (i) constitute a violation of, (ii) require investigation or other response or corrective action under, or (iii) could reasonably be expected to give rise to liability under, Environmental Laws, which violations, actions and/or liabilities, individually or in the aggregate, could, reasonably be expected to result in a Material Adverse Effect.
 
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                (d)         None of such Originator, or any of its Subsidiaries is undertaking or financing, in whole or in part, either individually or together with other potentially responsible parties, any investigation, response or other corrective action relating to any actual or threatened Release of Hazardous Materials at any property, facility or location pursuant to any Environmental Law except for such investigation, response or other corrective action that, individually or in the aggregate, could not, reasonably be expected to result in a Material Adverse Effect.
 
                (e)         All Hazardous Materials generated, used, treated, handled or stored by such Originator or any of its Subsidiaries at, or transported by or on behalf of such Originator or any of its Subsidiaries to or from, any property or facility currently or formerly owned, leased or operated by such Originator or any of its Subsidiaries have been disposed of in a manner which could not reasonably be expected to result, individually or in the aggregate in a Material Adverse Effect.
 
                (f)         Except as could not reasonably be expected to result, individually or in the aggregate, in a Material Adverse Effect, none of such Originator or any of its Subsidiaries has contractually assumed, and is not subject or a party to any judgment, order, decree or agreement which imposes, any liability or obligation under or relating to any Environmental Law.

Section 2.02.  Ownership of Properties.  Such Originator and each of its Subsidiaries has good record fee simple title (or otherwise holds full legal (and, if applicable, beneficial) ownership under applicable Law) to, or valid leasehold interests in, or easements or other limited property interests in, all Real Property necessary in the ordinary conduct of its business, free and clear of all Liens except for minor defects in title that do not materially interfere with its ability to conduct its business or to utilize such assets for their intended purposes and Liens permitted under Section 4.01 (other than Section 4.01(z)) and except where the failure to have such title could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 2.03.  Subsidiaries.  Schedule 2.03 sets forth the name of, and the ownership interest of each Originator and each Wholly-owned Subsidiary of such Originator as of the Closing Date (other than dormant or inactive Subsidiaries).

Section 2.04.  Insurance.  Schedule 2.04 sets forth a description of all insurance maintained by or on behalf of such Originator as of the Closing Date.  As of the Closing Date, all premiums in respect of such insurance currently due have been paid.

Section 2.05.  Labor Matters.  As of the Closing Date, there are no strikes, lockouts or slowdowns against such Originator and its Subsidiaries pending or, to the knowledge of such Originator, threatened.
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Section 2.06.  Solvency.  As of the Closing Date, the Originators and their Restricted Subsidiaries, taken as a whole, are Solvent.

Section 2.07.  Anti-Terrorism Laws.  
 
            (a)            To the best knowledge of the Originators organized in the United States, no such Restricted Party nor any subsidiary thereof: (i) is, or is controlled by or is acting on behalf of, an Anti-Terrorism Party; (ii) has received funds or other property from an Anti-Terrorism Party; or (iii) is in breach of or is the subject of any action or investigation under any Anti-Terrorism Law.

            (b)            To the best of such Originators knowledge, each of the Restricted Parties organized in the United States and each subsidiary thereof has taken reasonable measures to ensure compliance
 
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ARTICLE 3
Affirmative Covenants

Until the later of (i) the Termination Date and (ii) the date upon which no Capital shall be outstanding and no Yield or other Obligations (other than contingent indemnification obligations) remain unpaid, each Originator shall, and shall cause each of its Restricted Subsidiaries to:

Section 3.01.  Notices
.
(a)         Promptly after a Responsible Officer of an Originator has obtained knowledge thereof, notify the Agent:

(i)    of the occurrence of any Event of Termination or Potential Event of Termination; and

(ii)    of any matter that has resulted or could reasonably be expected to result in a Material Adverse Effect.

(b)         Each notice pursuant to this Section shall be accompanied by a written statement of a Responsible Officer of such Originator (x) that such notice is being delivered pursuant to Section 3.01 (a)(i) or (a)(ii) (as applicable) and (y) setting forth details of the occurrence referred to therein and stating what action such party has taken and proposes to take with respect thereto.

Section 3.02.  Payment of Obligations.Timely pay, discharge or otherwise satisfy as the same shall become due and payable in the normal conduct of its business, all its obligations and liabilities in respect of the Taxes imposed upon it or upon its income or profits or in respect of its property, except, in each case, to the extent the failure to pay or discharge the same could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

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                Section 3.03.  Preservation of Existence, Etc.  (a) Preserve, renew and maintain in full force and effect its legal existence under the Laws of the jurisdiction of its organization except (x) in a transaction permitted by Section 4.04 or Section 4.05 and (y) any Restricted Party may merge, amalgamate or consolidate with any other Restricted Party (provided that if either such Restricted Party was an Originator immediately prior to such transaction, the surviving or resulting entity from such transaction shall be an Originator) and (b) take all reasonable action to maintain all rights, privileges (including its good standing, where such concept exists), permits, licenses and franchises necessary or desirable in the normal conduct of its business, except (i) to the extent that failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect or (ii) pursuant to a transaction permitted  Section 4.04 or Section 4.05 or by clause (a)(y) of this Section.

Section 3.04.  Maintenance of Properties.  Except if the failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, maintain, preserve and protect all of its material properties and equipment necessary in the operation of its business in good working order, repair and condition, ordinary wear and tear excepted and casualty or condemnation excepted.

Section 3.05.  Maintenance of Insurance.  Maintain with reputable insurance companies, insurance with respect to its assets, properties and business against loss or damage to the extent available on commercially reasonable terms of the kinds customarily insured against by Persons of similar size engaged in the same or similar industry, of such types and in such amounts (after giving effect to any self-insurance (including captive industry insurance) reasonable and customary for similarly situated Persons of similar size engaged in the same or similar businesses as such Restricted Party) as are customarily carried under similar circumstances by such other Persons.

Section 3.06.  Compliance with Laws.  Comply in all material respects with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its business or property, except to the extent the failure to comply therewith could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 3.07.  Compliance with Environmental Laws; Environmental Reports. Comply, and cause all lessees and other Persons occupying its Real Property to comply, with all Environmental Laws and Environmental Permits applicable to its operations, facilities and Real Property, except where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; obtain and renew all material Environmental Permits applicable to its operations, facilities and Real Property; and conduct all responses required by, and in accordance with, Environmental Laws; provided that neither such Restricted Party nor any of its Subsidiaries shall be required to undertakeany response to the extent that its obligation to do so is being contested in good faith and by proper proceedings and appropriate reserves are being maintained with respect to such circumstances in accordance with GAAP.
 
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Section 3.08.  Books and Records. Maintain proper books of record and account, in which entries that are full, true and correct in all material respects and which reflect all material financial transactions and matters involving the assets and business of the Restricted Parties.

Section 3.09.  Inspection Rights.  Permit representatives and independent contractors of the Agent or, as provided in the second proviso below, any Purchaser to visit and inspect any of its properties, to examine its corporate, financial and operating records, and make copies thereof or abstracts therefrom, and to discuss its affairs, finances and accounts with its directors, officers, and independent public accountants, all at the reasonable expense of the Originators and at such reasonable times during normal business hours, upon reasonable advance notice to Lyondell; provided that, excluding any such visits and inspections during the continuation of an Event of Termination, only the Agent on behalf of the Purchasers may exercise rights of the Agent and the Purchasers under this Section and the Agent shall not exercise such rights more often than two (2) times during any calendar year at the expense of the Originators; provided further that when an Event of Termination exists, the Agent or any Purchaser (or any of their respective representatives or independent contractors) may do any of the foregoing at the expense of the Originators at any time during normal business hours and upon reasonable advance notice.  The Agent and the Purchasers shall give such Restricted Party the opportunity to participate in any discussions with such Restricted Partys independent public accountants.  Notwithstanding anything to the contrary in this Section, at all times during such visits and inspections the Agent or any Purchaser (or their respective representatives or contractors) must comply with all applicable site regulations as the Restricted Party or any of their respective officers or employees may require by reasonable notice of the same.

Section 3.10.  ERISA. Promptly after any Originator or any ERISA Affiliate knows or has reason to know of the occurrence of any of the following events that, individually or in the aggregate (including in the aggregate such events previously disclosed or exempt from disclosure hereunder, to the extent the liability therefor remains outstanding), would reasonably be expected to have a Material Adverse Effect, deliver to the Agent and each of the Purchasers a certificate of a Financial Officer setting forth details as to such occurrence and the action, if any, that such Originator or such ERISA Affiliate is required or proposes to take, together with any notices (required, proposed or otherwise) given to or filed with or by the Originator, such ERISA Affiliate, the PBGC, a Plan participant (other than notices relating to any individual participants benefits) or the Plan administrator with respect thereto: (A) that a Reportable Event has occurred; (B) that an accumulated funding deficiency has been incurredor an application is to be made to the Secretary of the Treasury for a waiver or modification of the minimum funding standard (including any required installment payments) or an extension of any amortization period under Section 412 of the Code (or Section 430 of the Code as amended by the Pension Protection Act of 2006) with respect to a Plan; (C) that a Plan having an Unfunded Current Liability has been or is to be terminated, reorganized, partitioned or declared insolvent under Title IV of ERISA (including the giving of written notice thereof); (D) that proceedings will be or have been instituted to terminate a Plan having an Unfunded Current Liability (including the giving of written notice thereof); (E) that a proceeding has been instituted against such Originator or an ERISA Affiliate pursuant to Section 515 of ERISA to collect a delinquent contribution to a Plan; (F) that the PBGC has notified such Originator or any ERISA Affiliate of its intention to appoint a trustee to administer any Plan; that such Originator or any ERISA Affiliate has failed to make a required installment or other payment pursuant to Section 412 of the Code with respect to a Plan; or (G) that such Originator or any ERISA Affiliate has incurred or will incur (or has been notified in writing that it will incur) any liability (including any contingent or secondary liability) to or on account of a Plan pursuant to Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201 or 4204 of ERISA or Section 4971 or 4975 of the Code.
 
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Section 3.11.  Know Your Customer Requests.  If:
 
                        (1)    a Change in Law after the Closing Date;
            
(2)            any change in the status of a Transaction Party or the composition of the shareholders or interest holders of a Transaction Party after the Closing Date; or
 
        (3)            a proposed assignment or transfer by a Purchaser of any of its rights and obligations under the Receivables Purchase Agreement to a party that is not a Purchaser prior to such assignment or transfer,obliges the Agent or any Purchaser (or, in the case of paragraph (3) above, any prospective new Purchaser) to comply with know your customer or similar identification procedures in circumstances where the necessary information is not already available to it, each Originator shall promptly upon the request of the Agent, in its capacity as a Purchaser or on behalf of any Purchaser, supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself or on behalf of any Purchaser, or, in the case of the event described in paragraph (3) above, on behalf of any prospective new Purchaser) in order for the Agent, such Purchaser or, in the case of the event described in paragraph (3) above, such prospective new Purchaser to carry out and be satisfied it has complied with all necessary know your customer or other similar  checks under all applicable laws and regulations pursuant to the transactions contemplated in the Transaction Documents.

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ARTICLE 4
Negative Covenants

Until the later of (i) the Termination Date and (ii) the date upon which no Capital shall be outstanding and no Yield or other Obligations (other than contingent indemnification obligations) remain unpaid, each Originator shall not, nor shall it permit any of its Restricted Subsidiaries to, directly or indirectly:

Section 4.01.  Liens.  Create, incur, assume or suffer to exist or become effective any Lien of any kind upon any of its property, assets or revenues, whether now owned or hereafter acquired, other than the following:
 
        (a)         Liens created pursuant to any Transaction Document, Securitization Transaction (as defined in the Senior Facility Credit Agreement) or any ABF Loan Document;
 
            (b)         Liens existing on the Closing Date or which are required to come into effect as a result of existing contractual provisions (in each case, to the extent in respect of underlying obligations exceeding $1,000,000 individually listed on Schedule 4.01(b) and any reissuance, renewals or extensions thereof);
 
                (c)         Liens for taxes, assessments or governmental charges or claims that are extinguished within 60 days of notice of their existence, are not yet due and payable or that are being contested in good faith by appropriate proceedings;
 
                (d)         Liens of landlords, carriers, vendor, pipeline, warehousemen, mechanics, suppliers, materialmen, repairmen, employees, pension plan administrators or other like Liens arising by operation of law in the ordinary course of business of such Restricted Party which secure amounts which are not overdue for a period of more than 30 days or not yet subject to penalties for nonpayment or that are being contested in good faith by appropriate proceedings;
 
                (e)         Liens (i) arising out of pledges or deposits made in the ordinary course of business in connection with workers compensation, unemployment insurance and other types of social security or other insurance (including unemployment insurance) and (ii) arising out of pledges and deposits in the ordinary course of business securing liability for reimbursement or indemnification obligations with respect to premiums and exit fees of (including to support obligations in respect of letters of credit or bank guarantees for the benefit of) insurance carriers providing property, casualty or liability insurance to the Company or any of its Subsidiaries;
 
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                (f)         Liens arising out of pledges or deposits made to secure the performance of tenders, bids or trade or government contracts, or to secure leases, statutory or regulatory, insurance obligations, surety, judgment or appeal bonds, completion guarantee, surety, letters of credit, performance bonds, guarantees or other obligations of a like nature (including those to secure health, safety and environmental obligations) incurred in the ordinary course of business (other than obligations for the payment of borrowed money);
 
                (g)         zoning restrictions of governmental authorities, easements, licenses, reservations of, or rights of others for, licenses reservations, title defects, rights of others for rights-of-way, utilities, sewers, electrical lines, telephone lines, telegraph wires, restrictions, encroachments and other similar charges, encumbrances or title defects of zoning, survey exceptions, encumbrances, or other restrictions as to the use of real property or Liens incurred in the ordinary course of business that do not in the aggregate materially interfere with in any material respect the ordinary conduct of the business of the Company and its Restricted Subsidiaries, taken as a whole;
 
                (h)         Liens arising by reason of any judgment, decree or order of any court so long as such Lien is adequately bonded and any appropriate legal proceedings that may have been duly initiated for the review of such judgment, decree or order shall not have been finally terminated or the period within which such proceedings may be initiated shall not have expired;
 
                (i)         (x) leases or subleases or licenses or sublicenses of Real Property or IP Rights granted in the ordinary course of business to others that do not individually or in the aggregate interfere in any material respect with the ordinary conduct of the business of the Company and its Restricted Subsidiaries, taken as a whole and (y) any interest or title of a lessor in property subject to a lease other than a capitalized lease;
         
                (j)         Liens in favor of customs and revenue authorities arising as a matter of Law to secure payment of customs duties in connection with the importation of goods;
 
        (k)         Liens (i) of a collection bank arising under Section 4-210 of the Uniform Commercial Code on items in the course of collection, (ii) attaching to commodity trading accounts or other commodities brokerage accounts incurred in the ordinary course of business, and (iii) in favor of banking or other financial institutions arising as a matter of Law encumbering deposits (including the right of set-off) and which are within the general parameters customary in the banking industry or arising pursuant to such banking institutions general terms and conditions;

                (l)         Liens (i) on cash advances in favor of the seller of any property to be acquired in or monies placed in escrow pursuant to an Investment permittedpursuant to Section 4.02 to be applied against the purchase price for such Investment, (ii) over assets being acquired pursuant to Investments permitted by Section 4.02 pending payment in full of the purchase price (iii) consisting of an agreement to Dispose of any property in a Disposition permitted under Section 4.05 and (iv) consisting of intellectual property licenses permitted by Section 4.02(o);
 
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                (m)        Liens in favor of any Restricted Subsidiary securing Indebtedness permitted under Section 4.03 (other than Indebtedness owed to a Restricted Subsidiary that is not a Transaction Party or ABF Loan Party);
 
        (n)         Liens arising out of conditional sale, title retention, consignment or similar arrangements for sale of goods entered into by any Restricted Party in the ordinary course of business;
 
                (o)         Liens upon specific items of inventory or other goods and proceeds of any Person securing such Persons obligations in respect of documentary letters of credit. Liens on documents of title in respect of documenting letters of credit or bankers acceptances issues or credit for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;
 
                (p)         Liens securing Indebtedness and other obligations under Asset Backed Credit Facilities, Securitization Transactions and Receivables Financings; provided that any Liens in respect of Receivables Financings which are recourse to the Company or any Restricted Subsidiary (other than any Securitization Entity) shall be limited to accounts receivable, inventory, the Equity Interests in, and intercompany Indebtedness owed by, any Securitization Entity, related books and records and the accounts and proceeds thereof together with any returned goods therefrom;
 
                (q)         Liens securing Indebtedness and other Obligations (in each case, as defined in the Senior Facility Credit Agreement);
 
                (r)         Liens arising by reason of deposits necessary to qualify such Restricted Party to conduct business, maintain self insurance or comply with any law and Liens securing the PBGC Settlement;
 
            (s)         Liens securing any Capitalized Lease and Liens to secure Indebtedness (including Capitalized Leases) permitted by clause (e) of Section 4.03 covering only the property or assets acquired with such Indebtedness;
 
                (t)         Liens securing obligations under Swap Contracts of the Company or any of its Restricted Subsidiaries permitted under the Senior Facility Credit Agreement or any collateral for the obligations under such Swap Contracts;
 
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        (u)         Liens on property of, or on Equity Interests or Indebtedness of, any Person or attaching to any assets existing at the time such property or Person is acquired by, merged with or into or consolidated with, or assets are acquired by such Restricted Party; provided that such Liens (a) do not extend to or cover any property or assets of such Restricted Party other than the property or assets acquired (other than assets and property affixed or appurtenant thereto) or the property and assets of the Person merged into or consolidated with such Restricted Party and (b) were created prior to, and not in connection with or in contemplation of, such acquisition, merger, amalgamation or consolidation;
 
       (v)         Liens granted by Restricted Parties (other than Transaction Parties or ABF Loan Parties) in support of Indebtedness of Restricted Subsidiaries (other than Transaction Parties or ABF Loan Parties); provided that the aggregate amount secured by such Liens does not exceed $500,000,000 at any one time outstanding;
 
       (w)        Liens in respect of the Senior Second Lien Debt (as defined in the Senior Facility Credit Agreement), any Permitted Financing or any Permitted Refinancing (as defined in the Senior Facility Credit Agreement), and Liens of the Restricted Parties with respect to obligations that do not exceed, in the aggregate, the greater of (i) $250,000,000 and (ii) 1% of Consolidated Net Tangible Assets (as defined in the Senior Facility Credit Agreement) at any one time outstanding;
 
        (x)         Liens over shares in joint ventures or over dividends in respect thereof in any Restricted Subsidiary acting as a special purpose vehicle with the sole purpose to hold shares in a joint venture to secure Indebtedness or other obligations of such joint venture or Restricted Subsidiary or Indebtedness permitted by Section 7.03(t) of the Senior Facility Credit Agreement;
 
        (y)         Liens resulting from any Limited Recourse Stock Pledge;
 
       (z)         Liens granted in favor of Restricted Parties and ABF Loan Parties and Liens on any property or assets of a Restricted Subsidiary granted in favor of an Originator, or any wholly owned Restricted Subsidiary;
 
        (aa)       Liens securing Indebtedness incurred to modify, refinance, defease, refund, extend, renew or replace Indebtedness that has been secured by a Lien permitted by this Agreement; provided that (a) such new Lien shall be limited to all or part of the same property and assets that secured or, under the written agreements pursuant to which the original Lien arose, could secure the original Lien plus improvements and accessions to, such property (or proceeds or distributions thereof); and (b) the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of (i) the outstanding principal amount or, if greater, committed amount of the Indebtedness at the time the original Lien became a Lien permitted under this Section and (ii) an amount necessary to pay any fees and expenses, including prepayment premiums,associated hedging break costs and premiums or replacement hedges, related to such refinancing, refunding, extension, renewal or replacement;
 
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        (bb)       any extension, amendment, renewal or replacement, in whole or in part, of any Lien described in Sections 4.01 (b), (s), (u), (v) and (w); provided that any such extension, renewal or replacement shall be no more restrictive in any material respect than the Lien so extended, amended, renewed or replaced and shall not extend to any additional property or assets;
 
        (cc)       Liens arising from precautionary Uniform Commercial Code financing statement filings;

(dd)      any netting or set-off arrangements entered into by the Company or any Restricted Subsidiary in the ordinary course of its banking arrangements (including, for the avoidance of doubt, cash pooling arrangements) for the purposes of netting debit and credit balances of the Company or any Restricted Subsidiary, including pursuant to any Treasury Services Agreement; and

(ee)       Liens over cash deposits deposited with the trustee in connection with the purchase of certain Existing Notes

Section 4.02.  Investments.  Make or hold any Investments, except:
 
                (a)         Investments in cash or Cash Equivalents;

                (b)         loans and advances to employees, directors and officers of such Originator and its Subsidiaries (i) required by applicable employment laws or (ii) otherwise in the ordinary course of business for travel, business, related entertainment, relocation, as part of a recruitment or retention plan and related expenses in an aggregate principal amount outstanding not to exceed $10,000,000;

        (c)         Investments (i) by such Restricted Party in any Transaction Party or any ABF Loan Party or any Person that will, substantially contemporaneously with the making of the relevant Investment, become a Transaction Party or ABF Loan Party (ii) by any Restricted Party that is not a Transaction Party or any ABF Loan Party in the Company or any other Restricted Subsidiary that is not at the time of such Investment a Transaction Party or ABF Loan Party, (iii) by such Restricted Party (A) in any Subsidiary, constituting an exchange of Equity Interests of such Subsidiary for Indebtedness of such Subsidiary or (B) constituting Guarantees of Indebtedness or other monetary obligations of Subsidiaries owing to such Restricted Party and (iv) consisting of intercompany Investments incurred in the ordinary course of business among the Restricted Parties and any ABF Restricted Parties on the one hand, and the Company or any of its Restricted Subsidiaries on the other;
 
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        (d)         [Reserved]
 
       (e)         (i) Investments existing on the Closing Date, (ii) Investments contemplated on the Closing Date and set forth on Schedule 4.02(e) and (iii) any modification, replacement, renewal, reinvestment or extension of any Investment set forth on Schedule 4.02(e) that does not increase the aggregate amount thereof;
 
        (f)         Swap Contracts entered into in the ordinary course of business and otherwise permitted under the Senior Facility Credit Agreement;
 
          (g)        any acquisition of all or substantially all the assets of, or all the Equity Interests (other than directors qualifying shares) in, a Person or division or line of business of a Person to the extent (A) such acquisition is effected by a contribution to capital constituting Disqualified Equity Interests, (B) the consideration paid is settled by the issuance or with proceeds of the issuance of Qualified Equity Interests of the Company or Parent or any Holding Company of Parent or (C) immediately after giving effect thereto: Article 1 no Event of Termination or Potential Event of Termination shall have occurred and be continuing or would result therefrom;   Article 2 the acquired entity, assets, division or line of business shall be in a Permitted Business; Article 3 after giving effect to such acquisition the Company and its Restricted Subsidiaries would be in pro forma compliance with the First Lien Senior Secured Leverage Ratio (as defined in the Senior Facility Credit Agreement) and Consolidated Debt Service Ratio required by Section 7.11 of (and as defined under) the Senior Facility Credit Agreement; and Article 4 with respect to such Investments by Transaction Parties in assets that are not (or do not be or become) owned by a Transaction Party or in Persons that are not or do not become Transaction Parties within 90 days of consummation of the acquisition (1) such Person shall not be designated an Unrestricted Subsidiary within 12 months of such acquisition and (2) the aggregate consideration paid in such Investments pursuant to this clause (iv) shall not exceed $2,000,000,000 (net of any capital distribution in respect of any such Investment) (any such acquisition, a Permitted Acquisition);
  
       (h)         loans and advances to the Company and any other direct or indirect parent of a Restricted Subsidiary, in lieu of, and not in excess of the amount of (after giving effect to any other loans, advances or Restricted Payments in respect thereof), Restricted Payments to the extent permitted to be made to such parent in accordance with Section 4.06; provided that such loans and advances shall be deemed a Restricted Payment for the purposes of Section 4.06;
 
       (i)         Additional Investments to the extent of the Applicable Amount (as defined in the Senior Facility Credit Agreement), as and to the extent permitted under the Senior Facility Credit Agreement;
 
       (j)         Investments (including Investments in securities) received pursuant to any plan of reorganization or similar arrangement upon the bankruptcy orinsolvency of any debtors of such Restricted Party or received in settlement of debts created in the ordinary course of business and owing to such Restricted Party or in satisfaction of judgments or in settlement of any litigation or arbitration;
 
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        (k)         Investments by a Restricted Party in a Securitization Entity (as defined in the Senior Facility Credit Agreement) or any Investment by a Securitization Entity in any other Person in connection with a Securitization Transaction (as defined in the Senior Facility Credit Agreement); provided that any Investment in a Securitization Entity is in the form of a purchase money note or an equity interest;
 
       (l)         Investments held by any Person (other than an Affiliate of such Person) that becomes a Restricted Subsidiary of an Originator; provided that such Investments were not acquired in contemplation of the acquisition of such Person;
 
       (m)        Investments in Subsidiaries of Restricted Parties or Permitted Joint Ventures not to exceed $500,000,000 plus
 
(i)   the aggregate net after-tax amount returned in cash on or with respect to any Investments made in such Unrestricted Subsidiaries and Permitted Joint Ventures whether through interest payments, principal payments, dividends or other distributions or payments on account of such Investment,
 
(ii)   the net after-tax cash proceeds received by such Restricted Party from the disposition of all or any portion of such Investments (other than to a Restricted Party),
 
(iii)          upon redesignation of an Unrestricted Subsidiary of a Restricted Party as a Restricted Subsidiary, the fair market value of such Subsidiary; and
 
(iv)          Investments in Equity Interests of Specified Joint Ventures in an amount not to exceed $20,000,000;
 
       (n)         Investments in a Permitted Business having an aggregate value, taken together with all other Investments made pursuant to this clause that are at that time outstanding, not to exceed $250,000,000 (with value of each such Investment being measured at the time made and without giving effect to subsequent changes in value);
 
       (o)         Investments through the licensing contribution of technology in a Person that is or will be as a result of such Investment a Permitted Joint Venture, or Investments through the licensing, contribution or transactions whicheconomically result in a contribution in-kind of intellectual property pursuant to joint venture arrangements, in each case in the ordinary course of business;

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        (p)         Guarantees of Indebtedness to the extent such Guarantee is permitted under Section 4.03;
 
       (q)         Investments made by such Restricted Party as consideration for a Disposition pursuant to Section 4.05;
 
        (r)         Limited Recourse Stock Pledges; and
 
       (s)         Investments not otherwise permitted in the Company and its Restricted Subsidiaries.

Notwithstanding the foregoing, no Investment shall be made in any member of the Millennium Holdings Group (as defined in the Senior Facility Credit Agreement) other than Investments (x) outstanding on the Closing Date and set forth on Schedule 4.02(e), (y) made  pursuant to Section 4.02(i) or Section 4.06(d) for the purpose of paying final judgments or settlements or orders for the payment of money or for the purpose of paying costs and expenses associated with litigation and claims under the related insurance policies and (z) in respect of environmental remediation capital expenditures or for the purpose of paying costs and expenses associated with litigation and claims under related insurance policies.

Section 4.03.  Indebtedness.  Create, incur, assume or suffer to exist any Indebtedness, except:
 
        (a)         Indebtedness of any Transaction Party under the Transaction Documents or any ABF Loan Party under the ABF Agreement and ABF Collateral Documents or, in either case, any refinancings thereof;
 
        (b)         Indebtedness existing or outstanding on the Closing Date and any refinancing thereof permitted under the Senior Facility Credit Agreement;
 
        (c)         Guarantees by such Restricted Party in respect of Indebtedness of the Company and any Restricted Subsidiary;
 
       (d)        (i) Indebtedness of such Restricted Party owing to the Company or any Restricted Subsidiary to the extent such Indebtedness would be permitted under the Senior Facility Credit Agreement and (ii) non-ordinary course intercompany Indebtedness of such Restricted Party owing to any Restricted Party for so long as such Indebtedness is held by any Restricted Party, in each case subject to no Lien held by a Person other than any Restricted Party; provided that in the case of clause (ii) if as of any date any Person other than any Restricted Party owns or holds any such intercompany Indebtedness or holds a Lien inrespect of such Indebtedness, it shall be deemed the incurrence of Indebtedness not permitted by this Section 4.03(d);
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        (e)         Indebtedness incurred in the ordinary course of business not to exceed the greater of (i) $200,000,000 in the aggregate and (ii) 0.8% of Consolidated Net Tangible Assets at the date of incurrence, in each case, at any one time outstanding and

(1)   representing Capitalized Leases or;

(2)   constituting Indebtedness incurred to finance the acquisition of, or cost of design, construction, installation, repair, addition to or improvement of, property or assets of a Restricted Party or an ABF Restricted Party used in the ordinary course of business of such Restricted Party or ABF Restricted Party; provided, however, that such Indebtedness shall not exceed the cost of such property or assets or repair or improvement thereof and shall not be secured by any property or assets of such Restricted Party or ABF Restricted Party other than the property and assets so acquired;
 
        (f)         Swap Contracts that are incurred for the purpose of (i) fixing or hedging interest rate or currency risk with respect to any fixed or floating rate Indebtedness permitted under this Agreement or any receivable or liability the payment of which is determined by reference to a foreign currency; provided that the notional principal amount of any such Swap Contract does not exceed the principal amount of the Indebtedness to which such Swap Contract relates or (ii) managing fluctuations in the price or cost of raw materials, emission rights, manufactured products or related commodities; provided that, in each case, such obligations are entered into in the ordinary course of business to hedge or mitigate risks to which the Company or any of its Restricted Subsidiaries is exposed in the conduct of its business or the management of its liabilities;
 
        (g)         Indebtedness under the Senior Second Lien Debt, any Permanent Financing, the Securitization Transactions, the Asset Backed Credit Facilities (each as defined under the Senior Facility Credit Agreement) entered into or existing, on the Closing Date and the Existing Notes, the Guarantees thereof and any refinancing thereof permitted under the Senior Facility Credit Agreement;
 
        (h)         Indebtedness arising from agreements of such Originator or a Subsidiary providing for indemnification, adjustment of purchase price, earn out or similar obligations, in each case, incurred in connection with the disposition or acquisition of any business, assets or Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition; provided that the maximum aggregate liability in respect of all such Indebtedness shall at no time exceed the gross proceeds actually received by such Originator and theSubsidiary in connection with such disposition except to the extent such Originator or relevant Subsidiary has a liability in respect of such business, asset or subsidiary before (and not created in contemplation of) such disposition;
 
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        (i)         Treasury Services Agreements entered into in the ordinary course of business;
 
        (j)         Indebtedness consisting of obligations of such Restricted Party under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and any acquisition, Investment, or Disposition expressly permitted hereunder;
 
        (k)         Indebtedness of such Restricted Party, in an aggregate principal amount not to exceed the greater of (i) $750,000,000 and (ii) 3% of Consolidated Net Tangible Assets at the date of incurrence, in each case, at any time outstanding;
       
        (l)         Indebtedness of such Restricted Party represented by letters of credit, bank guarantees, bankers acceptances or warehouse receipts for the account of such Restricted Party or any ABF Restricted Party or similar instruments, as the case may be, in order to provide security for workers compensation or environmental claims, payment obligations in connection with self-insurance or similar requirements in the ordinary course of business;
 
        (m)        obligations in respect of, tender, bid, judgment, appeal, performance or governmental contract bonds and completion guarantees, surety, standby letters of credit and warranty and contractual service obligations of a like nature, trade letters of credit and documentary letters of credit and similar bonds or guarantees provided by such Restricted Party or any ABF Restricted Party in the ordinary course of business;
 
        (n)         the incurrence by a Securitization Entity (as defined in the Senior Facility Credit Agreement) of Indebtedness in a Securitization Transaction (as defined in the Senior Facility Credit Agreement) permitted hereunder that is not recourse to the Company or any Subsidiary of the Company (except for Standard Securitization Undertakings);
 
        (o)         Indebtedness of a Restricted Party to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by such Restricted Party from any such Subsidiary which assets are subsequently conveyed by such Restricted Party to a Securitization Entity in a Securitization Transaction;
 
        (p)         Guarantees by such Restricted Party of Indebtedness incurred by Permitted Joint Ventures or Unrestricted Subsidiaries not to exceed the greater of Article 5 $250,000,000 in the aggregate and Article 6 1% of Consolidated NetTangible Assets at the date of incurrence, in each case, at any one time outstanding;

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        (q)         Indebtedness of a Person existing at the time that Person becomes a Restricted Party or assumed in connection with an acquisition by a Restricted Party or Indebtedness attaching to assets acquired in an acquisition, and, in each case not incurred in connection with or in anticipation of such acquisition; provided that the holders of any such Indebtedness do not, at any time, have direct or indirect recourse to any property or assets of such Restricted Party other than the property or assets of such acquired Person and its Subsidiaries; provided, further, that on the date of such acquisition and after giving pro forma effect thereto, either (i) the Company would have been able to incur at least $1.00 of additional Indebtedness pursuant to Section 7.03(r) of the Senior Facility Credit Agreement or (ii) the Consolidated Fixed Charge Coverage Ratio (as defined in the Senior Facility Credit Agreement) would be greater than or equal to the Consolidated Fixed Charge Coverage Ratio (as defined in the Senior Facility Credit Agreement) immediately prior to giving pro forma effect to such acquisition in each case, together with any Permitted Refinancing thereof;
 
        (r)         (i) other Indebtedness of any Restricted Party or ABF Loan Party which may be secured by a Lien to the extent permitted under Section 7.01 of the Senior Facility Credit Agreement; provided that, (x) both immediately prior to and after giving effect thereto on a Pro Forma Basis, no Default (as defined in the Senior Facility Credit Agreement) shall exist or result therefrom and (y) the Consolidated Fixed Charge Coverage Ratio (as defined in the Senior Facility Credit Agreement) of the Company and its Restricted Subsidiaries (calculated on a Pro Forma Basis after giving effect to the incurrence of such Indebtedness) for the most recently ended four fiscal quarters for which financial statements are available immediately preceding the date on which such Indebtedness is incurred would have been at least 2.00 to 1.00 and (ii) any Permitted Refinancings (as defined in the Senior Facility Credit Agreement) thereof;
     
        (s)         Indebtedness of such Restricted Party (each a JV Investor) the purpose of which is to finance a Permitted Joint Venture or an investment therein; provided that at all times (a) the creditors under the relevant facility have no direct or indirect recourse to any Restricted Party other than such JV Investor and (b) the only direct or indirect recourse those creditors have to such JV Investor is limited to the proceeds (if any) of dividends received by such JV Investor in respect of such JV Investors investment in that Permitted Joint Venture;
 
        (t)         Indebtedness consisting of take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business; and
 
        (u)         Indebtedness arising from the honoring by a bank or other financial institution of a check or draft or similar instrument drawn against insufficient funds, overdrafts and money market lines in the ordinary course of business.
 
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        Section 4.04.  Fundamental Changes.  Merge and amalgamate, dissolve, liquidate, consolidate with or into another Person, or Dispose of (whether in one transaction or in a series of related transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to or in favor of any Person (other than as part of the Transaction), except that:
 
        (a)         any Restricted Party (other than a Transaction Party) may merge and amalgamate with any Restricted Party;
 
        (b)         any Disposition permitted under Section 4.05;
 
        (c)         any Restricted Subsidiary (other than a Transaction Party) may Dispose of all or substantially all of its assets (upon voluntary liquidation or otherwise) to any Originator or to another Restricted Subsidiary of an Originator; and
   
       (d)         so long as no Event of Termination or Potential Event of Termination exists or would result therefrom, such Restricted Party may merge, consolidate or amalgamate with any other Person; provided that (i) such Restricted Party shall be the continuing or surviving corporation or (ii) if the Person formed by or surviving any such merger, amalgamation or consolidation is not such Originator (any such Person, the Successor Originator), (A) the Successor Originator shall be an entity in the same corporate form organized or existing under the laws of the United States, any state thereof, the District of Columbia or any territory thereof, (B) the Successor Originator shall expressly assume all the obligations of the Originator under this Agreement and the other Transaction Documents to which such Originator is a party pursuant to a supplement hereto or thereto in form reasonably satisfactory to the Agent, (C) after giving effect to such transaction and the use of any proceeds therefrom, the Company would have the ability to incur (i) an additional $1.00 of Indebtedness under Section 7.03(r) under the Senior Facility Credit Agreement or (ii) the Consolidated Fixed Charge Coverage Ratio under (and as defined in) the Senior Facility Credit Agreement at the time of such transaction and after giving pro forma effect thereto as if such transaction had occurred at the beginning of the applicable four-quarter period will be equal to or greater than it was immediately before such transaction; and (D) the Originator shall have delivered to the Agent a certificate of a Financial Officer and an opinion of counsel, each stating that such merger, amalgamation or consolidation and such supplement to this Agreement or any Transaction Document comply with this Agreement; provided, further, that if the foregoing are satisfied, the Successor Originator, will succeed to, and be substituted for, the Originator under this Agreement; provided, further, that unless such Person is an Originator, neither Millennium Chemicals Inc. nor Millennium Holdings LLC nor any of their respective subsidiaries as of the Closing Date may be merged with or into any Restricted Party.
 
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        Section 4.05.  Dispositions.  Make any Disposition or enter into any agreement to make any Disposition (other than as part of or in connection with the transactions contemplated by the Transaction Documents), except:
 
        (a)         Dispositions of obsolete, redundant, surplus or worn out property, whether now owned or hereafter acquired, in the ordinary course of business and Dispositions of property no longer used or useful in the conduct of the business of any Restricted Party;
 
        (b)         Dispositions of inventory in the ordinary course of business;
 
        (c)         Dispositions of property to the extent that (i) such property is exchanged for credit against the purchase price of similar replacement property or (ii) the proceeds of such Disposition are promptly applied to the purchase price of such replacement property;
 
        (d)         Dispositions to the Company or any Restricted Subsidiary to the extent such Dispositions would be permitted under the Senior Facility Credit Agreement;
  
       (e)         Dispositions permitted by Sections 4.04 and 4.07 and Liens permitted by Section 4.01;
 
        (f)         Dispositions of property pursuant to sale-leaseback transactions; provided that the fair market value of all property so Disposed of after the Closing Date shall not exceed $250,000,000;
 
        (g)         Dispositions of cash and Cash Equivalents;
 
        (h)         leases, subleases, licenses or sublicenses (including the provision of software under an open source license), in each case in the ordinary course of business and which do not materially interfere with the business of the Company and its Restricted Subsidiaries;
  
       (i)         transfers of property as a result of Casualty Events;
 
       (j)         Dispositions of property not otherwise permitted under this Section, the proceeds (net of costs associated with such Disposition) of which do not to exceed $1,000,000,000 in any transaction or series of related transactions in the aggregate; provided that (i) at the time of such Disposition, no Event of Termination or Potential Event of Termination shall exist or would result from such Disposition, and (ii) with respect to any Disposition pursuant to this clause for a purchase price in excess of $50,000,000, the Restricted Parties shall receive not less than 75% of such consideration in the form of cash or Cash Equivalents (in each case, free and clear of all Liens at the time received); provided for the purposes of this clause (ii) any liabilities (as shown on the Companys most recent balance sheet provided hereunder or in the footnotes thereto) of the Company orsuch Restricted Subsidiary, other than liabilities that are by their terms subordinated to the payment in cash of the Obligations, that are assumed by the transferee with respect to the applicable Disposition and for which the Company and all of the Restricted Subsidiaries shall have been validly released by all applicable creditors in writing shall be deemed to be cash;

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        (k)        Dispositions listed in Schedule 4.05(k) hereto;
 
        (l)         Dispositions of inventory and accounts receivable in connection with any Securitization Transactions or the transactions contemplated by the ABF Agreement;
 
        (m)        any swap of assets in exchange for services or other assets in the ordinary course of business of comparable or greater value or usefulness to the business of the Company and its Subsidiaries, taken as a whole, as determined in good faith by the management of the Company; and
    
        (n)         Dispositions pursuant to buy-sell arrangements or similar agreements between Lyondell China Holdings Limited of Ningbo ZRCC and Lyondell Chemical Company Ltd.

provided that any Disposition of any property pursuant to this Section 4.05 (except (i) pursuant to Section 4.05(e) and Section 4.05(i) and (ii) Dispositions from a Transaction Party or an ABF Loan Party to any other Transaction Party or ABF Loan Party) shall be for no less than the fair market value of such property at the time of such Disposition.

Section 4.06.  Restricted Payments.  Declare or make, directly or indirectly, any Restricted Payment, except:
 
        (a)         such Restricted Party may make Restricted Payments to the Company and Restricted Subsidiaries (and, in the case of a Restricted Payment by a non-Wholly Owned Restricted Party, to the Company and any other Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests);
 
        (b)         such Restricted Party may declare and make dividend payments or other Restricted Payments payable solely in the Equity Interests (other than Disqualified Equity Interests not otherwise permitted by Section 4.03) of such Person;
    
        (c)         the payment of any dividend or consummation of any irrevocable redemption within 60 days after the date of declaration of such dividend or the giving of a redemption notice if the dividend or redemption would have been permitted on the date of declaration or giving of notice
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        (d)         any Restricted Payments, either (i) solely in exchange for shares of Qualified Equity Interests of the Company or (ii) if no Default or Event of Default under and as defined in the Senior Facility Credit Agreement shall have occurred and be continuing, through the application of net cash proceeds of a substantially concurrent equity offering (other than to a subsidiary of the Company) or capital contribution received by the Company;
 
        (e)         to the extent constituting Restricted Payments, a Restricted Party may enter into and consummate the Acquisition and transactions expressly permitted by any provision of Section 4.04;
 
        (f)         cash repurchases of Equity Interests in such Restricted Party deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants;
 
        (g)         beginning on August 1, 2010, so long as no Default or Event of Default under and as defined in the Senior Facility Credit Agreement shall have occurred and be continuing or would be caused thereby, repurchases by such Restricted Party of, or declarations and payments of dividends to a direct or indirect parent of such Restricted Party to permit repurchases by such direct or indirect parent of, Equity Interests of the Company or a Restricted Subsidiary or such parent from employees, former employees, directors or former directors of the Company or a Restricted Subsidiary or any of its Subsidiaries (or permitted transferees of such Persons) or their authorized representatives upon the death, disability or termination of employment of such employees or directors, in an aggregate amount for all periods not to exceed 2.0% of the capital stock of the Company from time to time at fair market value at the date of such repurchase;
 
        (h)         Restricted Payments to any direct or indirect parent company of the Company for legal, audit, tax and other expenses directly relating to the administration of that parent company (or any of its parent companies) including customary compensation payable to that Persons directors and employees, not to exceed 1,500,000 or the equivalent dollar amount in any fiscal year;

        (i)         cash payments in lieu of issuing fractional shares pursuant to the exercise or conversion of any exercisable or convertible securities;
 
        (j)         payments or distributions to dissenting shareholders pursuant to applicable Law in connection with or in contemplation of, any acquisition, merger, amalgamation, consolidation or transfer of assets that complies with Section 4.04;
 
        (k)         payments of dividends on Disqualified Equity Interests issued in accordance with Section 4.03;
 
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        (l)         directors fees (including non-executive directors of such Originator) or if the Originator is a partnership, directors fees of the general partner of the Originator, in an amount not to exceed $1,500,000 per year;
 
        (m)        so long as no Default or Event of Default under and as defined in the Senior Facility Credit Agreement shall have occurred and be continuing or would be caused thereby, Restricted Payments in respect of sums payable (including payment of fees) pursuant to the Management Agreement in an aggregate amount not to exceed (x) $25,000,000 in respect of any fiscal year in which Consolidated EBITDA is less than $6,000,000,000 or (y) $30,000,000 in respect of any fiscal year in which Consolidated EBITDA exceeds $6,000,000,000;
 
        (n)         so long as no Default or Event of Default under and as defined in the Senior Facility Credit Agreement shall have occurred and be continuing or would be caused thereby, (i) Restricted Payments by any Restricted Party in an amount not to exceed (x) prior to Listing $50,000,000 per annum and $200,000,000 in the aggregate, plus (y) at any time, if, the Applicable Amount Availability Condition under and as defined in the Senior Facility Credit Agreement shall be met,  other Restricted Payments in an aggregate amount pursuant to this clause (n) not to exceed the portion, if any, of the Applicable Amount under and as defined in the Senior Facility Credit Agreement on the date of such election that the Servicer elects to apply pursuant to this clause (n), such election to be specified in a written notice of a Principal Financial Officer calculating in reasonable detail the amount of Applicable Amount immediately prior to such election and the amount thereof elected to be so applied, and (ii) following Listing, the payment of dividends on the listed common stock at a rate not to exceed 6% per annum of the net cash proceeds received by the Company in connection with such Listing or any subsequent Listing; provided that if such Listing was of the share capital of a Holding Company of the Company, the net proceeds of any such dividend are used to fund a corresponding dividend in equal or greater amount on the share capital of such Holding Company;
 
        (o)         distributions by any Restricted Party or any joint venture of chemicals to a holder of Equity Interests of such Restricted Party or joint venture if such distributions are made pursuant to a provision in a joint venture agreement or other arrangement entered into in connection with the establishment of such joint venture or Restricted Party that requires such holder to pay a price for such chemicals equal to that which would be paid in a comparable transaction negotiated on an arms-length basis (or pursuant to a provision that imposes a substantially equivalent requirement); and
 
        (p)         payments in the amounts and on the conditions described in the Tax Sharing Agreement (as defined in the Senior Facility Credit Agreement).

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Section 4.07.  Change in Nature of Business.  Engage in any material line of business substantially different from a Permitted Business.
 
Section 4.08.  Transactions with Affiliates.  Enter into any transaction of any kind with any Affiliate of such Restricted Party, whether or not in the ordinary course of business, other than:
 
        (a)         reasonable fees and compensation paid to and employee benefit arrangements, customary insurance and indemnity provided on behalf of, officers, directors, managers, employees or consultants of such Restricted Party as determined in good faith by the Board of Directors or senior management of the Company or such Restricted Party;
 
        (b)         transactions exclusively between or among the Company and any of its Restricted Subsidiaries or exclusively between or among such Restricted Subsidiaries in each case, provided such transactions are not otherwise prohibited hereby;
 
        (c)         any agreement as in effect as of the Closing Date set forth on Schedule 4.09(c) or any amendment or renewal thereto or any transaction contemplated thereby or in any replacement agreement thereto so long as any such amendment or renewal or replacement agreement is not more disadvantageous to the Lenders (as determined by the Board of Directors of the Company in their reasonable and good faith judgment) in any material respect than the original agreement;
 
        (d)         Investments of the type described in clauses (b), (c), (g), (h), (i), (m) and (s) of Section 4.02 and Restricted Payments made in compliance with Section 4.06;
 
       (e)         transactions between any of the Originators, the ABF Loan Parties and any of their respective Subsidiaries in connection with the transactions contemplated by the ABF Agreement and the Receivables Purchase Agreement;
 
        (f)         transactions with customers, clients, suppliers, distributors or other purchases or sales of goods or services, in each case in the ordinary course of business;
 
       (g)         transactions with Permitted Joint Ventures entered into in the ordinary course of business and in a manner consistent with past practice;
 
          (h)        the issuance or sale of any Qualified Equity Interests of such Originators Equity Interests or capital contributions received by such Originator;
 
       (i)         transactions entered into between or among such Restricted Party and any joint venture, or other Affiliate that would otherwise be subject to this covenant solely because a Restricted Party owns any Equity Interests of or otherwise controls such person, or other Affiliate engaged in a Permitted Business that is under common control with such Restricted Party, on terms that are no lessfavorable as might reasonably have been obtained at such time from an unaffiliated party or, if no such comparable transaction is available, on terms that are fair from a financial point of view to such Restricted Party;

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        (j)         transactions entered into by a Person prior to the time such Person becomes a Restricted Subsidiary or is merged or consolidated into a Restricted Party (provided such transaction is not entered into in contemplation of such event);
 
        (k)         dividends and distributions to the Company and its Restricted Subsidiaries by any Unrestricted Subsidiary of the Company or joint venture; and
 
        (l)         transactions (x) involving aggregate payments of consideration equal to or less than $10,000,000 or (y) on terms that are no less favorable to the relevant Restricted Party than those terms that might reasonably have been obtained in a comparable transaction at such time on an arms-length basis by such Restricted Party and an unrelated Person or, if no such comparable transaction with a Person who is not an Affiliate is available on terms that are fair from a financial point of view to such Restricted Party as certified by an independent financial advisor; provided that the board of directors of each of such Restricted Party and the parent of such Restricted Party must approve each transaction with an Affiliate to which they are a party that involves aggregate payments or other property with a fair market value in excess of $25,000,000 such approval to be evidenced by a board resolution that states that the board of directors has determined that the transaction complies with the foregoing provisions and (y) if any Restricted Party enters into a transaction with an Affiliate that involves payments or other property with an aggregate fair market value of more than $100,000,000, then prior to the consummation of such transaction, the parties to such transaction must obtain a favorable opinion as to the fairness of such transaction or series of related transactions to such Restricted Party from a financial point of view, from an independent financial advisor and file the same with the Agent.

Section 4.09.  Burdensome Agreements.  Enter into or permit to exist any Contractual Obligation (other than this Agreement or any other Transaction Document) that limits the ability of any Restricted Party to make Restricted Payments to any Originator; provided that the foregoing shall not apply to Contractual Obligations which:

(i)   (x) exist on the Closing Date and (to the extent not otherwise permitted by this Section) are listed on Schedule 4.09 and (y) to the extent Contractual Obligations permitted by clause (x) are set forth in an agreement evidencing Indebtedness, are set forth in any agreement evidencing any permitted renewal, extension or refinancing of such Indebtedness so long as such renewal, extension or refinancing does not expand the scope of such Contractual Obligation,


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(ii)    are binding on a Restricted Subsidiary at the time such Restricted Subsidiary first becomes a Restricted Subsidiary, so long as such Contractual Obligations were not entered into solely in contemplation of such Person becoming a Restricted Subsidiary and as amended or modified; provided, however, that any such amendment or modification is no less favorable to such Originator in any material respect as determined by the Board of Directors of such Originator in their reasonable and good faith judgment than the provisions prior to such amendment or modification; provided further that this clause (ii) shall not apply to Contractual Obligations that are binding on a Person that becomes a Restricted Subsidiary pursuant to Section 4.04,
 
(iii)    represent Indebtedness of a Restricted Subsidiary which is not a Transaction Party which is permitted by Section 4.03,

(iv)   arise in connection with any Disposition permitted by Section 4.04 or 4.05 and relate solely to the assets or Person subject to such Disposition,

(v)    are customary provisions in joint venture agreements and other similar agreements applicable to joint ventures permitted under Section 4.02 and applicable solely to such joint venture entered into in the ordinary course of business,

(vi)   are negative pledges and restrictions on Liens in favor of any holder of Indebtedness permitted under Section 4.03 but solely to the extent any negative pledge relates to the property financed by such Indebtedness (and excluding in any event any Indebtedness constituting Junior Financing (as defined in the Senior Facility Credit Agreement),

(vii)      are customary restrictions on leases, subleases, licenses or asset sale agreements otherwise permitted hereby so long as such restrictions relate to the assets subject thereto,

(viii)     comprise restrictions imposed by any agreement relating to secured Indebtedness permitted pursuant to Section 4.03(e) to the extent that such restrictions apply only to the property or assets securing such Indebtedness,

(ix)    are customary provisions restricting subletting or assignment of any lease governing a leasehold interest of such Restricted Party,

(x)     are customary provisions restricting assignment of any agreement entered into in the ordinary course of business,
 
42

(xi)   comprise restrictions imposed by the Senior Facility Credit Agreement and related documentation, the Senior Second Lien Debt Documentation, any Permanent Financing, Permitted Refinancing or under any Receivables Financings (including Securitization Transactions) (each as defined in the Senior Facility Credit Agreement);

(xii)   are restrictions on cash or other deposits imposed by customers under contracts entered into in the ordinary course of business and

(xiii)     customary restrictions in construction loans, purchase money obligations, Capitalized Leases, security agreements or mortgages securing Indebtedness of such Restricted Party to the extent such restrictions restrict the transfer of the property subject to such Capitalized Leases, security agreements or mortgages.

Section 4.10.  Anti-Money Laundering.  Each Restricted Party will use commercially reasonable efforts to ensure that no funds used to pay the obligations under the Transaction Documents are derived from any unlawful activity.

Section 4.11.  Capital Expenditures.

Limitation on Capital Expenditures.  Permit the aggregate amount of Capital Expenditures (other than Excluded Capital Expenditures) made in any fiscal year by the Company and its Restricted Subsidiaries to exceed the amount set forth opposite such fiscal year below (each such amount, a Scheduled Capital Expenditure Amount):

Year
  
Amount (in millions)
  
       
January 1, 2008  -  December 31, 2008
   $ 1,250  
         
January 1, 2009 and each fiscal year thereafter
   $ 1,000  

provided, however, that

(i)   so long as no Event of Termination or Potential Event of Termination has occurred and is continuing or would result from such expenditure, an amount equal to 50% of any portion of any amount set forth above, if not expended in the fiscal year for which it is permitted above, may be carried over for expenditure in the following fiscal year (each such amount, a Carry-Forward Amount); provided that if any such amount is so carried over, it will be deemed used in the fiscal year after the amount set forth opposite such fiscal year above; and
 
43

(ii)   so long as no Event of Termination or Potential Event of Termination has occurred and is continuing or would result from such expenditure, if Capital Expenditures (other than Excluded Capital Expenditures) made during any fiscal year exceed the amount set forth opposite such fiscal year above, if any, an amount up to 50% of the Scheduled Capital Expenditures Amount for the next succeeding fiscal year (each such amount, a carry-back amount) may be carried back to such prior fiscal year and utilized to make Capital Expenditures in such prior fiscal year (it being understood and agreed that (A) no carry-back amount may be carried back beyond the fiscal year immediately prior to the fiscal year of such Scheduled Capital Expenditure Amount and (B) the portion of the carry-back amount actually utilized in any fiscal year shall be deducted from the Scheduled Capital Expenditure Amount in the fiscal year from which it was carried back); provided further that if the Applicable Amount Availability Condition (as defined in the Senior Facility Credit Agreement) shall be met, the Restricted Parties shall be permitted to make Capital Expenditures in an aggregate amount pursuant to Section 7.11(c) of the Senior Facility Credit Agreement not to exceed the portion, if any, of the Applicable Amount (as defined in the Senior Facility Credit Agreement) on the date of such election that the Restricted Parties elect to apply such clause.

Section 4.12.  Accounting Changes.  Make any change in its fiscal year; provided, however, that such Originator may, upon written notice to the Agent, change its or any of its Subsidiaries fiscal year to any other fiscal year reasonably acceptable to the Agent , in which case the Originator and the Agent shall, and are hereby authorized by the Purchasers to, make any adjustments to this Agreement that are reasonably necessary to reflect such change in fiscal year.

Section 4.13. Fixed Charge Coverage Ratio.  If with respect to any period of four consecutive fiscal quarters ending on or after March 31, 2008, the Fixed Charge Coverage Ratio calculated as of the end of such four-quarter period is less than 1.10 to 1:00 (an FCC Period), permit to exist a period of five consecutive Business Days during the fiscal quarter immediately following such FCC Period during which Total Excess Availability on each such Business Day is less than $200,000,000 unless on each Business Day during such five Business Day period both (x) Total Collateral Availability is greater than or equal to $275,000,000 and (y) Total Excess Availability is greater than or equal to $150,000,000.  
 
44

ARTICLE 5
Undertaking as to Servicer

Section 5.01.  Unconditional Undertaking.  Lyondell hereby unconditionally and irrevocably undertakes and agrees with and for the benefit ofeach of the Agent, and the Purchasers (collectively, the Indemnified Parties) to cause the due and punctual performance and observance by the Servicer (so long as any Affiliate of Lyondell is the Servicer) of all of the terms, covenants, agreements, undertakings and other obligations on the part of the Servicer (so long as any Affiliate of Lyondell is the Servicer) to be performed or observed under each of the Receivables Purchase Agreement, the Receivables Sale Agreement and the other Transaction Documents and any other documents delivered in connection therewith in accordance with the terms thereof, including, without limitation, the obligations to pay when due all monetary obligations of the Servicer (so long as any Affiliate of Lyondell is the Servicer) under the Receivables Purchase Agreement, the Receivables Sale Agreement and the other Transaction Documents, whether for Collections received, deemed Collections, interest, indemnifications, fees, costs, expenses or otherwise (such terms, covenants, agreements, undertakings and other obligations being the Obligations) and undertakes and agrees to pay any and all expenses (including reasonable counsel fees and out-of-pocket expenses) incurred by the Indemnified Parties, or any of them, in enforcing its rights under this Agreement.  In the event that the Servicer (so long as any Affiliate of Lyondell is the Servicer) shall fail in any manner whatsoever to perform or observe any of its Obligations when the same shall be required to be performed or observed, then Lyondell shall itself duly and punctually perform or observe, or cause to be duly and punctually performed and observed, such Obligation, and it shall not be a condition to the accrual of the obligation of Lyondell hereunder to perform or observe any Obligation (or to cause the same to be performed or observed) that any Indemnified Party shall have first made any request of or demand upon or given any notice to the Servicer (so long as any Affiliate of Lyondell is the Servicer) or any of the other Originators or any of their successors or assigns, or have instituted any action or proceeding against the Servicer (whether or not any Affiliate of Lyondell is the Servicer) or any of the other Originators or any of their successors or assigns in respect thereof.

Section 5.02.  Obligations Absolute.  Lyondell undertakes and agrees that the Obligations will be paid and performed strictly in accordance with the terms of the Transaction Documents and each other document delivered in connection therewith, regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of any Indemnified Party with respect thereto.  The obligations of Lyondell under this Article 5 are independent of the Obligations, and a separate action or actions may be brought and prosecuted against Lyondell to enforce the obligations under this Article 5, irrespective of whether any action is brought against the Servicer (if any Affiliate of Lyondell is the Servicer) or any of the other Originators or whether the Servicer (if any Affiliate of Lyondell is the Servicer) or any of the other Originators is joined in any such action or actions.  The liability of Lyondell under this Article 5 shall be irrevocable, absolute and unconditional irrespective of, and to the extent permitted by law, Lyondell hereby irrevocably waives anydefenses (except for any defenses arising or accruing as a result of the gross negligence or willful misconduct of any of the Indemnified Parties) it may now or hereafter have in any way relating to, any or all of the following:

45
 
        (a)         any lack of validity or enforceability of the Obligations or of any Pool Receivable, any Receivable Interest or any Related Security, or of any Transaction Document or any other document relating thereto;
 
        (b)         any change in the time, manner or place of payment of, or in any other term of, all or any of the Obligations under the Transaction Documents or any other document relating thereto, or any other amendment or waiver of or any consent to departure from any Transaction Document or any other document relating thereto;
 
        (c)         any taking, exchange, release or nonperfection of or failure to transfer title to any asset or collateral, or any taking, release, amendment or waiver of or consent to departure from any guaranty, for all or any of the Obligations;
    
        (d)         any manner of application of any asset or collateral, or proceeds thereof, to all or any of the Obligations, or any manner of sale or other disposition of any asset or collateral for all or any of the Obligations or any other obligations of the Servicer (whether or not any Affiliate of Lyondell is the Servicer) or any of the other Originators under the Transaction Documents or any other document relating thereto;
 
        (e)         any change, restructuring or termination of the structure or existence of the Servicer (whether or not any Affiliate of Lyondell is the Servicer) or any of the other Originators;
 
        (f)         any failure of any Indemnified Party to disclose to Lyondell any information relating to the financial condition, operations, properties or prospects of any of the other Originators now or in the future known to such Indemnified Party (Lyondell waiving any duty on the part of such Indemnified Party to disclose such information);
 
        (g)         any impossibility or impracticality of performance, illegality, any act of any government, or any other circumstance (including, without limitation, any statute of limitations) or any existence of or reliance on any representation by any Indemnified Party that might constitute a defense available to, or a discharge of, the Servicer (whether or not any Affiliate of Lyondell is the Servicer) or any of the other Originators or a guarantor of the Obligations; or
 
        (h)         any other circumstance, event or happening whatsoever, whether foreseen or unforeseen and whether similar or dissimilar to anything referred to above in this Section 5.02.
 
46

Each of the parties hereto and, by its acceptance hereof, the Agent, the Purchasers and the other Indemnified Parties agrees that the obligations of any Originator under this Agreement, including the obligations of Lyondell under Article 5 hereof, and any liability of any party in respect of its representations, warranties and agreements under this Agreement, do not constitute in any way (i) a guarantee of the obligations of the Seller under the Transaction Documents or (ii) any agreement to indemnify or hold harmless any Indemnified Party from and against any failure to collect amounts in respect of a Pool Receivable, to the extent such failure results from a discharge of the Obligor with respect thereto in a proceeding in respect of such Obligor under applicable bankruptcy laws or otherwise results from such Obligors financial inability to pay such amounts.

The provisions of this Article 5 shall continue to be effective or be reinstated, as the case may be, if any time (x) any payment in connection with any of the Obligations is rescinded or must otherwise be returned by any Indemnified Party, or (y) any performance or observance of any Obligation is rescinded or otherwise invalidated, upon the insolvency, bankruptcy or reorganization of the Servicer (if any Affiliate of Lyondell is the Servicer) or any of the other Originators or otherwise, all as though payment had not been made or as though such Obligation had not been performed or observed.

Section 5.03.  Waivers and Acknowledgments.  Error! Bookmark not defined. To the extent permitted by applicable law, each Originator hereby waives promptness, diligence, notice of acceptance and any other notice (except to the extent that such other notice is expressly required to be given to such Originator by any Indemnified Party pursuant to any other Transaction Document) with respect to any of the Obligations and this Agreement and any other document related thereto, and any requirement that any Indemnified Party protect, secure, perfect or insure any lien or any property subject thereto or exhaust any right or take any action against the Servicer (whether or not any Affiliate of Lyondell is the Servicer) or any of the other Originators or any other Person or any asset or collateral.
 
(b)         Each Originator hereby waives any right to revoke this Agreement, and acknowledges that this Agreement is continuing in nature and applies to all Obligations whether existing now or in the future.

Section 5.04.  Subrogation. Lyondell shall not exercise or assert any rights that it may now have or hereafter acquire against the Servicer (to the extent Lyondell is not the Servicer) or any of the other Originators that arise from the existence, payment, performance or enforcement of Lyondells obligations under this Agreement or any other Transaction Document, including, without limitation, any right of subrogation, reimbursement, exoneration, contribution or indemnification or any right to participate in any claim or remedy of any Indemnified Party against such Servicer or any of the other Originators or any asset or collateral, whether or not such claim, remedy or right arises in equity orunder contract, statute or common law, including, without limitation, the right to take or receive from such Servicer or any of the other Originators, directly or indirectly, in cash or other property or by setoff or in any other manner, payment or security on account of such claim, remedy or right, unless and until all amounts in connection with the Obligations  and all amounts payable under this Agreement shall have been paid in full and all other amounts payable to the Indemnified Parties under the Transaction Documents shall have been paid in full (other than contingent indemnification obligations).  If any amount shall be paid to Lyondell in violation of the preceding sentence at any time prior to the later of (i) the payment in full of the Obligations and all other amounts payable under this Agreement and all amounts payable to the Indemnified Parties under the Transaction Documents (other than contingent indemnification obligations) and (ii) the Termination Date, such amount shall be held in trust for the benefit of the Indemnified Parties and shall forthwith be paid to the Agent to be credited and applied to the Obligations, whether matured or unmatured, in accordance with the terms of the Transaction Documents or to be held by the Agent as collateral security for any Obligations payable under this Agreement thereafter arising.

47

ARTICLE 6
Miscellaneous

Section 6.01.  Notices.  Error! Bookmark not defined. All notices and other communications hereunder shall, unless otherwise stated herein, be given in writing or by any telecommunication device capable of creating a written record (including, with respect to Approved Electronic Communications, electronic mail), (i) to each Originator, the Agent and the Initial Purchasers, at its address set forth under its name on the signature pages of the Receivables Purchase Agreement or (ii) to each Purchaser other than the Initial Purchasers, at its address specified on the Assignment and Acceptance pursuant to which it became a Purchaser under the Receivables Purchase Agreement or, in either case, at such other address as shall be designated by such party in a notice to the other parties hereto given as provided herein or in the Receivables Purchase Agreement.
 
        (b)         All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt if delivered by hand or overnight courier service or sent by telecopy equipment of the sender, or on the date five Business Days after dispatch by certified or registered mail if mailed, in each case delivered, sent or mailed (properly addressed) to such party as provided in this Section 6.01 or in accordance with the latest unrevoked direction from such party given in accordance with this Section 6.01.
 
        (c)         Notices and other communications hereunder not constituting Approved Electronic Communications may be delivered or furnished byelectronic communications pursuant to procedures approved by the Agent and Equistar; provided that approval of such procedures may be limited to particular notices or communications.

48
 
Section 6.02 . No Waivers.  No failure or delay by any Indemnified Party exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege.  The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

Section 6.03 . Amendments and Waivers.  Any provision of this Agreement may be amended or waived if, but only if, such amendment or waiver is in writing and is signed by each Originator and consented to by the Required Purchasers (and, if the rights or duties of the Agent are affected thereby, by it).
 
Section 6.04.  Continuing Agreement; Assignments under Receivables Purchase Agreement.  This Agreement is a continuing agreement and shall, subject to the reinstatement provisions contained in Section 5.02, Article 1 remain in full force and effect until the later of (i) the payment and performance in full of the Obligations and the payment of all other amounts payable under this Agreement (other than contingent indemnification obligations) and (ii) the Termination Date, Article 2 be binding upon each Originator and their successors and permitted assigns, and Article 3 inure to the benefit of, and be enforceable by, the Indemnified Parties and each of their respective successors and permitted transferees and assigns.  Without limiting the generality of clause (c) of the immediately preceding sentence, (A) any Purchaser may assign all or any of its Receivables Interests under the Receivables Purchase Agreement in accordance with the terms thereof, and (B) the Agent may be replaced pursuant to the provisions the Receivables Purchase Agreement, and such replacement Agent, shall thereupon become vested with all the benefits in respect thereof granted to such Purchaser or the Agent, as the case may be, herein or otherwise.

Section 6.05 . Successors.  The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, except that the Originators may not assign or otherwise transfer any of their rights under this Agreement without the prior written consent of the Agent and the Purchasers.  Any Person that hereafter becomes an Originator pursuant to Section 7.01 of the Receivables Sale Agreement shall simultaneously become an Originator party hereto pursuant to an instrument to such effect in form reasonably satisfactory to the Agent.  Any Originator which ceases to be an Originator pursuant to Section 7.03 of the Receivables Sale Agreement shall automatically and simultaneously cease to be an Originator hereunder (subject, in the case of Lyondell, to its continuing obligations under Article 5 hereof).

49

Section 6.06 . Governing Law; Submission to Jurisdiction.  This Agreement shall be governed by, and construed and interpreted in accordance with, the laws of the State of New York.  To the extent permitted by applicable law, each Originator hereby submits to the nonexclusive jurisdiction of the United States District Court for the Southern District of New York and of any New York State court sitting in the Borough of Manhattan in New York City for purposes of all legal proceedings arising out of or relating to this Agreement or the transactions contemplated hereby.  Each Originator irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such proceeding brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum.

Section 6.07 . Counterparts; Effectiveness.  This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.  This Agreement shall become effective on the date that the Agent shall have received counterparts hereof signed by each Originator (or receipt by the Agent in the form satisfactory to it of facsimile or other written confirmation from each Originator of execution of a counterpart hereof by each Originator).

Section 6.08 .  WAIVER OF JURY TRIAL.  EACH ORIGINATOR AND, BY ACCEPTANCE HEREOF, THE AGENT, EACH PURCHASER AND EACH OTHER INDEMNIFIED PARTY HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATION TO THIS AGREEMENT  OR THE ACTIONS OF THE AGENT OR ANY PURCHASER IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF.

 
50

IN WITNESS WHEREOF, each party hereto has caused this Agreement to be duly executed by an authorized officer as of the day and year first above written.


 
LYONDELL CHEMICAL COMPANY
as Servicer and as Originator
   
 
By:
 /s/ Karen A. Twitchell 
   
Name:                   Karen A. Twitchell
   
Title:                     Authorized Representative
   
Address:              1221 McKinney, Suite 700
                     Houston, TX 77010
    Attention:    Assistant Treasurer 
    Telephone:          713/652-7200 
   
Facsimile:             713/652-4598
 
[Undertaking Agreement]
 
 


 
EQUISTAR CHEMICALS, LP
as Originator
   
By:
 /s/ Karen A. Twitchell 
   
Name:                   Karen A. Twitchell
   
Title:                     Authorized Representative
   
Address:              1221 McKinney, Suite 700
                     Houston, TX 77010
    Attention:    Assistant Treasurer 
    Telephone:          713/652-7200 
   
Facsimile:             713/652-4598
 
[Undertaking Agreement]
 
 

 
HOUSTON REFINING LP
as Originator
   
By:
 /s/ Karen A. Twitchell
   
Name:                   Karen A. Twitchell
   
Title:                     Authorized Representative
   
Address:              1221 McKinney, Suite 700
                     Houston, TX 77010
    Attention:    Assistant Treasurer 
    Telephone:          713/652-7200 
   
Facsimile:             713/652-4598
 
 
[Undertaking Agreement]
 
 
 
 
EX-4.10 14 lyo10k-032808ex410.htm INTERCREDITOR AGREEMENT DATED AS OF DECEMBER 20, 2007 lyo10k-022808ex410.htm
EXHIBIT 4.10
 
DATED DECEMBER 20, 2007
 
BASELL AF S.C.A.
as the Company
 
THE COMPANIES NAMED IN SCHEDULE 1
as Original Obligors
 
CITIBANK, N.A.
as Senior Agent and Security Agent
 
MERRILL LYNCH CAPITAL CORPORATION
as Interim Facility Agent
 
CITIBANK, N.A.
as ABL Agent
 
THE BANK OF NEW YORK
as High Yield Notes Trustee
 
and
 
CERTAIN ENTITIES
as Original Hedging Banks,
ARCO Notes Trustee, Equistar Notes Trustee,
Investors, Intercompany Lenders and Intercompany Borrowers
 


INTERCREDITOR AGREEMENT
 

 
 
 

TABLE OF CONTENTS
 

 
Clause
    
Page
       
1.
  
DEFINITIONS AND INTERPRETATION
1
2.
  
RANKING
23
3.
  
ABL INTERCREDITOR MATTERS
24
4.
  
HEDGING DEBT
24
5.
  
OTHER SENIOR DEBT
25
6.
  
HIGH YIELD NOTES DEBT
27
7.
  
INVESTOR DEBT
29
8.
  
INTERCOMPANY DEBT
30
9.
  
REPRESENTATIONS
31
10.
  
UNDERTAKINGS OF THE OBLIGORS
31
11.
  
PERMITTED PAYMENTS
34
12.
  
SUSPENSION OF PERMITTED PAYMENTS
35
13.
  
TURNOVER OF NON-PERMITTED PAYMENTS
37
14.
  
SUBORDINATION ON INSOLVENCY
39
15.
  
FAILURE OF TRUSTS
42
16.
  
PROTECTION OF SUBORDINATION
42
17.
  
PRIORITY
45
18.
  
RESTRICTIONS ON ENFORCEMENT
46
19.
  
PERMITTED ENFORCEMENT
47
20.
  
APPLICATION OF RECOVERIES
49
21.
  
ENFORCEMENT OF SECURITY
54
22.
  
OPTION TO PURCHASE
57
23.
  
PRESERVATION OF DEBT
58
24.
  
SHARING AMONG CERTAIN PARTIES
59
25.
  
SUBROGATION
62
26.
  
CONSENTS
63
27.
  
ROLE OF THE SECURITY AGENT
64
28.
  
TRUSTEES
71
29.
  
INFORMATION
75
30.
  
POWER OF ATTORNEY
76
31.
  
EXPENSES
78
32.
  
CHANGES TO THE PARTIES
78
33.
  
NOTICES
83
34.
  
PARTIAL INVALIDITY
84
35.
  
REMEDIES AND WAIVERS
84
36.
  
COUNTERPARTS
84
37.
  
AMENDMENTS
85
38.
  
GOVERNING LAW
85
39.
  
ENFORCEMENT
86
SCHEDULE 1 THE ORIGINAL OBLIGORS
87
SCHEDULE 2 THE ORIGINAL HEDGING BANKS
89
SCHEDULE 3 THE ORIGINAL INVESTORS
90
SCHEDULE 4 THE ORIGINAL INTERCOMPANY LENDERS AND BORROWERS
91
SCHEDULE 5 FORM OF ACCESSION AGREEMENT
95
SCHEDULE 6 EXISTING LYONDELL DEBT SECURITY
98
SCHEDULE 7 HIGH YIELD NOTES MAJOR TERMS
98
SCHEDULE 8 HIGH YIELD NOTES GUARANTEE MATURITY PROVISIONS
101
SCHEDULE 9 SECURITY AGENCY PROVISIONS
102
SCHEDULE 10 SECOND LIEN NOTES MAJOR TERMS
106
SCHEDULE 11 UNSECURED SENIOR NOTES MAJOR TERMS
107
EXHIBIT 1 ABL INTERCREDITOR AGREEMENT
 

 
-i-
 

THIS AGREEMENT is dated December 20, 2007 and made between:
 
1.
BASELL AF S.C.A., a société en commandite par actions, whose registered office is at 15-17, Avenue Gaston Diderich, L-1420 Luxembourg, registered with the Luxembourg register of commerce and companies under number B 107545 and having a corporate capital of €50,000,024 (the “Company”);
 
2.
THE SUBSIDIARIES of the Company listed in Schedule 1 (The Original Obligors) as original borrowers under the Senior Facilities (the “Original Borrowers”) or as original guarantors of the Senior Facilities (together with the Company, the “Original Guarantors”);
 
3.
CITIBANK, N.A. as agent of the other Senior Finance Parties (the “Senior Agent”);
 
4.
CITIBANK, N.A. as security trustee and collateral agent for the Senior Secured Parties, the High Yield Notes Finance Parties and the High Yield Noteholders (the “Security Agent”);
 
5.
MERRILL LYNCH CAPITAL CORPORATION as agent of the other Interim Facility Finance Parties (the “Interim Facility Agent”);
 
6.
CITIBANK, N.A. as agent of the ABL Finance Parties (the “ABL Agent”);
 
7.
THE BANK OF NEW YORK in its capacity as the High Yield Notes Trustee (the “High Yield Notes Trustee”);
 
8.
THE TRUSTEE FOR THE SECOND LIEN NOTEHOLDERS in its capacity as the Second Lien Notes Trustee, on its accession to this Agreement (the “Second Lien Notes Trustee”);
 
9.
THE TRUSTEE FOR THE UNSECURED SENIOR NOTEHOLDERS in its capacity as the Unsecured Senior Notes Trustee, on its accession to this Agreement (the “Unsecured Senior Notes Trustee”);
 
10.
THE BANK OF NEW YORK in its capacity as the Arco Notes Trustee (the “Arco Notes Trustee”);
 
11.
THE BANK OF NEW YORK in its capacity as the Equistar Notes Trustee (the “Equistar Notes Trustee”);
 
12.
THE FINANCIAL INSTITUTIONS (if any) listed in Schedule 2 (The Original Hedging Banks) as original hedging banks (the “Original Hedging Banks”);
 
13.
THE INVESTORS listed in Schedule 3 (The Original Investors) as original investors (the “Original Investors”); and
 
14.
THE SUBSIDIARIES of the Company listed in Schedule 4 (The Original Intercompany Lenders and Borrowers) as original intercompany lenders (together with the Company, the “Original Intercompany Lenders”; or as original intercompany borrowers (together with the Company, the “Original Intercompany Borrowers”).
 
IT IS AGREED as follows:
 
1.
DEFINITIONS AND INTERPRETATION
 
1.1
Definitions
 
In this Agreement:
 
“ABL Facility” means the revolving credit facility made available under the ABL Agreement.
 
 
 

“ABL Agreement” means a revolving credit facility dated on or about the date of this Agreement between, among others Target and certain subsidiaries as borrowers and guarantors and the ABL Finance Parties.
 
“ABL Collateral” means the assets subjected to liens, or purported to be subject to liens, in favour of the ABL Finance Parties pursuant to the ABL Finance Documents.
 
“ABL Debt” means all present and future moneys, debts and liabilities and other Obligations (as defined in the ABL Agreement) due, owing or incurred by any Obligor to any ABL Finance Party under or in connection with any ABL Finance Document (in each case, whether alone or jointly, or jointly and severally, with any other person, whether actually or contingently, and whether as principal, surety or otherwise) together with any related Additional Debt.
 
“ABL Declared Default” means an ABL Default which has resulted in the ABL Agent exercising any of its rights to accelerate the principal of the ABL Debt or the principal being automatically accelerated in each case under section 7.01 of the ABL Agreement.
 
“ABL Default” means an Event of Default under and as defined in the ABL Agreement.
 
“ABL Discharge Date” means the date on which the Security Agent is satisfied (acting reasonably) that all ABL Debt (other than contingent indemnification obligations) has been fully and irrevocably paid or discharged and all commitments of the ABL Finance Parties in respect of the ABL Debt have expired or been cancelled.
 
“ABL Finance Documents” means the Loan Documents as defined in the ABL Agreement.
 
“ABL Finance Parties” means the  Agents and the Lenders as defined in the ABL Agreement.
 
“ABL Intercreditor Agreement” means the Intercreditor Agreement, dated on or about the date hereof, between the Security Agent, the ABL Agent, LyondellBasell Receivables I, LLC, Lyondell Chemical Company and the other parties thereto.
 
“ABL Lenders” means the lenders under the ABL Agreement.
 
“Acceleration Date” means the date (if any) of a Senior Declared Default or, following the Senior Discharge Date, a High Yield Notes Declared Default.
 
“Accession Agreement” means an agreement substantially in the form set out in Schedule 5 (Form of Accession Agreement).
 
“Acquisition” means the acquisition of the Target pursuant to the Merger Agreement.
 
“Acquisition Closing Date” means the date on which the Acquisition is completed.
 
“Additional Debt” means, in relation to any Debt, any money, debt or liability due, owing or incurred under or in connection with:
 
 
(a)
any refinancing (other than (i) of the Interim Facility Debt from the proceeds of an issuance of Second Lien Notes or Unsecured Senior Notes and (ii) with respect to the High Yield Notes Debt, out of the proceeds of Permitted Junior Securities at the prior written election of the Company), deferral or extension of that Debt;
 
 
(b)
any further advance which may be made under any document, agreement or instrument supplemental to any relevant Finance Document together with any related interest, fees and costs;
 
 
-2-
 

 
(c)
any claim for interest accruing on or after the filing of any petition in bankruptcy or for reorganisation relating to the relevant Obligor at the rate specified in the documentation with respect thereto whether or not a claim for post filing interest is allowed in such proceeding;
 
 
(d)
any claim for damages or restitution in the event of rescission of that Debt or otherwise in connection with any relevant Finance Document;
 
 
(e)
any claim against any Obligor or Intercompany Borrower flowing from any recovery by an Obligor or Intercompany Borrower or any liquidator, receiver, administrator, administrative receiver, compulsory manager or other similar officer of a payment or discharge in respect of that Debt on the grounds of preference or otherwise; and
 
 
(f)
any amount (such as post-insolvency interest) which would be included in any of the above but for any discharge, non-provability, unenforceability or non-allowability of the same in any insolvency or other proceedings.
 
“Affiliate” means, in relation to any person, a Subsidiary of that person or a Holding Company of that person or any other Subsidiary of that Holding Company.
 
“Arco Noteholders” means the holders of the Arco Notes.
 
“Arco Notes” means $100,000,000 10 1/4% Debentures due 2010 and the $225,000,000 9.8% Debentures due 2020 issued by the Arco Chemical Company (as predecessor to Lyondell Chemical Company) pursuant to the Arco Notes Indenture.
 
“Arco Notes Collateral” means all property and assets subject to the Arco Notes Security Documents.
 
“Arco Notes Debt” means all present and future moneys, debts and liabilities due, owing or incurred by Lyondell Chemical Company to any Arco Notes Finance Party or Arco Noteholder under or in connection with the Arco Notes (in each case, whether alone or jointly, or jointly and severally, with any other person, whether actually or contingently, and whether as principal, surety or otherwise).
 
“Arco Notes Discharge Date” means the date on which all Arco Notes Debt has been irrevocably and unconditionally discharged in full.
 
“Arco Notes Finance Documents” means the Arco Notes, the Arco Notes Indenture, this Agreement and the Arco Notes Security Documents.
 
“Arco Notes Finance Parties” means the Arco Notes Trustee (on behalf of itself and the Arco Noteholders) and the Security Agent.
 
“Arco Notes Indenture” means the indenture governing the Arco Notes dated as of June 15,1988 as supplemented by a Supplemental Indenture dated January 5, 2000.
 
“Arco Notes Recoveries” means the aggregate of all moneys and other assets received or recovered from time to time by any Arco Notes Finance Party or Arco Noteholder under or in connection with any Arco Notes Security Documents.
 
“Arco Notes Security Documents” means any of the security agreements and other documents identified in Schedule 6 (Existing Lyondell Debt Security) under the heading “Arco Notes Security Documents”.
 
“Arco Notes Trustee” means any entity acting as trustee under the Arco Notes and which accedes to this Agreement pursuant to Clause 32.7 (Accession of Arco Notes Trustee).
 
 
-3-
 
 
“Authorisation” means an authorisation, consent, approval, resolution, licence, permit, exemption, filing, notarisation or registration.
 
“Basell Funding” means Basell Funding S.à r.l., a société à responsabilité limitée whose registered office is at 15-17, Avenue Gaston Diderich, L-1420 Luxembourg, registered with the Luxembourg register of commerce and companies under number B 107544 and having a corporate capital of €50,000,024.
 
“Basell Holdings” means Basell Holdings B.V. with registration number 24344658.
 
 “BI S.à.r.l.” means BI S.à r.l., a société à responsabilité limitée whose registered office is at 15-17, Avenue Gaston Diderich, L-1420 Luxembourg, registered with the Luxembourg register of commerce and companies under number B 107544 and having a corporate capital of €50,000,024.
 
“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Laws of, or are in fact closed in, the State of New York and:
 
 
(a)
if such day relates to any fundings, disbursements, settlements and payments in US dollars, any day in which dealings in deposits in US dollars are conducted by and between banks in the London interbank eurodollar market; or
 
 
(b)
(if such day relates to any fundings, disbursements, settlements and payments in euro) any day on which the Trans-European Automated Real-Time Gross Settlement Express Transfer payment system is open for the settlement of payments in euro.
 
“Charged Assets” means the assets over which Security is expressed to be created pursuant to any Security Document.
 
“Creditor” means each Senior Secured Party and any other Junior Creditor.
 
“Debt” means any Senior Debt, Hedging Debt, Interim Facility Debt, Second Lien Notes Debt, Unsecured Senior Notes Debt, High Yield Notes Debt, High Yield Notes On-Loan Debt, High Yield Notes Guarantee Debt, Investor Debt and Intercompany Debt.
 
“Enforcement Action” means in relation to any Debt, any action of any kind to:
 
 
(a)
demand payment, declare prematurely due and payable or otherwise seek to accelerate payment of or place on demand all or any of that Debt;
 
 
(b)
recover all or any of that Debt (including by exercising any set-off, save as required by law);
 
 
(c)
exercise or enforce any right against any surety or any other right under any other document, agreement or instrument in relation to (or given in support of) all or any of that Debt (including under the Security Documents);
 
 
(d)
petition for (or take or support any other step which may lead to) an Insolvency Event in relation to any Obligor or Intercompany Borrower; or
 
 
(e)
start any legal proceedings against any Obligor or Intercompany Borrower.
 
“Equistar Noteholders” means the holders of the Equistar Notes.
 
“Equistar Notes” means $150,000,000 7.55% Senior Notes due 2026 issued by the Lyondell Petrochemical Company pursuant to the Equistar Notes Indenture together with any other series of notes created under the Equistar Notes Indenture.
 
 
-4-
 

“Equistar Notes Collateral” means all property and assets subject to the Equistar Notes Security Documents.
 
“Equistar Notes Debt” means all present and future moneys, debts and liabilities due, owing or incurred by Lyondell Petrochemical Company to any Equistar Notes Finance Party or Equistar Noteholder under or in connection with the Equistar Notes (in each case, whether alone or jointly, or jointly and severally, with any other person, whether actually or contingently, and whether as principal, surety or otherwise).
 
“Equistar Notes Discharge Date” means the date on which all Equistar Notes Debt has been irrevocably and unconditionally discharged in full.
 
“Equistar Notes Finance Documents” means the Equistar Notes, the Equistar Notes Indenture, this Agreement and the Equistar Notes Security Documents.
 
“Equistar Notes Finance Parties” means the Equistar Notes Trustee (on behalf of itself and the Equistar Noteholders) and the Security Agent.
 
“Equistar Notes Indenture” means the indenture governing the Equistar Notes dated as of January 29, 1996 as supplemented by Supplemental Indentures dated February 15, 1996, December 1, 1997, November 3, 2000 and November 17, 2000.
 
“Equistar Notes Recoveries” means the aggregate of all moneys and other assets received or recovered from time to time by any Equistar Notes Finance Party or Equistar Noteholder under or in connection with any Equistar Notes Security Documents.
 
“Equistar Notes Security Documents” means any of the security agreements and other documents identified in Schedule 6 (Existing Lyondell Debt Security) under the heading “Equistar Notes Security Documents”.
 
“Equistar Notes Trustee” means any entity acting as trustee under the Equistar Notes and which accedes to this Agreement pursuant to Clause 32.8 (Accession of Equistar Notes Trustee).
 
“Fee Letter” means any letter or letters dated on or about the date of this Agreement between the Security Agent and the Company setting out the fee referred to in Clause 27.16 (Security agency fee).
 
“Final Discharge Date” means the later of the Senior Discharge Date and the High Yield Notes Discharge Date.
 
“Finance Documents” means the Senior Finance Documents, the Hedging Documents, the Interim Facility Finance Documents, the Second Lien Notes Finance Documents, the Unsecured Senior Notes Documents, the High Yield Notes Finance Documents, the Investor Documents and the Intercompany Documents.
 
“Financial Indebtedness” means Indebtedness as defined in any Senior Agreement.
 
“General Collateral” means all property or assets subject to the Security Documents other than Arco Notes Collateral, Equistar Notes Collateral and High Yield Notes Collateral.
 
“Group” means the Company and its Subsidiaries for the time being, including, on and from the Acquisition Closing Date, the Target Group.
 
“Hedging Bank” means:
 
 
(a)
any Original Hedging Bank; and
 
 
-5-
 

 
(b)
any Hedge Bank (as defined in the Senior Facility Agreement) or any other person which in each case has become a Hedging Bank in accordance with Clause 32.3 (Accession of Hedging Banks) or Clause 32.4 (Assignments and transfers by Hedging Banks),
 
which in each case has not ceased to be a Hedging Bank in accordance with this Agreement.
 
“Hedging Debt” means all present and future moneys, debts and liabilities due, owing or incurred by any Obligor to any Hedging Bank under or in connection with any Hedging Document (in each case, whether alone or jointly, or jointly and severally, with any other person, whether actually or contingently, and whether as principal, surety or otherwise) together with any related Additional Debt.
 
“Hedging Document” means each Swap Contract and each Treasury Services Agreement (in each case as defined in the Senior Facility Agreement) entered into or to be entered into between an Obligor and a Hedging Bank listed in Schedule 2 (The Original Hedging Banks) or under Clause 32.2 (Accession of Hedging Banks).
 
“Hedging Recoveries” means the aggregate of all moneys and other assets received or recovered from time to time by any Hedging Bank under or in connection with any Hedging Debt; provided, however, that for purposes of Section 13.1 (Turnover), it shall mean Hedging Recoveries as so defined under or in connection with the Security Documents.
 
“High Yield Noteholders” means the holders of the High Yield Notes.
 
“High Yield Notes” means $615,000,000 8 3/8% Senior Notes due 2015 and the €500,000,000 8 3/8% Senior Notes due 2015 issued by the Company pursuant to the High Yield Notes Indenture.
 
“High Yield Notes Collateral” means all property or assets subject to the High Yield Notes Security Documents.
 
“High Yield Notes Debt” means all present and future moneys, debts and liabilities due, owing or incurred by the Company to any High Yield Notes Finance Party or High Yield Noteholder under or in connection with the High Yield Notes (in each case, whether alone or jointly, or jointly and severally, with any other person, whether actually or contingently, and whether as principal, surety or otherwise), together with any related Additional Debt provided, however, that the definition of “High Yield Notes Debt” shall not include the High Yield Notes Trustee Amounts.
 
“High Yield Notes Declared Default” means a High Yield Notes Default which has resulted in the High Yield Notes Finance Parties accelerating all amounts due under the High Yield Notes.
 
“High Yield Notes Default” means an event of default under the High Yield Notes Indenture.
 
“High Yield Notes Discharge Date” means the date on which all High Yield Notes Guarantee Debt has been irrevocably and unconditionally discharged in full.
 
“High Yield Notes Finance Documents” means the High Yield Notes, the High Yield Notes Indenture (including the High Yield Notes Guarantees), this Agreement, the High Yield Notes Security Documents and the High Yield Notes On-Loan Documents.
 
“High Yield Notes Finance Parties” means the High Yield Notes Trustee (on behalf of itself and the High Yield Noteholders) and the Security Agent.
 
“High Yield Notes Guarantee Debt” means all present and future moneys, debts and liabilities due, owing or incurred by any High Yield Notes Guarantor to any High Yield Notes Finance Party or High Yield Noteholder under or in connection with any High Yield Notes Guarantee (in each case, whether alone or jointly, or jointly and severally, with any other person, whether actually or contingently, and whether as principal, surety or otherwise), together with any related Additional Debt provided, however, that the definition of “High Yield Notes Guarantee Debt” shall not include the High Yield Notes Trustee Amounts.
 
 
-6-
 

“High Yield Notes Guarantee Maturity Provisions” means the terms substantially as set out in Schedule 8 (High Yield Notes Guarantee Maturity Provisions).
 
“High Yield Notes Guarantee Recoveries” means the aggregate of all moneys and other assets received or recovered (whether by exercising any set-off or otherwise) from time to time by any High Yield Notes Finance Party or High Yield Noteholder under or in connection with the High Yield Notes Guarantee Debt provided, however, that the definition of “High Yield Notes Guarantee Recoveries” shall not include the High Yield Notes Trustee Amounts.
 
“High Yield Notes Guarantees” means the guarantees by the High Yield Notes Guarantors of the obligations of the Company under the High Yield Notes and the High Yield Notes Indenture (which guarantees except for any High Yield Notes Trustee Amounts owing to the High Yield Notes Trustee are subordinated in right of payment to the Senior Debt and the ABL Debt in accordance with this Agreement).
 
“High Yield Notes Guarantors” means Basell Funding and each other Subsidiary of the Company that becomes a guarantor of the High Yield Notes in accordance with the High Yield Notes Indenture.
 
“High Yield Notes Indenture” means the indenture governing the High Yield Notes dated August 10, 2005 as supplemented by the First Supplemental Indenture dated February 2, 2006.
 
“High Yield Notes Major Terms” means the terms set out in Schedule 7 (High Yield Notes Major Terms).
 
“High Yield Notes On-Loan” means the loan of the proceeds of the High Yield Notes made by the Company to Basell Holdings in accordance with paragraph (b) of Clause 6.1 (Issue of High Yield Notes and High Yield Notes On-Loan Debt).
 
“High Yield Notes On-Loan Debt” means all present and future moneys, debts and liabilities due, owing or incurred by Basell Holdings to any holder of the High Yield Notes On-Loan under or in connection with the High Yield Notes On-Loan, (in each case, whether alone or jointly, or jointly and severally, with any other person, whether actually or contingently, and whether as principal, surety or otherwise) together with any related Additional Debt.
 
“High Yield Notes On-Loan Discharge Date” means the date on which all High Yield Notes On-Loan Debt has been irrevocably and unconditionally discharged in full.
 
“High Yield Notes On-Loan Documents” means all documents, agreements and instruments evidencing the High Yield Notes On-Loan.
 
“High Yield Notes On-Loan Recoveries” means the aggregate of all moneys and other assets received or recovered (whether by exercising any set-off or otherwise) from time to time under or in connection with the High Yield Notes On-Loan Debt.
 
“High Yield Notes Recoveries” means the aggregate of all moneys and other assets received or recovered (whether by exercising any set-off or otherwise) from time to time by any High Yield Notes Finance Party or High Yield Noteholder under or in connection with the High Yield Notes Finance Documents provided, however, that the definition of “High Yield Notes Recoveries” shall not include the High Yield Notes Trustee Amounts.
 
“High Yield Notes Security Documents” means any of the security agreements and other documents identified in Schedule 7 (High Yield Notes Major Terms) under the heading “High Yield Notes Security”.
 
“High Yield Notes Standstill Period” has the meaning given to it in Clause 19.3 (High Yield Notes Standstill Period).
 
 
-7-
 

“High Yield Notes Standstill Start Date” has the meaning given to it in Clause 19.3 (High Yield Notes Standstill Period).
 
“High Yield Notes Stop Notice” means a notice delivered under paragraph (a)(ii)(B) of Clause 12.2 (Suspension of Permitted High Yield Notes Guarantee Payments and Permitted High Yield Notes On-Loan Payments) specifying the relevant Senior Default and that Permitted High Yield Notes On-Loan Payments and Permitted High Yield Notes Guarantees Payments are being suspended.
 
“High Yield Notes Trustee” means any entity acting as trustee under any issue of the High Yield Notes and which accedes to this Agreement pursuant to Clause 32.9 (Accession of High Yield Notes Trustee).
 
“High Yield Notes Trustee Amounts” means amounts payable to the High Yield Notes Trustee under this Agreement, any indemnity provisions for costs and expenses in favour of the High Yield Notes Trustee contained in the High Yield Notes Indenture and under the provisions of the High Yield Notes Guarantees, all compensation for services provided by the High Yield Notes Trustee which is payable to the High Yield Notes Trustee pursuant to this Agreement, the High Yield Notes Indenture and the High Yield Notes Guarantees and all out-of-pocket costs and expenses properly incurred by the High Yield Notes Trustee in carrying out its duties or performing any service pursuant to the terms of the High Yield Notes Indenture, the High Yield Notes Guarantees and this Agreement, including, without limitation (a) compensation for the costs and expenses of the collection by the High Yield Notes Trustee of any amount payable to the High Yield Notes Trustee for the benefit of the High Yield Noteholders, and (b) costs and expenses of the High Yield Notes Trustee’s agents and counsel (but excluding (i) any payment in relation to any unpaid costs and expenses incurred in respect of any litigation by or on behalf of any High Yield Notes Trustee or any High Yield Noteholders against any of the Senior Finance Parties and (ii) any payment made directly or indirectly on or in respect of any amounts owing under any High Yield Notes (including principal, interest, premium or any other amounts to any of the High Yield Noteholders)).
 
“Holding Company” means, in relation to a company, corporation or other legal entity, any other company, corporation or other legal entity in respect of which the former company, corporation or other legal entity is a Subsidiary.
 
“Insolvency Event” means:
 
 
(a)
any Key Company is unable or admits inability to pay its debts as they fall due, suspends, or threatens to suspend, making payments on any of its debts or, by reason of actual or anticipated financial difficulties, commences negotiations with one or more of its creditors (other than the Senior Lenders) with a view to a general rescheduling of any class of its indebtedness;
 
 
(b)
a moratorium is declared in respect of any indebtedness of any Key Company; or
 
 
(c)
a petition is filed for a receiving order or an assignment is made for the general benefit of creditors of any Key Company which is incorporated in Canada or any province or territory thereof;
 
 
(d)
any corporate action, legal proceedings or other procedure or step is taken in relation to:
 
 
(i)
bankruptcy, the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, liquidation, insolvency, administration or reorganisation (by way of voluntary arrangement, scheme of arrangement reorganisation, making a proposal or otherwise) of any Key Company other than a solvent liquidation or reorganisation of any member of the Group which is not an Obligor;
 
 
-8-
 

 
(ii)
a composition, compromise, assignment, relief or arrangement with any creditor of any Key Company;
 
 
(iii)
the appointment of a liquidator (other than in respect of a solvent liquidation of a member of the Group which is not an Obligor), liquidator in bankruptcy, receiver, interim receiver, administrative receiver, trustee in bankruptcy, administrator, compulsory manager or other similar officer in respect of any Key Company or any of its assets; or
 
 
(iv)
the enforcement of any Security over any assets of any Key Company,
 
or any analogous procedure or step is taken in any jurisdiction, provided that (d) above shall not apply to any winding-up petition which is frivolous or vexatious and is discharged, stayed or dismissed within 30 days of commencement or, if earlier, the date on which it is advertised; and
 
 
(e)
in respect of any U.S. Obligor:
 
(i)
it makes a general assignment for the benefit of creditors;
 
(ii)
it commences a voluntary case or proceeding under any U.S. Bankruptcy Law;
 
(iii)
an involuntary case under any U.S. Bankruptcy Law is commenced against it and is not controverted within 30 days or is not dismissed or stayed within 90 days after commencement of the case; or
 
(iv)
an order for relief or other order approving any case of proceeding is entered under any U.S. Bankruptcy Law.
 
“Instructing Group” means:
 
 
(a)
until the Senior Facility Discharge Date, in respect of Clause 21.4 (Authority of Security Agent), the Senior Agent under the Senior Facility Agreement;
 
 
(b)
until the Senior Facility Discharge Date, in respect of any provision of this Agreement other than Clause 21.4 (Authority of Security Agent), the Senior Agent under the Senior Facility Agreement and, prior to the Interim Facility Discharge Date, the Interim Facility Agent under the Interim Facility Agreement;
 
 
(c)
after the Senior Facility Discharge Date and until the Interim Facility Discharge Date, the Interim Facility Agent under the Interim Facility Agreement;
 
 
(d)
after the Senior Discharge Date and the Interim Facility Discharge Date and until the Second Lien Notes Discharge Date, the Second Lien Notes Trustee under the Second Lien Notes Indenture;
 
 
(e)
after the Senior Facility Discharge Date, the Interim Facility Discharge Date and the Second Lien Notes Discharge Date and until  the High Yield Notes Discharge Date, in respect of Clause 21.4 (Authority of Security Agent), the High Yield Notes Trustee;
 
 
(f)
after the Senior Facility Discharge Date, the Interim Facility Discharge Date and the Second Lien Discharge Date until the Unsecured Senior Notes Discharge Date, in respect of any provision of this Agreement other than Clause 21.4 (Authority of Security Agent), the Unsecured Senior Notes Trustee; and
 
 
(g)
after the Senior Discharge Date until the High Yield Notes Discharge Date, in respect of any provision of this Agreement other than Clause 21.4 (Authority of Security Agent), the High Yield Notes Trustee.
 
 
-9-
 
 
“Instructing Second Lien Agent” means the Interim Facility Agent under the Interim Facility Agreement until the Interim Facility Discharge Date and, after the Interim Facility Discharge Date until the Second Lien Notes Discharge Date, the Second Lien Notes Trustee.
 
“Intercompany Borrower” means:
 
 
(a)
any Original Intercompany Borrower; and
 
 
(b)
any member of the Group which has become an Intercompany Borrower in accordance with Clause 32.15 (Assignments and transfers by Intercompany Lenders and Intercompany Borrowers) or Clause 32.16 (Accession of Intercompany Borrowers and Intercompany Lenders),
 
which in each case has not ceased to be an Intercompany Borrower in accordance with this Agreement.
 
“Intercompany Debt” means all present and future moneys, debts and liabilities due, owing or incurred by any member of the Group which is an Obligor to any other member of the Group (in each case, whether alone or jointly, or jointly and severally, with any other person, whether actually or contingently, and whether as principal, surety or otherwise) (other than Basell Sales and Marketing B.V., Basell Polylefins Company B.V.B.A., Basell Capital Corporation, LyondellBasell Receivables I, LLC and any other Securitization Entity (as defined in the Senior Facility Agreement) together with any related Additional Debt, but excluding any High Yield Notes On-Loan Debt provided that, without prejudice to any rights of any Senior Party under this Agreement, any provisions herein with respect to Intercompany Debt and the High Yield Notes and the High Yield Notes Finance Parties and High Yield Noteholders shall only apply so far as the High Yield Notes and the High Yield Notes Finance Parties and High Yield Noteholders are concerned to subordinate the Intercompany Debt to the High Yield Notes On-Loan Debt, the High Yield Notes Guarantee Debt and the High Yield Notes (not including in respect of this proviso any Additional Debt in respect thereof that is refinancing debt).
 
“Intercompany Documents” means all documents, agreements and instruments evidencing any Intercompany Debt.
 
“Intercompany Lender” means:
 
 
(a)
any Original Intercompany Lender; and
 
 
(b)
any member of the Group which has become an Intercompany Lender in accordance with Clause 32.15 (Assignments and transfers by Intercompany Lenders and Intercompany Borrowers) or Clause 32.16 (Accession of Intercompany Borrowers and Intercompany Lenders),
 
which in each case has not ceased to be an Intercompany Lender in accordance with this Agreement.
 
“Intercompany Recoveries” means the aggregate of all moneys and other assets received or recovered (whether by exercising any set-off or otherwise) from time to time by any Intercompany Lender under or in connection with any Intercompany Debt.
 
“Interest Period” means, in relation to a particular loan under a Finance Document, each relevant interest period provided for under such Finance Document.
 
“Interim Facility” means the interim term loan facility made available under the Interim Facility Agreement.
 
“Interim Facility Agreement” means the $8,000,000,000 bridge loan agreement dated on or about the date of this Agreement between, among others, the Company, LyondellBasell Finance Company, as borrower, certain subsidiaries of the Company as guarantors and the Interim Facility Finance Parties.
 
 
-10-
 

“Interim Facility Debt” means all present and future moneys, debts and liabilities due, owing or incurred by any Obligor to any Interim Facility Finance Party under or in connection with any Interim Facility Finance Document (in each case, whether alone or jointly, or jointly and severally, with any other person, whether actually or contingently, and whether as principal, surety or otherwise) together with any related Additional Debt.
 
“Interim Facility Declared Default” means an Interim Facility Default which has resulted in the Interim Facility Agent exercising any of its rights to accelerate the principal of the Interim Facility Debt or the principal being automatically accelerated in each case under section 7.02 of the Interim Facility Agreement.
 
“Interim Facility Default” means an event of default under the Interim Facility Agreement.
 
“Interim Facility Discharge Date” means the date on which the Security Agent is satisfied (acting reasonably) that all Interim Facility Debt has been fully and irrevocably paid or discharged and all commitments of the Interim Facility Finance Parties in respect of the Interim Facility Debt have expired or been cancelled.
 
“Interim Facility Finance Documents” means the Loan Documents as defined in the Interim Facility Agreement.
 
“Interim Facility Finance Parties” means the Finance Parties as defined in the Interim Facility Agreement.
 
“Interim Facility Lenders” means the lenders under the Interim Facility Agreement.
 
“Interim Facility Payment Default” means any Interim Facility Default relating to a non-payment of principal or interest or arrangement, underwriting, commitment or conversion fees.
 
“Interim Facility Recoveries” means the aggregate of all moneys and other assets received or recovered (whether by exercising any set-off or otherwise) from time to time by any Interim Facility Finance Party under or in connection with any Interim Facility Debt; provided, however, that for purposes of Section 13.1 (Turnover), it shall mean Interim Facilities Recoveries as so defined under or in connection with the Interim Facility Security Documents.
 
“Interim Facility Security Documents” means the security documents that may at any time be entered into by a member of the Group as Security in favour of a Senior Secured Party for any of the present and future moneys, debts and liabilities due, owing or incurred by it to any Senior Secured Party under or in connection with any Interim Facility Finance Document.
 
“Investor” means:
 
 
(a)
any Original Investor; and
 
 
(b)
any person which has become an Investor in accordance with Clause 32.10 (Assignments and transfers by Investors),
 
which in each case has not ceased to be an Investor in accordance with this Agreement.
 
“Investor Debt” means all present and future moneys, debts and liabilities due, owing or incurred by any Obligor to any Investor under or in connection with any Investor Document, including any dividends and any advisory, monitoring or management fee (in each case, whether alone or jointly, or jointly and severally, with any other person, whether actually or contingently, and whether as principal, surety or otherwise), together with any related Additional Debt provided that, without prejudice to any rights of any Senior Finance Party and Interim Facility Finance Party under this Agreement, any provisions herein with respect to Investor Debt and the High Yield Notes and the High Yield Notes Finance Parties and High Yield Noteholders shall only apply so far as the High Yield Notes and the High Yield Notes Finance Parties and High Yield Noteholders are concerned to subordinate the Investor Debt outstanding on the issue of the High Yield Notes.
 
 
-11-
 

“Investor Documents” means:
 
 
(a)
the Management Agreement; and
 
 
(b)
any other document (including articles of association or other constitutional documents), agreement or instrument under or pursuant to which any sum is or becomes or is capable of becoming due, owing or incurred from or by any Obligor to any Investor in its capacity as Investor (and not as an officer or employee or otherwise).
 
“Investor Recoveries” means the aggregate of all moneys and other assets received or recovered (whether by exercising any set-off or otherwise) from time to time by any Investor under or in connection with any Investor Debt.
 
 “Issuer Intercompany Debt” means the Intercompany Debt due, owing or incurred to the Company.
 
“Junior Creditor” means:
 
 
(a)
until the Senior Discharge Date, the High Yield Noteholders and the Subordinated Parties; and
 
 
(b)
after the Senior Discharge Date and until the High Yield Notes Discharge Date, the Subordinated Parties.
 
“Junior Debt” means:
 
 
(a)
until the Senior Discharge Date, the High Yield Notes Guarantee Debt, the High Yield Notes On-Loan Debt and the Subordinated Debt; and
 
 
(b)
after the Senior Discharge Date and until the High Yield Notes Discharge Date, the Subordinated Debt.
 
“Key Company” means each of the Company, Basell Funding, each Obligor and, prior to the Senior Facility Discharge Date and Interim Facility Discharge Date, any Material Subsidiary or Significant Subsidiary as defined under the Senior Facility Agreement or the Interim Facility Agreement.
 
“LyondellBasell Finance Company” means LyondellBasell Finance Company, a Delaware corporation.
 
“Management Agreement” means the management agreement between among others, the Company and Nell Limited.
 
“Material Adverse Effect” means a material adverse effect on or material adverse change in:
 
 
(a)
the financial condition, assets or business of the Group taken as a whole (after taking into account any warranty, indemnity or right of recourse against any third party with respect to the relevant event or circumstances (including, without limitation, coverage by insurances)) where “taking into account” includes the consideration of all relevant facts and circumstances including the creditworthiness of the relevant third party, the timing and likelihood of successful recoveries and potential counterclaims and other claims against any of the Obligors;
 
 
(b)
the ability of the Obligors taken as a whole to perform and comply with their payment obligations as they fall due under any Senior Finance Document or their financial covenant obligations under the Senior Finance Documents;
 
 
-12-
 

 
(c)
the validity, legality or enforceability of any Senior Finance Document in a manner which would be materially adverse to the interests of the Senior Lenders; or
 
 
(d)
the validity, legality or enforceability of any Security expressed to be created pursuant to any Security Document or on the priority and ranking of any of that Security, in either case in a manner which would be materially adverse to the interests of the Senior Lenders.
 
“Merger Agreement” means the Agreement and Plan of Merger among the Company, BIL Acquisition Holdings Limited and Target, dated as of July 16, 2007.
 
“Noteholders” means the holders of the Second Lien Notes, the Unsecured Senior Notes and the High Yield Notes.
 
“Notes Finance Documents” means the Second Lien Notes Finance Documents, the Unsecured Senior Notes Finance Documents and the High Yield Notes Finance Documents.
 
“Notes Finance Parties” means the Second Lien Notes Finance Parties, the Unsecured Senior Notes Finance Parties and the High Yield Notes Finance Parties.
 
“Obligor” means the Company, each Original Obligor, each person who becomes a Borrower or a Guarantor (each as defined in the Senior Facility Agreement) after the date hereof, each Additional Guarantor (as defined in the Interim Facility Agreement), each Second Lien Notes Guarantor, each Unsecured Senior Notes Guarantor and each High Yield Notes Guarantor.
 
“Original Obligor” means an Original Borrower or an Original Guarantor.
 
“Parallel Debt” means the Security Agent Claim created under Clause 24.6 (Parallel Debt).
 
“Party” means a party to this Agreement.
 
“Permitted High Yield Notes Guarantee Payments” means the payments, receipts and set-offs in relation to the High Yield Notes Guarantees that are permitted by Clause 11.2 (Permitted High Yield Notes Guarantee Payments and Permitted High Yield Notes On-Loan Payments) as long as they are so permitted.
 
“Permitted High Yield Notes On-Loan Payments” means the payments, receipts and set-offs in relation to the High Yield Notes On-Loan that are permitted by Clause 11.2 (Permitted High Yield Notes Guarantee Payments and Permitted High Yield Notes On-Loan Payments) as long as they are so permitted.
 
“Permitted Intercompany Payments” means the payments, receipts and set-offs permitted by Clause 11.4 (Permitted Intercompany Payments) as long as they are so permitted.
 
“Permitted Investor Payments” means the payments, receipts and set-offs permitted by Clause 11.3  (Permitted Investor Payments) as long as they are so permitted.
 
“Permitted Junior Securities” means:
 
 
(a)
equity securities of any Holding Company of BI S.à.r.l. or (ii) debt securities of any Holding Company of BI S.à.r.l. with no guarantee or security from BI S.à.r.l. or any Subsidiary of it or other member of the Group;
 
 
(b)
equity securities of BI S.à.r.l. or (ii) debt securities of BI S.à.r.l. with no security from BI S.à.r.l. or any Subsidiary of it or other member of the Group; and
 
 
-13-
 

 
(c)
equity securities of the Company issued to any Investor or to any High Yield Noteholders by virtue of their capacity as such or debt securities of the Company issued in compliance with the High Yield Notes Major Terms and High Yield Notes Guarantee Maturity Provisions,
 
provided that any such issue of securities is not in violation of any other term of this Agreement or any other Finance Document.
 
“Permitted Payment” means a Permitted High Yield Notes Guarantee Payment, a Permitted High Yield Notes On-Loan Payment, a Permitted Intercompany Payment or a Permitted Investor Payment.
 
“Recovering Creditor” has the meaning given to it in Clause 24.1 (Payments to Secured Parties, High Yield Notes Finance Parties and High Yield Noteholders).
 
“Recovery” has the meaning given to it in Clause 24.1 (Payments to Secured Parties, High Yield Notes Finance Parties and High Yield Noteholders).
 
“Relevant High Yield Notes Default” has the meaning given to it in Clause 19.2.1 (Permitted High Yield Notes On-Loan and Permitted High Yield Notes Security Documents enforcement).
 
“Relevant Jurisdiction” means, in relation to an Obligor:
 
 
(a)
its jurisdiction of incorporation;
 
 
(b)
any jurisdiction where any asset subject to or intended to be subject to a Security Document is situated;
 
 
(c)
any jurisdiction where it conducts its business; and
 
 
(d)
the jurisdiction whose laws govern the perfection of any of the Security Documents entered into by it.
 
“Reports” means the documents listed in Schedule 1.01(d) to the Interim Facility Agreement.
 
“Representative” means (ii) the Senior Agent in respect of the Senior Facility Finance Parties, (ii) the Interim Facility Agent in respect of the Interim Facility Finance Parties, (iii) the Second Lien Notes Trustee in respect of the Second Lien Noteholders and (iv) the Unsecured Senior Notes Trustee in respect of the Unsecured Senior Noteholders.
 
“Reservations” means:
 
 
(a)
any legal principle that equitable remedies are remedies which may be granted or refused at the discretion of the court;
 
 
(b)
the limitation of enforcement by laws relating to bankruptcy, insolvency, liquidation, reorganisation, court schemes, moratoria, administration and other laws generally affecting the rights of creditors;
 
 
(c)
the time barring of claims under any applicable limitation laws (including the Limitation Acts);
 
 
(d)
the possibility that an undertaking to assume liability for or to indemnify a person against non-payment of stamp duty may be void;
 
 
(e)
defences of set-off or counterclaim and similar principles, rights and defences under the laws of any jurisdiction in which the relevant obligations under the Senior Finance Documents may have to be performed;
 
 
-14-
 

 
(f)
the possibility that a court may strike out provisions of a contract as being invalid for reasons of oppression, undue influence or similar reasons; and
 
 
(g)
any other reservations or qualifications of law (but not of fact) expressed in any legal opinions,
 
in each case which are specifically referred to in any legal opinion delivered pursuant to any condition to drawdown or accession.
 
“Responsible Officer” when used in this Agreement means any officer within the corporate trust and agency department of any High Yield Notes Trustee, including any vice president, assistant vice president, assistant treasurer, trust officer or any other officer of such High Yield Notes Trustee who customarily performs functions similar to those performed by such officers, or to whom any corporate trust matter is referred because of such individual’s knowledge of and familiarity with the particular subject and who shall have direct responsibility for the administration of this Agreement and any High Yield Notes Indenture.
 
“Second Lien Debt” means the Interim Facility Debt and the Second Lien Notes Debt.
 
“Second Lien Discharge Date” means the later of the Interim Facility Discharge Date and the Second Lien Notes Discharge Date.
 
“Second Lien Finance Documents” means the Interim Facility Finance Documents and the Secured Lien Notes Finance Documents.
 
“Second Lien Noteholders” means the holders of the Second Lien Notes.
 
“Second Lien Notes” means the notes to be issued by the Second Lien Notes Issuer that comply with Schedule 10.
 
“Second Lien Notes Debt” means all present and future moneys, debts and liabilities due, owing or incurred by the Second Lien Notes Issuer and/or the Second Lien Notes Guarantors to any Second Lien Notes Finance Party or Second Lien Noteholder under or in connection with the Second Lien Notes Finance Documents (in each case, whether alone or jointly, or jointly and severally, with any other person, whether actually or contingently, and whether as principal, surety or otherwise), together with any related Additional Debt; provided, however, that the definition of “Second Lien Notes Debt” shall not include the Second Lien Notes Trustee Amounts.
 
“Second Lien Notes Declared Default” means a Second Lien Notes Default which has resulted in the Second Lien Notes Finance Parties accelerating all amounts due under the Second Lien Notes.
 
“Second Lien Notes Default” means an event of default under the Second Lien Notes Indenture.
 
“Second Lien Notes Discharge Date” means the date on which all Second Lien Notes Guarantee Debt has been irrevocably and unconditionally discharged in full.
 
“Second Lien Notes Finance Documents” means the Second Lien Notes, the Second Lien Notes Indenture (including the Second Lien Notes Guarantees), this Agreement, the Second Lien Notes Security Documents.
 
“Second Lien Notes Finance Parties” means the Second Lien Notes Trustee (on behalf of itself and the Second Lien Noteholders) and the Security Agent.
 
“Second Lien Notes Guarantees” means the guarantees by the Second Lien Notes Guarantors of the obligations of LyondellBasell Finance Company under the Second Lien Notes and the Second Lien Notes Indenture.
 
 
-15-
 

“Second Lien Notes Guarantors” means the Company and each other Subsidiary of the Company that is or becomes a guarantor of the Second Lien Notes in accordance with the Second Lien Notes Indenture.
 
“Second Lien Notes Indenture” means the indenture governing the Second Lien Notes dated on or about the date of accession of the Second Lien Notes Trustee.
 
“Second Lien Notes Issuer” means LyondellBasell Finance Company or any other entity that issues the Second Lien Notes in compliance with Schedule 10.
 
“Second Lien Notes Payment Default” means any Second Lien Notes Default relating to a non-payment of principal or interest.
 
“Second Lien Notes Recoveries” means the aggregate of all moneys and other assets received or recovered (whether by exercising any set-off or otherwise) from time to time by any Second Lien Notes Finance Party or Second Lien Noteholder under or in connection with the Second Lien Notes Debt; provided, however that for purposes of Section 13.1 (Turnover), it shall mean Second Lien Notes Recoveries as so defined under or in connection with the Second Lien Notes Security Documents only; provided, further, however, that the definition of “Second Lien Notes Recoveries” shall not include the Second Lien Notes Trustee Amounts.
 
“Second Lien Notes Security Documents” means the Security granted in accordance with the Second Lien Notes Indenture to secure all or any part of the Second Lien Notes Debt.
 
“Second Lien Notes Trustee” means any entity acting as trustee under any issue of the Second Lien Notes and which accedes to this Agreement pursuant to Clause 32.5 (Accession of Second Lien Notes Trustee).
 
“Second Lien Notes Trustee Amounts” means amounts payable to the Second Lien Notes Trustee under this Agreement, any indemnity provisions for costs and expenses in favour of the Second Lien Notes Trustee contained in the Second Lien Notes Indenture and under the provisions of the Second Lien Notes Guarantees, all compensation for services provided by the Second Lien Notes Trustee which is payable to the Second Lien Notes Trustee pursuant to this Agreement, the Second Lien Notes Indenture and the Second Lien Notes Guarantees and all out-of-pocket costs and expenses properly incurred by the Second Lien Notes Trustee in carrying out its duties or performing any service pursuant to the terms of the Second Lien Notes Indenture, the Second Lien Notes Guarantees and this Agreement, including, without limitation (a) compensation for the costs and expenses of the collection by the Second Lien Notes Trustee of any amount payable to the Second Lien Notes Trustee for the benefit of the Second Lien Noteholders, and (b) costs and expenses of the Second Lien Notes Trustee’s agents and counsel (but excluding (i) any payment in relation to any unpaid costs and expenses incurred in respect of any litigation by or on behalf of any Second Lien Notes Trustee or any Second Lien Noteholders against any of the Senior Finance Parties and (ii) any payment made directly or indirectly on or in respect of any amounts owing under any Second Lien Notes (including principal, interest, premium or any other amounts to any of the Second Lien Noteholders)).
 
“Second Lien Security Documents” means the Interim Facility Security Documents and the Second Lien Notes Security Documents.
 
“Security” means a mortgage, charge, pledge, lien or other security interest securing any obligation of any person or any other agreement or arrangement having a similar effect.
 
“Security Documents” means the Senior Security Documents, the Interim Facility Security Documents, the Second Lien Notes Security Documents, the Arco Notes Security Documents, the Equistar Notes Security Documents and the High Yield Notes Security Documents.
 
“Senior Agreements” means the Senior Facility Agreement (prior to the Senior Facility Discharge Date), the Interim Facility Agreement (prior to the Interim Facility Discharge Date), the Second Lien Notes Indenture (prior to the Second Lien Notes Discharge Date) and the Unsecured Senior Notes Indenture.
 
 
-16-
 

“Senior Debt” means the Senior Facility Debt, the Interim Facility Debt, the Second Lien Notes Debt and the Unsecured Senior Notes Debt.
 
“Senior Declared Default” means a Senior Facility Declared Default, an ABL Declared Default, an Interim Facility Declared Default, a Second Lien Notes Declared Default and/or an Unsecured Senior Notes Declared Default.
 
“Senior Default” means a Senior Facility Default, an ABL Default, an Interim Facility Default, a Second Lien Notes Default and/or an Unsecured Senior Notes Default.
 
“Senior Discharge Date” means the last to occur of (a) the Senior Facility Discharge Date, (b) the Interim Facility Discharge Date, (c) the Second Lien Notes Discharge Date and (d) the Unsecured Senior Notes Discharge Date.
 
“Senior Facility Agreement” means the  credit agreement dated on or about the date of this Agreement between the Company, certain Subsidiaries of the Company as borrowers and guarantors and the Senior Finance Parties.
 
“Senior Facility Debt” means all present and future moneys, debts and liabilities due, owing or incurred by any Obligor to any Senior Finance Party under or in connection with any Senior Finance Document, (in each case, whether alone or jointly, or jointly and severally, with any other person, whether actually or contingently, and whether as principal, surety or otherwise), together with any related Additional Debt but excluding any Hedging Debt.
 
“Senior Facility Declared Default” means a Senior Facility Default which has resulted in the Senior Agent exercising any of its rights to declare all amounts then outstanding to be immediately due and payable under Section 8.02 of the Senior Facility Agreement or as a result of which the debt thereunder is automatically accelerated pursuant to the Senior Facility Agreement.
 
“Senior Facility Default” means an Event of Default as defined in the Senior Facility Agreement.
 
“Senior Facility Discharge Date” means the date on which the Security Agent is satisfied (acting reasonably) that all Senior Facility Debt, and Hedging Debt has been fully and irrevocably paid or discharged and all commitments of the Senior Finance Parties and the Hedging Banks in respect of the Senior Facility Debt or the Hedging Debt, as the case may be, have expired or been cancelled.
 
“Senior Facilities” means the senior term loan and revolving credit facilities made available under the Senior Facility Agreement.
 
“Senior Finance Documents” means the Loan Documents (as defined in the Senior Facility Agreement) but excluding the Hedging Documents.
 
“Senior Finance Parties” means the Secured Parties as defined in the Senior Facility Agreement.
 
“Senior Lender” means any lender under the Senior Facility Agreement.
 
“Senior Party” means the Senior Finance Party, ABL Finance Party, the Interim Finance Party, the Second Lien Notes Finance Party, the Unsecured Senior Notes Finance Party and the Hedging Banks.
 
“Senior Payment Default” means any Senior Default relating to a non-payment of principal or interest or any failure by an Obligor to pay on the due date or by the end of any applicable grace period following the due date any amount payable pursuant to a Hedging Document in respect of Hedging Debt, at the place and in the currency in which it is expressed to be payable.
 
 
-17-
 

“Senior Recoveries” means the aggregate of all moneys and other assets received or recovered (whether by exercising any set-off or otherwise) from time to time by any Senior Finance Party under or in connection with any Senior Debt.
 
“Senior Representative” means the Senior Agent (prior to the Senior Facility Discharge Date), the Interim Facility Agent (prior to the Interim Facility Discharge Date), the Second Lien Notes Trustee (prior to the Second Lien Notes Discharge Date) and the Unsecured Senior Notes Trustee (prior to the Unsecured Senior Notes Discharge Date).
 
“Senior Secured Debt” means the Senior Facility Debt, the Hedging Debt, the Interim Facility Debt and the Second Lien Notes Debt.
 
“Senior Secured Party” means a Senior Finance Party, a Hedging Bank, an Interim Facility Finance Party or a Second Lien Notes Finance Party.
 
“Senior Secured Representatives” shall mean the Senior Agent (prior to the Senior Facility Discharge Date), the Interim Facility Agent (prior to the Interim Facility Discharge Date) and the Second Lien Notes Trustee (prior to the Second Lien Notes Discharge Date).
 
“Senior Security Documents” means the Security granted in accordance with the Senior Facility Agreement to secure all or any part of the Senior Secured Debt and the Hedging Debt.
 
“Sharing Payment” has the meaning given to it in Clause 24.1 (Payments to Secured Parties, High Yield Notes Finance Parties and High Yield Noteholders).
 
“Subordinated Debt” means any Investor Debt or Intercompany Debt.
 
“Subordinated Party” means any Investor or Intercompany Lender.
 
“Subsidiary” shall mean Subsidiary as defined in any of the Senior Agreements.
 
“Suspension Event” means at any time prior to the Senior Discharge Date:
 
 
(a)
a notice delivered on the instructions of the Instructing Group following an event of default (as defined under the applicable Senior Agreements) relating to a non-payment or, if prior to the Senior Facility Discharge Date, breach of financial covenants (or failure to supply any Compliance Certificate (as defined under the Senior Facility Agreement) in relation to the Senior Facility Agreement); or
 
 
(b)
a notice exercising any right to demand immediate repayment of all amounts thereunder being delivered under the applicable Senior Agreement.
 
“Target” means Lyondell Chemical Company, a Delaware corporation.
 
“Target Group” means the Target and its Subsidiaries.
 
“Tax” means any tax, levy, impost, duty or other charge or withholding of a similar nature (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same).
 
“Trustee Amounts” means the Second Lien Notes Trustee Amounts, the Unsecured Senior Notes Trustee Amounts and the High Yield Notes Trustees Amounts.
 
“Trustees” means the Second Lien Notes Trustee, the Unsecured Senior Notes Trustee and the High Yield Notes Trustee.
 
 
-18-
 

“Unsecured Senior Noteholders” means the holders of the Unsecured Senior Notes.
 
“Unsecured Senior Notes” means the notes to be issued by the Unsecured Senior Notes Issuer that comply with Schedule 11.
 
“Unsecured Senior Notes Debt” means all present and future moneys, debts and liabilities due, owing or incurred by the Unsecured Senior Notes Issuer and/or the Unsecured Senior Notes Guarantors to any Unsecured Senior Notes Finance Party or Unsecured Senior Noteholder under or in connection with the Unsecured Senior Notes Finance Documents (in each case, whether alone or jointly, or jointly and severally, with any other person, whether actually or contingently, and whether as principal, surety or otherwise), together with any related Additional Debt; provided, however, that the definition of “Unsecured Senior Notes Debt” shall not include the Unsecured Senior Notes Trustee Amounts.
 
“Unsecured Senior Notes Declared Default” means an Unsecured Senior Notes Default which has resulted in the Unsecured Senior Notes Finance Parties accelerating all amounts due under the Unsecured Senior  Notes.
 
“Unsecured Senior Notes Default” means an event of default under the Unsecured Senior Notes Indenture.
 
“Unsecured Senior Notes Discharge Date” means the date on which all Unsecured Senior Notes Guarantee Debt has been irrevocably and unconditionally discharged in full.
 
“Unsecured Senior Notes Finance Documents” means the Unsecured Senior Notes, the Unsecured Senior Notes Indenture (including the Unsecured Senior Notes Guarantees) and this Agreement.
 
“Unsecured Senior Notes Finance Parties” means the Unsecured Senior Notes Trustee (on behalf of itself and the Unsecured Senior Noteholders) and the Original Security Agent.
 
“Unsecured Senior Notes Guarantees” means the guarantees by the Unsecured Senior Notes Guarantors of the obligations of LyondellBasell Finance Company under the Unsecured Senior Notes and the Unsecured Senior Notes Indenture.
 
“Unsecured Senior Notes Guarantors” means the Company and each other Subsidiary of the Company that is or becomes a guarantor of the Unsecured Senior Notes in accordance with the Unsecured Senior Notes Indenture.
 
“Unsecured Senior Notes Indenture” means the indenture governing the Unsecured Senior Notes dated on or above the date of accession of the Unsecured Senior Notes Trustee.
 
“Unsecured Senior Notes Issuer” means LyondellBasell Finance Company or any other entity that issues the Unsecured Senior Notes in compliance with Schedule 11.
 
“Unsecured Senior Notes Recoveries” means the aggregate of all moneys and other assets received or recovered (whether by exercising any set-off or otherwise) from time to time by any Unsecured Senior Notes Finance Party or Unsecured Senior Stockholder under or in connection with the Unsecured Senior Notes Debt.
 
“Unsecured Senior Notes Trustee” means any entity acting as trustee under any issue of the Notes and which accedes to this Agreement pursuant to Clause 32.6 (Accession of Unsecured Senior Notes Trustee).
 
“Unsecured Senior Notes Trustee Amounts” means amounts payable to the Unsecured Senior  Notes Trustee under this Agreement, any indemnity provisions for costs and expenses in favour of the Unsecured Senior Notes Trustee contained in the Unsecured Senior Notes Indenture and under the provisions of the Unsecured Senior Notes Guarantees, all compensation for services provided by the Unsecured Senior Notes Trustee which is payable to the Unsecured Senior Notes Trustee pursuant to this Agreement, the Unsecured Senior Notes Indenture and the Unsecured Senior Notes Guarantees and all out-of-pocket costs and expenses properly incurred by the Unsecured Senior Notes Trustee in carrying out its duties or performing any service pursuant to the terms of the Unsecured Senior Notes Indenture, the Unsecured Senior Notes Guarantees and this Agreement, including, without limitation (a) compensation for the costs and expenses of the collection by the Unsecured Senior Notes Trustee of any amount payable to the Unsecured Senior Notes Trustee for the benefit of the Unsecured Senior Noteholders, and (b) costs and expenses of the Unsecured Senior Notes Trustee’s agents and counsel (but excluding (i) any payment in relation to any unpaid costs and expenses incurred in respect of any litigation by or on behalf of any Unsecured Senior Notes Trustee or any Unsecured Senior Noteholders against any of the Senior Finance Parties and (ii) any payment made directly or indirectly on or in respect of any amounts owing under any Unsecured Senior Notes (including principal, interest, premium or any other amounts to any of the Unsecured Senior Noteholders)).
 
 
-19-
 

“US Bankruptcy Law” means the United States Bankruptcy Code of 1978, as amended, or any other United States federal or state bankruptcy, insolvency or similar law.
 
“VAT” means value added tax as provided for in the Value Added Tax Act 1994 and any other tax of a similar nature.
 
1.2
Construction
 
 
1.2.1
Unless a contrary indication appears, any reference in this Agreement to:
 
 
(a)
any “Arco Noteholder”, “Arco Notes Trustee”, the “Company”, “Equistar Noteholder”, “Equistar Notes Trustee”, the “Hedging Bank”, any “High Yield Noteholder”, the “High Yield Notes Trustee”, any “Intercompany Borrower”, any “Intercompany Lender”, the “Interim Facility Agent”, any “Interim Facility Finance Party”, any “Interim Facility Lender”, any “Investor”, the “Issuing Bank”, any “Obligor”, any “Party”, any “Second Lien Noteholder”, the “Second Lien Notes Trustee”, any “Secured Party”, the “Security Agent”, the “Senior Agent”, any “Senior Finance Party”, any “Senior Lender”, “Senior Secured Party”, any “Unsecured Senior Noteholder” or the “Unsecured Senior Note Trustee” shall be construed so as to include its successors in title, assigns and transferees permitted under this Agreement;
 
 
(b)
“actual knowledge” of aTrustee shall be construed to mean that such Trustee shall not be charged with knowledge (actual or otherwise) of the existence of facts that would impose an obligation on it to make any payment or prohibit it from making any payment unless:
 
(i)
a Responsible Officer of such Trustee has received written notice that such payments are required or prohibited by this Agreement or its respective Indenture in which event the Trustee shall be deemed to have actual notice within one Business Day of receiving that notice, or
 
(ii)
in the case of the High Yield Notes Trustee, a Responsible Officer of such High Yield Notes Trustee has not received notice of the Senior Discharge Date pursuant to Clause 29.3 (Discharge of Senior Debt and Hedging Debt) and such payment is to be made out of any receipt or recovery by the High Yield Notes Trustee from a Subsidiary of the Company pursuant to the High Yield Notes Guarantee, other than where such payment is (i) with the consent of the Senior Agent as notified in writing to a Responsible Officer of such High Yield Notes Trustee or (ii) to the High Yield Notes Trustee in respect of any High Yield Notes Trustee Amount;
 
 
(c)
“assets” includes present and future properties, revenues and rights of every description;
 
 
-20-
 

 
(d)
the “equivalent” in any currency (the “first currency”) of any amount in another currency (the “second currency”) shall be construed as a reference to the amount in the first currency which could be purchased with that amount in the second currency at the Security Agent’s spot rate of exchange for the purchase of the first currency with the second currency in the London foreign exchange market at or about 11:00 a.m. on a particular day (or at or about such time and on such date as the Security Agent may from time to time reasonably determine to be appropriate in the circumstances);
 
 
(e)
a “Finance Document”, “Hedging Document”, “High Yield Notes Finance Document”, “Intercompany Document”, “Interim Facility Finance Document”, “Investor Document”, or any other agreement or instrument is a reference to that document or other agreement or instrument as amended or novated but excluding any amendment or novation contrary to this Agreement;
 
 
(f)
“guarantee” means any guarantee, letter of credit, bond, indemnity or similar assurance against loss, or any obligation, direct or indirect, actual or contingent, to purchase or assume any indebtedness of any person or to make an investment in or loan to any person or to purchase assets of any person where, in each case, such obligation is assumed in order to maintain or assist the ability of such person to meet its indebtedness;
 
 
(g)
“indebtedness” includes any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether present or future, actual or contingent;
 
 
(h)
a “person” includes any person, firm, company, corporation, government, state or agency of a state or any association, trust or partnership (whether or not having separate legal personality) or two or more of the foregoing;
 
 
(i)
a “regulation” includes any regulation, rule, official directive, request or guideline (whether or not having the force of law) of any governmental, intergovernmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organisation;
 
 
(j)
“shares” or “share capital” include equivalent ownership interests (and “shareholder” and similar expressions shall be construed accordingly);
 
 
(k)
“set-off” includes combining accounts and payment netting;
 
 
(l)
a provision of law is a reference to that provision as amended or re-enacted; and
 
 
(m)
a time of day is a reference to New York time.
 
1.2.2
Dutch Terms
 
In this Agreement, where it relates to a Dutch entity, a reference to:
 
 
(a)
a necessary action to authorise, where applicable, includes without limitation:
 
(i)
any action required to comply with the Dutch Works Council Act (Wet op de ondernemingsraden); and
 
(ii)
obtaining unconditional positive advice (advies) from each competent works council;
 
 
-21-
 
 
 
(b)
a winding-up, administration or dissolution includes a Dutch entity being:
 
(i)
declared bankrupt (failliet verklaard);
 
(ii)
dissolved (ontbonden);
 
 
(c)
a moratorium includes surseance van betaling and granted a moratorium includes surseance verleend;
 
 
(d)
a trustee in bankruptcy includes a curator;
 
 
(e)
an administrator includes a bewindvoerder;
 
 
(f)
a receiver or an administrative receiver does not include a curator or bewindvoerder; and
 
 
(g)
an attachment includes a beslag.
 
 
1.2.3
German Terms
 
In this Agreement, where it relates to a German entity, a reference to:
 
 
(a)
a person being unable to pay its debts includes that person being in a state of Zahlungsunfähigkeit under section 17 of the German Insolvency Law (Insolvenzordnung) or being over indebted (überschuldet) under section 19 of the German Insolvency Law (Insolvenzordnung) or being at risk of being unable to pay its debts as they fall due (drohende Zahlungsunfähigkeit);
 
 
(b)
a compulsory manager, receiver or administrator includes an Insolvenzverwalter or creditor’s trustee (Sachwalter);
 
 
(c)
a winding up, administration or dissolution includes insolvency proceedings (Insolvenzverfahren); and
 
 
(d)
promptly means unverzüglich as contemplated by section 121, subparagraph (i) of the German Civil Code.
 
 
1.2.4
Luxembourg Terms
 
In this Agreement, a reference used in connection with a Luxembourg Obligor to:
 
 
(a)
a winding up, administration or dissolution includes, without limitation, bankruptcy (faillite), insolvency, voluntary or judicial liquidation (liquidation volontaire ou judicaire), composition with creditors (concordat préventif de faillite), reprieve from payment (sursis de paiement), controlled management (gestion contrôlé), fraudulent conveyance (action pauliana), general settlement with creditors, reorganisation or similar laws affecting the rights of creditors generally;
 
 
(b)
a receiver, administrative receiver, administrator or the like includes, without limitation, a juge délégué, expert-vérificateur, commissaire, juge-commisaire, liquidateur or curateur;
 
 
(c)
a security interest includes any hypothéque, nantissement, gage, privilege, sûreté réelle, droit de retention and any type of real security or agreement or arrangement having a similar effect and any transfer of title by way of security; and
 
 
-22-
 

 
(d)
a person being unable to pay its debts includes that person being in a state of cessation of payments (cessation de paiements).
 
 
1.2.5
Section, Clause and Schedule headings are for ease of reference only.
 
 
1.2.6
A default, an event of default or potential event of default, however described, is “continuing” if it has not been remedied or waived in accordance with the terms of the relevant agreement.
 
 
1.2.7
In determining whether any Senior Debt, Hedging Debt, High Yield Notes Debt, High Yield Notes Guarantee Debt or High Yield Notes On-Loan Debt has been irrevocably paid or discharged, contingent liabilities (such as the risk of clawback from a preference claim) will be disregarded except to the extent that there is a reasonable likelihood that those contingent liabilities will become actual liabilities.
 
 
1.2.8
The High Yield Notes Finance Parties and High Yield Noteholders are only entitled to participate in the proceeds of the Charged Assets to the extent that such proceeds are derived from assets subject to the High Yield Notes Security Documents and the rights of the High Yield Noteholders in respect of such proceeds shall in any event be subject to the priorities set out in Clause 20 (Application of Recoveries); provided, however, that this shall not affect the High Yield Notes Trustee from claiming and being paid the High Yield Notes Trustee Amounts.
 
1.3
Alternative debt instruments
 
If the Second Lien Notes and/or the Unsecured Senior Notes are not issued and any person executes an alternative refinancing of the Interim Facility which refinances the Interim Facility Debt in full or in part or the Extended Notes (as defined in the Interim Facility Agreement) are issued and replace the Interim Facility Debt in full, references in this Agreement to the Second Lien Notes and/or Unsecured Senior Notes (as applicable based on whether such refinancing debt benefits from the Security pledged under the Second Lien Notes Security Documents) and related definitions shall be construed so as to apply to such alternative refinancing, the Extended Loans and the Extended Notes and all provisions relation to the Interim Facility Debt, the Interim Facility Finance Parties and the like shall no longer apply provided that such alternative refinancing is unsubordinated and is not otherwise in breach of the Finance Documents and is undertaken by LyondellBasell Finance Company (or any Holding Company thereof which is a Subsidiary of the Company) and is on terms which are subject to, and consistent with, this Agreement and so that such alternative refinancing is treated under this Agreement in the same manner as the issue of the Second Lien Notes and/or the Unsecured Senior Notes would have been treated.
 
2.
RANKING
 
2.1
Contractual subordination
 
 
2.1.1
Unless expressly provided to the contrary in this Agreement, Debt will rank in right and priority of payment in the following order within the sub-group consisting of members of the Group other than the Company:
 
 
(a)
first, the Senior Debt, the ABL Debt and the Hedging Debt, pari passu between themselves;
 
 
(b)
second, the High Yield Notes Guarantee Debt and the High Yield Notes On-Loan Debt; and
 
 
(c)
third, the Intercompany Debt (other than Intercompany Debt due, owing or incurred by the Company),
 
in each case in accordance with the terms of this Agreement.
 
 
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2.1.2
Unless otherwise expressly provided in this Agreement, Debt of the Company will rank in right and priority of payment in the following order:
 
 
(a)
first, the High Yield Notes Debt, any Hedging Debt and any guarantee of the Senior Debt and any guarantee of the Hedging Debt; and
 
 
(b)
second, the Investor Debt and Intercompany Debt due, owing or incurred by the Company.
 
2.2
Intercompany Debt
 
This Agreement does not purport to rank any of the Investor Debt and Intercompany Debt as between themselves.
 
3.
ABL INTERCREDITOR MATTERS
 
3.1
General
 
The ABL Agent is entering into this Agreement on behalf of the ABL Finance Parties solely to accept and implement the benefits of subordination of the High Yield Notes Guaranteed Debt, the High Yield Notes On-Loan Debt and the Intercompany Debt as specified herein.  Nothing in this Agreement affects in any way the rights of the ABL Finance Parties under the ABL Finance Documents with respect to the ABL Collateral or otherwise, or imposes any obligation on any ABL Finance Party, except as expressly provided in clause 29.
 
3.2
ABL Intercreditor Agreement
 
The Parties hereto hereby authorize the Security Agent to enter into the ABL Intercreditor Agreement in the form attached hereto as Exhibit 1 (with such changes as the Security Agent and the Instructing Group may agree) and specifically acknowledge the terms thereof.  Such ABL Intercreditor Agreement may not be amended or modified without the prior consent of the Instructing Group.
 
4.
HEDGING DEBT
 
4.1
Hedging Debt
 
Until the Senior Facility Discharge Date, no Hedging Bank shall, except with the prior consent of the Senior Agent under the Senior Facility Agreement:
 
 
4.1.1
exercise or enforce any right against any Obligor under any of the Security Documents;
 
 
4.1.2
permit to subsist or receive any Security, or any guarantee, for, or in respect of, any Hedging Debt, other than under any Senior Security Document and the guarantees in any applicable Senior Finance Document;
 
 
4.1.3
take or omit to take any action whereby the ranking in respect of the Security contemplated by this Agreement may be impaired; or
 
 
4.1.4
assign any of its rights or transfer any of its rights or obligations under any Hedging Document to any person unless and until the Security Agent executes an Accession Agreement duly completed and signed on behalf of that person.
 
 
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4.2
Hedging Documents
 
Each Hedging Bank shall promptly provide to the Security Agent copies of all Hedging Documents to which that Hedging Bank is a party.
 
4.3
Amendments to Hedging Documents
 
Until the Senior Facility Discharge Date, no Obligor or Hedging Bank shall, except with the prior consent of the Senior Agent under the Senior Facility Agreement, amend or give any waiver or consent under any provision of any Hedging Document which would result in:
 
 
4.3.1
any Hedging Document ceasing to comply with the requirements of this Clause 4; or
 
 
4.3.2
the assignment of any of its rights or transfer of any of its rights or obligations under any Hedging Document to any person unless and until the Security Agent executes an Accession Agreement duly completed and signed on behalf of that person,
 
other than any amendment, waiver or consent purely of a technical or administrative nature.
 
4.4
Termination of Hedging Documents
 
If:
 
 
(a)
the Senior Discharge Date would have occurred but for the fact that only Hedging Debt  remains outstanding; and
 
 
(b)
a Hedging Bank is requiring any Interim Facility Finance Party to refrain from taking any step which, but for this Agreement, it would not have been prevented from taking,
 
the Security Agent may, on the instructions of the Interim Facility Agent under the Interim Facility Agreement, direct the relevant Obligor to (and, promptly on receipt of that direction, that Obligor shall) terminate or procure the termination of all outstanding derivative transactions under the Hedging Documents in relation to that Hedging Bank.
 
4.5
Hedging Guarantee
 
Each Obligor confirms that the Hedging Banks are entitled to rely on the guarantee in Article XI (Guarantee) of the Senior Facility Agreement granted by such Obligor (in each case subject to any limitations therein or in any Accession Agreement by which such Obligor became party to the Senior Facility Agreement).
 
5.
OTHER SENIOR DEBT
 
5.1
Interim Facility Debt
 
Until the Senior Facility Discharge Date, no Interim Facility Finance Party shall, except with the prior consent of the Senior Agent under the Senior Facility Agreement:
 
 
(a)
exercise or enforce any right against any Obligor under any of the Interim Facility Security Documents;
 
 
(b)
exercise any set-off against any Interim Facility Debt;
 
 
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(c)
permit to subsist or receive any Security, or any guarantee, for, or in respect of, any Interim Facility Debt, other than under any Interim Facility Security Document and the guarantees in any applicable Interim Facility Finance Document;
 
 
(d)
take or omit to take any action whereby the ranking in respect of the Security contemplated by this Agreement may be impaired; or
 
 
(e)
in the case of the Interim Facility Agent, assign any of its rights or transfer any of its obligations under the Interim Facility Finance Documents unless and until the Security Agent executes an Accession Agreement duly completed and signed by the Interim Facility Agent.
 
5.2
Issue of Second Lien Notes
 
No member of the Group shall enter into the Second Lien Notes Indenture unless:
 
 
(a)
the Senior Agent has received a copy of the proposed Second Lien Notes Finance Documents in substantially final form before the proposed date of issue of the Second Lien Notes;
 
 
(b)
the net proceeds of the issuance of the Second Lien Notes will be used to repay the Interim Facility Debt;
 
 
(c)
the terms of the Second Lien Notes are consistent in all material respects with Schedule 10 or are otherwise approved by the Senior Agent (acting reasonably); and
 
 
(d)
the Second Lien Notes Issuer, the Second Lien Notes Trustee and each of the Second Lien Notes Guarantors execute this Agreement or sign an Accession Agreement before or concurrently with the issuance of the Second Lien Notes.
 
5.3
Other Second Lien Notes Limitations
 
Until the Senior Facility Discharge Date, no Second Lien Notes Finance Party or Second Lien Noteholder shall, except with the prior consent of the Senior Agent under the Senior Facility Agreement:
 
 
(a)
exercise or enforce any right against any Obligor under any of the Second Lien Notes Security Documents;
 
 
(b)
exercise any set-off against any Second Lien Notes Debt;
 
 
(c)
permit to subsist or receive any Security, or any guarantee, for, or in respect of, any Second Lien Notes Debt, other than under any Second Lien Notes Security Document and the guarantees in any applicable Second Lien Notes Finance Document;
 
 
(d)
take or omit to take any action whereby the ranking in respect of the Security contemplated by this Agreement may be impaired; or
 
 
(e)
in the case of the Second Lien Notes Trustee, assign any of its rights or transfer any of its obligations under the Second Lien Notes Finance Documents unless and until the Security Agent executes an Accession Agreement duly completed and signed by the Second Lien Notes Trustee.
 
5.4
Issue of Unsecured Senior Notes
 
No member of the Group shall enter into the Unsecured Senior Notes Indenture unless:
 
 
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(a)
the Senior Agent has received a copy of the proposed Unsecured Senior Notes Finance Documents in substantially final form before the proposed date of issue of the Unsecured Senior Notes;
 
 
(b)
the net proceeds of the issuance of the Unsecured Senior Notes will be used to repay the Interim Facility Debt;
 
 
(c)
the terms of the Unsecured Senior Notes are consistent in all material respects with Schedule 11 or are otherwise approved by the Senior Agent (acting reasonably); and
 
 
(d)
the Unsecured Senior Notes Issuer, the Unsecured Senior Notes Trustee and each of the Unsecured Senior Notes Guarantors execute this Agreement or sign an Accession Agreement before or concurrently with the issuance of the Unsecured Senior Notes.
 
5.5
Other Unsecured Senior Notes Limitations
 
Until the Senior Facility Discharge Date, no Unsecured Senior Notes Finance Party or Unsecured Senior Noteholder shall, except with the prior consent of the Senior Agent under the Senior Facility Agreement:
 
 
(a)
permit to subsist or receive any Security, or any guarantee, for, or in respect of, any Unsecured Senior Notes Debt, other than as may be permitted under the Finance Documents; and
 
 
(b)
in the case of the Unsecured Senior Notes Trustee, assign any of its rights or transfer any of its obligations under the Unsecured Senior Notes Finance Documents unless and until the Security Agent executes an Accession Agreement duly completed and signed by the Unsecured Senior Notes Trustee.
 
6.
HIGH YIELD NOTES DEBT
 
6.1
High Yield Notes On-Loan Debt
 
The High Yield Notes On-Loan shall:
 
 
6.1.1
provide for payment of interest in a manner consistent in all material respects with the High Yield Notes Finance Documents and only to the extent permitted under Clause 11.2 (Permitted High Yield Notes Guarantee Payments and Permitted High Yield Notes On-Loan Payments);
 
 
6.1.2
provide for a scheduled maturity date not prior to the maturity date of the High Yield Notes and provide that it may not be repaid prior to such maturity date unless such repayment is expressly made subject to this Agreement (and accordingly it is agreed that no such repayment may be made unless the payment is expressly permitted under the Senior Agreements or the Senior Discharge Date has occurred);
 
 
6.1.3
not include the benefit of any Security;
 
 
6.1.4
not benefit from any guarantee or indemnity given by any member of the Group except to the extent of an indemnity which is expressly made subject to this Agreement (and accordingly it is agreed that no such payment may be made under such indemnity unless the payment is expressly permitted under the Senior Agreements or the Senior Discharge Date has occurred); and
 
 
6.1.5
provide that any transferee thereof must sign an Accession Agreement.
 
 
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6.2
Prohibited High Yield Notes Guarantee Debt Payments, Guarantees and Security
 
Until the Senior Discharge Date, except with the prior consent of each Senior Representative, no High Yield Notes Finance Party or High Yield Noteholder shall:
 
 
6.2.1
demand or receive payment, repayment or prepayment from any High Yield Notes Guarantor of any principal, interest or other amount on or in respect of, or any distribution from any High Yield Notes Guarantor in respect of, any High Yield Notes Guarantee Debt in cash or in kind or apply any such money or property in or towards discharge of any High Yield Notes Guarantee Debt except as permitted by Clause 11.2 (Permitted High Yield Notes Guarantee Payments and Permitted High Yield Notes On-Loan Payments), Clause 14.3 (Filing of claims) or Clause 19.2 (Permitted High Yield Notes On-Loan and Permitted High Yield Notes Security Documents enforcement);
 
 
6.2.2
exercise any set-off against any High Yield Notes Guarantee Debt, except as permitted by Clause 11.2 (Permitted High Yield Notes Guarantee Payments and Permitted High Yield Notes On-Loan Payments), Clause 14.3 (Filing of claims) or Clause 19.2 (Permitted High Yield Notes On-Loan and Permitted High Yield Notes Security Documents enforcement); or
 
 
6.2.3
permit to subsist or receive any Security over any assets of any member of the Group or any guarantee from any member of the Group for, or in respect of, any High Yield Notes Guarantee Debt, other than under any High Yield Notes Security Document and the High Yield Notes Guarantees;
 
provided, however, that, after the Senior Facility Discharge Date and the Interim Facility Discharge Date, the consent of the Senior Representatives shall be deemed to have been given to an action prescribed in clause 6.2.3 to the extent such  action was not prohibited by the Senior Agreements.
 
Nothing in this Clause 6.2 shall preclude the payment of, and receipt by the High Yield Notes Trustee of, any High Yield Notes Trustee Amounts.
 
6.3
Prohibited High Yield Notes On-Loan Payments, Guarantees and Security
 
Until the Senior Discharge Date, except with the prior consent of each Senior Representative, no holder of the High Yield Notes On-Loan shall:
 
 
6.3.1
demand or receive payment, repayment or prepayment from Basell Holdings of any principal, interest or other amount on or in respect of, or any distribution from Basell Holdings in respect of, the High Yield Notes On-Loan Debt in cash or in kind or apply any such money or property in or towards discharge of any High Yield Notes On-Loan Debt except as permitted by Clause 11.2 (Permitted High Yield Notes Guarantee Payments and Permitted High Yield Notes On-Loan Payments), Clause 14.3 (Filing of claims) or Clause 19.2 (Permitted High Yield Notes On-Loan and Permitted High Yield Notes Security Documents enforcement);
 
 
6.3.2
exercise any set-off against any High Yield Notes On-Loan Debt, except as permitted by Clause 11.2 (Permitted High Yield Notes Guarantee Payments and Permitted High Yield Notes On-Loan Payments), Clause 14.3 (Filing of claims) or Clause 19.2 (Permitted High Yield Notes On-Loan and Permitted High Yield Notes Security Documents enforcement); or
 
 
6.3.3
permit to subsist or receive any Security over any assets of any member of the Group, or any guarantee from any member of the Group for, or in respect of, any High Yield Notes On-Loan Debt;
 
provided, however, that after the Senior Facility Discharge Date and the Interim Facility Discharge Date the consent of the Senior Representatives shall be deemed to have been given to an action prescribed in clause 6.3.3 to the extent such action is not prohibited by the Senior Agreements.
 
 
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7.
INVESTOR DEBT
 
7.1
Investor Debt
 
Until the Final Discharge Date, no Investor shall, except with the prior consent of (a) each Senior Representative unless such action is not prohibited by the covenants in its respective Senior Agreement and (b) the High Yield Notes Trustee, unless such action is not prohibited by the covenants in the High Yield Notes Indenture:
 
 
7.1.1
demand or receive payment, repayment or prepayment of any principal, interest or other amount on or in respect of, or any distribution in respect of, any Investor Debt in cash or in kind or apply any money or property in or towards discharge of any Investor Debt, except as permitted by Clause 11.3 (Permitted Investor Payments) or Clause 14.3 (Filing of claims);
 
 
7.1.2
exercise any set-off against any Investor Debt, except as permitted by Clause 11.3 (Permitted Investor Payments) or Clause 14.3 (Filing of claims);
 
 
7.1.3
permit to subsist or receive any Security, or any guarantee, for, or in respect of, any Investor Debt;
 
 
7.1.4
claim or rank as a creditor in the insolvency, winding-up, bankruptcy or liquidation of any member of the Group other than in accordance with Clause 14.3 (Filing of claims);
 
 
7.1.5
sue, claim or bring proceedings against any member of the Group for breach of any representation, warranty or undertaking by any member of the Group under or in connection with any Investor Document;
 
 
7.1.6
sue, claim or bring proceedings against the provider of a Report in connection with any Report nor receive any payment in connection with any such suit, claim or proceeding;
 
 
7.1.7
take or omit to take any action whereby the ranking and/or subordination contemplated by this Agreement may be impaired;
 
 
7.1.8
convert any Investor Debt into shares of an Obligor;
 
 
7.1.9
exercise its voting rights as shareholder of the Company so as to permit or require any member of the Group to pay, prepay, redeem, purchase, defease or otherwise acquire any Investor Debt; or
 
7.1.10
exercise its voting rights as shareholder of the Company so as to permit or require the declaration or payment by the Company of any dividend or distribution on or in respect of the share capital of the Company or the redemption, repayment, reduction, repurchase, cancellation or other extinguishment of any share in the capital of the Company.
 
7.2
Amendments to Investor Documents
 
Until the Senior Discharge Date and for the benefit of the holders of Senior Debt only, no Obligor or Investor shall, except with the prior consent of (a) each Senior Representative, unless such action is not prohibited by the covenants in the Senior Agreement and (b) the High Yield Notes Trustee, unless, such action is not prohibited by the covenants in the High Yield Notes Indenture, amend or give any waiver or consent under any provision of any Investor Document which would result in:
 
 
7.2.1
the interests of the Senior Finance Parties (if before the Senior Facility Discharge Date) or the Interim Facility Finance Parties (if after the Senior Facility Discharge Date), or the ranking and/or subordination contemplated by this Agreement, being adversely affected;
 
 
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7.2.2
any change to the basis on which any amounts (including fees) accrue, are calculated or are payable under any Investor Document;
 
 
7.2.3
any member of the Group being subject to more onerous obligations as a whole than those contained in the Investor Documents at the date of this Agreement or obligations which would conflict with any provision of this Agreement; or
 
 
7.2.4
any member of the Group becoming liable to make an additional payment (or increase an existing payment) under any Investor Document, other than any liability arising under the Investor Documents as originally entered into,
 
other than any amendment, waiver or consent purely of a technical or administrative nature.
 
8.
INTERCOMPANY DEBT
 
8.1
Intercompany Lenders
 
Until the Final Discharge Date, but for the benefit of the High Yield Notes with respect to paragraph 8.1.6 below only, no Intercompany Lender shall, except with the prior consent of (a) each Senior Representative, unless such action is not prohibited by the covenants in its respective Senior Agreement and (b) the High Yield Notes Trustee, unless, such action is not prohibited by the covenants in the High Yield Notes Indenture:
 
 
8.1.1
demand or receive payment, repayment or prepayment of any principal, interest or other amount on or in respect of, or any distribution in respect of, any Intercompany Debt in cash or in kind or apply any money or property in or towards discharge of any Intercompany Debt, except as permitted by Clause 11.4 (Permitted Intercompany Payments) or Clause 14.3 (Filing of claims);
 
 
8.1.2
exercise any set-off against any Intercompany Debt, except as permitted by Clause 11.4 (Permitted Intercompany Payments) or Clause 14.3 (Filing of claims);
 
 
8.1.3
permit to subsist or receive any Security, or any guarantee, for, or in respect of, any Intercompany Debt;
 
 
8.1.4
claim or rank as a creditor in the insolvency, winding-up, bankruptcy or liquidation of any member of the Group other than in accordance with Clause 14.3 (Filing of claims);
 
 
8.1.5
sue, claim or bring proceedings against any Obligor or Intercompany Borrower for breach of any representation, warranty or undertaking by any Obligor or Intercompany Borrower under or in connection with any Intercompany Document; or
 
 
8.1.6
take or omit to take any action whereby the ranking and/or subordination contemplated by this Agreement may be impaired.
 
8.2
Intercompany Borrowers
 
Until the Final Discharge Date, but for the benefit of the High Yield Notes with respect to paragraph 8.2.4 below only, no Intercompany Borrower shall, except with the prior consent of (a) each Senior Representative, unless such action is not prohibited by the covenants in its respective Senior Agreement and (b) the High Yield Notes Trustee, unless, such action is not prohibited by the covenants in the High Yield Notes Indenture:
 
 
8.2.1
pay, repay or prepay any principal, interest or other amount on or in respect of, or make any distribution in respect of, or redeem, purchase or defease, any Intercompany Debt in cash or in kind, except as permitted by Clause 11.4 (Permitted Intercompany Payments) or Clause 14.3 (Filing of claims);
 
 
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8.2.2
exercise any set-off against any Intercompany Debt, except as permitted by Clause 11.4 (Permitted Intercompany Payments) or Clause 14.3 (Filing of claims);
 
 
8.2.3
create or permit to subsist any Security over any of its assets, or give any guarantee, for, or in respect of, any Intercompany Debt; or
 
 
8.2.4
take or omit to take any action whereby the ranking and/or subordination contemplated by this Agreement may be impaired.
 
9.
REPRESENTATIONS
 
Representations of the Subordinated Parties
 
Each Subordinated Party makes the representations and warranties set out in this Clause 9.1 to each Senior Party and to each High Yield Notes Finance Party (but not for the benefit of the High Yield Noteholders) only in relation to itself in each case on the date of this Agreement:
 
9.1
it is duly incorporated (if a corporate person) or duly established (in any other case) and validly existing under the law of its jurisdiction of incorporation or formation;
 
9.2
it has the power to own its assets and carry on its business as it is being, and is proposed to be, conducted;
 
9.3
subject to any applicable Reservations, the obligations expressed to be assumed by it in this Agreement are legal, valid, binding and enforceable;
 
9.4
the entry into and performance by it of, and the transactions contemplated by, this Agreement do not and will not conflict with:  (i) any law or regulation applicable to it; (ii) its constitutional documents or (iii) any agreement or instrument binding on it or any of its assets, in each case to the extent that it would reasonably be expected to have a Material Adverse Effect;
 
9.5
it has the power to enter into, perform and deliver, and has taken all necessary action to authorise its entry into, performance and delivery of this Agreement and the transactions contemplated by this Agreement;
 
9.6
subject to any applicable Reservations, all Authorisations required for the performance by it of this Agreement and the transactions contemplated by this Agreement and to make this Agreement admissible in evidence in its jurisdiction of incorporation have been obtained or effected and are in full force and effect;
 
9.7
the documents to which it is a party as described in this Agreement (if any) contain all the terms and conditions of the Investor Debt or Intercompany Debt (as relevant); and
 
9.8
subject to the Security under the Security Documents, it is the sole beneficial owner of the Investor Debt or Intercompany Debt (as relevant) owed to it.
 
10.
UNDERTAKINGS OF THE OBLIGORS
 
 
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10.1
Hedging Debt
 
Until the Senior Facility Discharge Date, no Obligor shall (and the Company shall ensure that no member of the Group will), except with the prior consent of the Senior Agent under the Senior Facility Agreement:
 
10.1.1
create or permit to subsist any Security over any of its assets, or give any guarantee, for, or in respect of, any Hedging Debt, other than under any Senior Security Document and the guarantees in any applicable Senior Finance Document.
 
10.2
Second Lien Debt
 
Until the Senior Facility Discharge Date, no Obligor shall (and the Company shall ensure that no member of the Group will), except with the prior consent of the Senior Agent under the Senior Facility Agreement:
 
10.2.1
exercise any set-off against any Second Lien Debt;
 
10.2.2
create or permit to subsist any Security over any assets of any member of the Group, or give any guarantee, from any member of the Group, for, or in respect of, any Second Lien Debt, other than under any Interim Facility Security Document, Second Lien Notes Security Document and the guarantees in or required by any applicable Second Lien Finance Document; or
 
10.2.3
transfer any rights and/or obligations under the Second Lien Finance Documents unless simultaneously with that transfer, the relevant transferee signs an Accession Agreement.
 
10.3
High Yield Notes Guarantee Debt
 
Until the Senior Discharge Date, except with the prior consent of each Senior Representative under its respective Senior Agreement, no Obligor shall (and the Company shall ensure that no Obligor will):
 
10.3.1
pay, repay or prepay any principal, interest or other amount on or in respect of, or make any distribution in respect of, any High Yield Notes Guarantee Debt in cash or in kind or apply any such money or property in or towards discharge of any High Yield Notes Guarantee Debt except as permitted by Clause 11.2 (Permitted High Yield Notes Guarantee Payments and Permitted High Yield Notes On-Loan Payments), Clause 14.3 (Filing of claims) or Clause 19.2 (Permitted High Yield Notes On-Loan and Permitted High Yield Notes Security Documents enforcement) and except for any payment by the Company with respect to the High Yield Notes Debt which is not otherwise in violation of this Agreement;
 
10.3.2
exercise any set-off against any High Yield Notes Guarantee Debt, except as permitted by Clause 11.2 (Permitted High Yield Notes Guarantee Payments and Permitted High Yield Notes On-Loan Payments), Clause 14.3 (Filing of claims) or Clause 19.2 (Permitted High Yield Notes On-Loan and Permitted High Yield Notes Security Documents enforcement);
 
10.3.3
create or permit to subsist any Security over any assets of any member of the Group or give any guarantee from any member of the Group for, or in respect of, any High Yield Notes Guarantee Debt, other than Security created pursuant to any High Yield Notes Security Documents and the High Yield Notes Guarantees; or
 
10.3.4
amend the terms of any High Yield Notes Finance Document in a manner that would be inconsistent with the High Yield Notes Major Terms or the High Yield Notes Guarantee Maturity Provisions unless previously approved by each Senior Representative under its respective Senior Agreement;
 
 
-32-
 
 
provided, however, that upon the Senior Facility Discharge Date and the Interim Facility Discharge Date the consent of the Senior Representatives shall be deemed to have been given to an action prescribed in clauses 10.3.3 or 10.3.4 to the extent such action is not prohibited by the Senior Agreements.
 
Nothing in this Clause 10 shall prevent the payment of, and receipt by the High Yield Notes Trustee of, any High Yield Notes Trustee Amounts.
 
10.4
High Yield Notes On-Loan Debt
 
Until the Senior Discharge Date, except with the prior consent of each Senior Representative under its respective Senior Agreement, no Obligor shall (and the Company shall ensure that no Obligor will):
 
10.4.1
pay, repay or prepay any principal, interest or other amount on or in respect of, or make any distribution in respect of, any High Yield Notes On-Loan Debt in cash or in kind or apply any money or property in or towards discharge of any High Yield Notes On-Loan Debt or otherwise pay or advance any amount to the Company except as permitted by Clause 11.2 (Permitted High Yield Notes Guarantee Payments and Permitted High Yield Notes On-Loan Payments), Clause 14.3 (Filing of claims) or Clause 19.2 (Permitted High Yield Notes On-Loan and Permitted High Yield Notes Security Documents enforcement);
 
10.4.2
exercise any set-off against any High Yield Notes On-Loan Debt, except as permitted by Clause 11.2 (Permitted High Yield Notes Guarantee Payments and Permitted High Yield Notes On-Loan Payments), Clause 14.3 (Filing of claims) or Clause 19.2 (Permitted High Yield Notes On-Loan and Permitted High Yield Notes Security Documents enforcement);
 
10.4.3
create or permit to subsist or receive any Security over any assets of any member of the Group, or give any guarantee from any member of the Group, for, or in respect of, any High Yield Notes On-Loan Debt; or
 
10.4.4
amend any provision of the High Yield Notes On-Loan so that it would conflict with any of the terms set out in Clause 6.1 (High Yield Notes On-Loan Debt);
 
provided, however, that upon the Senior Facility Discharge Date and the Interim Facility Discharge Date the consent of the Senior Representatives shall be deemed to have been given to an action prescribed in clauses 10.4.3 or 10.4.4 to the extent such action is not prohibited by the Senior Agreements.
 
10.5
Subordinated Debt
 
Until the Final Discharge Date and to the extent for the benefit of the holders of the High Yield Notes with respect to paragraph 10.5.4 below only, no Obligor shall (and the Company shall ensure that no member of the Group will) except with the prior consent of (a) each Senior Representative unless such action is not prohibited by the covenants in its respective Senior Agreement and (b) the High Yield Notes Trustee, unless such action is not prohibited by the covenants in the High Yield Notes Indenture:
 
10.5.1
pay, repay or prepay any principal, interest or other amount on or in respect of, or make any distribution in respect of, or redeem, purchase or defease, any Subordinated Debt in cash or in kind, except for the capitalisation of interest in accordance with the Finance Documents or as permitted by Clause 11 (Permitted Payments) or Clause 14.3 (Filing of claims);
 
10.5.2
exercise any set-off against any Subordinated Debt, except as permitted by Clause 11 (Permitted Payments) or Clause 14.3 (Filing of claims);
 
10.5.3
create or permit to subsist any Security over any of its assets, or give any guarantee, for, or in respect of, any Subordinated Debt;
 
 
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10.5.4
amend, terminate or give any waiver or consent under any Investor Document or Intercompany Document, other than any amendment, termination, waiver or consent purely of a technical or administrative nature; or
 
10.5.5
take or omit to take any action whereby the ranking and/or subordination contemplated by this Agreement may be impaired.
 
11.
PERMITTED PAYMENTS
 
11.1
Permitted Hedging Payments
 
The relevant Obligor may pay (by setoff or otherwise), and the Hedging Banks may receive and retain, payments in respect of Hedging Debt arising under the Hedging Documents.
 
11.2
Permitted High Yield Notes Guarantee Payments and Permitted High Yield Notes On-Loan Payments
 
11.2.1
The High Yield Notes Finance Parties and High Yield Noteholders may receive and retain Permitted Junior Securities in respect of the High Yield Notes Guarantee Debt and the High Yield Notes Trustee may receive and retain High Yield Notes Trustee Amounts.
 
11.2.2
The High Yield Notes Guarantors may pay and the High Yield Notes Trustee may receive and retain payments in respect of High Yield Notes Trustee Amounts incurred on or behalf of the High Yield Notes Trustee in connection with carrying out its duties or exercising powers or discretion under the High Yield Notes Finance Documents.
 
11.2.3
Subject to Clause 12.1 (Suspension of Permitted High Yield Notes Guarantee Payments and Permitted High Yield Notes On-Loan Payments) and Clause 14 (Subordination on insolvency):
 
 
(a)
the High Yield Notes Guarantors may pay and the High Yield Notes Finance Parties and High Yield Noteholders may receive and retain payments in respect of any interest, fees, expenses or other amounts (including High Yield Notes Trustee Amounts and reasonable legal fees and taxes) on or in respect of any High Yield Notes Guarantee Debt in accordance with the High Yield Notes Finance Documents; and
 
 
(b)
Basell Holdings may pay, and the holders of the High Yield Notes On-Loan may receive and retain and distribute payment in respect of, any interest, fees, expenses or other amounts (including High Yield Notes Trustee Amounts and reasonable legal fees and taxes) on or in respect of the High Yield Notes On-Loan Debt in accordance with the terms of the High Yield Notes On-Loan Documents,
 
provided that all such payments received under the High Yield Notes On-Loan are applied in payment of the Company’s obligations under the High Yield Notes (or amounts due in respect thereof).
 
11.2.4
Until the Senior Discharge Date, except with the prior consent of each Senior Representative under its respective Senior Agreement, no Obligor may pay, and no holder of the High Yield Notes On-Loan may receive and retain payment in respect of any principal in respect of the High Yield Notes On-Loan other than in connection with the repayment of the High Yield Notes to the extent not prohibited by the Senior Agreements.

 
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11.3
Permitted Investor Payments
 
Subject to Clause 12.2 (Suspension of Permitted Investor Payments) and Clause 14 (Subordination on insolvency), the relevant Obligor may pay, and the relevant Investor may receive and retain payments in respect of, any Investor Debt in accordance with the Senior Agreements and the High Yield Notes Indenture.
 
11.4
Permitted Intercompany Payments
 
Subject to Clause 12.3 (Suspension of Permitted Intercompany Payments) and Clause 14 (Subordination on insolvency), the relevant Intercompany Borrower may pay (by cash, set off or otherwise), and the relevant Intercompany Lender may receive and retain payments in respect of, any Intercompany Debt in accordance with the Senior Agreements provided that no such payment is made to the Company other than to the extent to make or fund a dividend or other distribution permitted to be made by the Senior Agreements on the equity interests of the Company provided that no such payment is made to the Company other than (a) to the extent to make or fund a dividend or other distribution permitted to be made by the Senior Agreements on the equity interests of the Company, (b) to the extent required to fund legal, audit, tax and other expenses directly relating to the administration of the Company including customary compensation payable to the Company’s directors or (if the Company is a partnership) the directors of its general partner in an amount not exceeding EUR 3,000,000, and (c) to fund payments under the Management Agreement, the Tax Sharing Agreement and other Restricted Payments other than Restricted Investments (each as defined in the Interim Facility Agreement) other than those described in (a) and (b) above that the Company is entitled to make pursuant to the Senior Facility Agreement provided the same are so applied within 15 days of receipt.
 
11.5
Set-off
 
In this Clause 11, a payment or receipt includes a discharge by set-off.
 
12.
SUSPENSION OF PERMITTED PAYMENTS
 
12.1
Suspension of Permitted High Yield Notes Guarantee Payments and Permitted High Yield Notes On-Loan Payments
 
12.1.1
Until the Senior Discharge Date except with the prior consent of each Senior Representative under its respective Senior Agreement and subject to Clause 14 (Subordination on insolvency):
 
 
(a)
no High Yield Notes Guarantor may make, and no High Yield Notes Finance Party or High Yield Noteholder may receive, any Permitted High Yield Notes Guarantees Payment (other than Permitted Junior Securities and High Yield Notes Trustee Amounts); and
 
 
(b)
Basell Holdings may not make, and the holders of the High Yield Notes On-Loan may not receive, any Permitted High Yield Notes On-Loan Payment,
 
if, in each case:
 
(i)
a Senior Payment Default is continuing; or
 
(ii)
a Senior Default, other than a Senior Payment Default, is continuing from the date which is one Business Day after the date on which a Representative in respect of Senior Debt then having a Senior Default delivers a High Yield Notes Stop Notice to a Responsible Officer of the High Yield Notes Trustee and to the Company until the earliest of:
 
 
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(1)
the date falling 179 days after delivery of that High Yield Notes Stop Notice;
 
 
(2)
if a High Yield Notes Standstill Period is in effect at any time after the relevant Senior Default giving rise to delivery of that High Yield Notes Stop Notice, the date on which that High Yield Notes Standstill Period expires;
 
 
(3)
the date on which the relevant Senior Default(s) have been remedied or waived in accordance with all applicable Senior Agreements;
 
 
(4)
the date on which the Representative who delivered the applicable High Yield Notes Stop Notice delivers a notice to the High Yield Notes Trustee and the Company cancelling the High Yield Notes Stop Notice;
 
 
(5)
the date on which the Security Agent or the High Yield Notes Trustee takes Enforcement Action permitted under this Agreement in respect of the High Yield Notes Guarantee Debt; and
 
 
(6)
the Senior Discharge Date.
 
12.1.2
Unless the High Yield Notes Finance Parties, High Yield Noteholders and the holders of the High Yield Notes On-Loan waive this requirement:
 
 
(a)
a new High Yield Notes Stop Notice may not be delivered unless and until 365 days have elapsed since the delivery of the immediately prior High Yield Notes Stop Notice; and
 
 
(b)
no High Yield Notes Stop Notice may be delivered by a Representative in reliance on a Senior Default more than 45 days after the earlier of (x) the date such Representative received notice of that Senior Default and (y) the date the agency department of such Representative otherwise becomes aware of such Senior Default.
 
12.1.3
A Representative may only serve one High Yield Notes Stop Notice with respect to the same event or set of circumstances. This shall not affect the right of any Representative to issue a High Yield Notes Stop Notice in respect of any other event or set of circumstances.
 
12.1.4
For the avoidance of doubt, this Clause 12.1:
 
 
(a)
acts as a suspension of payment and not as a waiver of the right to receive payment on the dates such payments are due;
 
 
(b)
will not prevent the accrual or capitalisation of interest (including default interest) in accordance with the High Yield Notes Finance Documents;
 
 
(c)
will not prevent the payment of any High Yield Notes Trustee Amount;
 
 
(d)
will not prevent the payment of:
 
(i)
audit fees, directors’ fees, taxes and any other proper and incidental expenses required to maintain existence; and
 
(ii)
amounts required to comply with obligations under the High Yield Finance Documents (but not any payment in respect of interest and principal or other monies to the High Yield Notes Finance Parties and, without limitation to the generality of the foregoing, not any payment in connection with any redemption, purchase or defeasance of the High Yield Notes), including costs and expenses (if any) related to public reporting and ongoing administration of the High Yield Notes Finance Documents.
 
 
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12.2
Suspension of Permitted Investor Payments
 
Until the Senior Discharge Date (and for the benefit of the holders of Senior Debt only) and subject to Clause 14 (Subordination on insolvency), no Obligor may make, and no Investor may receive, any Permitted Investor Payment if:
 
12.2.1
a Senior Declared Default is continuing; or
 
12.2.2
a Suspension Event is continuing.
 
12.3
Suspension of Permitted Intercompany Payments
 
Until the Senior Discharge Date (for the benefit of holders of Senior Debt only) and subject to Clause 14 (Subordination on insolvency), no Intercompany Borrower may make, and no Intercompany Lender may receive, any Permitted Intercompany Payment:
 
12.3.1
if a Senior Declared Default is continuing; or
 
12.3.2
in relation to the Issuer Intercompany Debt only, a Suspension Event is continuing.
 
13.
TURNOVER OF NON-PERMITTED PAYMENTS
 
13.1
Turnover
 
Until the Senior Discharge Date (and, for the purpose of paragraph 13.1.9 below only, the High Yield Notes Discharge Date) if:
 
13.1.1
any Hedging Bank receives or recovers any Hedging Recoveries;
 
13.1.2
any Interim Facility Finance Party receives or recovers any Interim Facility Recoveries except as provided under Clause 20 (Application of Recoveries);
 
13.1.3
any Second Lien Notes Finance Party or Second Lien Noteholder receives or recovers any Second Lien Notes Recoveries except as provided under Clause 20 (Application of Recoveries) and except where such party does not have actual knowledge that such payment was received or recovered from any person (directly or indirectly) which had benefited from an amount received or recovered in violation of such Clause 20 (Application of Recoveries);
 
13.1.4
any Arco Notes Finance Party or Arco Noteholder receives or recovers any Arco Notes Recoveries except as provided under Clause 20 (Application of Recoveries) and except where such party does not have actual knowledge that such payment was received or recovered from any person (directly or indirectly) which had benefited from an amount received or recovered in violation of such Clause 20 (Application of Recoveries);
 
13.1.5
any Equistar Notes Finance Party or Equistar Noteholder receives or recovers any Equistar Notes Recoveries except as provided under Clause 20 (Application of Recoveries) and except where such party does not have actual knowledge that such payment was received or recovered from any person (directly or indirectly) which had benefited from an amount received or recovered in violation of such Clause 20 (Application of Recoveries);
 
 
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13.1.6
any High Yield Notes Finance Party or High Yield Noteholder receives or recovers any High Yield Notes Guarantees Recoveries except for any Permitted High Yield Notes Guarantees Payments;
 
13.1.7
any holder of the High Yield Notes On-Loan receives or recovers any High Yield Notes On-Loan Recoveries except for any Permitted High Yield Notes On-Loan Payments;
 
13.1.8
any High Yield Notes Finance Party or High Yield Noteholder receives or recovers any High Yield Notes Recoveries except where such party does not have actual knowledge that such payment was received or recovered from any person (directly or indirectly) which had benefited from an amount received or recovered in violation of the terms of this Agreement;
 
13.1.9
any Investor receives or recovers any Investor Recoveries except for any Permitted Investor Payments; and
 
13.1.10
any Intercompany Lender receives or recovers any Intercompany Recoveries except for any Permitted Intercompany Payments,
 
(save for any amount received by the Second Lien Notes Trustee, Arco Notes Trustee, Equistor Notes Trustee or the High Yield Notes Trustee and paid to the Second Lien Noteholders, Arco Noteholders, Equistor Noteholders, or the High Yield Noteholders, respectively, where at the time of such payment the Second Lien Notes Trustee, Arco Notes Trustee, Equistar Notes Trustee or High Yield Notes Trustee (as applicable) has no actual knowledge that such receipt or recovery falls within paragraph 13.1.3, 13.1.4, 13.1.5 or 13.1.8, above, respectively), that party (or the Second Lien Noteholder, Arco Noteholder, Equistar Noteholder or High Yield Noteholder (as applicable)) shall:
 
13.1.11
within three Business Days notify details of the receipt or recovery to the Security Agent;
 
13.1.12
hold any such assets and moneys received or recovered by it on trust for the Security Agent for application in accordance with appropriate provision of Clause 20 (Application of Recoveries); and
 
13.1.13
within three Business Days of demand by the Security Agent, pay an amount equal to such receipt or recovery to the Security Agent for application in accordance with appropriate provision of Clause 20 (Application of Recoveries)).
 
13.2
Non-creation of charge
 
Nothing in this Clause 13 or any other provision of this Agreement is intended to or shall create a charge or other Security.
 
13.3
Protection upon turnover
 
If a Party is obliged to pay any amount to the Security Agent in accordance with this Clause 13 or Clause 14 (Subordination on Insolvency):
 
13.3.1
the relevant Obligor or Intercompany Borrower shall indemnify that person (to the extent of its liability for the relevant amount so paid) for any reasonable costs, liabilities and expenses properly incurred by it as a result of it having to make that payment; and
 
13.3.2
the relevant Debt in respect of which such person made that payment to the Security Agent will be deemed not to have been reduced or discharged in any way or to any extent by the relevant payment, distribution, proceeds or other discharge.
 

 
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14.
SUBORDINATION ON INSOLVENCY
 
14.1
Subordination events
 
If:
 
14.1.1
any order is made or resolution passed for the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of any Obligor or Intercompany Borrower;
 
14.1.2
any Obligor or Intercompany Borrower enters into any composition, assignment or arrangement with its creditors generally;
 
14.1.3
any liquidator, receiver, administrator, administrative receiver, compulsory manager or other similar officer is appointed in respect of any Obligor or Intercompany Borrower or any of its assets (other than for a permitted reorganization or solvent winding up permitted by the Senior Facility Agreement); or
 
14.1.4
any Security over any assets of any Obligor or Intercompany Borrower is enforced,
 
or any analogous event occurs in any jurisdiction, this Clause 14 shall apply.
 
14.2
Subordination
 
14.2.1
In any of the circumstances mentioned in Clause 14.1 (Subordination events):
 
 
(a)
the High Yield Notes Guarantee Debt and the High Yield Notes On-Loan Debt will be subordinate in right of payment to the Senior Debt, ABL Debt and the Hedging Debt; and
 
 
(b)
the Intercompany Debt and the Investor Debt will be subordinate in right of payment to the Senior Debt, ABL Debt, the Hedging Debt, the High Yield Notes Debt, the High Yield Notes Guarantee Debt and the High Yield On-Loan Debt.
 
14.2.2
In the event that any of the circumstances mentioned in Clause 14.1 (Subordination events) occur in relation to the Company, the Investor Debt as to which the Company is an obligor will be subordinate in right of payment to the High Yield Notes Debt.
 
14.3
Filing of claims
 
14.3.1
In any of the circumstances mentioned in Clause 14.1 (Subordination events), until the Senior Discharge Date, the Security Agent may, and is hereby irrevocably authorised on behalf of each Senior Secured Party, Unsecured Senior Notes Finance Party, ABL Finance Party, High Yield Notes Finance Party, holder of the High Yield Notes On-Loan and Subordinated Party to:
 
 
(a)
demand, claim, enforce and prove for the Junior Debt;
 
 
(b)
file claims and proofs, give receipts and take any proceedings in respect of filing such claims or proofs and do anything which the Security Agent considers necessary or desirable to recover the Junior Debt; and
 
 
(c)
receive all distributions of the Junior Debt for application in accordance with Clause 20 (Application of recoveries).
 
 
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14.3.2
If and to the extent that the Security Agent is not entitled, or elects not, to take any of the action mentioned in paragraph 14.3.1 above, each Junior Creditor (other than the High Yield Notes Trustee) shall do so promptly on request by the Security Agent.
 
14.3.3
The High Yield Notes Trustee shall in any event be entitled to request and retain payment of any High Yield Notes Trustee Amounts.
 
14.4
Distributions
 
Subject, in the case of the High Yield Notes Trustee, to Clause 28 (High Yield Notes Trustee), in any of the circumstances mentioned in Clause 14.1 (Subordination events), until the Senior Discharge Date, each Junior Creditor will:
 
14.4.1
hold all payments and distributions in cash or in kind received or receivable by it in respect of the Junior Debt on trust for the Security Agent for application in accordance with Clause 20.5 (General order of application);
 
14.4.2
within three Business Days of demand by the Security Agent, pay an amount equal to any Junior Debt owing to it and discharged by set-off or otherwise to the Security Agent for application in accordance with Clause 20.5 (General order of application);
 
14.4.3
promptly direct the trustee in bankruptcy, liquidator, assignee or other person distributing the assets of the relevant Obligor or Intercompany Borrower or their proceeds to pay distributions in respect of the Junior Debt directly to the Security Agent; and
 
14.4.4
promptly use its reasonable efforts to undertake any action requested by the Security Agent to give effect to this Clause 14.4,
 
save that, in each case, the High Yield Notes Finance Parties and the High Yield Noteholders shall be entitled to receive and retain Permitted Junior Securities and the High Yield Notes Trustee shall be entitled to receive and retain any High Yield Notes Trustee Amounts.
 
14.5
Voting
 
14.5.1
In any of the circumstances mentioned in Clause 14.1 (Subordination events), until the Senior Discharge Date:
 
 
(a)
the Security Agent may, and is hereby irrevocably authorised on behalf of each Senior Secured Party, holder of the High Yield Notes On-Loan and Subordinated Party to, exercise all of such parties’ powers of convening meetings, voting and representation in respect of the Security Documents; and
 
 
(b)
each such party other than the Second Lien Notes Trustee and the High Yield Notes Trustee shall promptly execute and/or deliver to the Security Agent such forms of proxy and representation as it may require to facilitate any such action.
 
14.5.2
If and to the extent that the Security Agent is not entitled, or elects not, to exercise a power under paragraph 14.5.1 above, each such party shall:
 
 
(a)
exercise that power as the Security Agent (acting on the instructions of an Instructing Group) directs; and
 
 
(b)
not exercise that power so as to impair the ranking and/or subordination contemplated by this Agreement.
 
 
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14.5.3
Nothing in this Clause 14.5 entitles the Security Agent (or an Instructing Group) to exercise or require any such Junior Creditor referred to in paragraph 14.5.1(a) above to exercise a power of voting or representation to waive, reduce, discharge, extend the due date for repayment of or reschedule any such Junior Debt of such Junior Creditor.
 
14.6
Acknowledgement of structural, contractual and effective subordination
 
It is acknowledged and agreed by:
 
14.6.1
the Investors that the Senior Parties, Second Lien Noteholders, Unsecured Senior Noteholders, High Yield Notes Finance Parties and High Yield Noteholders are relying on the structural subordination of the Investor Debt to the Senior Debt, ABL Debt, High Yield Notes Guarantee Debt and High Yield Notes On-Loan Debt, the contractual subordination of the Investor Debt to the High Yield Notes Debt and the effective subordination of the Investor Debt to the claims resulting from the Security created by the Company over its present and future assets;
 
14.6.2
the High Yield Notes Finance Parties, the High Yield Noteholders and the Company that the Senior Parties, Second Lien Noteholders and Unsecured Senior Noteholders, are relying on the structural subordination of the High Yield Notes Debt to the Senior Debt, ABL Debt or Hedging Debt (other than any guarantee by the Company of the Senior Debt or Hedging Debt undertaken by the Company directly), the contractual subordination of the High Yield Notes Guarantee Debt and the High Yield Notes On-Loan Debt to the Senior Debt and the effective subordination of the High Yield Notes to the claims resulting from the Security created by the Company over its present and future assets;
 
14.6.3
the Obligors and Intercompany Lenders that the Senior Parties, Second Lien Noteholders, Unsecured Senior Noteholders, High Yield Notes Finance Parties and High Yield Noteholders are relying on the contractual and/or effective subordination of the Intercompany Debt to the Senior Debt, ABL Debt, High Yield Notes Debt, High Yield Notes Guarantee Debt and High Yield Notes On-Loan Debt; and
 
14.6.4
all the Parties that matters such as:  (i) the establishment and maintenance of separate entities such as Basell Holdings, Basell Funding, Basell Germany Holdings GmbH, Basell Finance Company B.V. and the Company, and (ii) the various obligations under this Agreement to forebear, turn over, restrict right of action or require action, are intended to help the different classes of lenders and finance parties delineate and maintain the various repayment obligations and the ranking of such obligations as set forth in this Agreement.
 
14.7
General forbearance
 
In connection with any Insolvency Event involving a case or proceeding under the bankruptcy laws of the United States, the High Yield Notes Trustee (on behalf of itself and the High Yield Noteholders) and each other Junior Creditor:
 
14.7.1
waive any right to challenge or dispute actions in accordance with this Agreement and the Security Documents taken by the Security Agent on behalf of the Senior Debt to seek adequate protection with respect to the Security securing the Senior Secured Debt;
 
14.7.2
waive any right to challenge the validity, perfection, priority or senior rights of the Senior Debt and Hedging Debt as provided herein; and
 
14.7.3
consent to any use of cash collateral approved by the Security Agent on behalf of the Senior Secured Debt, provided that the proceeds are treated in accordance with the lien priorities established herein and in the Security Documents.
 
 
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15.
FAILURE OF TRUSTS
 
Subject, in the case of a Trustee, to Clause 28 (Trustees), if any trust intended to arise pursuant to Clause 13.1 (Turnover) or Clause 14.4 (Distributions) fails or for any reason (including the laws of any jurisdiction in which any assets, moneys, payments or distributions may be situated) cannot be given effect to, the relevant Party will pay to the Security Agent for application in accordance with the applicable provisions of Clause 20 (Application of Recoveries) an amount equal to the amount (or the value of the relevant assets) intended to be so held on trust for the Security Agent.
 
16.
PROTECTION OF SUBORDINATION
 
16.1
Continuing subordination
 
The subordination provisions in this Agreement shall remain in full force and effect by way of continuing subordination and shall not be affected in any way by any intermediate payment or discharge in whole or in part of any Debt.
 
16.2
Waiver of defences
 
Neither the subordination in this Agreement nor the obligations of any Senior Party, Second Lien Noteholder, Unsecured Senior Noteholder, High Yield Notes Finance Party, High Yield Noteholder, holder of the High Yield Notes On-Loan, Subordinated Party, Obligor or Intercompany Borrower shall be affected in any way by an act, omission, matter or thing which, but for this Clause 16, would reduce, release or prejudice the subordination or any of those obligations in whole or in part, (without limitation and whether or not known to any Senior Party, Second Lien Noteholder, Unsecured Senior Noteholder, High Yield Notes Finance Party, High Yield Noteholder, holder of the High Yield Notes On-Loan, Subordinated Party, Obligor or Intercompany Borrower or any other person) including:
 
16.2.1
any time, waiver or consent granted to, or composition with, any person;
 
16.2.2
the release of any person under the terms of any composition or arrangement with any creditor of any person;
 
16.2.3
the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or security over assets of, any person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any security;
 
16.2.4
any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of any person;
 
16.2.5
any amendment (however fundamental) or replacement of a Finance Document or any other document or security (other than with respect to the Notes Finance Parties and Noteholders in accordance with their respective Notes Indenture);
 
16.2.6
any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document or any other document or security;
 
16.2.7
any insolvency or similar proceedings; or
 
16.2.8
any postponement, discharge, reduction, non-provability or other similar circumstance affecting any obligation of any person under any Finance Document resulting from any insolvency, liquidation or dissolution proceedings or from any law, regulation or order.
 
 
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16.3
Appropriations by the Senior Finance Parties
 
Until the Senior Facility Discharge Date has occurred, each Senior Finance Party and Hedging Bank (or any trustee or agent on its behalf) may, subject to its obligations under this Agreement:
 
16.3.1
apply any moneys or other assets received or recovered by it under this Agreement or from any person against the Senior Debt or the Hedging Debt (as relevant) owed to it, in accordance with the Senior Facilities Agreement, in the case of each Senior Finance Party, or such order as it sees fit, in the case of each Hedging Bank;
 
16.3.2
apply any moneys or other assets received or recovered by it from any person (other than any moneys or other assets received or recovered under the Senior Finance Documents, or the Hedging Documents (as relevant) or under this Agreement) against any liability of the relevant person to it other than the Senior Debt, the Hedging Debt (as relevant) owed to it; or
 
16.3.3
after the Acceleration Date, unless or until such moneys or other assets received or recovered by it under the Senior Finance Documents or the Hedging Documents (as relevant) or under this Agreement in aggregate are sufficient to bring about the Senior Discharge Date, if otherwise applied in accordance with the provisions of this Agreement, hold in an interest-bearing suspense account any moneys or other assets received from any person.
 
16.4
Appropriations by the Interim Facility Finance Parties
 
Until the Interim Facility Discharge Date has occurred, each Interim Facility Finance Party (or any trustee or agent on its behalf) may, subject to its obligations under this Agreement:
 
16.4.1
apply any moneys or other assets received or recovered by it under this Agreement or from any person against the Interim Facility Debt owed to it, in such order as it sees fit;
 
16.4.2
apply any moneys or other assets received or recovered by it from any person (other than any moneys or other assets received or recovered under the Interim Facility Finance Documents or under this Agreement) against any liability of the relevant person to it other than the Interim Facility Debt owed to it; or
 
16.4.3
after the Acceleration Date, unless or until such moneys or other assets in aggregate received or recovered by it under the Interim Facility Finance Documents are sufficient to bring about the Interim Facility Discharge Date, if otherwise applied in accordance with the provisions of this Agreement, hold in an interest-bearing suspense account any moneys or other assets received from any person.
 
16.5
Appropriations by the Second Lien Notes Finance Parties and Second Lien Noteholders
 
Until the Second Lien Notes Discharge Date has occurred, each Second Lien Notes Finance Party and Second Lien Noteholder (or any trustee or agent on its behalf) may, subject to its obligations under this Agreement:
 
16.5.1
apply any moneys or other assets received or recovered by it under this Agreement or from any person against the Second Lien Notes Debt owed to it, in such order as it sees fit;
 
16.5.2
apply any moneys or other assets received or recovered by it from any person (other than any moneys or other assets received or recovered under the Second Lien Notes Finance Documents or under this Agreement) against any liability of the relevant person to it other than the Second Lien Notes Debt owed to it; or
 
 
-43-
 

16.5.3
after the Acceleration Date, unless or until such moneys or other assets in aggregate received or recovered by it under the Second Lien Notes Finance Documents are sufficient to bring about the Second Lien Notes Discharge Date, if otherwise applied in accordance with the provisions of this Agreement, hold in an interest-bearing suspense account any moneys or other assets received from any person provided, however, that the Second Lien Notes Trustee Amounts will not have to be so held.
 
16.6
Appropriations by the Unsecured Senior Notes Finance Parties and Unsecured Senior Noteholders
 
Until the Unsecured Senior Notes Discharge Date has occurred, each Unsecured Senior Notes Finance Party and Unsecured Senior Noteholder (or any trustee or agent on its behalf) may, subject to its obligations under this Agreement:
 
16.6.1
apply any moneys or other assets received or recovered by it under this Agreement or from any person against the Unsecured Senior Notes Debt owed to it, in such order as it sees fit;
 
16.6.2
apply any moneys or other assets received or recovered by it from any person (other than any moneys or other assets received or recovered under the Unsecured Senior Notes Finance Documents or under this Agreement) against any liability of the relevant person to it other than the Unsecured Senior Notes Debt owed to it; or
 
16.6.3
after the Acceleration Date, unless or until such moneys or other assets in aggregate received or recovered by it under the Unsecured Senior Notes Finance Documents are sufficient to bring about the Unsecured Senior Notes Discharge Date, if otherwise applied in accordance with the provisions of this Agreement, hold in an interest-bearing suspense account any moneys or other assets received from any person provided, however, that the Unsecured Senior Notes Trustee Amounts will not have to be so held.
 
16.7
Appropriations by the High Yield Notes Finance Parties and High Yield Noteholders
 
After the Senior Discharge Date and until the High Yield Notes Discharge Date has occurred, each High Yield Notes Finance Party and High Yield Noteholder (or any trustee or agent on its behalf) may, subject to its obligations under this Agreement:
 
16.7.1
apply any moneys or other assets received or recovered by it under this Agreement or from any person against the High Yield Notes Guarantee Debt owed to it, in such order as it sees fit;
 
16.7.2
apply any moneys or other assets received or recovered by it from any person (other than any moneys or other assets received or recovered under the High Yield Notes Finance Documents or under this Agreement) against any liability of the relevant person to it other than the High Yield Notes Guarantee Debt owed to it; or
 
16.7.3
after the Acceleration Date, unless or until such moneys or other assets in aggregate received or recovered by it under the High Yield Notes Finance Documents are sufficient to bring about the High Yield Notes Discharge Date, if otherwise applied in accordance with the provisions of this Agreement, hold in an interest-bearing suspense account any moneys or other assets received from any person provided, however, that the High Yield Trustee Amounts will not have to be so held.
 
16.8
Appropriations by the holders of the High Yield Notes On-Loan
 
After the Senior Discharge Date and until the High Yield Notes Discharge Date has occurred, each holder of the High Yield Notes On-Loan (or any trustee or agent on its behalf) may, subject to its obligations under this Agreement:
 
 
-44-
 
 
16.8.1
apply any moneys or other assets received or recovered by it under this Agreement or from any person against the High Yield Notes On-Loan Debt owed to it, in such order as it sees fit;
 
16.8.2
apply any moneys or other assets received or recovered by it from any person (other than any moneys or other assets received or recovered under the High Yield Notes Finance Documents or under this Agreement) against any liability of the relevant person to it other than the High Yield Notes On-Loan Debt owed to it; or
 
16.8.3
after the Acceleration Date, unless or until such moneys or other assets in aggregate received or recovered by it under the High Yield Notes On-Loan Documents are sufficient to bring about the High Yield Notes On-Loan Discharge Date, if otherwise applied in accordance with the provisions of this Agreement, hold in an interest-bearing suspense account any moneys or other assets received from any person.
 
17.
PRIORITY
 
17.1
Ranking
 
17.1.1
Except as otherwise provided in this Agreement, all Security created pursuant to:
 
 
(a)
the Security Documents in respect of the Arco Notes Collateral will secure on a first ranking basis the Senior Facility Debt, the Hedging Debt and the Acro Notes Debt pari passu between themselves and ahead of any Security in such Arco Notes Collateral for the Second Lien Debt and any claims by the Unsecured Senior Notes Finance Parties and the  High Yield Notes Finance Parties irrespective of the order of execution, creation, registration, notice, enforcement or otherwise;
 
 
(b)
the Security Documents in respect of the Equistar Notes Collateral will secure on a first ranking basis the Senior Facility Debt, the Hedging Debt and the Equistar Notes Debt  pari passu between themselves and ahead of any Security in such Equistar Notes Collateral for the Second Lien Debt and any claims by the Unsecured Senior Notes Finance Parties and the  High Yield Notes Finance Parties irrespective of the order of execution, creation, registration, notice, enforcement or otherwise;
 
 
(c)
the Security Documents in respect of the High Yield Notes Collateral will secure on a first ranking basis the Senior Secured Debt, pari passu between themselves and ahead of any Security in such High Yield Notes Collateral for the High Yield Notes Debt and any claims by the Unsecured Senior Notes Finance Parties and the  High Yield Notes Finance Parties irrespective of the order of execution, creation, registration, notice, enforcement or otherwise;
 
 
(d)
the Senior Security Documents (other than the Security Documents in respect of the Arco Notes Collateral, the Equistar Notes Collateral and the High Yield Notes Collateral) will secure on a first ranking basis the Senior Facility Debt and the Hedging Debt pari passu (subject to any limitation on the Debt which may be secured under the terms of the Senior Security Document or this Agreement) between themselves and ahead of any Security for the Second Lien Debt and any claims by the Unsecured Senior Notes Finance Parties and the  High Yield Notes Finance Parties irrespective of the order of execution, creation, registration, notice, enforcement or otherwise;
 
 
(e)
the Second Lien Security Documents (other than the Second Lien Security Documents in respect of the High Yield Collateral) will secure on a second-ranking basis the Interim Facility Debt and the Second Lien Notes Debt pari passu irrespective of:
 
(i)
the order of execution, creation, registration, notice, enforcement or otherwise;
 
 
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(ii)
the date on which any other Debt, arose;
 
(iii)
whether a Senior Finance Party or Hedging Bank is obliged to advance any Senior Debt or Hedging Debt; or
 
(iv)
any fluctuation in the amount, or any intermediate discharge in whole or in part, of any other Debt; and
 
 
(f)
the High Yield Notes Security Documents will secure on a second-ranking basis the High Yield Notes Debt and any High Yield Notes Guarantee Debt irrespective of:
 
(i)
the order of execution, creation, registration, notice, enforcement or otherwise;
 
(ii)
the date on which any other Debt arose;
 
(iii)
whether a Senior Finance Party or Hedging Bank is obliged to advance any Senior Debt or Hedging Debt; or
 
(iv)
any fluctuation in the amount, or any intermediate discharge in whole or in part, of any other Debt.
 
17.1.2
Notwithstanding paragraph 17.1.1, only Security permitted in accordance with the High Yield Notes Major Terms shall secure the High Yield Notes Debt.
 
17.1.3
The High Yield Notes Guarantee Debt, the High Yield Notes On-Loan Debt, the Investor Debt and Intercompany Debt, is and shall remain unsecured by the Security Documents.
 
17.1.4
The Parties acknowledge that the proceeds of enforcement of Security ranked by this clause 17.1 shall be applied in accordance with Clause 20.1 (Order of application).
 
17.2
Registration and notice
 
The Parties will co-operate with each other with a view to reflecting the priority of the Security created pursuant to any Security Document in any register or with any filing or registration authority and (other than the High Yield Notes Trustee) in giving notice to any person of any of the Security created pursuant to any Security Document.
 
18.
RESTRICTIONS ON ENFORCEMENT
 
18.1
Restrictions on enforcement by the Hedging Banks
 
Until the Senior Facility Discharge Date, (a) no Hedging Bank shall, except with the prior consent of the Senior Agent under the Senior Facility Agreement, take any Enforcement Action in relation to any Security Document and (b) following a Senior Facility Declared Default, no Hedging Banks may take any Enforcement Action without the prior written consent of the Facility Agent, provided that, for the purpose of this paragraph 18.1, the perfection or preservation of any Security, as opposed to the realisation of such Security, shall not be treated as enforcement.
 
18.2
Restrictions on enforcement by the Second Lien Finance Parties
 
Until the Senior Facility Discharge Date, the Interim Facility Finance Parties, the Second Lien Notes Finance Parties and the Second Lien Noteholders shall not, except with the prior consent of the Senior Agent under the Senior Facility Agreement, direct the Security Agent to enforce or otherwise (to the extent applicable), require the enforcement of, the High Yield Notes Security Documents, provided that, for the purpose of this paragraph 18.2, the perfection or preservation of any Security, as opposed to the realisation of such Security, shall not be treated as enforcement.
 
 
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18.3
Restrictions on enforcement by the holder of the High Yield Notes On-Loan and/or the High Yield Notes Security Documents
 
Until the Senior Discharge Date, except with the prior consent of or as required by the Instructing Group:
 
18.3.1
the holder of the High Yield Notes On-Loan shall not take any Enforcement Action in relation to any High Yield Notes On-Loan Debt or under the relevant High Yield Notes Security Documents;
 
18.3.2
the High Yield Notes Finance Parties and High Yield Noteholders shall not direct the Security Agent to enforce or otherwise (to the extent applicable), require the enforcement of, the High Yield Notes Security Documents; and
 
18.3.3
the High Yield Notes Finance Parties and High Yield Noteholders shall not take or require the taking of any Enforcement Action in relation to the High Yield Notes Guarantees unless they have matured in accordance with paragraph 1 of the High Yield Notes Guarantee Maturity Provisions,
 
except as permitted under Clause 19.2 (Permitted High Yield Notes On-Loan and Permitted High Yield Notes Security Documents enforcement) provided, however, that no such action required by the Instructing Group need be taken except to the extent the Instructing Group otherwise is entitled under this Agreement to direct such action.
 
18.4
Restrictions on enforcement by the Investors
 
Until the Final Discharge Date, no Investor shall, except with the prior consent of or as required by an Instructing Group, take any Enforcement Action in relation to any Investor Debt.  If required by an Instructing Group to take Enforcement Action, each Investor will apply any proceeds from that Enforcement Action in accordance with Clause 13 (Turnover of Non-Permitted Payments).
 
18.5
Restrictions on enforcement by the Intercompany Lenders
 
Until the Senior Discharge Date and for the benefit of the holders of Senior Debt only, no Intercompany Lender shall, except with the prior consent of or as required by an Instructing Group, take any Enforcement Action in relation to any Intercompany Debt.  If required by an Instructing Group to take Enforcement Action, the Intercompany Lenders will apply any proceeds from that Enforcement Action in accordance with Clause 13 (Turnover of Non-Permitted Payments).
 
18.6
Marshalling of Assets
 
Until the Senior Facility Discharge Date, each Interim Facility Finance Party, Second Lien Notes Finance Party and Second Lien Noteholder waives any and all rights to require the Security Agent to marshal any property or assets of any Obligor or resort to any of the property or assets of any Obligor in any particular order or manner.
 
19.
PERMITTED ENFORCEMENT
 
19.1
Permitted hedging enforcement
 
19.1.1
A Hedging Bank may designate an Early Termination Date in accordance with the relevant Hedging Document or otherwise terminate the relevant Hedging Document, provided that no other Enforcement Action is taken in respect of any Security Document.
 
 
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19.1.2
If a Senior Declared Default has occurred, each Hedging Bank will, promptly after a request by the Security Agent, designate an Early Termination Date under or otherwise terminate each Hedging Document to which it is a party and any derivative transaction entered into under that Hedging Document.
 
19.1.3
On or following:
 
 
(a)
the designation of an Early Termination Date or other termination as provided in paragraph 19.1.1 or 19.1.2 above; or
 
 
(b)
the occurrence of the Acceleration Date,
 
any amount which falls due from a Hedging Bank to any Obligor shall be paid by that Hedging Bank to the Security Agent promptly for application in accordance with Clause 20.1 (Order of application).
 
19.2
Permitted High Yield Notes On-Loan and Permitted High Yield Notes Security Documents enforcement
 
19.2.1
The restrictions in Clause 18.3 (Restrictions on enforcement by the holder of the High Yield Notes On-Loan and/or the High Yield Notes Security Documents) will not apply in respect of the High Yield Notes Guarantee Debt and High Yield Notes On-Loan, if:
 
 
(a)
a High Yield Notes Default (the “Relevant High Yield Notes Default”) is continuing;
 
 
(b)
each Senior Representative has received a notice of the Relevant High Yield Notes Default specifying the event or circumstance in relation to the Relevant High Yield Notes Default from the High Yield Notes Trustee;
 
 
(c)
a High Yield Notes Standstill Period has elapsed; and
 
 
(d)
the Relevant High Yield Notes Default is continuing at the end of the relevant High Yield Notes Standstill Period.
 
19.2.2
Promptly upon becoming aware of a High Yield Notes Default, the High Yield Notes Trustee may by notice (a “High Yield Notes Default Notice”) in writing notify each Senior Representative of the existence of such High Yield Notes Default.
 
19.3
High Yield Notes Standstill Period
 
In relation to a Relevant High Yield Notes Default, a High Yield Notes Standstill Period shall mean the period beginning on the date (the “High Yield Notes Standstill Start Date”) the High Yield Notes Trustee serves a High Yield Notes Default Notice on each Senior Representative in respect of such Relevant High Yield Notes Default and ending on the earlier to occur of:
 
19.3.1
the date falling 179 days after the High Yield Notes Standstill Start Date;
 
19.3.2
the date one or more of the Senior Parties take any Enforcement Action in relation to a particular High Yield Notes Guarantor provided, however, that:
 
 
(a)
if a High Yield Notes Standstill Period ends pursuant to this paragraph (b), the High Yield Notes Finance Parties and the High Yield Noteholders may only take the same Enforcement Action in relation to the High Yield Notes Guarantor as the Enforcement Action taken by the Senior Parties against such High Yield Notes Guarantor; and
 
 
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(b)
Enforcement Action for the purpose of this paragraph (b) shall not include action taken to preserve or protect any Security as opposed to realise it;
 
19.3.3
the date of an event as described in Clause 14.1 (Subordination events) in relation to a particular High Yield Notes Guarantor; and
 
19.3.4
the expiry of any other High Yield Notes Standstill Period outstanding at the date such first mentioned High Yield Notes Standstill Period commenced.
 
19.4
Subsequent High Yield Notes defaults
 
The High Yield Notes Finance Parties and High Yield Noteholders or the holder of the High Yield Notes On-Loan, as applicable, may take Enforcement Action under Clause 19.2 (Permitted High Yield Notes On-Loan and Permitted High Yield Notes Security Documents enforcement) in relation to a Relevant High Yield Notes Default even if, at the end of any relevant High Yield Notes Standstill Period or at any later time, a further High Yield Notes Standstill Period has begun as a result of any other High Yield Notes Default.
 
19.5
Permitted investor enforcement
 
The restrictions in Clause 18.4 (Restrictions on enforcement by the Investors) will not apply if an Insolvency Event is continuing, except that the Investors may only exercise the rights set out in paragraph (a)(i) and, with the prior consent of an Instructing Group, paragraph (a)(ii) of the definition of Enforcement Action in Clause 1.1 (Definitions) in relation to the relevant Key Company.
 
19.6
Permitted intercompany enforcement
 
The restrictions in Clause 18.5 (Restrictions on enforcement by the Intercompany Lenders) will not apply if an Insolvency Event is continuing, except that the Intercompany Lenders may only exercise the rights set out in paragraph (a)(i) and, with the prior consent of an Instructing Group, paragraph (a)(ii) of the definition of Enforcement Action in Clause 1.1 (Definitions) in relation to the relevant Key Company.
 
20.
APPLICATION OF RECOVERIES
 
20.1
Order of application for High Yield Collateral
 
Subject to the rights of creditors mandatorily preferred by law applying to companies generally, the proceeds of enforcement of the High Yield Collateral conferred by the Security Documents shall be applied in the following order:
 
20.1.1
first, in or towards payment pari passu to:
 
 
(a)
the Security Agent of any unpaid fees, costs, expenses and liabilities (including any interest thereon as provided in the Security Documents) incurred by or on behalf of the Security Agent (or any adviser, receiver, delegate, attorney or agent thereof) and the remuneration of the Security Agent (or any adviser, receiver, delegate, attorney or agent thereof) in connection with carrying out its duties or exercising powers or discretions under the Security Documents or this Agreement; and
 
 
(b)
the Trustees for application towards any unpaid fees, costs, expenses and liabilities incurred by or on behalf of the Trustees (or any advisor, receiver, delegate, attorney or agent thereof) in connection with any enforcement, recovery or other payment and the remuneration of the Trustees (or any adviser, receiver, delegate, attorney or agent thereof) in connection with carrying out its duties or exercising powers or discretions, in each case, under their applicable Note Finance Documents or this Agreement (including any Trustee Amounts but excluding any payment in relation to any unpaid fees, costs, expenses and liabilities incurred in respect of any litigation by or on behalf of any Notes Finance Party or Noteholder against any of the Senior Finance Parties);
 
 
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20.1.2
second, in or towards payment pari passu to the Senior Secured Representatives for application towards any unpaid fees, costs, expenses and liabilities incurred by or on behalf of any Senior Party in connection with such enforcement, recovery or other payment pari passu between themselves;
 
20.1.3
third, in or towards payment pari passu to the Senior Secured Representatives for application towards the balance of the Senior Secured Debt (in accordance with the applicable Senior Agreement); and
 
20.1.4
fourth, after the Senior Discharge Date, in or towards payment to or to the order of the High Yield Notes Trustee for application towards the balance of the High Yield Notes Guarantee Debt (in accordance with the High Yield Notes Indenture) or, prior to the Senior Discharge Date, to the Security Agent for distribution in accordance with Clause 20.5 (General order of application).
 
20.1.5
fifth, after the Final Discharge Date, in payment of the surplus (if any) to the relevant Obligor or other person entitled thereto.
 
20.2
Order of application for Arco Notes Collateral
 
Subject to the rights of creditors mandatorily preferred by law applying to companies generally, the proceeds of enforcement of the Arco Notes Collateral conferred by the Security Documents shall be applied in the following order:
 
20.2.1
first, in or towards payment pari passu to:
 
 
(a)
the Security Agent of any unpaid fees, costs, expenses and liabilities (including any interest thereon as provided in the Security Documents) incurred by or on behalf of the Security Agent (or any adviser, receiver, delegate, attorney or agent thereof) and the remuneration of the Security Agent (or any adviser, receiver, delegate, attorney or agent thereof) in connection with carrying out its duties or exercising powers or discretions under the Security Documents or this Agreement; and
 
 
(b)
the Second Lien Notes Trustee for application towards any unpaid fees, costs, expenses and liabilities incurred by or on behalf of the Second Lien Notes Trustee (or any advisor, receiver, delegate, attorney or agent thereof) in connection with any enforcement, recovery or other payment and the remuneration of the Second Lien Notes Trustee (or any adviser, receiver, delegate, attorney or agent thereof) in connection with carrying out its duties or exercising powers or discretions, in each case, under the Second Lien Notes Finance Documents or this Agreement (including any Second Lien Notes Trustee Amounts but excluding any payment in relation to any unpaid fees, costs, expenses and liabilities incurred in respect of any litigation by or on behalf of any Second Lien Notes Finance Party or Second Lien Noteholder against any of the Senior Finance Parties);
 
20.2.2
second, in or towards payment to the Senior Agent for application towards any unpaid fees, costs, expenses and liabilities incurred by or on behalf of any Senior Finance Party or Hedging Bank in connection with such enforcement, recovery or other payment pari passu between themselves;
 
20.2.3
third, in or towards payment pari passu to (a) the Arco Notes Trustee for application to the Arco Notes Debt (in accordance with the Arco Notes Indenture) and (b) the Senior Agent for application towards the balance of the Senior Facility Debt (in accordance with the Senior Facility Agreement) and the Hedging Debt pari passu between themselves;
 
 
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20.2.4
fourth, after the Senior Facility Discharge Date and the Arco Notes Discharge Date, in or towards payment to the Interim Facility Agent for application towards any unpaid costs and expenses incurred by or on behalf of any Interim Facility Finance Party in connection with such enforcement, recovery or other payment;
 
20.2.5
fifth, after the Senior Facility Discharge Date and the Arco Notes Discharge Date, in or towards payment pari passu to the Interim Facility Agent and the Second Lien Notes Trustee for application towards the balance of the Interim Facility Debt (in accordance with the Interim Facility Agreement) and the Second Lien Notes Debt (in accordance with the Second Lien Notes Indenture);
 
20.2.6
sixth, after the Second Lien Discharge Date, to the Security Agent for distribution in accordance with Clause 20.5 (General order of application).
 
20.3
Order of application for Equistar Notes Collateral
 
Subject to the rights of creditors mandatorily preferred by law applying to companies generally, the proceeds of enforcement of the Equistar Notes Collateral conferred by the Security Documents shall be applied in the following order:
 
20.3.1
first, in or towards payment pari passu to:
 
 
(a)
the Security Agent of any unpaid fees, costs, expenses and liabilities (including any interest thereon as provided in the Security Documents) incurred by or on behalf of the Security Agent (or any adviser, receiver, delegate, attorney or agent thereof) and the remuneration of the Security Agent (or any adviser, receiver, delegate, attorney or agent thereof) in connection with carrying out its duties or exercising powers or discretions under the Security Documents or this Agreement; and
 
 
(b)
the Second Lien Notes Trustee for application towards any unpaid fees, costs, expenses and liabilities incurred by or on behalf of the Second Lien Notes Trustee (or any advisor, receiver, delegate, attorney or agent thereof) in connection with any enforcement, recovery or other payment and the remuneration of the Second Lien Notes Trustee (or any adviser, receiver, delegate, attorney or agent thereof) in connection with carrying out its duties or exercising powers or discretions, in each case, under the Second Lien Notes Finance Documents or this Agreement (including any Second Lien Notes Trustee Amounts but excluding any payment in relation to any unpaid fees, costs, expenses and liabilities incurred in respect of any litigation by or on behalf of any Second Lien Notes Finance Party or Second Lien Noteholder against any of the Senior Finance Parties);
 
20.3.2
second, in or towards payment to the Senior Agent for application towards any unpaid fees, costs, expenses and liabilities incurred by or on behalf of any Senior Finance Party or Hedging Bank in connection with such enforcement, recovery or other payment pari passu between themselves;
 
20.3.3
third, in or towards payment pari passu to (a) the Equistar Notes Trustee for application to the Equistar Notes Debt (in accordance with the Equistar Notes Indenture) and (b) the Senior Agent for application towards the balance of the Senior Facility Debt (in accordance with the Senior Facility Agreement) and the Hedging Debt pari passu between themselves;
 
20.3.4
fourth, after the Senior Facility Discharge Date and the Equistar Notes Discharge Date, in or towards payment to the Interim Facility Agent for application towards any unpaid costs and expenses incurred by or on behalf of any Interim Facility Finance Party in connection with such enforcement, recovery or other payment;
 
 
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20.3.5
fifth, after the Senior Facility Discharge Date and the Equistar Notes Discharge Date, in or towards payment pari passu to the Interim Facility Agent and the Second Lien Notes Trustee for application towards the balance of the Interim Facility Debt (in accordance with the Interim Facility Agreement) and the Second Lien Notes Debt (in accordance with the Second Lien Notes Indenture);
 
20.3.6
sixth, after the Second Lien Discharge Date, to the Security Agent for distribution in accordance with Clause 20.5 (General order of application).
 
20.4
Order of application for other Security
 
Subject to the rights of creditors mandatorily preferred by law applying to companies generally, the proceeds of enforcement of the General Collateral conferred by the Security Documents shall be applied in the following order:
 
20.4.1
first, in or towards payment pari passu to:
 
 
(a)
the Security Agent of any unpaid fees, costs, expenses and liabilities (including any interest thereon as provided in the Security Documents) incurred by or on behalf of the Security Agent (or any adviser, receiver, delegate, attorney or agent thereof) and the remuneration of the Security Agent (or any adviser, receiver, delegate, attorney or agent thereof) in connection with carrying out its duties or exercising powers or discretions under the Security Documents or this Agreement; and
 
 
(b)
the Second Lien Notes Trustee for application towards any unpaid fees, costs, expenses and liabilities incurred by or on behalf of the Second Lien Notes Trustee (or any advisor, receiver, delegate, attorney or agent thereof) in connection with any enforcement, recovery or other payment and the remuneration of the Second Lien Notes Trustee (or any adviser, receiver, delegate, attorney or agent thereof) in connection with carrying out its duties or exercising powers or discretions, in each case, under the Second Lien Notes Finance Documents or this Agreement (including any Second Lien Notes Trustee Amounts but excluding any payment in relation to any unpaid fees, costs, expenses and liabilities incurred in respect of any litigation by or on behalf of any Second Lien Notes Finance Party or Second Lien Noteholder against any of the Senior Finance Parties);
 
20.4.2
second, in or towards payment to the Senior Agent for application towards any unpaid fees, costs, expenses and liabilities incurred by or on behalf of any Senior Finance Party or Hedging Bank in connection with such enforcement, recovery or other payment pari passu between themselves;
 
20.4.3
third, in or towards payment to the Senior Agent for application towards the balance of the Senior Facility Debt (in accordance with the Senior Facility Agreement) and the Hedging Debt pari passu between themselves;
 
20.4.4
fourth, after the Senior Facility Discharge Date, in or towards payment to the Interim Facility Agent for application towards any unpaid costs and expenses incurred by or on behalf of any Interim Facility Finance Party in connection with such enforcement, recovery or other payment;
 
20.4.5
fifth, after the Senior Facility Discharge Date, in or towards payment pari passu to the Interim Facility Agent and the Second Lien Notes Trustee for application towards the balance of the Interim Facility Debt (in accordance with the Interim Facility Agreement) and the Second Lien Notes Debt (in accordance with the Second Lien Notes Indenture);
 
20.4.6
sixth, after the Senior Discharge Date and the Second Lien Discharge Date, to the Security Agent for distribution in accordance with Clause 20.5 (General order of application).
 
 
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20.5
General order of application
 
Subject to the rights of creditors mandatorily preferred by law applying to companies generally, all recoveries by the Security Agent under guarantees of the Debt and all other amounts paid to the Security Agent pursuant to this Agreement to the extent not included in Clauses 20.1 (Order of application for High Yield Collateral), 2.02 (Order of application for Arco Notes Collateral), 20.3 (Order of application for Equistar Notes Collateral) and 20.4 (Order of application for other Security) shall be applied in the following order:
 
20.5.1
first, in or towards payment pari passu to:
 
 
(a)
the Security Agent of any unpaid fees, costs, expenses and liabilities (including any interest thereon as provided in the Security Documents) incurred by or on behalf of the Security Agent (or any adviser, receiver, delegate, attorney or agent thereof) and the remuneration of the Security Agent (or any adviser, receiver, delegate, attorney or agent thereof) in connection with carrying out its duties or exercising powers or discretions under the Security Documents or this Agreement; and
 
 
(b)
the Trustees for application towards any unpaid fees, costs, expenses and liabilities incurred by or on behalf of the Trustees (or any advisor, receiver, delegate, attorney or agent thereof) in connection with any enforcement, recovery or other payment and the remuneration of the Trustees (or any adviser, receiver, delegate, attorney or agent thereof) in connection with carrying out its duties or exercising powers or discretions, in each case, under their applicable Note Finance Documents or this Agreement (including any Trustee Amounts but excluding any payment in relation to any unpaid fees, costs, expenses and liabilities incurred in respect of any litigation by or on behalf of any Notes Finance Party or Noteholder against any of the Senior Finance Parties);
 
20.5.2
second, in or towards payment pari passu to each of the Senior Representatives and the ABL Agent for application towards any unpaid fees, costs, expenses and liabilities incurred by or on behalf of any Senior Party or Hedge Bank in connection with such enforcement, recovery or other payment pari passu between themselves;
 
20.5.3
third, in or towards payment pari passu to each of the Senior Representatives and the ABL Agent for application towards the balance of the Senior Debt (in accordance with the applicable Senior Agreement), the Hedge Debt and the ABL Debt;
 
20.5.4
fourth, after the Senior Discharge Date, in or towards payment to or to the order of the High Yield Notes Trustee for application towards the balance of the High Yield Notes Guarantee Debt (in accordance with the High Yield Notes Indenture); and
 
20.5.5
fifth, after the Final Discharge Date, in payment of the surplus (if any) to the relevant Obligor or other person entitled thereto.
 
20.6
Good discharge
 
An acknowledgement of receipt signed by the relevant person to whom payments are to be made under this Clause 20 shall be a good discharge of the Security Agent.
 
20.7
Pledge of Basell Poliolefine Italia S.r.l.
 
Notwithstanding clause 20.4, for so long as the pledge of Basell Poliolefine Italia S.r.l. by its terms secures only the direct obligations of Basell Holdings B.V. any proceeds from enforcement of the pledge by Basell Holdings B.V. of its interest in Basell Poliolefine Italia S.r.l. shall only be applied to that portion of the Senior Debt borrowed directly by Basell Holdings B.V.
 
 
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21.
ENFORCEMENT OF SECURITY
 
21.1
Enforcement instructions
 
21.1.1
Subject to paragraph 21.1.2 below, until the Senior Facility Discharge Date, the Security Agent shall:
 
 
(a)
exercise any right, power, authority or discretion vested in it as Security Agent in accordance with any instructions given to it by the Senior Agent under the Senior Facility Agreement (or, if so instructed by the Senior Agent under the Senior Facility Agreement, refrain from exercising any right, power, authority or discretion vested in it as Security Agent); and
 
 
(b)
not be liable for any act (or omission) if it acts (or refrains from taking any action) in accordance with an instruction of the Senior Agent under the Senior Facility Agreement.
 
21.1.2
Where:
 
 
(a)
the High Yield Finance Parties are permitted to take Enforcement Action in relation to the High Yield Notes Security Documents under Clause 19.2 (Permitted High Yield Notes On-Loan and Permitted High Yield Notes Security Documents enforcement); and
 
 
(b)
the Senior Finance Parties have taken no Enforcement Action in relation to the Senior Security Documents related to the shares of Basell Funding,
 
the Security Agent shall (but only as long as the Senior Secured Parties are not taking Enforcement Action) (i) exercise any right, power, authority or discretion vested in it as Security Agent in accordance with any instructions given to it by the High Yield Notes Trustee (or, if so instructed by the High Yield Notes Trustee, refrain from exercising any right, power, authority or discretion vested in it as Security Agent) and (ii) not be liable for any act (or omission) if it acts (or refrains from taking any action) in accordance with an instruction of the High Yield Notes Trustee subject to liability on the part of the Security Agent for gross negligence, willful misconduct or fraud.
 
21.1.3
After the Senior Facility Discharge Date and until the Second Lien Discharge Date, the Security Agent shall:
 
 
(a)
exercise any right, power, authority or discretion vested in it as Security Agent in accordance with any instructions given to it by the Instructing Second Lien Agent (or, if so instructed by the Instructing Second Lien Agent refrain from exercising any right, power, authority or discretion vested in it as Security Agent); and
 
 
(b)
not be liable for any act (or omission) if it acts (or refrains from taking any action) in accordance with an instruction of the Instructing Second Lien Agent under the Interim Facility Agreement.
 
21.1.4
After the Senior Facility Discharge Date and the Second Lien Discharge Date and until the High Yield Notes Discharge Date, the Security Agent shall:
 
 
(a)
exercise any right, power, authority or discretion vested in it as Security Agent in accordance with any instructions given to it by the High Yield Notes Trustee (or, if so instructed by the High Yield Notes Trustee, refrain from exercising any right, power, authority or discretion vested in it as Security Agent); and
 
 
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(b)
not be liable for any act (or omission) if it acts (or refrains from taking any action) in accordance with an instruction of the High Yield Notes Trustee subject to liability on the part of the Security Agent for gross negligence, willful misconduct or fraud.
 
21.1.5
Any instructions given in accordance with paragraph 21.1.1, 21.1.2, 21.1.3 or 21.1.4 above will be binding on all the Senior Secured Parties and the High Yield Noteholders.
 
21.1.6
The Security Agent may refrain from acting in accordance with any instructions given in accordance with paragraph 21.1.1, 21.1.2, 21.1.3 or 21.1.4 above until it has received such security as it may require for any cost, loss or liability (together with any associated VAT) which it may incur in complying with the instructions.
 
21.1.7
In the absence of instructions given in accordance with paragraph 21.1.1, 21.1.2, 21.1.3 or 21.1.4 above, the Security Agent may act (or refrain from taking action) as it considers to be in the best interest of the Senior Finance Parties or, after the Senior Facility Discharge Date, the Interim Facility Finance Parties and the Second Lien Noteholders or, after the Second Lien Discharge Date, the High Yield Noteholders.
 
21.1.8
The Security Agent is not authorised to act on behalf of a Senior Secured Party, High Yield Notes Finance Party or a High Yield Noteholder (without first obtaining that party’s consent) in any legal or arbitration proceedings relating to any Senior Finance Document, any Hedging Document, any Interim Facility Finance Document, any Second Lien Notes Finance Document, any High Yield Notes Finance Document or this Agreement.
 
21.2
Exemption
 
No Senior Finance Party shall be responsible to any other Party, and no Interim Facility Finance Party shall be responsible to any other Party, and no Second Lien Notes Finance Party shall be responsible to any other Party and no High Yield Notes Finance Party shall be responsible to any other Party, under this Agreement for any instructions given or not given to the Security Agent in relation to the Security Documents provided, however, that with respect to any responsibility of the Second Lien Notes Trustee and the High Yield Notes Trustee only, this Clause 21.2 is subject to Clause 28.11 (Instructions).
 
21.3
Release of Security on enforcement
 
If, pursuant to or for the purpose of any Enforcement Action taken or to be taken by the Security Agent in accordance with this Agreement, the Security Agent requires any release of any Security for the Senior Secured Debt granted by any member of the Group or (subject to the conditions set out in Clause 21.4 (Authority of Security Agent)) the release of any High Yield Notes Guarantee or the High Yield Notes Security Documents, each Party shall promptly enter into any release and/or other document and take any action which the Security Agent may reasonably require.
 
21.4
Authority of Security Agent
 
21.4.1
If in connection with any Enforcement Action:
 
 
(a)
the Security Agent (or any receiver) sells or otherwise disposes of (or proposes to sell or otherwise dispose of) any asset under any Security Document; or
 
 
(b)
a member of the Group sells or otherwise disposes of (or proposes to sell or otherwise dispose of) any asset at the request of the Security Agent or an Instructing Group,
 
the Security Agent may, and is hereby irrevocably authorised (and released from the restrictions set forth in Section 181 of the German Civil Code (Bürgerliches Gesetzbuch)) on behalf of each Party to:
 
 
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(i)
release the Security created pursuant to the Security Documents over the relevant asset; and
 
(ii)
if the relevant asset comprises all of the shares in the capital of a member of the Group pledged in favour of the Senior Finance Parties, (x) release that member of the Group and any Subsidiary of it from all its past, present and future liabilities and/or obligations (both actual and contingent) as a guarantor of the whole or any part of the High Yield Notes Debt (including any liability to any other member of the Group by way of guarantee or contribution) and (y) release any Security granted by that member of the Group or any Subsidiary of it over any asset under any Security Document,
 
provided that, in each case, the conditions of paragraphs 21.4.2 and 21.4.3 below are satisfied.
 
21.4.2
It is a further condition to the release of the High Yield Notes Guarantees, High Yield Notes Security Documents and the whole or any part of the High Yield Notes On-Loan Debt described in paragraph 21.4.1 above, that:
 
 
(a)
the proceeds of such sale or disposal are in cash (or substantially in cash);
 
 
(b)
all claims of the Senior Parties, Second Lien Noteholders and Unsecured Senior Noteholders under the Senior Agreements against a member of the Group (if any) all of whose shares pledged in favour of the Senior Finance Parties, Interim Facility Finance Parties and Second Lien Notes Finance Parties are sold or disposed of pursuant to such Enforcement Action, are unconditionally released and discharged or sold or disposed of concurrently with such sale, and all Security under the Senior Security Documents, Interim Facility Security Documents and Second Lien Notes Security Documents in respect of the assets that are sold or disposed of is simultaneously and unconditionally released and discharged concurrently with such sale, provided that in the event of a sale or disposal of any such claim (instead of a release or discharge):
 
(i)
the Senior Agent determines acting reasonably and in good faith that the Senior Finance Parties will recover more than if such claim was released or discharged; and
 
(ii)
the Senior Agent serves a notice on the Security Agent notifying the Security Agent of the same, in which case the Security Agent shall be entitled immediately to sell and transfer such claim to such purchaser (or an affiliate of such purchaser);
 
 
(c)
such sale or disposal (including any sale or disposal of any claim) is made (a) pursuant to a public auction (b) pursuant to any process or proceedings approved or supervised by or on behalf of any court of law or (c) for fair market value (taking into account the circumstances giving rise to such sale or disposal) as certified by an internationally recognised investment bank selected by the Security Agent.
 
21.4.3
The net cash proceeds of sale or disposal shall be applied in or towards payment of Debt in accordance with the applicable provisions of Clause 20 (Application or Recoveries) and all proceeds (if any) for the benefit of the High Yield Notes Debt shall have been, or contemporaneously with any such release shall be:
 
 
(a)
paid to High Yield Noteholders in repayment or redemption of their High Yield Notes;
 
 
(b)
deposited with the Security Agent or the High Yield Notes Trustee for the benefit of the High Yield Noteholders; or
 
 
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(c)
deposited in an account in which a security interest has been perfected for the benefit of the High Yield Noteholders.
 
21.4.4
Each Party shall promptly enter into any release and/or other document and take any action which the Security Agent may reasonably require to give effect to paragraphs 21.4.1 and 21.4.2 above and in accordance with this Agreement.
 
21.4.5
No such release under paragraph 21.4.1 above will affect the obligations and/or liabilities of:
 
 
(a)
any other member of the Group to the Senior Secured Parties, High Yield Noteholders and/or Subordinated Parties; or
 
 
(b)
any Subordinated Party to the Secured Parties and/or the High Yield Noteholders.
 
21.5
High Yield Notes Trustee
 
Where the Security Agent is entitled or required to act in accordance with the instructions of the Second Lien Notes Trustee or the High Yield Notes Trustee it will be entitled to act (without further investigation) upon any instructions or communication received by it from the Second Lien Notes Trustee or the High Yield Notes Trustee (or any other representative appointed on behalf of the Second Lien Notes Finance Party or Second Lien Notes, or (as applicable) the High Yield Notes Finance Parties or High Yield Noteholders) and will not be bound to enquire whether the requisite Second Lien Noteholder or High Yield Noteholder approval has been obtained provided this has been confirmed by or on behalf of the Second Lien Notes Trustee or the High Yield Notes Trustee.
 
22.
OPTION TO PURCHASE
 
22.1
Option to purchase
 
If after the Second Lien Discharge Date and a High Yield Notes Stop Notice has been issued and is current and the Senior Finance Parties have taken Enforcement Action, provided the High Yield Notes Trustee has received instructions and confirmation that all conditions in Clause 22.2 (Terms of purchase) will be satisfied at the relevant time from the High Yield Noteholders, then the High Yield Notes Trustee or holders of at least 50 per cent. of the High Yield Notes may at the expense of the High Yield Noteholders within 60 days of the Senior Finance Parties taking Enforcement Action give not less than 10 Business Days’ notice to the Senior Agent to acquire or procure the acquisition by a person nominated by the High Yield Notes Trustee or the High Yield Noteholders (as the case may be) of all (but not part only) of the rights and obligations of:
 
 
(a)
the Senior Finance Parties in connection with the Senior Facility Debt under the Senior Finance Documents by way of transfer under Section 10.07 (Successors and Assigns) of the Senior Facility Agreement; and
 
 
(b)
the Hedging Banks in connection with the Hedging Debt under the Hedging Documents,
 
but without prejudice to the Senior Finance Parties’ ability to take Enforcement Action in accordance with this Agreement prior to any such acquisition and subject to Clause 22.2 (Terms of purchase).
 
22.2
Terms of purchase
 
Any purchase under Clause 22.1 (Option to purchase) shall be on the following terms:
 
22.2.1
payment in full in cash of an amount equal to the Senior Facility Debt outstanding as at the date that amount is to be paid, as determined by the Senior Agent (acting reasonably);
 
 
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22.2.2
payment in full in cash of the amount which each Senior Finance Party certifies to be necessary to compensate it for any loss on account of funds borrowed, contracted for or utilised to fund any amount included in the Senior Facility Debt resulting from the receipt of that payment otherwise than on the last day of an Interest Period;
 
22.2.3
after the transfer, no Senior Finance Party will be under any actual or contingent liability to any Obligor or any other person under this Agreement or any Senior Finance Document for which it is not holding cash collateral in an amount and on terms reasonably satisfactory to it;
 
22.2.4
each High Yield Noteholder (or a third party acceptable to all the Senior Finance Parties and High Yield Notes Finance Parties), as the case may be, indemnifies each Senior Finance Party on the date of the relevant transfer in respect of all losses which may be sustained or incurred by any Senior Finance Party as a result of any sum received or recovered by any Senior Finance Party from any Obligor, any High Yield Notes Finance Party or any other person being required (or it being alleged that it is required) to be paid back by or clawed back from any Senior Finance Party for any reason; and
 
22.2.5
the relevant transfer shall be without recourse to, or warranty from, any Senior Finance Party, except that each Senior Finance Party shall be deemed to have represented and warranted on the date of that transfer that:
 
 
(a)
it is the sole owner, free from all Security and third party interests (other than any arising under the Senior Finance Documents or by operation of law), of all rights and interests under the Senior Finance Documents purporting to be transferred by it by that transfer; and
 
 
(b)
it has the power to enter into and make, and has taken all necessary action to authorise its entry into and making, that transfer.
 
23.
PRESERVATION OF DEBT
 
23.1
Preservation of Junior Debt
 
23.1.1
Notwithstanding any term of this Agreement postponing, subordinating or preventing the payment of all or any part of the Junior Debt, the relevant Junior Debt shall, as between the Obligors, the Intercompany Borrowers and the Junior Creditors, be deemed to remain owing or due and payable (and interest, default interest or indemnity payments shall continue to accrue) in accordance with the High Yield Notes Finance Documents, the High Yield Notes On-Loan Documents, the Investor Documents or the Intercompany Documents (as the case may be).
 
23.1.2
No failure to exercise, nor any delay in exercising, on the part of any Junior Creditor any right or remedy under any High Yield Notes Finance Document, High Yield Notes On-Loan Document, Investor Document or Intercompany Document (as the case may be) by reason of any term of this Agreement postponing, restricting or preventing such exercise shall operate as a waiver, nor shall any single or partial exercise of any right or remedy prevent any further or other exercise or the exercise of any other right or remedy by any Junior Creditor.
 
23.2
No liability
 
23.2.1
No Senior Party or Hedging Bank will be liable to any Junior Creditor for:
 
 
(a)
the manner of exercise or any non-exercise of its rights, remedies, powers, authorities or discretions under this Agreement; or
 
 
(b)
any failure to collect or preserve any Debt or delay in doing so.
 
 
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23.2.2
No High Yield Notes Finance Party will be liable to any Junior Creditor for:
 
 
(a)
the manner of exercise or any non-exercise of its rights, remedies, powers, authorities or discretions under this Agreement; or
 
 
(b)
any failure to collect or preserve any Debt or delay in doing so.
 
24.
SHARING AMONG CERTAIN PARTIES
 
24.1
Payments to Senior Secured Parties, Unsecured Senior Notes Finance Parties, Unsecured Senior Noteholders High Yield Notes Finance Parties and High Yield Noteholders
 
Subject, in the case of the Second Lien Notes Trustee, Unsecured Notes Trustee and the High Yield Notes Trustee, to Clause 28 (Trustees), on or after the Acceleration Date if a Senior Secured Party, Unsecured Senior Notes Finance Parties, Unsecured Senior Noteholders, High Yield Notes Finance Party or High Yield Noteholder, (a “Recovering Creditor”) makes a Senior Recovery, Hedging Recovery, Interim Facility Recovery, Second Lien Notes Recovery, Unsecured Senior Notes Recovery or High Yield Notes Guarantee Recovery, as relevant (the “Recovery”) in respect of any amounts owed by any Obligor other than in accordance with the applicable provisions of Clause 20 (Application of Recoveries) and applies that amount to a payment due under the Finance Documents to which it is a party then:
 
24.1.1
the Recovering Creditor shall, within three Business Days, notify details of the Recovery to the Security Agent and, as relevant, the Senior Agent, the Interim Facility Agent, the Second Lien Notes Trustee, Unsecured Senior Notes Trustee or the High Yield Notes Trustee;
 
24.1.2
the Security Agent shall determine whether the Recovery is in excess of the amount the Recovering Creditor would have been paid had the Recovery been made by the Security Agent and distributed in accordance with the applicable provisions of Clause 20.1 (Application of Recoveries), without taking account of any Tax which would be imposed on the Security Agent, the Senior Agent, the Interim Facility Agent, the Second Lien Notes Trustee, Unsecured Senior Notes Trustee or the High Yield Notes Trustee, as relevant, in relation to the Recovery; and
 
24.1.3
the Recovering Creditor shall, within three Business Days of demand by the Security Agent, pay to the Security Agent an amount (the “Sharing Payment”) equal to such Recovery less any amount which the Security Agent determines may be retained by the Recovering Creditor as its share of any payment to be made in accordance with the applicable provisions of Clause 20 (Application of Recoveries).
 
24.2
Redistribution of payments
 
The Security Agent shall treat the Sharing Payment as if it had been paid by the relevant Obligor and distribute it between the Senior Secured Parties, Unsecured Senior Notes Finance Parties, Unsecured Senior Noteholders, the High Yield Notes Finance Parties and High Yield Noteholders (other than the Recovering Creditor) in accordance with the applicable provisions of Clause 20 (Application of Recoveries).
 
24.3
Recovering Creditor’s rights
 
24.3.1
On a distribution by the Security Agent under Clause 24.2 (Redistribution of payments), the Recovering Creditor will be subrogated to the rights of the Senior Secured Parties, Unsecured Senior Notes Finance Parties, Unsecured Senior Noteholders, the High Yield Notes Finance Parties and High Yield Noteholders which have shared in the redistribution.
 
24.3.2
If and to the extent that the Recovering Creditor is not able to rely on its rights under paragraph 24.3.1 above, the relevant Obligor shall be liable to the Recovering Creditor for a debt equal to the Sharing Payment which is immediately due and payable.
 
 
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24.4
Reversal of redistribution
 
If any part of the Sharing Payment received or recovered by a Recovering Creditor becomes repayable and is repaid by that Recovering Creditor, then:
 
24.4.1
each Senior Secured Party, Unsecured Senior Notes Finance Party and High Yield Notes Finance Party which has received a share of the relevant Sharing Payment pursuant to Clause 24.2 (Redistribution of payments) shall, upon request of the Security Agent, pay to the Security Agent for account of that Recovering Creditor an amount equal to the appropriate part of its share of the Sharing Payment (together with an amount as is necessary to reimburse that Recovering Creditor for its proportion of any interest on the Sharing Payment which that Recovering Creditor is required to pay); and
 
24.4.2
that Recovering Creditor’s rights of subrogation in respect of any reimbursement shall be cancelled and the relevant Obligor will be liable to the reimbursing Senior Secured Party and/or Unsecured Senior Notes Finance Party and/or High Yield Notes Finance Party (as relevant) for the amount so reimbursed.
 
24.5
Exceptions
 
24.5.1
This Clause 24 shall not apply to the extent that the Recovering Creditor would not, after making any payment pursuant to this Clause, have a valid and enforceable claim against the relevant Obligor.
 
24.5.2
A Recovering Creditor is not obliged to share with any Senior Secured Party, Unsecured Senior Notes Finance Party or High Yield Notes Finance Party (as relevant) any amount which the Recovering Creditor has received or recovered as a result of taking legal or arbitration proceedings, if:
 
 
(a)
it notified that Senior Secured Party and/or Unsecured Senior Notes Finance Party and/or High Yield Notes Finance Party of the legal or arbitration proceedings; and
 
 
(b)
that Senior Secured Party and/or Unsecured Senior Notes Finance Party and/or High Yield Notes Finance Party had an opportunity to participate in those legal or arbitration proceedings but did not do so as soon as reasonably practicable having received notice and did not take separate legal or arbitration proceedings.
 
24.5.3
Neither the Second Lien Notes Trustee, Unsecured Senior Notes Trustee or the High Yield Notes Trustee shall have to make a Sharing Payment to the Security Agent under Clause 24.1.3 (Payments to Senior Secured Parties, High Yield Notes Finance Parties and High Yield Noteholders) in respect of a Recovery received by it as a Recovering Creditor to the extent that at the time of such Recovery and its transfer to the Second Lien Noteholders, Unsecured Senior Notes Trustee or the High Yield Noteholders (as applicable), the Second Lien Notes Trustee, Unsecured Senior Notes Trustee or the High Yield Notes Trustee (as applicable) has no actual knowledge that such a Recovery was not made in accordance with Clause 20 (Application of Recoveries).
 
24.5.4
Nothing in this Clause 24 shall prevent a Trustee receiving and retaining any Trustee Amounts.
 
24.6
Parallel Debt
 
24.6.1
Security Agent Claim means any amount which an Obligor owes to the Security Agent under this Clause 24.6 (Parallel Debt).;
 
 
Secured Party Claim means any amount which an Obligor owes to a Senior Secured Party, a High Yield Notes Finance Party or a High Yield Noteholder.
 
 
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24.6.2
Unless expressly provided to the contrary in an Finance Document, the Security Agent holds:
 
 
(a)
any security created by a Security Document governed by Luxembourg law;
 
 
(b)
the benefit of any Security Agent Claims: and
 
 
(c)
any proceeds of security,
 
for the benefit, and as the property, of the Senior Secured Parties and so that they are not available to the personal creditors of the Security Agent.
 
24.6.3
The Security Agent will separately identify in its records the property rights referred to in Clause 24.6.2 above.
 
24.6.4
Clauses 24.6.2 and 24.6.3 above do not apply to any security created by a Finance Document governed by Dutch law.
 
24.6.5
Each Obligor must pay the Security Agent, as an independent and separate creditor, an amount equal to each Secured Party Claim on its due date.
 
24.6.6
The Security Agent may enforce performance of any Security Agent Claim in its own name as an independent and separate right.  This includes any suit, execution, enforcement of security, recovery of guarantees and applications for and voting in respect of any kind of insolvency proceeding.
 
24.6.7
Each Senior Secured Party, High Yield Notes Finance Party and High Yield Note Holders must, at the request of the Security Agent, perform any act required in connection with the enforcement of any Security Agent Claim.  This includes joining in any proceedings as co-claimant with the Security Agent.
 
24.6.8
Each Senior Secured Party, High Yield Notes Finance and High Yield Noteholder, irrevocably and unconditionally waives any right it may have to require a Senior Secured Party, High Yield Notes Finance Party or High Yield Noteholder to join in any proceedings as co-claimant with the Security Agent in respect of any Security Agent Claim.
 
24.6.9
Discharge by an Obligor of a Secured Party Claim will discharge the corresponding Security Agent Claim in the same amount.  Discharge by an Obligor of a Security Agent Claim will discharge the corresponding Secured Party Claim in the same amount.
 
24.6.10
The aggregate amount of the Security Agent Claims will never exceed the aggregate amount of Secured Party Claims.
 
24.6.11
A defect affecting a Security Agent Claim against an Obligor will not affect any Secured Party Claim.  A defect affecting a Secured Party Claim against an Obligor will not affect any Security Agent Claim.
 
24.6.12
Each Security Agent Claim is created on the understanding that and provided that the Security Agent will:
 
 
(a)
share the benefit, including in particular the proceeds of the Security Agent Claim, with the other Senior Secured Parties and High Yield Notes Finance Parties; and
 
 
(b)
pay those proceeds to the Senior Secured Parties and High Yield Notes Finance Parties,
 
in accordance with this Agreement.
 
 
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24.6.13
Each Party agrees that the Security Agent:
 
(i)
will be the joint and several creditor (together with the relevant Senior Secured Party) of each and every obligation of each Obligor towards each Senior Secured Party under this Agreement; and
 
(ii)
will have its own independent right to demand performance by each Obligor of those obligations.
 
24.6.14
Discharge by an Obligor of any obligation owed to the Security Agent or another Senior Secured Party shall, to the same extent, discharge the corresponding obligation owing to the other.
 
24.6.15
Without limiting or affecting the Security Agent’s rights against each Obligor (whether under this clause 24.6 or under any other provision of the Finance Documents), the Security Agent agrees with each other Senior Secured Party (on a several and divided basis) that, subject to clause 24.6.16 below, it will not exercise its rights as a joint and several creditor with a Senior Secured Party except with the consent of the relevant Senior Secured Parties (as required under the Finance Documents).
 
24.6.16
Nothing in clause 24.6.15 shall in any way limit the Security Agent’s right to act in the protection or preservation of rights under or to enforce any Finance Document as contemplated by this Agreement and/or the relevant Finance Document (or to do any act reasonably incidental to any of the above).
 
25.
SUBROGATION
 
25.1
Subrogation of High Yield Notes Finance Parties and High Yield Noteholders
 
If any Senior Debt, ABL Debt or Hedging Debt is paid out of any proceeds received in respect of or on account of the High Yield Notes Guarantee Debt owing to one or more High Yield Notes Finance Parties and High Yield Noteholders:
 
 
(a)
those High Yield Notes Finance Parties and High Yield Noteholders (pro rata to their respective interests in such High Yield Notes Guarantee Debt) will to that extent be subrogated to the Senior Debt, ABL Debt and Hedging Debt so paid (and all Security and guarantees for that Senior Debt, Hedging Debt); but
 
 
(b)
except with the prior consent of each Senior Representative under its respective Senior Agreement and the ABL Agent under the ABL Agreement (as the case may be), the High Yield Notes Finance Parties (with the exception of the High Yield Notes Trustee in respect of any High Yield Notes Trustee Amounts owing to it) and High Yield Noteholders may not exercise those subrogation rights until after the Senior Discharge Date. After the Senior Discharge Date, to the extent that the High Yield Notes Finance Parties and High Yield Noteholders may exercise such rights of subrogation, each Senior Party (as the case may be) (and subject, in each case, to being indemnified to its reasonable satisfaction against any resulting costs, expenses and liabilities, by cash collateral if so requested) will give such assistance to enable such rights to be exercised as the High Yield Notes Finance Parties and High Yield Noteholders and/or the Security Agent may reasonably request.
 
25.2
Subrogation of holder of High Yield Notes On-Loan
 
If any Senior Debt or Hedging Debt is paid out of any proceeds received in respect of or on account of the High Yield Notes On-Loan Debt:
 
 
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(a)
those holders of the High Yield Notes On-Loan will to that extent be subrogated to the Senior Debt and Hedging Debt so paid (and all Security and guarantees for that Senior Debt and Hedging Debt); but
 
 
(b)
except with the prior consent of each Senior Representative under its respective Senior Agreement (as the case may be), the holders of the High Yield Notes On-Loan may not exercise those subrogation rights until after the Senior Discharge Date.  After the Senior Discharge Date, to the extent that the holder of the High Yield Notes On-Loan may exercise such rights of subrogation, each Senior Party (as the case may be) (and subject, in each case, to being indemnified to its reasonable satisfaction against any resulting costs, expenses and liabilities, by cash collateral if so requested) will give such assistance to enable such rights to be exercised as the holders of the High Yield Notes On-Loan may reasonably request.
 
25.3
Non-subrogation
 
Save to any extent otherwise agreed by an Instructing Group, no Subordinated Party, Intercompany Borrower or Obligor will under any circumstances be subrogated to or entitled to exercise any of the rights of any Senior Party, High Yield Noteholder or High Yield Notes Finance Party or any Security under the Finance Documents.
 
26.
CONSENTS
 
26.1
No objection by High Yield Notes Finance Parties, High Yield Noteholders or holders of the High Yield Notes On-Loan
 
No High Yield Notes Finance Party, High Yield Noteholder or holder of the High Yield Notes On-Loan shall have any claim or remedy against any member of the Group or Senior Party by reason of:
 
 
(a)
the entry by any of them into any Finance Document or any other agreement contemplated in any Finance Document between any Senior Party and any member of the Group;
 
 
(b)
any waiver or consent; or
 
 
(c)
any requirement or condition imposed by or on behalf of any Senior Party under any Finance Document, or any such other agreement,
 
which breaches or causes a default, an event of default or potential event of default (however described) under any High Yield Notes Finance Document or High Yield Notes On-Loan Document. No High Yield Noteholder, High Yield Notes Finance Party or holder of the High Yield Notes On-Loan, may object to any such matter by reason of any provision of any High Yield Notes Finance Document or High Yield Notes On-Loan Document.
 
26.2
No objection by Subordinated Parties
 
No Subordinated Party shall have any claim or remedy against any member of the Group or any Senior Party, High Yield Notes Finance Party or High Yield Noteholder by reason of:
 
 
(a)
the entry by any of them into any Finance Document, High Yield Notes On-Loan Document or any other agreement between any such party and any member of the Group;
 
 
(b)
any waiver or consent; or
 
 
(c)
any requirement or condition imposed by or on behalf of any such party under any Finance Document, High Yield Notes On-Loan Document or any such other agreement,
 
 
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which breaches or causes a default, an event of default or potential event of default (however described) under any Intercompany Document or Investor Document. No Subordinated Party may object to any such matter by reason of any provision of any Investor Document or Intercompany Document.
 
27.
ROLE OF THE SECURITY AGENT
 
27.1
Appointment of the Security Agent
 
27.1.1
Each other Senior Secured Party, each Arco Notes Finance Party, each Equistar Notes Finance Party and each High Yield Notes Finance Party appoints Citibank, N.A. to act as security trustee under and in connection with the Senior Finance Documents, the Hedging Documents, the Interim Facility Finance Documents, the Second Lien Notes Finance Documents, the Arco Notes Finance Documents, the Equistar Notes Finance Documents or the High Yield Notes Finance Documents (as relevant) and this Agreement in relation to any security interest which is expressed to be or is construed to be governed by English, Hong Kong or laws of Canada (including the federal laws of Canada and the laws of each province or territory thereof), or any other law from time to time designated by the Security Agent and an Obligor.
 
27.1.2
Except as expressly provided in this Clause 27.1.1, and without limiting or affecting Clause 24.6 (Parallel Debt), each other Senior Secured Party, Arco Notes Finance Party, Equistar Notes Finance Party and High Yield Notes Finance Party appoints Citibank, N.A. to act as collateral agent (the “Collateral Agent”)  under and in connection with the Senior Finance Documents, the Hedging Documents, the Interim Facility Finance Documents, the Second Lien Notes Finance Documents, the Arco Notes Finance Documents, the Equistar Notes Finance Documents and the High Yield Notes Finance Documents (as relevant) and this Agreement.
 
27.1.3
Without limiting or affecting Clause 24.6 (Parallel Debt), each other Senior Secured Party, each Arco Notes Finance Party, each Equistar Notes Finance Party and each High Yield Notes Finance Party authorises the Security Agent to execute on its behalf the Security Documents and exercise the rights, powers, authorities and discretions specifically given to it under or in connection with the Senior Finance Documents, the Hedging Documents, the Interim Facility Finance Documents, the Second Lien Notes Finance Documents, the High Yield Notes Finance Documents, the Arco Notes Finance Documents, the Equistar Notes Finance Documents and this Agreement together with any other incidental rights, powers, authorities and discretions.
 
27.1.4
For the purposes of any security to be granted by an Obligor in the Province of Québec, each Senior Finance Party (acting for itself and on behalf of each of its Affiliates which are or become a Senior Finance Party from time to time) confirms the appointment and designation of the Security Agent (or any successor thereto) as the person holding the power of attorney (“fondé de pouvoir”) within the meaning of Article 2692 of the Civil Code of Québec and, in such capacity, the Security Agent shall hold the hypothecs granted under the laws of the Province of Québec as such fondé de pouvoir in the exercise of the rights conferred thereunder.  The execution by the Security Agent, as such fondé de pouvoir prior to the date hereof of any deed creating or evidencing any such hypothec is hereby ratified and confirmed.  Notwithstanding the provisions of Section 32 of the Act respecting the special powers of legal persons (Québec), the Security Agent may acquire and be the holder of any of the bonds issued and secured by any such hypothec. Each future Senior Secured Party that becomes party to this Agreement, by becoming a party to this Agreement, shall be deemed to have ratified and confirmed (for itself and, in the case of each Senior Secured Party, on behalf of each of its Affiliates that are or become a Senior Secured Party from time to time) the appointment of the Security Agent as fondé de pouvoir.
 
27.1.5
The appointment referred to under this Clause 27.1 (Appointment of Security Agent) shall be regarded and construed, for the purposes of Italian law, as a mandato con rappresentanza, and accordingly the Security Agent shall act as the mandatario con rappresentanza of the Senior secured Parties and shall be fully entitled to, without limitation:
 
 
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(a)
exercise in its name (in nome proprio) and in the name and on behalf (in nome e per conto) of the Senior Secured Parties all rights, powers and discretion, execute all documents and take all actions which are expressed to be exercised, executed or taken by the Senior Secured Parties under or in connection with any of the Security Documents governed by Italian law;
 
 
(b)
execute and perfect, in its name (in nome proprio) and in the name and on behalf (in nome e per como) of the Senior Secured Parties, any amendment agreement, deed of acknowledgement, supplemental deed, confirmation deed or any other document to be executed in connection with or under any Security Document governed by Italian law;
 
 
(c)
apply the proceeds of any enforcement and sale under the relevant Security Document governed by Italian law in accordance with the terms of this Agreement; and
 
 
(d)
take, in its name (in nome proprio) and in the name and on behalf (in nome e per conto) of the Senior Secured Parties, any enforcement action in connection with any Security and in accordance with the enforcement procedures provided for by Italian law and the provisions of the security documents governed by Italian law, provided that the Security Agent may delegate or authorize any Senior Secured Party to take enforcement actions in compliance with the provisions of the other Finance Documents and the provisions of Italian law.
 
27.1.6
The Security Agent is released from the restrictions set forth in Section 181 of the German Civil Code (Bürgerliches Gesetzbuch) and is also entitled to release sub-delegates from such restrictions.
 
27.2
Duties of the Security Agent
 
27.2.1
The Senior Agent, the Interim Facility Agent, the Second Lien Notes Trustee, the Arco Notes Trustee, the Equistar Notes Trustee and the High Yield Notes Trustee shall promptly send to the Security Agent such certification as the Security Agent may reasonably require pursuant to paragraph 7 (Basis of distribution) of Schedule 9 (Security agency provisions).
 
27.2.2
The duties of the Security Agent under the Senior Finance Documents, the Hedging Documents, the Interim Facility Finance Documents, the Second Lien Notes Finance Documents, the Arco Notes Security Documents, the Equistar Notes Security Documents, the High Yield Notes Finance Documents and this Agreement are solely mechanical and administrative in nature.
 
27.3
Role of the Security Agent
 
The Security Agent shall not be an agent or trustee of any Senior Secured Party, High Yield Notes Finance Party, Arco Notes Finance Party, Equistar Notes Finance Party, High Yield Noteholder or holder of the High Yield Notes On-Loan (save, in each case, as expressly provided in any Finance Document) or any Obligor or any other person under or in connection with any Senior Finance Document, Hedging Document, Interim Facility Finance Document, the Second Lien Notes Finance Documents, the Arco Notes Security Document, the Equistar Notes Security Document, the High Yield Notes Finance Document or this Agreement. The Security Agent is not acting as an agent or trustee of any Investor.
 
27.4
No fiduciary duties
 
27.4.1
Nothing in this Agreement constitutes the Security Agent (except as expressly provided in Clause 24.6 (Parallel Debt) or Schedule 9 (Security agency provisions)) as a trustee or fiduciary of any other person.
 
 
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27.4.2
The Security Agent shall not be bound to account to any Senior Secured Party, Second Lien Noteholders, Arco Noteholders, Equistar Noteholders, High Yield Notes Finance Party or High Yield Noteholder for any sum or the profit element of any sum received by it for its own account.
 
27.5
Business with the Group
 
The Security Agent may accept deposits from, lend money to and generally engage in any kind of banking or other business with any member of the Group or any other person.
 
27.6
Rights and discretions of the Security Agent
 
27.6.1
The Security Agent may rely on:
 
 
(a)
any representation, notice or document believed by it to be genuine, correct and appropriately authorised; and
 
 
(b)
any statement made by a director, authorised signatory or employee of any person regarding any matters which may reasonably be assumed to be within his knowledge or within his power to verify.
 
27.6.2
The Security Agent may assume, unless it has received notice to the contrary in its capacity as security trustee or security agent for the Senior Secured Parties, Second Lien Noteholders, Arco Noteholders, Equistar Noteholders, High Yield Noteholders and High Yield Notes Finance Parties, that:
 
 
(a)
no default, event of default or potential event of default, however described, has occurred (unless it has actual knowledge of a default, an event of default or potential event of default, however described, arising under a Senior Default relating to non-payment or any failure by an Obligor to pay on the due date any amount payable pursuant to a Hedging Document at the place at and in the currency in which it is expressed to be payable);
 
 
(b)
any right, power, authority or discretion vested in any Party or any group of Senior Lenders, Interim Facility Lenders, Senior Secured Parties, Second Lien Noteholder, Arco Noteholder, Equistar Noteholder, High Yield Noteholder or High Yield Notes Finance Parties has not been exercised; and
 
 
(c)
any notice or request made by the Company (other than a Committed Loan Notice or a Swing Line Loan Notice (each as defined in the Senior Facility Agreement) or a Borrowing Request (as defined in the Interim Facility Agreement) under the Senior Facility Agreement or the Interim Facility Agreement) is made on behalf of and with the consent and knowledge of all the Obligors.
 
27.6.3
The Security Agent may engage, pay for and rely on the advice or services of any lawyers, accountants, surveyors or other experts.
 
27.6.4
The Security Agent may act in relation to the Senior Finance Documents, the Hedging Documents, the Interim Facility Finance Documents, the Second Lien Notes Finance Documents, the High Yield Notes Finance Documents and this Agreement through its personnel and agents.
 
27.6.5
The Security Agent may disclose to any other Party any information it reasonably believes it has received as Security Agent.
 
27.6.6
Notwithstanding any other provision of any Senior Finance Document, any Hedging Document, any Interim Facility Finance Document, any Second Lien Notes Finance Document, the Arco Notes Security Document and the Equistar Notes Security Document, any High Yield Notes Finance Document or this Agreement to the contrary, the Security Agent is not obliged to do or omit to do anything if it would or might in its reasonable opinion constitute a breach of any law or regulation, or a breach of a fiduciary duty or duty of confidentiality.
 
 
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27.7
Responsibility for documentation
 
The Security Agent is not responsible for:
 
 
(a)
the adequacy, accuracy and/or completeness of any information (whether oral or written) supplied by the Security Agent, an Obligor or any other person given in or in connection with any Senior Finance Document, any Hedging Document, any Interim Facility Finance Document, any Second Lien Notes Finance Documents, Arco Notes Security Documents, Equistar Notes Security Document, any High Yield Notes Finance Document or this Agreement; or
 
 
(b)
the legality, validity, effectiveness, adequacy or enforceability of any Senior Finance Document, any Hedging Document, any Interim Facility Finance Document, any Second Lien Notes Finance Documents, any Arco Notes Finance Document, any Equistar Notes Finance Documents any High Yield Notes Finance Document, this Agreement or any other agreement, arrangement or document entered into, made or executed in anticipation of or in connection with any Senior Finance Document, any Hedging Document, any Interim Facility Finance Document, any Second Lien Notes Finance Documents, any Arco Notes Finance Document, any Equistar Notes Finance Documents any High Yield Notes Finance Document or this Agreement.
 
27.8
Exclusion of liability
 
27.8.1
Without limiting paragraph 27.8.2 below, the Security Agent will not be liable for any action taken by it under or in connection with any Senior Finance Document, any Hedging Document, any Interim Facility Finance Document, any Second Lien Notes Finance Documents,any Arco Notes Security Documents, any Equistar Notes Security Document, any High Yield Notes Finance Document or this Agreement, unless directly caused by its gross negligence or willful misconduct.
 
27.8.2
No Party (other than the Security Agent) may take any proceedings against any officer, employee or agent of the Security Agent in respect of any claim it might have against the Security Agent or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Senior Finance Document, any Hedging Document, any Interim Facility Finance Document, any Second Lien Notes Finance Documents, any Arco Notes Security Documents, any Equistar Notes Security Document, any High Yield Notes Finance Document or this Agreement and any officer, employee or agent of the Security Agent may rely on this Clause.
 
27.8.3
The Security Agent will not be liable for any delay (or any related consequences) in crediting an account with an amount required under the Senior Finance Documents, the Hedging Documents, the Interim Facility Finance Documents, the Second Lien Notes Finance Documents, the Arco Notes Security Documents, the Equistar Notes Security Document, the High Yield Notes Finance Document or this Agreement to be paid by it if it has taken all necessary steps as soon as reasonably practicable to comply with the regulations or operating procedures of any recognised clearing or settlement system used by it for that purpose.
 
27.9
Indemnities to the Security Agent
 
Each other Senior Secured Party, Second Lien Noteholder, Arco Notes Noteholder, Equistar Notes Noteholder and High Yield Noteholder shall (in proportion to its share of the Senior Debt, Hedging Debt, Interim Facility Debt, Second Lien Notes Debt, Arco Notes Debt, Equistar Notes Debt or High Yield Notes Guarantee Debt (as the case may be)) then outstanding to all the Senior Debt, Hedging Debt, Interim Facility Debt, Second Lien Notes Debt or High Yield Notes Guarantee Debt (as the case may be) then outstanding indemnify the Security Agent, within three Business Days of demand, against any cost, loss or liability incurred by the Security Agent (otherwise than by reason of its gross negligence or willful misconduct) in acting as Security Agent under the Senior Finance Documents, the Hedging Documents, the Interim Facility Finance Documents, Second Lien Notes Finance Documents, the Arco Notes Security Documents, the Equistar Notes Security Document, or the High Yield Notes Finance Documents (if relevant) or this Agreement (unless it has been reimbursed by an Obligor pursuant to a Senior Finance Document, a Hedging Document, an Interim Facility Finance Document, the Second Lien Notes Finance Documents, any Arco Notes Security Documents, any Equistar Notes Security Document, or a High Yield Notes Finance Document (as relevant) or this Agreement).
 
 
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27.10
Resignation of the Security Agent
 
27.10.1
The Security Agent may resign and appoint one of its Affiliates acting through an office as successor by giving five days’ written notice to the Interim Facility Finance Parties, the Arco Notes Trustee, the Equistar Notes Trustee, the Second Lien Notes Trustee, the High Yield Notes Trustee and the Company and, until the Senior Discharge Date, the other Senior Finance Parties and the Hedging Banks.
 
27.10.2
Alternatively, the Security Agent may resign by giving five days’ written notice to the Interim Facility Finance Parties, the Second Lien Notes Trustee,  the Arco Notes Trustee, the Equistar Notes Trustee, the High Yield Notes Trustee and the Company and, until the Senior Discharge Date, the other Senior Finance Parties and the Hedging Banks, in which case the Senior Agent under the Senior Facility Agreement, until the Senior Facility Discharge Date, or the Interim Facility Agent under the Interim Facility Agreement, after the Senior Facility Discharge Date, the Second Lien Notes Trustee, after the Senior Facility Discharge Date and the interim Facility Discharge Date, or the High Yield Notes Trustee, after the Second Lien Notes Discharge Date (in each case, after consultation with the Company) may appoint a successor Security Agent.
 
27.10.3
If the Senior Agent under the Senior Facility Agreement, the Interim Facility Agent under the Interim Facility Agreement, the Second Lien Notes Trustee or, as the case may be, the High Yield Notes Trustee have not appointed a successor Security Agent in accordance with paragraph 27.10.2 above within 30 days after notice of resignation has been given, the Security Agent (after consultation with the Company) may appoint a successor Security Agent.
 
27.10.4
The retiring Security Agent shall make available to its successor such documents and records and provide such assistance as its successor may reasonably request for the purposes of performing its functions as Security Agent under the Senior Finance Documents, the Hedging Documents, the Interim Facility Finance Documents, the Second Lien Notes Finance Documents, the Arco Notes Security Documents, the Equistar Notes Security Documents, the High Yield Notes Finance Documents and this Agreement.
 
27.10.5
The resignation notice of the Security Agent shall only take effect upon (i) the appointment of a successor and (ii) the execution of all documents and the taking of all other actions necessary or, in the reasonable opinion of the successor desirable, in connection with the substitution, in accordance with applicable law, of the successor as creditor of each Obligor’s Parallel Debt and as holder of the Security created pursuant to the Finance Documents.
 
27.10.6
Upon the appointment of a successor, the retiring Security Agent shall be discharged from any further obligation in respect of the Senior Finance Documents, the Hedging Documents, the Interim Facility Finance Documents, the Second Lien Notes Finance Documents, the Arco Notes Finance Documents, the Equistar Notes Finance Documents, the High Yield Notes Finance Documents and this Agreement except from those arising before the resignation of the Security Agent, but shall remain entitled to the benefit of this Clause 27. Its successor and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party.
 
 
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27.10.7
After consultation with the Company, the Senior Agent under the Senior Facility Agreement, until the Senior Facility Discharge Date, or the Interim Facility Agent under the Interim Facility Agreement, after the Senior Discharge Date and until the Interim Facility Discharge Date, the Second Lien Notes Trustee after the Senior Facility Discharge Date and the Interim Facility Discharge Date and until the Second Lien Notes Discharge Date or the High Yield Notes Trustee, after the Second Lien Notes Discharge Date, may, by notice to the Security Agent, require it to resign in accordance with paragraph 27.10.2 above. In this event, the Security Agent shall resign in accordance with paragraphs 27.10.2 and 27.10.5 above.
 
27.11
Confidentiality
 
27.11.1
The Security Agent (in acting as security trustee or security agent for the Senior Secured Parties, the Arco Finance Parties, the Equistar Finance Parties, the Second Lien Noteholders, the High Yield Notes Finance Parties and High Yield Noteholders) shall be regarded as acting through its respective security trustee or security agency division which shall be treated as a separate entity from any other of its divisions or departments.
 
27.11.2
If information is received by another division or department of the Security Agent, it may be treated as confidential to that division or department and the Security Agent shall not be deemed to have notice of it.
 
27.12
Credit appraisal by the Secured Parties and High Yield Notes Trustee
 
Without affecting the responsibility of any Obligor or other person for information supplied by it or on its behalf in connection with any Senior Finance Document, any Hedging Document, any Interim Facility Finance Document, any Second Lien Notes Finance Documents, any High Yield Notes Finance Document or this Agreement, each Senior Finance Party, Hedging Bank, Interim Facility Finance Party, Second Lien Notes Finance Party, Second Lien Noteholder, High Yield Notes Finance Party and High Yield Noteholder confirms to the Security Agent that it has been, and will continue to be, solely responsible for making its own independent appraisal and investigation of all risks arising under or in connection with any Senior Finance Document, any Hedging Document, any Interim Facility Finance Document, any Second Lien Notes Finance Documents, any High Yield Notes Finance Document or this Agreement including but not limited to:
 
27.12.1
the financial condition, status and nature of each member of the Group and the Target Group;
 
27.12.2
the legality, validity, effectiveness, adequacy or enforceability of any Senior Finance Document, any Hedging Document, any Interim Facility Finance Document, any Second Lien Notes Finance Documents, any High Yield Notes Finance Document or this Agreement or any other agreement, Security, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Senior Finance Document, any Hedging Document, any Interim Facility Finance Document, any Second Lien Notes Finance Documents, any High Yield Notes Finance Document or this Agreement;
 
27.12.3
whether that Senior Finance Party, Hedging Bank, Interim Facility Finance Party, Second Lien Notes Finance Party or High Yield Notes Finance Party has recourse, and the nature and extent of that recourse, against any Party or any of its respective assets under or in connection with any Senior Finance Document, any Hedging Bank, any Interim Facility Finance Document, any Second Lien Notes Finance Documents, any High Yield Notes Finance Document or this Agreement, the transactions contemplated by the Senior Finance Documents, the Hedging Documents, the Interim Facility Finance Documents, any Second Lien Notes Finance Documents, the High Yield Notes Finance Documents or this Agreement or any other agreement, Security, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Senior Finance Document, any Hedging Document, any Interim Facility Finance Document, any Second Lien Notes Finance Documents, any High Yield Notes Finance Document or this Agreement; and
 
 
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27.12.4
the adequacy, accuracy and/or completeness of any information provided by the Security Agent, any Party or by any other person under or in connection with any Senior Finance Document, any Hedging Document, any Interim Facility Finance Document, any Second Lien Notes Finance Documents, any High Yield Notes Finance Document or this Agreement, the transactions contemplated by the Senior Finance Documents, the Hedging Documents, the Interim Facility Finance Document, any Second Lien Notes Finance Documents, any High Yield Notes Finance Documents or this Agreement or any other agreement, Security, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Senior Finance Document, any Hedging Document, any Interim Facility Finance Document, any Second Lien Notes Finance Documents, any High Yield Notes Finance Document or this Agreement.
 
27.13
Management time of the Security Agent
 
Any amount payable to the Security Agent under Clause 27.9 (Indemnities to the Security Agent) and Clause 31 (Expenses) shall include the cost of utilising its management time or other resources and will be calculated on the basis of such reasonable daily or hourly rates as it may notify to the Company, the Senior Agent, the Hedging Banks, the Interim Facility Agent, the Second Lien Notes Trustee and the High Yield Notes Trustee, as relevant, and is in addition to any fee paid or payable to it under any Senior Finance Document, any Hedging Document, any Interim Facility Finance Document, any Second Lien Notes Finance Documents, any High Yield Notes Finance Document or this Agreement.
 
27.14
Deduction from amounts payable by the Security Agent
 
If any Party owes an amount to the Security Agent under the Senior Finance Documents, the Hedging Documents, the Interim Facility Finance Documents, the Second Lien Notes Finance Documents, the High Yield Notes Finance Documents or this Agreement, the Security Agent may, after giving notice to that Party, deduct an amount not exceeding that amount from any payment to that Party which the Security Agent would otherwise be obliged to make under the Senior Finance Documents, the Hedging Documents, the Interim Facility Finance Documents, the Second Lien Notes Finance Documents, the High Yield Notes Finance Documents or this Agreement and apply the amount deducted in or towards satisfaction of the amount owed. For the purposes of the Senior Finance Documents, the Hedging Documents, the Interim Facility Finance Documents, the Second Lien Notes Finance Documents, the  High Yield Notes Finance Documents or this Agreement, that Party shall be regarded as having received any amount so deducted provided, however, that this Clause 27.14 shall not entitle the Security Agent to deduct any amount from any High Yield Notes Trustee Amounts.
 
27.15
Security agency provisions
 
The provisions of Schedule 9 (Security agency provisions) shall bind each Party.
 
27.16
Security agency fee
 
The Company shall pay to the Security Agent (for its own account) a security agency fee in the amount and at the times agreed in a Fee Letter.
 
27.17
Indemnity to the Security Agent
 
The Company shall promptly indemnify the Security Agent against any cost, loss or liability incurred by the Security Agent (acting reasonably) as a result of:
 
27.17.1
investigating any event which it reasonably believes is a default, an event of default or potential event of default, however described; or
 
27.17.2
acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised.
 
 
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27.18
Security Agent expenses
 
The Company shall promptly on demand pay the Security Agent the amount of all costs and expenses (including legal fees) incurred by it in connection with the administration or release of any Security created pursuant to any Security Document.
 
28.
TRUSTEES
 
28.1
Liability
 
28.1.1
It is expressly understood and agreed by the Parties that this Agreement is executed and delivered by each Trustee not individually or personally but solely in its capacity as trustee in the exercise of the powers and authority conferred and vested in it under its respective Notes Finance Documents for and on behalf of the Noteholders only for which such Trustee acts as trustee and it shall have no liability for acting for itself or in any capacity other than as trustee and nothing in this Agreement shall impose on it any obligation to pay any amount out of its personal assets. Notwithstanding any other provision of this Agreement, its obligations hereunder (if any) to make any payment of any amount or to hold any amount on trust shall be only to make payment of such amount to or hold any such amount on trust to the extent that (i) it has actual knowledge that such obligation has arisen and (ii) it has received and, on the date on which it acquires such actual knowledge, has not distributed to the Noteholders for which it acts as trustee in accordance with its respective Notes Indenture (in relation to which it is trustee) any such amount.
 
28.1.2
It is further understood and agreed by the Parties that in no case shall any Trustee be (i) personally responsible or accountable in damages or otherwise to any other party for any loss, damage or claim incurred by reason of any act or omission performed or omitted by that High Yield Notes Trustee in good faith in accordance with this Agreement or any of the Notes Finance Documents in a manner that such Trustee believed to be within the scope of the authority conferred on it by this Agreement or any of its respective Notes Finance Documents or by law, or (ii) personally liable for or on account of any of the statements, representations, warranties, covenants or obligations stated to be those of any other Party, all such liability, if any, being expressly waived by the Parties and any person claiming by, through or under such Party; provided however, that each Trustee shall be personally liable under this Agreement for its own gross negligence or willful misconduct. It is also acknowledged and agreed that no Trustee shall have any responsibility for the actions of any individual Creditor or Noteholder (save in respect of its own actions).
 
28.2
No action
 
No Trustee shall have any obligation to take any action under this Agreement unless it is indemnified and/or secured and/or prefunded to its satisfaction in respect of all costs, expenses and liabilities which it would in its opinion thereby incur (together with any associated VAT). No Trustee shall have an obligation to indemnify (out of its personal assets) any other person, whether or not a Party, in respect of any of the transactions contemplated by this Agreement unless caused by its gross negligence or willful misconduct.
 
28.3
Reliance on certificates
 
Each Trustee shall at all times be entitled to and may rely on any notice, consent or certificate given or granted by any Party without being under any obligation to enquire or otherwise determine whether any such notice, consent or certificate has been given or granted by such Party properly acting as directed by the appropriate Instructing Group.
 
28.4
No fiduciary duty
 
No Trustee shall be deemed to owe any fiduciary duty to any Creditor (save in respect of such persons for whom it acts as trustee) and shall not be personally liable to any Creditor if it shall in good faith mistakenly pay over or distribute to any Creditor or to any other person cash, property or securities to which any other Creditor shall be entitled by virtue of this Agreement or otherwise. With respect to the Creditors, each Trustee undertakes to perform or to observe only such of its covenants or obligations as are specifically set forth in the Notes Finance Documents pursuant to which it acts as trustee and this Agreement and no implied agreement, covenants or obligations with respect to the other Creditors shall be read into this Agreement against the High Yield Notes Trustee.
 
 
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28.5
Debt assumptions
 
The High Yield Notes Trustee is entitled to assume that in respect of the Senior Debt:
 
28.5.1
no Senior Payment Default has occurred;
 
28.5.2
no other Senior Default has occurred;
 
28.5.3
none of the Senior Debt has been accelerated; and
 
28.5.4
the Senior Discharge Date has not occurred,
 
unless a Responsible Officer of the High Yield Notes Trustee has actual knowledge to the contrary. The High Yield Notes Trustee is not obliged to monitor or enquire whether any Senior Default has occurred.
 
28.6
Senior Lenders, Hedging Banks or Interim Facility Lenders
 
In acting pursuant to this Agreement and the High Yield Notes Indenture, the High Yield Notes Trustee is not required to have any regard to the interests of the Senior Lenders, Hedging Banks, Interim Facility Lenders, Second Lien Noteholders or Unsecured Senior Noteholders.
 
28.7
Claims of Security Agent
 
The Security Agent agrees and acknowledges that it shall have no claim against any Trustee in respect of any fees, costs, expenses and liabilities due and payable to, or incurred by, the Security Agent.
 
28.8
Reliance and advice
 
Each Trustee may:
 
28.8.1
rely on any notice or document believed by it to be genuine and correct and to have been signed by, or with the authority of, the proper person;
 
28.8.2
rely on any statement made by any person regarding any matters which may be assumed to be within its knowledge or within its powers to verify; and
 
28.8.3
engage, pay for and rely on professional advisers selected by it (including those representing a person other than such Trustee).
 
28.9
Provisions survive termination
 
The provisions of this Clause 28 shall survive any termination of this Agreement.
 
28.10
Other Parties not affected
 
No provision of this Clause 28 shall alter or change the rights and obligations as between the other Parties in respect of each other.
 
 
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28.11
Instructions
 
28.11.1
In acting under this Agreement, the Second Lien Notes Trustee shall seek instructions from the Second Lien Noteholders at any time and, where it acts on the instructions of the Second Lien Noteholders, the Second Lien Notes Trustee shall not incur any liability to any person for so acting. The Second Lien Notes Trustee is not liable to any person for any loss suffered as a result of any delay caused as a result of it seeking instructions from the Second Lien Noteholders.
 
28.11.2
In acting under this Agreement, the Unsecured Senior Notes Trustee shall seek instructions from the Unsecured Senior Noteholders at any time and, where it acts on the instructions of the Unsecured Senior Noteholders, the Unsecured Senior Notes Trustee shall not incur any liability to any person for so acting. The Unsecured Senior Notes Trustee is not liable to any person for any loss suffered as a result of any delay caused as a result of it seeking instructions from the Unsecured Noteholders.
 
28.11.3
In acting under this Agreement, the High Yield Notes Trustee shall seek instructions from the High Yield Noteholders at any time and, where it acts on the instructions of the High Yield Noteholders, the High Yield Notes Trustee shall not incur any liability to any person for so acting. The High Yield Notes Trustee is not liable to any person for any loss suffered as a result of any delay caused as a result of it seeking instructions from the High Yield Noteholders.
 
28.12
Responsibility of High Yield Notes Trustee
 
No Trustee is responsible to any other Senior Finance Party, Interim Facility Finance Party, Hedging Bank, Second Lien Notes Finance Party, Unsecured Senior Notes Finance Party or High Yield Notes Finance Party for the legality, validity, effectiveness, enforceability, adequacy, accuracy, completeness or performance of:
 
28.12.1
any Finance Document or any other document;
 
28.12.2
any statement or information (whether written or oral) made in or supplied in connection with any Finance Document or any other document; or
 
28.12.3
any observance by any Obligor of its obligations under any Finance Document or any other document.
 
28.13
Confirmation
 
Without affecting the responsibility of any Obligor for information supplied by it or on its behalf in connection with any Finance Document, each Senior Lender, Interim Facility Lender, Hedging Bank, Second Lien Notes Finance Party, Unsecured Senior Notes Finance Party and High Yield Notes Finance Party (other than each Trustee (in its personal capacity) and the Security Agent) confirms that it:
 
28.13.1
has made, and will continue to make, its own independent appraisal of all risks arising under or in connection with the Senior Finance Documents, the Interim Facility Finance Documents, the Hedging Documents, the Second Lien Notes Finance Documents, the Unsecured Senior Notes Finance Documents or the High Yield Notes Finance Documents (including the financial condition and affairs of each Obligor and its related entities and the nature and extent of any recourse against any Party or its assets); and
 
28.13.2
has not relied exclusively on any information provided to it by any Trustee in connection with any Senior Finance Document, Interim Facility Finance Document, Hedging Document, the Second Lien Notes Finance Documents, the Unsecured Senior Notes Finance Documents or the High Yield Notes Finance Document.
 
 
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28.14
Provision of information
 
No Trustee is obliged to review or check the adequacy, accuracy or completeness of any document it forwards to another Party.  No Trustee is responsible for:
 
28.14.1
providing any Senior Lender, Interim Facility Lender, Hedging Bank, Second Lien Noteholder, Unsecured Senior Noteholder or High Yield Noteholder with any credit or other information concerning the risks arising under or in connection with the Senior Finance Documents, Interim Facility Finance Documents, Hedging Documents, Second Lien Notes Finance Documents, Unsecured Senior Notes Finance Documents or High Yield Notes Finance Documents (including any information relating to the financial condition or affairs of any Obligor or its related entities or the nature or extent of recourse against any Party or its assets) whether coming into its possession before, on or after the date of this Agreement; or
 
28.14.2
obtaining any certificate or other document from any Obligor.
 
28.15
Departmentalism
 
In acting as a Trustee, each Trustee shall be treated as acting through its agency division which shall be treated as a separate entity from its other divisions and departments. Any information received or acquired by a Trustee which, in its opinion, is received or acquired by some other division or department or otherwise than in its capacity as a Trustee may be treated as confidential by such Trustee and will not be treated as information possessed by such Trustee in its capacity as such.
 
28.16
Disclosure of information
 
Each Obligor irrevocably authorises each Trustee to disclose to any Senior Finance Party, Hedging Bank, Interim Facility Finance Party, Second Lien Notes Finance Party, Unsecured Senior Notes Finance Party and any High Yield Notes Finance Party any information that is received by such Trustee in its capacity as a Trustee.
 
28.17
Illegality
 
Each Trustee may refrain from doing anything (including disclosing any information) which might, in its opinion, constitute a breach of any law or regulation and may do anything which, in its opinion, is necessary or desirable to comply with any law or regulation.
 
28.18
Resignation of High Yield Notes Trustee
 
Each Trustee may resign or be removed in accordance with the terms of the High Yield Notes Indenture, provided that a replacement trustee agrees with the Parties to become the replacement trustee under this Agreement by the execution of an Accession Agreement.
 
28.19
Trustee assumptions
 
28.19.1
Each Trustee is entitled to assume that any payment or other distribution made pursuant to this Agreement or account of any Debt has been made in accordance with the provisions of Clause 17.1 (Ranking) and Clause 20 (Application of Recoveries) and the proceeds of enforcement of any Security conferred by the High Yield Notes Security Documents have been applied in the order set out in Clause 20 (Application of Recoveries).
 
28.19.2
The High Yield Notes Trustee is entitled to assume that any payment or other distribution made pursuant to this Agreement in respect of the High Yield Notes Debt has been made in accordance with the ranking in Clause 2 (Ranking) and is not prohibited by Clause 6.2 (Prohibited High Yield Notes Guarantee Debt Payments, Guarantees and Security), Clause 6.3 (Prohibited High Yield Notes On-Loan Payments, Guarantees and Security) or Clause 10.3 (High Yield Notes Guarantee Debt) and is permitted by Clause 11.3 (Permitted High Yield Notes Guarantee Payments and Permitted High Yield Notes On-Loan Payments); and
 
 
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28.19.3
The High Yield Notes Trustee is entitled to assume that any payment or distribution made in respect of the High Yield Notes Guarantee Debt is not prohibited by Clause 6.2 (Prohibited High Yield Notes Guarantee Debt Payments, Guarantees and Security) unless it has actual knowledge to the contrary.
 
28.19.4
No Trustee shall not be obliged to monitor performance by the Obligors of their respective obligations under, or compliance by them with, the terms of this Agreement. No Trustee is responsible for recovering any moneys paid to any Noteholder other than in accordance with the terms of this Agreement other than as a result of its own gross negligence or willful default.
 
28.19.5
No Trustee shall have any obligation under this Clause 28.19 in respect of amounts received or recovered by it unless (a) it has actual knowledge that the receipt or recovery falls within paragraphs 28.19.1 and 28.19.2 above, and (b) it has not distributed to the Noteholders in accordance with its respective Notes Indenture any amount so received or recovered.
 
28.19.6
Notwithstanding Clauses 28.19 (Trustee Assumptions), each Trustee shall be liable under this Agreement for its own gross negligence.
 
29.
INFORMATION
 
29.1
Defaults
 
29.1.1
Each of the Senior Agent, the ABL Agent, the Interim Facility Agent, the Second Lien Notes Trustee, the Unsecured Senior Notes Trustee and the High Yield Notes Trustee will promptly notify each other and the Security Agent of the occurrence of a default, an event of default or a potential event of default (however described) under or breach of the Senior Facility Agreement, ABL Agreement, the Interim Facility Agreement, Second Lien Notes Indenture, Unsecured Senior Notes Indenture  or the High Yield Notes Indenture respectively of which it has actual knowledge.
 
29.1.2
Each Hedging Bank, Subordinated Party and the holder of the High Yield Notes On-Loan will promptly notify the Senior Agent, the ABL Agent, the Interim Facility Agent, the Second Lien Notes Trustee, the Unsecured Senior Notes Trustee, the Security Agent and the High Yield Notes Trustee of the occurrence of a default, an event of default or potential event of default (however described, including any termination event) under or breach of any Hedging Document, Investor Document, Intercompany Document or the High Yield Notes On-Loan of which it has actual knowledge.
 
29.2
Amounts of Debt
 
Each of the Senior Agent, the Hedging Banks, the Interim Facility Agent, the Second Lien Notes Trustee, the Unsecured Senior Notes Trustee, the High Yield Notes Trustee, the holder of the High Yield Notes On-Loan and the Subordinated Parties will on request by any of the others or the Security Agent from time to time notify the others and the Security Agent of details of the amount of its outstanding Senior Debt under their respective Senior Agreement, its outstanding Hedging Debt, its outstanding High Yield Notes Guarantee Debt, its outstanding High Yield Notes On-Loan Debt or its outstanding Subordinated Debt respectively.
 
29.3
Discharge of Senior Debt and Hedging Debt
 
The Senior Agent shall promptly notify the Interim Facility Agent, the Second Lien Notes Trustee, the Unsecured Senior Notes Trustee, the High Yield Notes Trustee and the Security Agent of the occurrence of the Senior Facility Discharge Date. Prior to receipt of any such notice, each Trustee shall be entitled to assume that the Senior Facility Discharge Date has not occurred.
 
 
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29.4
Discharge of Interim Facility Debt
 
The Interim Facility Agent shall promptly notify the Security Agent, the Second Lien Notes Trustee, the Unsecured Senior Notes Trustee and the High Yield Notes Trustee of the occurrence of the Interim Facility Discharge Date.
 
Prior to receipt of any such notice, each Trustee shall be entitled to assume that the Interim Facility Discharge Date has not occurred.
 
29.5
Discharge of Second Lien Notes Debt
 
The Second Lien Notes Trustee shall promptly notify the Unsecured Senior Notes Trustee, the High Yield Notes Trustee and the Security Agent of the occurrence of the Second Lien Notes Discharge Date.  Prior to receipt of any such notice, the Unsecured Senior Notes Trustee and the High Yield Notes Trustee shall be entitled to assume that the Second Lien Notes Discharge Date has not occurred.
 
29.6
Discharge of Unsecured Senior Notes Debt
 
The Unsecured Senior Notes Trustee shall promptly notify the Second Lien Notes Trustee, the High Yield Notes Trustee and the Security Agent of the occurrence of the Unsecured Senior Notes Discharge Date.  Prior to receipt of any such notice, the Second Lien Notes Trustee and the High Yield Notes Trustee shall be entitled to assume that the Unsecured Senior Notes Discharge Date has not occurred.
 
29.7
Discharge of High Yield Notes Guarantee Debt
 
The High Yield Notes Trustee shall promptly notify the Security Agent of the occurrence of the High Yield Notes Discharge Date.  Prior to receipt of any such notice, the Unsecured Senior Notes Trustee and the Second Lien Notes Trustee shall be entitled to assume that the High Yield Notes Discharge Date has not occurred.
 
29.8
Discharge of High Yield Notes On-Loan Debt
 
The holders of the High Yield Notes On-Loan shall promptly notify the Security Agent of the occurrence of the High Yield Notes On-Loan Discharge Date (if after the High Yield Notes Discharge Date).
 
29.9
Discharge of Debt
 
For the avoidance of doubt, no Party shall be required to amend or give any waiver or consent under any provision of this Agreement after the date on which its Debt has been fully and irrevocably paid or discharged and all commitments of that Party in respect of its Debt have expired or been cancelled.
 
30.
POWER OF ATTORNEY
 
30.1
Appointment - Senior Agent
 
Each Junior Creditor (other than the High Yield Notes Trustee and any High Yield Noteholder) by way of security irrevocably appoints each of the Senior Agent and the Security Agent as its attorney (with full power of substitution), on its behalf and in its name or otherwise, at such time until the Senior Facility Discharge Date and in such manner as the attorney thinks fit to do anything which it:
 
30.1.1
has authorised any Senior Finance Party to do under this Agreement; and
 
 
-76-
 
 
30.1.2
is obliged to do but has not done under this Agreement within 10 Business Days after receiving notice from the Senior Agent requiring it to do so.
 
30.2
Appointment - Interim Facility Agent
 
Each Junior Creditor (other than the High Yield Notes Trustee and any High Yield Noteholder) by way of security irrevocably appoints each of the Interim Facility Agent and the Security Agent as its attorney (with full power of substitution), on its behalf and in its name or otherwise, at such time after the Senior Facility Discharge Date until the Interim Facility Discharge Date and in such manner as the attorney thinks fit to do anything which it:
 
30.2.1
has authorised any Interim Facility Finance Party to do under this Agreement; and
 
30.2.2
is obliged to do but has not done under this Agreement within 10 Business Days after receiving notice from the Interim Facility Agent requiring it to do so.
 
30.3
Appointment – Second Lien Notes Trustee
 
Each Junior Creditor by way of security irrevocably appoints the Second Lien Notes Trustee as its attorney (with full power of substitution), on its behalf and in its name or otherwise, at such time after the Senior Facility Discharge Date and the Interim Facility Discharge Date until the Second Lien Notes Discharge Date and in such manner as the attorney thinks fit to do anything which it:
 
30.3.1
has authorised any Second Lien Notes Finance Party to do under this Agreement; and
 
30.3.2
is obliged to do but has not done under this Agreement within 10 Business Days after receiving notice from the Second Lien Notes Trustee requiring it to do so.
 
30.4
Appointment – Unsecured Senior Notes Trustee
 
Each Junior Creditor by way of security irrevocably appoints the Unsecured Senior Notes Trustee as its attorney (with full power of substitution), on its behalf and in its name or otherwise, at such time after the Senior facility Discharge Date, the Interim Facility Discharge Date and the Second Lien Notes Discharge Date until the Unsecured Senior Notes Discharge Date and in such manner as the attorney thinks fit to do anything which it:
 
30.4.1
has authorised any Unsecured Senior Notes Finance Party to do under this Agreement; and
 
30.4.2
is obliged to do but has not done under this Agreement within 10 Business Days after receiving notice from the Unsecured Senior Notes Trustee requiring it to do so.
 
30.5
Appointment – High Yield Notes Trustee
 
Each Junior Creditor by way of security irrevocably appoints the High Yield Notes Trustee as its attorney (with full power of substitution), on its behalf and in its name or otherwise, at such time after the Senior Discharge Date until the High Yield Discharge Date and in such manner as the attorney thinks fit to do anything which it:
 
30.5.1
has authorised any High Yield Notes Finance Party to do under this Agreement; and
 
30.5.2
is obliged to do but has not done under this Agreement within 10 Business Days after receiving notice from the High Yield Notes Trustee requiring it to do so.
 
 
-77-
 
 
30.6
Ratification
 
Each Junior Creditor (other than the High Yield Notes Trustee) ratifies and confirms and agrees to ratify and confirm whatever any such attorney shall do in the exercise or purported exercise of the power of attorney granted by it in this Clause 30.  Any such attorney appointed under this Clause 30 is released from the restriction set forth in Section 181 of the German Civil Code (Bürgerliches Gesetzbuch).
 
31.
EXPENSES
 
To the extent not already paid under another Finance Document, each Obligor and each Subordinated Party will, within three Business Days of demand, pay to the Security Agent for the benefit of each Senior Secured Party and High Yield Notes Finance Party the amount of all costs and expenses (including legal fees) incurred by that Senior Secured Party or High Yield Notes Finance Party (as the case may be) in connection with the enforcement or preservation of that person’s rights against that Obligor or Subordinated Party under this Agreement.
 
32.
CHANGES TO THE PARTIES
 
32.1
Accession of Senior Agent
 
32.1.1
The Senior Agents may not assign any of its rights or transfer any of its rights or obligations under this Agreement to any person unless and until:
 
 
(a)
the Senior Agent is permitted to, and at the same time does, assign or transfer its related rights and obligations under the Senior Finance Documents to that person; and
 
 
(b)
the Security Agent executes an Accession Agreement duly completed and signed on behalf of that person.
 
32.1.2
Each Party (other than the Senior Agent under paragraph 32.1.1 above) irrevocably authorises the Security Agent to execute on its behalf any Accession Agreement which has been duly completed and signed on behalf of that transferee.
 
32.2
Accession of Hedging Banks
 
32.2.1
No person entering into any Hedging Document with any Obligor will be entitled to share in any Security created by any Security Document in respect of any of the moneys, debts or liabilities arising under or in connection with that Hedging Document or benefit from the representations, warranties or undertakings of any Party under this Agreement unless and until:
 
 
(a)
that person and the Hedging Document are listed in Schedule 2 (The Original Hedging Banks); or
 
 
(b)
that person is a Hedge Bank (as defined in the Senior Facility Agreement),
 
 
and, in each case that Hedging Document is permitted by the Senior Agreements.
 
32.2.2
That person shall become a Hedging Bank if the Security Agent executes an Accession Agreement duly completed and signed on behalf of that person.
 
32.2.3
Each Party (other the relevant proposed Hedging Bank under paragraph 32.2.1(b) above) irrevocably authorises the Security Agent to execute on its behalf any Accession Agreement which has been duly completed and signed on behalf of that proposed Hedging Bank.
 
 
-78-
 

32.2.4
The Company shall procure that no Obligor shall enter into any Hedging Document unless and until:
 
 
(a)
that Hedging Document and the Hedging Bank relating to that Hedging Document are listed in Schedule 2 (The Original Hedging Banks); or
 
 
(b)
the proposed Hedging Bank has become a Hedging Bank in accordance with paragraphs 32.2.1(b) and 32.2.3 above.
 
32.3
Assignments and transfers by Hedging Banks
 
32.3.1
No Hedging Bank may assign any of its rights or transfer any of its rights or obligations under this Agreement to any person unless and until:
 
 
(a)
that Hedging Bank is permitted to, and at the same time does, assign or transfer its related rights and obligations under the Hedging Documents to that person; and
 
 
(b)
the Security Agent executes an Accession Agreement duly completed and signed on behalf of that person.
 
32.3.2
Each Party (other than the relevant transferee under paragraph 32.3.1 above) irrevocably authorises the Security Agent to execute on its behalf any Accession Agreement which has been duly completed and signed on behalf of that transferee.
 
32.4
Assignments and transfers by Interim Facility Finance Parties
 
32.4.1
The Interim Facility Agent may not assign any of its rights or transfer any of its rights or obligations under this Agreement to any person unless and until:
 
 
(a)
the Interim Facility Agent is permitted to, and at the same time does, assign or transfer its related rights and obligations under the Interim Facility Finance Documents to that person; and
 
 
(b)
the Security Agent executes an Accession Agreement duly completed and signed on behalf of that person.
 
32.4.2
Each Party (other than the Interim Facility Agent under paragraph 32.4.1 above) irrevocably authorises the Security Agent to execute on its behalf any Accession Agreement which has been duly completed and signed on behalf of that transferee.
 
32.5
Accession of Second Lien Notes Trustee
 
32.5.1
The Company shall procure that, prior to the issue of the Second Lien Notes, the Second Lien Notes Trustee (and, if such entity ceases to act as trustee in relation to the Second Lien Notes for any reason, any successor or other person which is appointed or acts as trustee under the Second Lien Notes Indenture) shall promptly complete, sign and deliver to the Security Agent an Accession Agreement under which the Second Lien Notes Trustee agrees to be bound by this Agreement as if it had originally been a Party to this Agreement in such capacity. In connection with the foregoing, the Security Agent shall make such changes to the terms hereof relating to the rights and duties of the Second Lien Notes Trustee and any other Party as are required by the Second Lien Notes Trustee without the consent of any other Party provided that such changes would not have a material adverse effect on the other Parties.
 
 
-79-
 
 
32.5.2
Each Party (other than the relevant proposed trustee under paragraph 32.5.1 above) irrevocably authorises the Security Agent to execute on its behalf any Accession Agreement which has been duly completed and signed on behalf of that person.
 
32.6
Accession of Unsecured Senior Notes Trustee
 
32.6.1
The Company shall procure that, prior to the issue of the Unsecured Senior Notes, the Unsecured Senior Notes Trustee (and, if such entity ceases to act as trustee in relation to the Unsecured Senior Notes for any reason, any successor or other person which is appointed or acts as trustee under the Unsecured Senior Notes Indenture) shall promptly complete, sign and deliver to the Security Agent an Accession Agreement under which the Unsecured Senior Notes Trustee agrees to be bound by this Agreement as if it had originally been a Party to this Agreement in such capacity. In connection with the foregoing, the Security Agent shall make such changes to the terms hereof relating to the rights and duties of the Unsecured Senior Notes Trustee and any other Party as are required by the Unsecured Senior Notes Trustee without the consent of any other Party provided that such changes would not have a material adverse effect on the other Parties.
 
32.6.2
Each Party (other than the relevant proposed trustee under paragraph 32.6.1 above) irrevocably authorises the Security Agent to execute on its behalf any Accession Agreement which has been duly completed and signed on behalf of that person.
 
32.7
Accession of Arco Notes Trustee
 
32.7.1
The Company shall procure that, if the Arco Notes Trustee ceases to act as trustee in relation to the Arco Notes for any reason, any successor or other person which is appointed or acts as trustee under the Arco Notes Indenture shall promptly complete, sign and deliver to the Security Agent an Accession Agreement under which the Arco Notes Trustee agrees to be bound by this Agreement as if it had originally been a Party to this Agreement in such capacity. In connection with the foregoing, the Security Agent shall make such changes to the terms hereof relating to the rights and duties of the Arco Notes Trustee and any other Party as are required by the Arco Notes Trustee without the consent of any other Party provided that such changes would not have a material adverse effect on the other Parties.
 
32.7.2
Each Party (other than the relevant proposed trustee under paragraph 32.7.1 above) irrevocably authorises the Security Agent to execute on its behalf any Accession Agreement which has been duly completed and signed on behalf of that person.
 
32.8
Accession of Equistar Notes Trustee
 
32.8.1
The Company shall procure that, if the  Equistar Notes Trustee ceases to act as trustee in relation to the Equistar Notes for any reason, any successor or other person which is appointed or acts as trustee under the Equistar Notes Indenture shall promptly complete, sign and deliver to the Security Agent an Accession Agreement under which the Equistar Notes Trustee agrees to be bound by this Agreement as if it had originally been a Party to this Agreement in such capacity. In connection with the foregoing, the Security Agent shall make such changes to the terms hereof relating to the rights and duties of the Equistar Notes Trustee and any other Party as are required by the Equistar Notes Trustee without the consent of any other Party provided that such changes would not have a material adverse effect on the other Parties.
 
32.6.2
Each Party (other than the relevant proposed trustee under paragraph 32.8.1 above) irrevocably authorises the Security Agent to execute on its behalf any Accession Agreement which has been duly completed and signed on behalf of that person.
 
 
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32.9
Accession of High Yield Notes Trustee
 
32.9.1
The Company shall procure that, if the High Yield Note Trustee ceases to act as trustee in relation to the High Yield Notes for any reason, any successor or other person which is appointed or acts as trustee under the High Yield Notes Indenture shall promptly complete, sign and deliver to the Security Agent an Accession Agreement under which the High Yield Notes Trustee agrees to be bound by this Agreement as if it had originally been a Party to this Agreement in such capacity. In connection with the foregoing, the Security Agent shall make such changes to the terms hereof relating to the rights and duties of the High Yield Notes Trustee and any other Party as are required by the High Yield Notes Trustee without the consent of any other Party provided that such changes would not have a material adverse effect on the other Parties.
 
32.9.2
Each Party (other than the relevant proposed trustee under paragraph 32.9.1 above) irrevocably authorises the Security Agent to execute on its behalf any Accession Agreement which has been duly completed and signed on behalf of that person.
 
32.9.3
The High Yield Notes Trustee (on behalf of the High Yield Noteholders), by its execution of an Accession Agreement, acknowledges and agrees that:
 
 
(a)
that to the extent and in the manner set out in the High Yield Notes Indenture under which the High Yield Notes are issued, the payment of all Senior Subordinated Guarantee Debt (as such term is defined in the High Yield Notes Indenture) is expressly made subordinate to and subject in right of payment to the prior payment in full in cash of all Senior Debt, ABL Debt and Hedging Debt;
 
 
(b)
the Senior Debt and Hedging Debt each qualify as “Guarantor Senior Debt” for the purposes of and as such term is defined in the High Yield Notes Indenture;
 
 
(c)
the Senior Parties are entitled to rely on and enforce the subordination provisions contained in the High Yield Notes Indenture and the provisions in the High Yield Notes Indenture restricting the circumstances in which a demand may be made under the Senior Subordinated Guarantee (as such term is defined in the High Yield Notes Indenture) or the High Yield Notes Security may be enforced; and
 
 
(d)
it accepts any Accession Agreement and the accession by the relevant parties to this Agreement in the capacity described therein. For the avoidance of doubt, the High Yield Notes Trustee hereby waives any right to approve, or of objection to, the accession or identity of such persons and confirms that it hereby waives any obligation on the part of a party to procure the High Yield Notes Trustee’s counter-signature or acceptance of any such Accession Agreement.
 
32.10
Assignment and transfers by Investors
 
32.10.1
No Investor may assign any of its rights or transfer any of its rights or obligations under this Agreement to any person unless and until:
 
 
(a)
that Investor is permitted to, and at the same time does, assign or transfer its related rights and obligations under the Investor Documents to that person; and
 
 
(b)
the Security Agent executes an Accession Agreement duly completed and signed on behalf of that person.
 
32.10.2
Each Party (other than the relevant transferee under paragraph 32.10.1 above) irrevocably authorises the Security Agent to execute on its behalf any Accession Agreement which has been duly completed and signed on behalf of that transferee.
 
 
-81-
 
 
32.11
Assignment and transfer by Obligors
 
No Obligor may assign any of its rights or transfer any of its rights or obligations under this Agreement.
 
32.12
Accession of additional Obligors
 
32.12.1
The Company shall procure that any member of the Group which it requests to become an Additional Guarantor (as defined in the Interim Facility Agreement) or a Borrower or a Guarantor (as defined in the Senior Facility Agreement) shall deliver to the Security Agent a duly completed and signed Accession Agreement on or before becoming such a Borrower, Guarantor or Additional Guarantor under the Senior Facility Agreement or the Interim Facility Agreement, as applicable.
 
32.12.2
Each Party (other than the relevant proposed Borrower, Guarantor or Additional Guarantor referred to under paragraph 32.12.1 above) irrevocably authorises the Security Agent to execute on its behalf any Accession Agreement which has been duly completed and signed on behalf of that proposed Borrower, Guarantor or Additional Guarantor.
 
32.13
Assignment and transfer by High Yield Notes Guarantors
 
Until the Senior Discharge Date, no High Yield Notes Guarantor may assign any of its rights or transfer any of its rights or obligations under this Agreement (other than in connection with a transaction in which the applicable High Yield Notes Guarantee is assigned or transferred to or otherwise assumed by another person in a transaction not prohibited by the High Yield Notes Indenture or the Senior Agreements (and having regard to the terms of the High Yield Notes Major Terms)).
 
32.14
Accession of additional High Yield Notes Guarantors
 
32.14.1
Until the Senior Discharge Date, the Company shall procure that any new High Yield Notes Guarantor shall deliver to the Security Agent a duly completed and signed Accession Agreement on or before becoming a new High Yield Notes Guarantor.
 
32.14.2
Each Party (other than the new High Yield Notes Guarantors under paragraph 32.14.1 above) irrevocably authorises the Security Agent to execute on its behalf any Accession Agreement which has been duly completed and signed on behalf of that proposed new High Yield Notes Guarantor.
 
32.15
Assignments and transfers by Intercompany Lenders and Intercompany Borrowers
 
32.15.1
No Intercompany Lender or Intercompany Borrower may assign any of its rights or transfer any of its rights or obligations under this Agreement to any person unless and until the Security Agent executes an Accession Agreement duly completed and signed on behalf of that person.
 
32.15.2
Each Party (other than the relevant transferee under paragraph 32.15.1 above) irrevocably authorises the Security Agent to execute on its behalf any Accession Agreement which has been duly completed and signed on behalf of that transferee.
 
32.16
Accession of Intercompany Borrowers and Intercompany Lenders
 
32.16.1
The Company shall procure that any member of the Group (other than Basell Sales & Marketing B.V., Basell Polyolefins Company B.V.B.A., Basell Capital Corporation, LyondellBasell Receivables I, LLC, any other Securitization Entity (as defined in the Senior Facility Agreement) which (i) is an Obligor and becomes a borrower from any member of the Group or (ii) becomes a creditor of an Obligor, in each case, in respect of Financial Indebtedness, in either case exceeding €10,000,000 (or its equivalent in another currency or currencies), is a party to, or accedes to this Agreement as an Intercompany Borrower or, as the case may be, an Intercompany Lender by delivering to the Security Agent a duly completed and signed Accession Agreement on or before becoming an Intercompany Borrower or, as the case may be, an Intercompany Lender; provided, however, that no such Obligor or creditor of an Obligor (i) which is a Subsidiary of LyondellBasell Finance Company and (ii) is not a Loan Party (as defined in the Senior Facility Agreement) shall be obligated to accede to this Agreement prior to 45 days after the date hereof.
 
 
-82-
 
 
32.16.2
That member of the Group shall become an Intercompany Borrower or an Intercompany Lender if the Security Agent executes that Accession Agreement.
 
32.16.3
Each Party (other than the relevant proposed Intercompany Borrower or Intercompany Lender under paragraph 32.16.1 above) irrevocably authorises the Security Agent to execute on its behalf any Accession Agreement which has been duly completed and signed on behalf of that proposed Intercompany Borrower or Intercompany Lender.
 
32.16.4
The Security Agent shall promptly execute any Accession Agreement which has been duly completed and signed on behalf of the proposed Intercompany Borrower or Intercompany Lender.
 
32.17
Notification by Security Agent
 
The Security Agent shall notify the other Parties promptly of the receipt and execution by it on their behalf of any Accession Agreement.
 
33.
NOTICES
 
33.1
Communications in writing
 
Any communication or document to be made or delivered under or in connection with this Agreement shall be made in writing and, unless otherwise stated, may be made or delivered by fax or letter.
 
33.2
Addresses
 
The address and fax number (and the department or officer, if any, for whose attention the communication is to be made) of each Party for any communication or document to be made or delivered under or in connection with this Agreement is:
 
33.2.1
in the case of the Company, any other Original Obligor, any Senior Finance Party or any Interim Facility Finance Party, that identified in accordance with the terms of the Senior Facility Agreement or, as the case may be, Second Lien Notes Trustee, Unsecured Senior Notes Trustee, the Interim Facility Agreement; and
 
33.2.2
in the case of each Hedging Bank, Subordinated Party or the High Yield Notes Trustee, that notified in writing to the Security Agent on or prior to the date on which it becomes a Party,
 
or any substitute address, fax number or department or officer as the Party may notify to the Security Agent (or the Security Agent may notify to the other Parties, if a change is made by the Security Agent) by not less than five Business Days’ notice.
 
33.3
Delivery
 
33.3.1
Any communication or document made or delivered by one person to another under or in connection with this Agreement will only be effective:
 
 
(a)
if by way of fax, when received in legible form; or
 
 
-83-
 
 
 
(b)
if by way of letter, when it has been left at the relevant address or five Business Days after being deposited in the post postage prepaid in an envelope addressed to it at that address,
 
and, if a particular department or officer is specified as part of its address details provided under Clause 33.2 (Addresses), if addressed to that department or officer provided that in the case of any communication or document given to a Trustee any such notice will be deemed given when it is actually received by a Responsible Officer of the such Trustee.
 
33.3.2
Any communication or document to be made or delivered to the Security Agent will be effective only when actually received by the Security Agent and then only if it is expressly marked for the attention of the department or officer identified with the Security Agent’s signature below (or any substitute department or officer as the Security Agent shall specify for this purpose) provided that in the case of any communication to a Trustee any such communication will only be effective when it is actually received by a Responsible Officer of such Trustee.
 
33.4
Notification of address and fax number
 
Promptly upon receipt of notification of an address and fax number or change of address or fax number pursuant to Clause 33.2 (Addresses) or changing its own address or fax number, the Security Agent shall notify the other Parties.
 
33.5
English language
 
33.5.1
Any notice given under or in connection with this Agreement must be in English.
 
33.5.2
All other documents provided under or in connection with this Agreement must be:
 
 
(a)
in English; or
 
 
(b)
if not in English, and if so required by the Security Agent after an Event of Default (as defined in any Finance Document), accompanied by an English translation acceptable to the Security Agent (acting reasonably) and, in this case, the English translation will prevail unless the document is a constitutional, statutory or other official document or a Security Document.
 
34.
PARTIAL INVALIDITY
 
If, at any time, any provision of this Agreement is or becomes illegal, invalid or unenforceable in any respect under any law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions nor the legality, validity or enforceability of such provision under the law of any other jurisdiction will in any way be affected or impaired.
 
35.
REMEDIES AND WAIVERS
 
No failure to exercise, nor any delay in exercising, on the part of any Senior Secured Party, Unsecured Senior Notes Finance Party, High Yield Notes Finance Party or Subordinated Party any right or remedy under this Agreement shall operate as a waiver, nor shall any single or partial exercise of any right or remedy prevent any further or other exercise or the exercise of any other right or remedy. The rights and remedies provided in this Agreement are cumulative and not exclusive of any rights or remedies provided by law.
 
36.
COUNTERPARTS
 
This Agreement may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of this Agreement.
 
 
-84-
 
 
37.
AMENDMENTS
 
37.1
Amendments
 
37.1.1
This Agreement may be amended by the Obligors and the Security Agent without the consent of any other Party to cure defects, resolve ambiguities or reflect changes, in each case, of a minor, technical or administrative nature.
 
37.1.2
This Agreement may also be amended by the Security Agent and a Trustee without the consent of any other Party, in the event that a Notes Indenture for which such Trustee acts or Trustee is required to be qualified under the US Trust Indenture Act of 1939, as amended, as a result of the exercise of registration rights, but only to the minimum extent required in order for that Notes Indenture to be so qualified.
 
37.2
Amendments affecting only certain Parties
 
Each Party acknowledges and agrees that to the extent than an amendment to this Agreement only affects the rights and obligations of one or more Parties or class of Parties to this Agreement, and could not reasonably be expected to be adverse to the interests of the other Parties or a class of Parties, only the Parties or class of Parties affected by such amendment need to agree to the amendments.
 
37.3
Refinancing
 
Any Senior Debt or ABL Debt may, to the extent permitted under the other Senior Agreements, be refinanced, replaced, increased or otherwise restructured (a “Refinancing”) in whole or in part on terms that do not result in a breach of any term of any agreement in respect of Junior Debt and any obligations incurred by the Group on such Refinancing in respect of such Senior Debt will, to the extent designated by the Company, rank senior to the Junior Debt and otherwise benefit from the provisions of this Agreement on, mutatis mutandis, the terms set out herein (and such obligations will constitute Senior Debt).
 
37.4
Replacement intercreditor agreement
 
Subject to being indemnified and/or secured to its satisfaction against any fees, costs, expenses or other liabilities, which it may in doing so incur, the High Yield Notes Trustee (for itself and as trustee for the High Yield Noteholders), the Junior Creditors and the Obligors shall enter into a replacement intercreditor agreement with the Senior Parties and the Hedging Banks on substantially the same terms and conditions as this Agreement (mutatis mutandis) on the novation, supplement, Refinancing or replacement of all or any part of the Senior Debt and do all other acts and things (including, without limitation, the execution of assignments or other instruments) as are reasonably required and practicable to give effect to the purposes of this Agreement (in the case of the High Yield Notes Trustee only, to the extent that such other acts and things are not prejudicial to the rights of the High Yield Notes Trustee under this Agreement or the High Yield Notes Indenture).
 
37.5
Trustees
 
Notwithstanding anything to the contrary in this Agreement, any amendment or waiver of this Agreement which is prejudicial to the rights and obligations of a Trustee in its personal capacity as such may not be effected without its prior consent.
 
38.
GOVERNING LAW
 
This Agreement is governed by New York law.
 
 
-85-
 
 
39.
ENFORCEMENT
 
39.1
Jurisdiction
 
 
THIS AGREEMENT  SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
 
 
ANY LEGAL ACTION OR PROCEEDING ARISING UNDER THIS AGREEMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK CITY OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH PARTY CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS.  EACH PARTY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR OTHER DOCUMENT RELATED THERETO.
 
39.2
Service of process
 
Without prejudice to any other mode of service allowed under any relevant law, each Obligor, each Intercompany Borrower and each Subordinated Party:
 
39.2.1
irrevocably appoints LyondellBasell Finance Company as its agent for service of process in relation to any proceedings before New York or Federal courts in connection with any Finance Document; and
 
39.2.2
agrees that failure by a process agent to notify the relevant Obligor, Intercompany Borrower or Subordinated Party of the process will not invalidate the proceedings concerned.
 
39.3
Waiver of trial by jury
 
Each Party waives any right it may have to a jury trial of any claim or cause of action in connection with any Finance Document or any transaction contemplated by any Finance Document. In the event of litigation, this Agreement may be filed as a written consent to trial by court.
 
 
-86-
 

SCHEDULE 1
 
THE ORIGINAL OBLIGORS
 
Name of Original Borrower
Jurisdiction of incorporation
Registration number (or equivalent, if any)
Basell AF S.C.A.
Luxembourg
B 107545
BIL Acquisition Holdings Limited (to be merged with and into Lyondell Chemical Company)
Delaware, United States
4388226
Basell Holdings B.V.
The Netherlands
24344658
Basell Finance Company B.V.
The Netherlands
34090540
Basell Germany Holdings GmbH
Germany
HRB 44982


Name of Original Guarantor
Jurisdiction of incorporation
Registration number (or equivalent, if any)
Nell Acquisition (US) LLC
Delaware, United States
3955083
Basell Finance USA Inc.
New York, United States
N/A
Basell North America Inc.
Delaware, United States
2015017
Basell USA Inc.
Delaware, United States
2015015
LyondellBasell Finance Company
Delaware, United States
4412649
LBI Acquisition LLC
Delaware, United States
4443425
LBIH LLC
Delaware, United States
4443530
Basell Holdings B.V.
The Netherlands
24344658
Basell International Holdings B.V.
The Netherlands
34090793
Basell Benelux B.V.
The Netherlands
20078583
Basell Europe Holdings B.V.
The Netherlands
34090809
Basell Finance Company B.V.
The Netherlands
34090540
Basell Finance & Trading Company B.V.
The Netherlands
34243687
Basell Sales and Marketing Company B.V.
The Netherlands
3425062
LyondellBasell Netherlands Holdings B.V.
The Netherlands
08163670
Basell AF S.C.A.
Luxembourg
B 107545
Basell Funding S.à.r.l.
Luxembourg
B 107544
Basell Polyolefine GmbH
Germany
HRB 45129
Basell Bayreuth Chemie GmbH
Germany
HRB 55766
Basell Germany Holdings GmbH
Germany
HRB 44982
Basell Polyolefins UK Ltd.
England
02811230
Basell UK Holdings Ltd.
England
03053549
Basell Asia Pacific Limited
Hong Kong
0167684
Basell Canada Inc
Canada
562607
Lyondell Refining I LLC
Delaware, United States
3607692
Lyondell Chemical Company
Delaware, United States
2075914
LyondellPOTechLP, Inc.
Delaware, United States
3192829
Lyondell LP3 Partners, LP
Delaware, United States
3607688
Lyondell Petrochemical L.P. Inc.
Delaware, United States
2799835
Houston Refining LP
Delaware, United States
2987782
Equistar Chemicals, LP
Delaware, United States
2801077
Lyondell Europe Holdings Inc.
Delaware, United States
4361811
Lyondell Chemical Products Europe LLC
Delaware, United States
0944226
Lyondell Chimie France LLC
Delaware, United States
0817667
Millennium Specialty Chemicals Inc.
Delaware, United States
2070632
Millennium Petrochemicals Inc.
Virginia, United States
0026552-0
Lyondell Chemical Technology, L.P.
Delaware, United States
2282031
Lyondell Chemical Technology 1 Inc.
Delaware, United States
4085628
Lyondell Refining Company LLC
Delaware, United States
2240602

 
-87-
 

Lyondell Houston Refinery Inc.
Delaware, United States
4197451
Lyondell Chemical Nederland, Ltd.
Delaware, United States
0745612
Lyondell-Equistar Holdings Partners
Delaware, United States
3396193
Lyondell (Pelican) Petrochemical L.P.1, Inc.
Delaware, United States
2886331
Lyondell LP4 Inc.
Delaware, United States
2799352
Lyondell LP3 GP, LLC
Delaware, United States
3607695
Millennium Petrochemicals Partners, LP
Delaware, United States
4085626
Millennium US Op Co, LLC
Delaware, United States
3401274
Millennium America Inc.
Delaware, United States
0903156
Millennium America Holdings Inc.
Delaware, United States
0903155
Millennium Worldwide Holdings I Inc.
Delaware, United States
3487870
Millennium Chemicals Inc.
Delaware, United States
2604298
Millennium Petrochemicals GP LLC
Delaware, United States
2803695
Lyondell Chemical Technology Management, Inc.
Delaware, United States
2242904
 
 
-88-
 

SCHEDULE 2
THE ORIGINAL HEDGING BANKS
 
 
Existing Hedges
 
(a)
Cross Currency Swaps
 
 
Contracting parties:  Basell Holdings BV and ABN AMRO Bank NV
Principal:  USD 175,000,000 and EUR 142,692,926.83
Quarterly interest payments
Tenor:  5 year (until August 15th 2010)
 
Contracting parties:  Basell Holdings BV and ING Bank NV
Principal:  USD 109,000,000 and EUR 89,024,390.24
Quarterly interest payments
Tenor:  10 year (until August 15th 2015)
 
Contracting parties:  Basell Holdings BV and ING Bank NV
Principal:  USD 80,000,000 and EUR 65,040,650.41
Quarterly interest payments
Tenor:  5 year (until August 15th 2010)
 
(b)
Total Return Swap
 
 
Contracting parties:  Basell Finance Company BV and ABN AMRO Bank NV
Principal:  adjustable but currently 1,200,000 shares Royal Dutch Shell A Plc and 140,000 shares BASF AG
Semi annual settlements
Tenor:  3 year (until October 4, 2008)(e)     EU Allowance/EU Credit Swaps
 
Contracting parties:  Basell Finance & Trading Company BV and ABN AMRO Bank NV
Principal:  EU Allowance 73,000, EU Credit 100,000
Settlement:  December 2008
 
Contracting parties:  Basell Finance & Trading Company BV and ABN AMRO Bank NV
Principal:  EU Allowance 214,937, EU Credit 250,000
Settlement:  December 2008
 
 
-89-
 

SCHEDULE 3
THE ORIGINAL INVESTORS
 
Name of Original Investor
Jurisdiction of incorporation
Registration number (or equivalent, if any)
BI S.à r.l.
Luxembourg
B 106994
AI Petrochemicals LLC
Delaware, USA
39366041
 
 
-90-
 

SCHEDULE 4
THE ORIGINAL INTERCOMPANY LENDERS AND BORROWERS
 

 
Name of Original Intercompany Lender
 
Basell Holdings B.V.
Basell Finance Company B.V.
Basell AF S.C.A. (to be renamed LyondellBasell Industries AF S.C.A)
Basell Polyolefine GmbH
Basell Bayreuth Chemie GmbH
Basell Germany Holdings GmbH
Basell Polyolefins UK Limited
Basell UK Holdings Limited
Basell Canada Inc.
Basell Asia Pacific Ltd
Basell International Holdings B.V.
Basell Benelux B.V.
Basell Europe Holdings B.V.
Basell Finance & Trading Company B.V.
Basell Sales & Marketing Company B.V.
Basell Funding S.à r.l.
Nell Acquisition (US) LLC
Basell Finance USA Inc.
Basell North America Inc.
Basell USA Inc
LyondellBasell Finance Company
LyondellBasell Netherlands Holdings B.V.
Basell Poliolefine Italia s.r.l.
LBI Acquisition LLC
LBIH LLC
BIL Acquisition Holdings Limited (to be merged with and into Lyondell Chemical Company)
BasellTech USA Inc.
Equistar Chemicals, LP
Houston Refining LP
Lyondell Asia Pacific, Ltd.
Lyondell Chemical Company
Lyondell Chemical Delaware Company
Lyondell Chemical Europe, Inc.
Lyondell Chemical Nederland Ltd.
Lyondell Chemical Technology, L.P.
Lyondell Chemie (POSM) B.V.
Lyondell Chemie International, B.V.
Lyondell Chemie Nederland, B.V.
Lyondell Chimie France LLC
Lyondell Chimie France SAS
Lyondell Chimie TDI, SCA

 
-91-
 

Lyondell Europe Holdings Inc.
Lyondell Greater China, Ltd.
Lyondell Houston Refinery, Inc.
Lyondell LP3 Partners, LP
Lyondell LP4 Inc.
Lyondell (Pelican) Petrochemical L.P. 1, Inc.
Lyondell Petrochemicals LP, Inc.
Lyondell PO-11 CV
Lyondell Refining Company LLC
Lyondell Refining I LLC
MHC Inc.
Millennium America Holdings Inc.
Millennium America Inc.
Millennium Chemicals Inc.
Millennium Holdings LLC
Millennium Petrochemicals GP LLC
Millennium Petrochemicals Inc.
Millennium Petrochemicals Inc. - Non Acetyls
Millennium Petrochemicals LP LLC
Millennium Petrochemicals Partners LP
Millennium Specialty Chemicals
Millennium Specialty Chemicals Inc. - St. Helena
Millennium US Op Co LLC
Millennium Worldwide Holdings I Inc.
PH Burbank Holdings, Inc.
PO Offtake, LP
POSM Delaware, Inc.
Suburban Propane G.P. Inc.


Name of Original Intercompany Borrower
 
Basell Holdings B.V.
Basell Finance Company B.V.
Basell AF S.C.A. (to be renamed LyondellBasell Industries AF S.C.A)
Basell Polyolefine GmbH
Basell Bayreuth Chemie GmbH
Basell Germany Holdings GmbH
Basell Polyolefins UK Limited
Basell UK Holdings Limited
Basell Canada Inc.
Basell Asia Pacific Ltd
Basell International Holdings B.V.
Basell Benelux B.V.
Basell Europe Holdings B.V.
Basell Finance & Trading Company B.V.
Basell Sales & Marketing Company B.V.
Basell Funding S.à r.l.

 
-92-
 
 
Nell Acquisition (US) LLC
Basell Finance USA Inc.
Basell North America Inc.
Basell USA Inc
LyondellBasell Finance Company
LyondellBasell Netherlands Holdings B.V.
Basell Poliolefine Italia s.r.l.
LBI Acquisition LLC
LBIH LLC
BIL Acquisition Holdings Limited (to be merged with and into Lyondell Chemical Company)
BasellTech USA Inc.

Equistar Chemicals, LP
Houston Refining LP
Lyondell Asia Pacific, Ltd.
Lyondell Chemical Company
Lyondell Chemical Delaware Company
Lyondell Chemical Europe, Inc.
Lyondell Chemical Nederland Ltd.
Lyondell Chemical Technology, L.P.
Lyondell Chemie (POSM) B.V.
Lyondell Chemie International, B.V.
Lyondell Chemie Nederland, B.V.
Lyondell Chimie France LLC
Lyondell Chimie France SAS
Lyondell Chimie TDI, SCA
Lyondell Europe Holdings Inc.
Lyondell Greater China, Ltd.
Lyondell Houston Refinery, Inc.
Lyondell LP3 Partners, LP
Lyondell LP4 Inc.
Lyondell (Pelican) Petrochemical L.P. 1, Inc.
Lyondell Petrochemicals LP, Inc.
Lyondell PO-11 CV
Lyondell Refining Company LLC
Lyondell Refining I LLC
MHC Inc.
Millennium America Holdings Inc.
Millennium America Inc.
Millennium Chemicals Inc.
Millennium Holdings LLC
Millennium Petrochemicals GP LLC
Millennium Petrochemicals Inc.
Millennium Petrochemicals Inc. - Non Acetyls
Millennium Petrochemicals LP LLC

 
-93-
 

Millennium Petrochemicals Partners LP
Millennium Specialty Chemicals
Millennium Specialty Chemicals Inc. - St. Helena
Millennium US Op Co LLC
Millennium Worldwide Holdings I Inc.
PH Burbank Holdings, Inc.
PO Offtake, LP
POSM Delaware, Inc.
Suburban Propane G.P. Inc.

 
-94-
 

SCHEDULE 5
 
FORM OF ACCESSION AGREEMENT
 
To:
[                    ] as Security Agent
 
From:
[Proposed Senior Agent/ABL Agent/Hedging Bank/Interim Facility Agent /holder of High Yield Notes On-Loan/Second Lien Notes Trustee/Unsecured Senior Notes Trustee/High Yield Notes Trustee/Investor/Inter­company Lender/Intercompany Borrower/Additional Guarantor/High Yield Notes Guarantor]
 
Dated:
 
Dear Sirs
 
[Company] - - Intercreditor Agreement
 
dated December 20 2007 (the “Agreement”)
 
1.
We refer to the Agreement. This is an Accession Agreement. Terms defined in the Agreement have the same meaning in this Accession Agreement unless given a different meaning in this Accession Agreement.
 
2.
[Proposed Senior Agent/ABL Agent /Hedging Bank/Interim Facility Agent/holder of High Yield Notes On-Loan/Second Lien Notes Trustee/Unsecured Senior Notes Trustee/High Yield Notes Trustee/Investor/Intercompany Lender/Intercompany Borrower//Additional Guarantor/High Yield Notes Guarantor] agrees to be bound by the terms of the Agreement [and, in the case of a Hedging Bank, the Senior Facility Agreement] as the Senior Agent/a Hedging Bank/Arco Notes Trustee/Equistar Notes Trustee/the Interim Facility Agent/the holder of High Yield Notes On-Loan/the Second Lien Notes Trustee/the Unsecured Senior Notes Trustee/the High Yield Notes Trustee/Investor/the Intercompany Lender/Intercompany Borrower/Additional Guarantor/High Yield Notes Guarantor].
 
3.
[Without limiting or affecting Clause 24.6 (Parallel Debt), in any circumstances in which the Security Agent is not acting pursuant to the Parallel Debt under Clause 24.6 (Parallel Debt), for the purposes of Italian law, the Security Agent shall be deemed to be acting in its capacity as agent (mandatario con rappresentanza) in its own name and on its behalf and in the name and on behalf of [Proposed Senior Finance Party/Proposed Hedging Bank] as a [Senior Finance Party/Hedging Bank], which by executing this Accession Agreement for the purposes hereof grants to the Security Agent any necessary power of attorney to execute the Security Documents in the name and on behalf of [Proposed Senior Finance Party/Proposed Hedging Bank] as a [Senior Finance Party/Hedging Bank] and to exercise any and all rights and powers of [Proposed Senior Finance Party/Proposed Hedging Bank] as a [Senior Finance Party/Hedging Bank] under the Security Documents including, but not limited to, the power to bring, prosecute, enforce, defend and abandon actions, suits and proceedings in relation to the Security Documents.]  [To be discussed with A&O.]
 
4.
[Proposed Additional Guarantor/Intercompany Borrower/Intercompany Lender] is a company duly incorporated under the law of [name of relevant jurisdiction].
 
[The amount which may be paid by [Proposed Additional Guarantor/Intercompany Borrower/Intercompany Lender] is subject to the following limitations:
 
 
(a)
if [Proposed Additional Guarantor/Intercompany Borrower/Intercompany Lender] is incorporated in [                   ];
 
 
(b)
if:
 
 
(i)
[Proposed Additional Guarantor/Intercompany Borrower/Intercompany Lender] is incorporated in any other jurisdiction; or
 
 
-95-
 
 
 
(ii)
[Proposed Additional Guarantor/Intercompany Borrower/Intercompany Lender] is incorporated in [                   ] [or [                   ]].
 
5.
[Proposed Senior Agent /Hedging Bank’s/Interim Facility Agent/holder of High Yield Notes On-Loan’s/Second Lien Notes Trustee’s/Unsecured Senior Notes Trustee’s High Yield Notes Trustee’s/Investor’s/ Intercompany Lender’s/Intercompany Borrower’s/Additional Guarantor’s/High Yield Notes Guarantor’s] administrative details are as follows:
 
Address:
 
Fax No:
 
Attention:
 
6.
[Details of the Hedging Document are as follows:
 
Date:
 
Parties:  [Proposed Hedging Bank] and [the Company]
 
Terms:  [Insert brief summary of type of contract].]
 
7.
This Accession Agreement is governed by New York law.
 
[Proposed Senior Agent /Hedging Bank/Interim Facility Agent/ holder of High Yield Notes On-Loan/Second Lien Notes Trustee/Unsecured Senior Notes Trustee/High Yield Notes Trustee/Investor/Intercompany Lender/Intercompany Borrower/Additional Guarantor/High Yield Notes Guarantor]
 
8.
[To be included in Accession Agreement for Hedging Banks and the Second Lien Notes Trustee only]
 
This Clause 8 is supplemental to a German security trust agreement (the “Security Trust Agreement”) dated [●] between the Security Agent, the Beneficiaries (as defined therein) and certain Obligors as Security Grantors.
 
The [Hedging Bank/Second Lien Notes Trustee] has taken note of the Security Trust Agreement and has especially taken note of the powers granted to the Security Agent therein.
 
The [Hedging Bank/Second Lien Notes Trustee] ratifies (genehmigt) the acceptance of accessory security entered into with a view to securing the [Hedging Debt/Second Lien Notes Debt], especially pledges, by the Security Agent as representative without power of attorney (Vertreter ohne Vertretungsvollmacht) on behalf of the [Hedging Bank/Second Lien Notes Trustee].  The [Hedging Bank/Second Lien Notes Trustee] thereby becomes a party to any German pledge agreement, being a [Loan Document], signed by the Security Agent as representative without power of attorney.
 
The [Hedging Banks/Second Lien Notes Trustee] and the Security Agent (for itself and on behalf of the other Senior Secured Parties) hereby agree that the [Hedging Bank/Second Lien Notes Trustee] accedes to the German Security Trust Agreement and that with effect on and form the date hereof the [Hedging Bank/Second Lien Notes Trustee] will be bound by the Security Trust Agreement as Beneficiary as if it had been originally a party to the Security Trust Agreement in that capacity.  The other parties to the Security Trust Agreement granted their anticipated consent to such accession in the Security Trust Agreement.
 
This Part 8 shall be governed by and shall be construed in accordance with German law.]
 
By:
 
This Accession Agreement is accepted by the Security Agent.
 
[Security Agent]
  
By:
Date:

 
-96-
 

SCHEDULE 6
EXISTING LYONDELL DEBT SECURITY
 
A.
Arco Notes Security Documents
 
U.S. Borrower Security Agreement, dated as of December 20, 2007 between Lyondell Chemical Company (formerly known as BIL Acquisition Holdings Limited) and Citibank, N.A., as Collateral Agent.
 
Fee Deed of Trust by Lyondell Chemical Company, as Grantor, to a trustee described therein, for the benefit of Citibank, N.A., as Beneficiary, relating to property located at 10801 Choate Road, Pasadena, Harris County, Texas 77507 (Choate Road PG Plant).
 
Fee Deed of Trust by Lyondell Chemical Company, as Grantor, to a trustee described therein, for the benefit of Citibank, N.A., as Beneficiary, relating to property located at Channelview Chemical Complex (South) 2502 Sheldon Road, Channelview, Harris County, Texas 77530 (Derivatives-MTBE, BDO, Polyols Plant).
 
Any other Security Document which, under the terms of the Arco Notes Indenture, is required to provide for security in favour of the Arco Notes Finance Documents.
 
B.
Equistar Notes Security Documents
 
Fee Deed of Trust by Equistar Chemicals, LP, as Grantor, to a trustee described therein, for the benefit of Citibank, N.A., as Beneficiary, relating to property located at 5761 Underwood Drive, Pasadena, Harris County, Texas 77507 (includes two Plants- Underwood Road EO/EG and Underwood Road EO Derivatives).
 
Fee Deed of Trust by Equistar Chemicals, LP, as Grantor, to a trustee described therein, for the benefit of Citibank, N.A., as Beneficiary, relating to property located at  Equistar Chemicals (North) 8280 Sheldon Road, Channelview, Harris County, Texas 77530 (Olefins I, Olefins II, Butadiene, BT, Methanol, C4/C5 Plant).
 
Fee and Leasehold Deed of Trust by Equistar Chemicals, LP, as Grantor, to a trustee described therein, for the benefit of Citibank, N.A., as Beneficiary, relating to property located at 12 miles south of Alvin on FM 2917, Alvin, Brazoria County, Texas 77512 and 2 Miles West of FM 2917 on FM 2004, Alvin, Brazoria County, Texas 77501 (includes two plants-Olefins/Aromatics Plant and HDPE Plant).
 
Fee Mortgage by Equistar Chemicals, LP to Citibank, N.A., relating to property located at 3400 Anamosa Road, Clinton, Clinton County, Iowa 52732 (Olefins, Polymers Plant).
 
Fee Deed of Trust by Equistar Chemicals, LP, as Grantor, to a trustee described therein, for the benefit of Citibank, N.A., as Beneficiary, relating to property located at 1501 McKinzie Road, Corpus Christi, Neuces County, Texas 78410 (Olefins/Aromatics Plant).
 
Fee Deed of Trust by Equistar Chemicals, LP, as Grantor, to a trustee described therein, for the benefit of Citibank, N.A., as Beneficiary, relating to property located at 1515 Miller Cut-Off Road, La Porte, Harris County, Texas 77571 (includes two Plants-Polymers LDPE/LLDPE and La Porte Olefins/Aromatics JV).
 
Fee Deed of Trust by Equistar Chemicals, LP, as Grantor, to a trustee described therein, for the benefit of Citibank, N.A., as Beneficiary, relating to property located at US Highway 60, 13 miles south of Bay City, Bay City, Matagorda County, Texas 77414 (LDPE Plant).
 
 
-97-
 
 
Fee Mortgage by Equistar Chemicals, LP to Citibank, N.A., relating to property located at 8805 N. Tabler Road, Morris, Grundy County, Illinois 60450 (Olefins/Polymers Plant).
 
Leasehold Deed of Trust by Equistar Chemicals, LP, as Grantor, to a trustee described therein, for the benefit of Citibank, N.A., as Beneficiary, relating to property located at Old Bloomington Highway, Victoria, Victoria County, Texas 77902 (HDPE Plant).
 
Fee Mortgage by Equistar Chemicals, LP to Citibank, N.A., relating to property located at 11530 Northlake Drive, Cincinnati, Hamilton County, Ohio 45249 (Cincinnati Technology Center).
 
Any other Security Document which, under the terms of the Equistar Notes Indenture, is required to provide for security in favour of the Equistar Notes Finance Document.
 
 
-98-
 

SCHEDULE 7
HIGH YIELD NOTES MAJOR TERMS
 
Issuer of High Yield Notes – Basell AF S.C.A. a société en commandite par actions.
 
High Yield Notes Trustee - Must accede to this Agreement.
 
Maturity – Not earlier than six months after the initial maturity of the longest term loan under the Senior Facility Agreement (as of the date hereof) it being acknowledged that the High Yield Notes may have optional redemption, change of control and asset sale provisions.
 
Purpose – To make a High Yield Notes On-Loan to Basell Holdings which shall be used to repay the Interim Facility Debt and fees and expenses in connection therewith and otherwise be used to refinance Senior Debt.
 
High Yield Notes Guarantees – Guarantees by members of the Group may only be given on a senior subordinated basis by the various subsidiaries of the Company, provided that such companies are also guarantors of the Senior Debt.
 
High Yield Notes Security – The High Yield Notes may have the benefit of security only on a second ranking basis and only in the form of:
 
(a)
a pledge of the subordinated downstream loan of the proceeds of the High Yield Notes from the Company to Basell Holdings; and
 
(b)
a pledge of all of the shares in Basell Funding.
 
 
-99-
 

SCHEDULE 8
HIGH YIELD NOTES GUARANTEE MATURITY PROVISIONS
 
1.
Each High Yield Notes Guarantee will provide that it will not mature (and no amount will become due or payable under it) unless:
 
 
(a)
a High Yield Notes Default arising out of the failure to pay any amount under the High Yield Notes Finance Documents has occurred and is continuing; and
 
 
(b)
enforcement is permitted under the terms of Clause 19.6 (Permitted High Yield Notes On-Loan and Permitted High Yield Notes Security Documents enforcement).
 
2.
Each High Yield Notes Guarantee shall contain provisions in relation to payment blockage, subordination and turnover that substantially replicate those provisions of this Agreement that relate to each High Yield Notes Guarantee or shall be made expressly subject to the provisions of this Agreement in a legally binding manner.
 
 
-100-
 

SCHEDULE 9
SECURITY AGENCY PROVISIONS
 
1.
Definitions
 
In this Schedule:
 
“Security Property” means all right, title and interest in, to and under any Security Document, including:
 
 
(a)
the assets over which Security is expressed to be created pursuant to any Security Document (the “Charged Assets”);
 
 
(b)
the benefit of the undertakings in any Security Document; and
 
 
(c)
all sums received or recovered by the Security Agent pursuant to any Security Document and any assets representing the same.
 
2.
Declaration of trust
 
2.1
The Security Agent, each other Senior Secured Party, the Arco Notes Secured Party, the Equistar Notes Secured Party and the High Yield Notes Trustee agree that the Security Agent shall hold the Security Property in trust for the benefit of the Senior Secured Parties, the Arco Noteholders, the Equistar Noteholders, the Second Lien Noteholders (if any) and the High Yield Notes Finance Parties and High Yield Noteholders on the terms of the Agreement.
 
2.2
Subject to paragraph 2.3 below, paragraph 2.1 above shall not apply to any Security Document which is expressed to be or is construed to be governed by any law other than English, Hong Kong or US law or laws of Canada (including the federal laws of Canada and the laws of each province or territory thereof) or any other law from time to time designated by the Security Agent and an Obligor or any Security Property arising under any such Security Document.
 
2.3
Paragraph 2.2 above shall not affect or limit Clause 24.6 (Parallel Debt) nor the applicability of the provisions of this Schedule with respect to any Security Document which is expressed to be or is construed to be governed by any law other than English, Hong Kong or US law or laws of Canada (including the federal laws of Canada and the laws of each province or territory thereof) or any other law from time to time designated by the Security Agent and an Obligor or any Security Property arising under any such Security Document.
 
3.
Defects in Security
 
The Security Agent shall not be liable for any failure or omission to perfect, or defect in perfecting, the Security created pursuant to any Security Document, including:
 
 
(a)
failure to obtain any Authorisation for the execution, validity, enforceability or admissibility in evidence of any Security Document; or
 
 
(b)
failure to effect or procure registration of or otherwise protect or perfect any of the Security created by the Security Documents under any laws in any territory.
 
4.
No enquiry
 
The Security Agent may accept without enquiry, requisition, objection or investigation such title as any Obligor may have to any Charged Assets.
 
 
-101-
 
 
5.
Retention of documents
 
The Security Agent may hold title deeds and other documents relating to any of the Charged Assets in such manner as it sees fit (including allowing any Obligor to retain them).
 
6.
Indemnity out of Security Property
 
The Security Agent and every receiver, delegate, attorney, agent or other similar person appointed under any Security Document may indemnify itself out of the Security Property against any cost, loss or liability incurred by it in that capacity (otherwise than by reason of its own gross negligence, willful misconduct or fraud).
 
7.
Basis of distribution
 
To enable it to make any distribution, the Security Agent may fix a date as at which the amount of the Debt is to be calculated and may require, and rely on, a certificate from any Party giving details of:
 
 
(a)
any sums due or owing to any Party as at that date; and
 
 
(b)
such other matters as it thinks fit.
 
8.
Rights of Security Agent
 
For purposes of Security granted under the laws of England and Wales, the Security Agent shall have all the rights, privileges and immunities which gratuitous trustees have or may have in England, even though it is entitled to remuneration.
 
9.
No duty to collect payments
 
Except as otherwise stated in this Agreement, the Security Agent shall not have any duty:
 
 
(a)
to ensure that any payment or other financial benefit in respect of any of the Charged Assets or any Debt is duly and punctually paid, received or collected; or
 
 
(b)
to ensure the taking up of any (or any offer of any) stocks, shares, rights, moneys or other property accruing or offered at any time by way of interest, dividend, redemption, bonus, rights, preference, option, warrant or otherwise in respect of any of the Charged Assets or any Debt.
 
10.
Perpetuity period
 
The perpetuity period for the trusts created by this Agreement shall be 80 years from the date of this Agreement.
 
11.
Appropriation
 
11.1
Each Party irrevocably waives any right to appropriate any payment to, or other sum received, recovered or held by, the Security Agent in or towards payment of any particular part of the Debt and agrees that the Security Agent shall have the exclusive right to do so.
 
11.2
Paragraph (a) above will override any application made or purported to be made by any other person.
 
12.
Investments
 
All money received or held by the Security Agent pursuant to the trusts in this Agreement may, in the name of, or under the control of, the Security Agent:
 
 
-102-
 
 
 
(a)
be invested in any investment it may select; or
 
 
(b)
be deposited at such bank or institution (including itself, any other Senior Secured Party or any Affiliate of any Senior Secured Party) as it thinks fit.
 
13.
Suspense account
 
Subject to paragraph 14 (Timing of distributions) below and save in respect of the Trustee Amounts, the Security Agent may:
 
 
(a)
hold in an interest bearing suspense account any moneys received by it from any Party; and
 
 
(b)
invest an amount equal to the balance from time to time standing to the credit of that suspense account in any of the investments authorised by paragraph 12 (Investments) above.
 
14.
Timing of distributions
 
Distributions by the Security Agent shall be made as and when determined by it.
 
15.
Delegation
 
15.1
The Security Agent may:
 
 
(a)
employ and pay an agent selected by it to transact or conduct any business and to do all acts required to be done by it (including the receipt and payment of money);
 
 
(b)
delegate to any person on any terms (including power to sub-delegate) all or any of its functions; and
 
 
(c)
with the prior consent of the Senior Agent under the Senior Facility Agreement (if before the Senior Discharge Date) and the Instructing Second Lien Agent (if before the Interim Facility Discharge Date) and the High Yield Notes Trustee (if before the High Yield Notes Discharge Date), appoint, on such terms as it may determine, or remove, any person to act either as separate or joint security trustee or agent with those rights and obligations vested in the Security Agent by this Agreement or any Security Document.
 
15.2
The Security Agent will not be:
 
 
(a)
responsible to anyone for any misconduct or omission by any agent, delegate or security trustee or security agent appointed by it pursuant to paragraph (a) above; or
 
 
(b)
bound to supervise the proceedings or acts of any such agent, delegate or security trustee or security agent,
 
provided that it exercises reasonable care in selecting that agent, delegate or security trustee or security agent.
 
16.
Unwinding
 
Any appropriation or distribution which later transpires to have been or is agreed by the Security Agent to have been invalid or which has to be refunded shall be refunded and shall be deemed never to have been made.
 
17.
Party
 
The Security Agent shall be entitled to assume that a Party is acting in a particular capacity stated in this Agreement or an Accession Agreement unless notified to the contrary.
 
 
-103-
 

SCHEDULE  10
SECOND LIEN NOTES MAJOR TERMS
 
Issuer of Second Lien Notes – LyondellBasell Finance Company (or any other Subsidiary of the Company incorporated in the United States or any State thereof or a member state of the European Union on December 31, 2003 which is a borrower or a guarantor of the Senior Facility Debt).
 
Second Lien Notes Trustee — Must accede to this Agreement.
 
Maturity – Not earlier than six months after the initial maturity of the longest term loan under the Senior Facility Agreement (as of the date hereof) it being acknowledged that the Second Lien Notes may have optional redemption, change of control and asset sale provisions.
 
Purpose – To  repay the Interim Facility Debt and fees and expenses in connection therewith and otherwise be used to refinance Senior Debt.
 
Second Lien Notes Guarantees – Guarantees by members of the Group may only be given on by the various subsidiaries of the Company provided that such companies are also guarantors of the Senior Facility Debt.
 
Second Lien Notes Security – The Second Lien Notes may have the benefit of security on some or all of the Security benefitting the Senior Facility Debt but only on a second ranking basis.
 
 
-104-
 

SCHEDULE  11
UNSECURED SENIOR NOTES MAJOR TERMS
 
Issuer of Unsecured Senior Notes – LyondellBasell Finance Company (or any other Subsidiary of the Company incorporated in the United States or any State thereof or a member state of the European Union on December 31, 2003 which is a borrower or a guarantor of the Senior Facility Debt).
 
Unsecured Senior Notes Trustee — Must accede to this Agreement.
 
Maturity – Not earlier than six months after the initial maturity of the longest term loan under the Senior Facility Agreement (as of the date hereof) it being acknowledged that the Unsecured Senior Notes may have optional redemption, change of control and asset sale provisions.
 
Purpose – To  repay the Interim Facility Debt and fees and expenses in connection therewith and otherwise be used to refinance Senior Debt.
 
Unsecured Senior Notes Guarantees – Guarantees by members of the Group may only be given on by the various subsidiaries of the Company provided that such companies are also guarantors of the Senior Facility Debt.
 
Unsecured Senior Notes Security –  None.
 
 
-105-
 

    IN WITNESS WHEREOF, each of the parties hereto has causeed a counterpart of this Agreement to be duly exeucted and delivered as of th date first written above.
 
 
  BASELL AF S.C.A. 
  BASELL ASIA PACIFIC LIMITED 
  BASELL BAYREUTH CHEMIE GMBH 
  BASELL CANADA INC. 
  BASELL EUROPE HOLDINGS B.V. 
  BASELL FINANCE & TRADING COMPANY B.V.
  BASELL FINANCE COMPANY B.V. 
  BASELL FINANCE USA INC. 
  BASELL FUNDING S.A.R.L. 
  BASELL GERMANY HOLDINGS GMBH 
  BASELL HOLDINGS B.V. 
  BASELL INTERNATIONAL HOLDINGS B.V. 
  BAELL POLYOLEFINE GMBH 
  LBI ACQUISITION LLC 
  LBIH LLC 
  LYONDELLBASELL FINANCE COMPANY 
  LYONDELLBASELL NETHERLANDS HOLDINGS B.V. 
   
  By        /s/ Bruce Dresbach
  Name:  Bruce Dresbach 
  Title:    Authorized Representative 
 

 
 
 
  BASELL NORTH AMERICA INC. 
  BASELL POLYOLEFINS UK LIMITED 
  BASELL SALES & MARKETING COMPANY B.V. 
  BASELL UK HOLDINGS LIMITED 
  BASELL USA INC.
  NELL ACQUISITION (US) LLC 
   
  By        /s/ Francesco Svelto
  Name:  Francesco Svelto 
  Title:    Authorized Representative 
 
 
 
 
 
  EQUISTAR CHEMICALS, LP 
  HOUSTON REFINING LP 
  LYONDELL CHEMICAL COMPANY 
  LYONDELL CHEMICAL NEDERLAND, LTD.
  LYONDELL CHEMICAL PRODUCTS EUROPE LLC
  LYONDELL CHEMICAL TECHNOLOGY, L.P.
  LYONDELL CHEMICAL TECHNOLOGY 1 INC. 
  LYONDELL CHEMICAL TECHNOLOGY MANAGEMENT, INC. 
  LYONDELL CHIMIE FRANCE LLC
  LYONDELL-EQUISTAR HOLDINGS PARTNERS
  LYONDELL EUROPE HOLDINGS INC. 
  LYONDELL HOUSTON REFINERY INC. 
  LYONDELL LP3 GP, LLC
  LYONDELL LP3 PARTNERS LP
  MILLENNIUM AMERICA HOLDINGS INC.
  MILLENNIUM AMERICA INC. 
  MILLENNIUM CHEMICALS INC. 
  MILLENNIUM PETROCHEMICALS GP LLC 
  MILLENNIUM PETROCHEMICALS INC. 
  MILLENNIUM PETROCHEMICALS PARTNERS, LP 
  MILLENNIUM SPECIALTY CHEMICALS INC. 
  MILLENNIUM US OP CO LLC 
  MILLENNIUM WORLDWIDE HOLDINGS I INC. 
   
  By        /s/ Karen A. Twitchell
  Name:  Karen A. Twitchell
  Title:    Authorized Representative 
 
 
 
 
 
 
  LYONDELL LP4 INC. 
  LYONDELL (PELICAN) PETROCHEMICAL L.P. 1, INC.
  LYONDELL PETROCHEMICAL L.P. INC. 
  LYONDELL REFINING COMPANY LLC
  LYONDELL REFINING LLC
   
  By        /s/ Gerald A. O'Brien, Vice President
  Name:  Gerald A. O'Brien
  Title:    Authorized Representative 

 
 

 
THE ARCO NOTES TRUSTEE
  
THE BANK OF NEW YORK
  
   
       
By:
 /s/ Jason Blondell     
Name:
 Jason Blondell  
Title:
    
       
Address:
    
Fax No.:
+44.207.964 2536
  
Attention:
    
       
   
THE EQUISTAR NOTES TRUSTEE
  
THE BANK OF NEW YORK
  
       
       
By:
 /s/ Jason Blondell     
Name:
 Jason Blondell  
Title:
    
       
Address:
    
Fax No.:
+44.207.964 2536
  
Attention:
    
       
   
THE HIGH YIELD NOTES TRUSTEE
  
THE BANK OF NEW YORK
  
       
       
By:
 /s/ Jason Blondell     
Name:
 Jason Blondell  
Title:
    
       
Address:
    
Fax No.:
+44.207.964 2536
  
Attention:
    

 
 
 
THE ABL AGENT
  
CITIBANK, N.A.
  
   
       
By:
 /s/ Edward Crook     
Name:  Edward Crook - Vice President
  
Title:   
 
     
 Citigroup Address:
 390 Greenwich Street   
  New York, NY 10013   
Edward Crook Fax No.:
 (212) 723-8691   
Attention:
 Edward Crook   

 
 
 
THE SENIOR AGENT:
  
CITIBANK, N.A.
  
   
       
By: :
 /s/ Edward Crook     
             Edward Crook - Vice President  
Senior Agent’s Address:    390 Greenwich Street 1st Floor
  
                 New York, NY 10013
  
Senior Agent's Fax No.:       (212) 723-8691  
Attention:              Edward Crook
  
 
 
 
 
THE SECURITY AGENT
  
CITIBANK, N.A.
  
   
   
By: :
 /s/ Edward Crook      
     Edward Crook - Vice President  
Security Agent’s Address:
 390 Greenwich Street 1st Floor   
  New York, NY 10013   
Security Agent’s Fax No.:
 (212) 723-8691   
Attention:
 Edward Crook   

 
 
 
THE ORIGINAL HEDGING BANKS
  
ABN AMRO BANK N.V.
  
   
   
By: :
 /s/ Erwin de Jong   /s/ Marko Krercer   
     Erwin de Jong        Marko Krercer  
     Executive Director
 Assistant Director   
     
 
    
 
 
ING BANK N.V.
  
   
   
By: :
 /s/ [not legible]   /s/ M. Klemme   
     [not legible]            M. Klemme   
     Director           Managing Director    
Address:
 Bijlmerplein 888   
  1000 Bv Amsterdam   
  The Netherlands   
Fax No.:
 +31 20 56 58207   
Attention:
    
 

 
 
 
THE INTERIM FACILITY AGENT
  
MERRILL LYNCH CAPITAL CORPORATION
  
   
   
By:
 /s/ [not legible]     
[  ] Address:
    
[  ] Fax No.:
    
Attention:
    

EX-4.11 15 lyo10k-032808ex411.htm INTERCREDITOR AGREEMENT DATED AS OF DECEMBER 20, 2007 lyo10k-022808ex411.htm
EXHIBIT 4.11
 
INTERCREDITOR AGREEMENT

Dated as of December 20, 2007

by and among

CITIBANK, N.A.
as Receivables Agent,

CITIBANK, N.A.
as ABL Agent,

CITIBANK, N.A.
as ICA Agent,

LYONDELLBASELL RECEIVABLES I, LLC
as Transferor,

LYONDELL CHEMICAL COMPANY
as Originator, as initial Receivables Servicer and as Borrower,

and

THE OTHER ORIGINATORS AND BORROWERS
from time to time party hereto

 
This INTERCREDITOR AGREEMENT dated as of December 20, 2007 (as modified, amended, restated or supplemented from time to time, this Agreement), by and among CITIBANK, N.A., in its capacity as Administrative Agent (together with its successors in such capacity, the Receivables Agent) under the Receivables Purchase Agreement (as hereinafter defined), CITIBANK, N.A., in its capacity as Administrative Agent on behalf of the ABL Secured Parties (as defined below) (together with its successors in such capacity, the ABL Agent), CITIBANK, N.A., not in its individual capacity but solely in its capacity as security agent for and on behalf of the ICA Secured Parties (as defined below) (together with its successors in such capacity, the ICA Agent), LYONDELLBASELL RECEIVABLES I, LLC, a Delaware limited liability company (the Transferor), LYONDELL CHEMICAL COMPANY, a Delaware corporation (Lyondell), and the other ORIGINATORS and BORROWERS (as such terms are hereinafter defined) from time to time party hereto.
 
RECITALS:
 
A.            Pursuant to a Receivables Sale Agreement dated as of December 20, 2007 (as amended, supplemented, modified or restated modified from time to time, the Receivables Sale Agreement) among Lyondell and certain subsidiaries and affiliates of Lyondell from time to time party thereto, as Originators (each, an Originator, and, collectively, the Originators) and (in the case of Lyondell) as Buyers Servicer, and the Transferor, as Buyer, each of the Originators has agreed to sell, transfer and assign to the Transferor, and the Transferor has agreed to purchase or otherwise acquire from such Originator, all of the right, title and interest of the Originators in the Receivables Assets (as hereinafter defined).
 
B.            The Transferor, as seller, Lyondell, in its capacity as initial servicer (in such capacity, the Receivables Servicer), the Receivables Purchasers (as defined below) and the Receivables Agent are parties to a Receivables Purchase Agreement dated as of December 20, 2007 (as amended, supplemented, modified or restated from time to time, the Receivables Purchase Agreement), pursuant to which, among other things, (i) the Receivables Purchasers have agreed, among other things, to purchase from the Transferor from time to time interests in the Receivables Assets purchased by or contributed to the Transferor pursuant to the Receivables Sale Agreement and (ii) the Transferor has created a security interest in such Receivables Assets to the Receivables Agent, for the benefit of itself and the Receivables Purchasers.
 
C.            The Receivables Sale Agreement and the Receivables Purchase Agreement provide for the filing of UCC financing statements to perfect the ownership and security interest of the parties thereto with respect to the property covered thereby.
 
D.            Lyondell and certain subsidiaries and affiliates of Lyondell from time to time party thereto, as Borrowers (each, a Borrower, and, collectively, the Borrowers), the ABL Agent and the financial institutions from time to time party thereto (collectively, the ABLLenders) are parties to an ABL Credit Agreement dated as of December 20, 2007 (as amended, supplemented, modified or restated from time to time, the ABLCredit Agreement).
 
E.            To secure the obligations of each Borrower to the ABL Lenders and ABL Agent under the ABL Credit Agreement and other Loan Documents (as hereinafter defined), each of the Borrowers, has granted to the ABL Agent for the benefit of the ABL Agent and the other ABL Secured Parties (as hereinafter defined) a security interest in, among other things, certain accounts receivable and certain general intangibles, including the Unsold Receivables (as hereinafter defined), certain inventory and all proceeds of the foregoing.
 
2
 
F.            Basell AF S.C.A., a Luxembourg entity (the Company) entered into that certain Intercreditor Agreement dated December 20, 2007 among the Company, the original obligors named therein, Citibank, N.A., as ICA Agent and Security Agent, Merrill Lynch Capital Corporation, as Interim Facility Agent, Citibank, N.A., as ABL Agent, The Bank of New York, as High Yield Notes Trustee, and certain entities named therein (as amended, supplemented, modified or restated from time to time, the Basell Intercreditor Agreement).
 
G.            To secure the obligations of one or more Borrowers to the ICA Secured Parties (as hereinafter defined), one or more Borrowers has entered into one or more ICA Collateral Documents (as herinafter defined).
 
H.            The parties hereto wish to set forth certain agreements with respect to the Receivables Assets and with respect to the Collateral (as hereinafter defined).
 
NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants contained herein, and for other good and valuable consideration, receipt of which is hereby acknowledged, it is hereby agreed as follows:
 
ARTICLE 1.        DEFINITIONS.
 
1.1.            Certain Defined Terms.  As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):
 
ABL Collateral means all property and interests in property, now owned or hereafter acquired or created, of any present or future Borrower in or upon which an ABL Lender Interest is granted or purported to be granted by any Borrower  to the ABL Agent or the other ABL Secured Parties under the ABL Security Agreement as in effect on the date hereof. For the avoidance of doubt, as in effect on the date hereof is intended to limit the types of collateral which may be ABL Collateral but not the grantor thereof.
 
ABL Collateral Documents means the ABL Security Agreement and any additional security or control documentation delivered or required to be delivered pursuant to the ABL Credit Agreement or any other ABL Loan Document to secure the Secured Obligations as defined in any such ABL Loan Document.
 
ABL Credit Agreement has the meaning specified in the recitals hereto.
 
 ABL Lender Claim means all of the indebtedness, obligations and other liabilities of any Borrower now or hereafter arising under, or in connection with, the ABL Loan Documents including, but not limited to, all sums now or hereafter loaned or advanced to or for the benefit of such Borrower, all reimbursement obligations of such Borrower with respect to letters of credit, any interest thereon (including, without limitation, interest accruing after the commencement of a bankruptcy, insolvency or similar proceeding relating to such Borrower, whether or not such interest is allowed or allowable as a claim in any such proceeding), any reimbursement obligations, fees or expenses due thereunder, and any costs of collection or enforcement.
 
3
 
ABL Lender Collateral means all ABL Collateral, which for avoidance of doubt does not include Receivables Assets.
 
ABL Lender Interest means, with respect to any property or interest in property, now owned or hereafter acquired or created, of any Borrower, any lien, claim, encumbrance, security interest or other interest of the ABL Agent or the other ABL Secured Parties in such property or interests in property.
 
ABLLoan Documents means the ABL Credit Agreement, the Notes issued under (and as defined in) the ABL Credit Agreement and the ABL Collateral Documents.
 
ABLSecured Parties means the Secured Parties as defined in the ABL Security Agreement.
 
ABL Security Agreement means the ABL Security Agreement dated as of December 20, 2007 among the Borrowers from time to time party thereto and the ABL Agent, as the same may be amended, supplemented, modified or restated from time to time.
 
Agent means the Receivables Agent, the ABL Agent or the ICA Agent, as applicable.
 
Basell Intercreditor Agreement has the meaning specified in the recitals hereto.

Borrower has the meaning specified in the recitals hereto.
 
Business Day means any day which is not a Saturday, Sunday or legal holiday in the State of New York or the State of Texas on which banks are open for business in New York City and Houston, Texas.
 
Claim means Lender Claim or Receivables Claim.
 
Collateral means collectively, the ABL Collateral and the ICA Collateral.
 
 Collections means, with respect to any Receivable, all cash collections and other cash proceeds of such Receivable, including, without limitation, (i) all cash proceeds of the Related Security with respect to such Receivable and (ii) in the case of any Purchased Receivable, any cash collections and other cash proceeds in respect of such Receivable deemed to have been received, and actually paid, pursuant to Section 2.03(a) of the Receivables Sale Agreement.
 
Company has the meaning specified in the recitals hereto.
 
4
 
Contract means an agreement between any Originator and an Obligor, in any written form acceptable to such Originator, or in the case of any open account agreement as evidenced by an invoice (x) setting forth the amount payable, the payment due date and other relevant terms of payment and a description, in reasonable detail, of the goods or services covered thereby or (y) approved by the Receivables Agent in its Discretion from time to time, in each case pursuant to or under which such Obligor shall be obligated to pay for goods or services from time to time.
 
Discretion refers to the Receivables Agents good faith exercise of its discretion in a manner consistent with its customary credit policies for receivables purchase or receivables-based credit facilities.
 
Disposition means, with respect to any assets of any Relevant Lyondell Party, any liquidation of such Relevant Lyondell Party or its assets, the establishment of any receivership for such Relevant Lyondell Party or its assets, a bankruptcy proceeding of such Relevant Lyondell Party (either voluntary or involuntary), the payment of any insurance, condemnation, confiscation, seizure or other claim upon the condemnation, confiscation, seizure, loss or destruction thereof, or damage to, or any other sale, transfer, assignment or other disposition of such assets.
 
Enforcement means collectively or individually, for (a) any of the Receivables Agent or the Receivables Purchasers to (i) terminate the Commitments under (and as defined in) the Receivables Documents or (ii) commence the judicial or nonjudicial enforcement of any of the default rights and remedies under the Receivables Documents and (b) any of the ABL Agent or the ABL Lenders during the continuance of a Lender Event of Default to (i) demand payment in full of or accelerate the indebtedness of the Borrowers to the ABL Lenders and ABL Agent or (ii) commence the judicial or nonjudicial enforcement of any of the default rights and remedies under the ABL Loan Documents.
 
Enforcement Notice means a written notice delivered in accordance with Section 2.5 which notice shall state that an Enforcement Period has commenced and specify the nature of the Lender Event of Default (if delivered by the ABL Agent) or the Event of Termination (if delivered by the Receivables Agent) giving rise thereto.
 
Enforcement Period means the period of time following the receipt by either the ABL Agent, on the one hand, or the Receivables Agent, on the other, of an Enforcement Notice delivered by any of the others until the earliest of the following:  (1) the Receivables Claim has been satisfied in full and none of the Receivables Purchasers have any further obligations under the Receivables Documents; (2) the ABL Lender Claim has been satisfied in full and the ABL Lenders have no further obligations under the ABL Loan Documents; and (3) the ABL Agent and the Receivables Agent agree in writing to terminate the Enforcement Period.
 
Event of Termination has the meaning specified in the Receivables Purchase Agreement.
 
Facility Termination Date means the Termination Date, as defined in the Receivables Purchase Agreement.
 
5
 
ICA Agent has the meaning specified in the recitals hereto.

ICA Claim means all of the indebtedness, obligations and other liabilities of any ICA Party now or hereafter arising under, or in connection with, the ICA Documents including, but not limited to, all sums now or hereafter loaned or advanced to or for the benefit of such ICA Party, all reimbursement obligations of such ICA Party with respect to letters of credit, any interest thereon (including, without limitation, interest accruing after the commencement of a bankruptcy, insolvency or similar proceeding relating to such ICA Party, whether or not such interest is allowed or allowable as a claim in any such proceeding), any reimbursement obligations, fees or expenses due thereunder, and any costs of collection or enforcement.

ICA Collateral shall mean all the collateral referred to in the ICA Documents that is intended under the terms of the ICA Documents to secure all or any part of the Senior Facility Debt, the Hedging Debt, the Interim Facility Debt, the Second Lien Note Debt and the High Yield Notes Debt (as each such term is defined in the Basell Intercreditor Agreement).

ICA Documents shall mean collectively, the Senior Facility Agreement, any Hedging Document, the Interim Facility Agreement, the High Yield Notes (as defined in the Basell Intercreditor Agreement) and the Second Lien Notes (as each such term is defined in the Basell Intercreditor Agreement) and those other ancillary agreements as to which the ICA Agent or any ICA Secured Party is a party or a beneficiary and all other agreements, instruments, documents and certificates, now or hereafter executed by or on behalf of any ICA Party, and delivered to the ICA Agent, in connection with any of the foregoing, in each case as the same may be amended, supplemented, restated or otherwise modified from time to time.

ICA Interest means, with respect to any property or interest in property, now owned or hereafter acquired or created, of any ICA Party, any lien, claim, encumbrance, security interest or other interest of the ICA Agent or the other ICA Secured Parties in such property or interests in property.

ICA Party shall mean each of the Company, its subsidiaries, including BIL Holdings Ltd (to be renamed Lyondell Basell Finance Company) that are the obligors and/or issuers under the ICA Documents.
 
ICA Secured Parties means collectively, the Senior Secured Parties, the High Yield Notes Finance Parties and the High Yield Noteholders (as each such term is defined in the Basell Intercreditor Agreement).
 
Inventory shall mean all now owned and hereafter acquired inventory, goods and merchandise, wherever located, to be furnished under any contract for service or held for sale or lease, all returned goods, raw materials, work-in-process, finished goods (including embedded software), other materials and supplies of any kind, nature, or description which are used or consumed in any Borrowers business or used in connection with the packing, shipping, advertising, selling or finishing of such goods, merchandise, and all documents of title or other documents representing them and shall include all feedstocks, line fill, stores inventory, catalysts, chemicals and additives.

6
 
Lender Claims means collectively, the ABL Lender Claim and the ICA Claim.

 Lender Event of Default means any Event of Default, as defined in the ABL Credit Agreement or any ICA Document.
 
Lender Interests means collectively, the ABL Lender Interest and the ICA Interest.
 
Loan Documents means collectively, the ABL Loan Documents and the ICA Documents.

Obligor means a Person obligated to make payments pursuant to a Contract.
 
Outstanding Balance of any Receivable means the then outstanding principal balance thereof.
 
Person means any natural person, corporation, limited liability company, trust,  joint venture, association, company, partnership, Governmental Authority or other entity.
 
Proceeds has the meaning ascribed to such term in the UCC.
 
Purchased Receivables means all now owned or hereafter existing Receivables sold, purported to be sold, transferred or contributed or purported to be transferred or contributed by any Originator to the Transferor or its permitted assignees under the Receivables Documents.
 
Receivable means the indebtedness (whether constituting accounts or general intangibles or chattel paper or otherwise) of any Obligor under a Contract, and includes the right to payment of any interest or finance charges and other obligations of such Obligor with respect thereto.
 
Receivables Assets means (i) the Purchased Receivables, (ii) the Related Security and Collections relating to the Purchased Receivables and (iii) all Proceeds of the foregoing; provided that Receivables Assets shall not include any Collections or other monies received in respect of Unsold Receivables (and earnings thereon) which are deposited in lock-boxes, deposit or other bank accounts to which Collections in respect of Purchased Receivables are sent or deposited.
 
Receivables Claim means all indebtedness, obligations and other liabilities of the Originators, the Receivables Servicer and the Transferor to the Receivables Purchasers and/or the Receivables Agent (including all indebtedness, obligations and other liabilities of the Originators to the Transferor as to which the Transferors rights have been assigned to the Receivables Agent and the Receivables Purchasers) now or hereafter arising under, or in connection with, the Receivables Documents, including, but not limited to, all sums now or hereafter paid to or for the benefit of the Transferor by the Receivables Purchasers in respect of the acquisition by the Receivables Purchasers of interests in Purchased Receivables or otherwise under the Receivables Purchase Agreement, any yield thereon (including, without limitation, yield accruing after the commencement of a bankruptcy, insolvency or similar proceeding relating to any Originator or the Transferor, whether or not such yield is an allowed claim in any such proceeding), any repayment obligations, fees or expenses due thereunder, and any costs of collection or enforcement.
 
7
 
Receivables Documents means the Receivables Sale Agreement, the Receivables Purchase Agreement, each Subordinated Note issued under (and as defined in) the Receivables Sale Agreement, the Undertaking Agreement dated as of December 20, 2007 (as amended, supplemented, modified or restated from time to time) by the Originators in favor of the Receivables Agent and the Receivables Purchasers, the Consent and Agreement dated as of December 20, 2007 (as amended, supplemented, modified or restated from time to time) between Originators and the Transferor, and each security or control documentation delivered or required to be delivered pursuant to any of the foregoing to evidence the interests of the Transferor and of Receivables Agent and the Receivables Purchasers, as applicable, in and to the Receivables, Related Security, Collections and proceeds thereof.
 
Receivables Interest means, with respect to any property or interests in property, now owned or hereafter acquired or created, of any Originator (regardless of whether sold or contributed by such Originator to the Transferor), any lien, claim, encumbrance, security interest or other interest of the Transferor and/or the Receivables Agent or any Receivables Purchaser in such property or interests in property.
 
Receivables Purchaser means each Person from time to time party to the Receivables Purchase Agreement in the capacity of a Purchaser (as defined in the Receivables Purchase Agreement).
 
Receivables Termination Notice has the meaning set forth in Section 2.10.
 
Records means all Contracts and other documents, books, records and other information (including, without limitation, computer programs, tapes, disks, data processing software and related property and rights) relating to Receivables and the Obligors thereunder or to inventory of the Borrowers.
 
Related Secured Parties means, (i) with respect to the Receivables Agent, the Receivables Purchasers, (ii) with respect to the ABL Agent, the ABL Secured Parties and (iii) with respect to the ICA Agent, the ICA Secured Parties.
 
Related Security means, with respect to any Receivable, (i) all right, title and interest of the applicable Originator or the Transferor in, under and to all security agreements and other Contracts that relate to such Receivable; (ii) all interest of the applicable Originator and the Transferor in the goods (including Returned Goods, except as otherwise provided in Section 2.1 and Section 2.3(e) hereof), if any, relating to the sale which gave rise to such Receivable; (iii) all other security interests or liens and property subject thereto from time to time purporting to secure payment of such Receivable, whether pursuant to the Contract related to such Receivable or otherwise, together with all financing statements authorized by an Obligor describing any collateral securing such Receivable; (iv) all rights in respect of lock-boxes to which Collections in respect of such Receivable are sent or deposited and all Restricted Accounts (as defined in the Receivables Purchase Agreement), and all funds and investments therein; (v) all letter of credit rights, guaranties, insurance and other agreements or arrangements of whatever character from time to time supporting or securing payment of such Receivable, whether pursuant to the Contract related to such Receivable or otherwise; (vi) all Records relating to such Receivables (subject, in the case of Records consisting of computer programs, data processing software and other intellectual property under license from third parties, to restrictions imposed by such license on the sublicensing or transfer thereof); (vii) all rights, interest and claims of the Transferor under the Receivables Sale Agreement, including, without limitation, (A) all rights to receive moneys due and to become due under or pursuant to the Receivables Sale Agreement, (B) all rights to receive proceeds of any indemnity, warranty or guaranty with respect to the Receivables Sale Agreement, (C) claims for damages arising out of or for breach of or default under the Receivables Sale Agreement and (D) the right to perform under the Receivables Sale Agreement and to compel performance and otherwise exercise all remedies thereunder; and (viii) all Proceeds of the foregoing.
 
8
 
Relevant Lyondell Party means any Borrower and/or any Originator, as the context may require.
 
Returned Goods means all returned, repossessed or foreclosed goods and/or merchandise the sale of which gave rise to a Receivable.
 
Secured Parties means any one or more of the ABL Secured Parties, the ICA Secured Parties, the Receivables Agent and the Receivables Purchasers.
 
UCC means at any time the Uniform Commercial Code as from time to time in effect in the State of New York at such time; provided, however, that in the event that, by reason of mandatory provision of law, the perfection , effect of perfection or non-perfection or priority of the security interest in any Collateral or Receivables Interest created by the Loan Documents or the Receivables Documents, as applicable is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, the term UCC shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or priority.

Unsold Receivables means any Receivables other than Purchased Receivables or Excluded Receivables.
 
1.2.            References to Terms Defined in the Receivables Documents and the ABL Loan Documents.  Whenever in Section 1.1 a term is defined by reference to the meaning ascribed to such term in any of the Receivables Documents or in any of the ABL Loan Documents, then, unless otherwise specified herein, such term shall have the meaning ascribed to such term in the Receivables Documents or ABL Loan Documents, respectively, as in existence on the date hereof, without giving effect to any amendments of such term (or any amendment of terms used in such term) as may hereafter be agreed to by the parties to such documents, unless such amendments have been consented to in writing by all of the parties hereto.
 
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ARTICLE 2.     INTERCREDITOR PROVISIONS ABL AGENT AND
RECEIVABLES AGENT
 
2.1.            Priorities with Respect to Receivables Assets.  Notwithstanding any provision of the UCC, any applicable law or decision or any of the ABL Loan Documents or the Receivables Documents, the ABL Agent (for itself and on behalf of each ABL Lender) hereby agrees that, upon the sale or other transfer (including, without limitation, by way of capital contribution) or purported sale or other transfer of any Receivable (or interest therein) by an Originator to the Transferor pursuant to the Receivables Sale Agreement, any ABL Lender Interest in such Purchased Receivables and all other Receivables Assets with respect thereto shall automatically and without further action cease and be forever released and discharged and the ABL Agent and the other ABL Secured Parties shall have no ABL Lender Interest therein; provided, however, that nothing in this Section 2.1 shall be deemed to constitute a release by the ABL Agent and the other ABL Secured Parties of: (i) any ABL Lender Interest in the proceeds received by any Originator from the Transferor for the sale of Receivables pursuant to the Receivables Sale Agreement (including, without limitation, cash payments made by the Transferor); (ii) any ABL Lender Interest or other right the ABL Agent and the other ABL Secured Parties have in any interests which any Originator may acquire from the Transferor and/or the Receivables Agent in Returned Goods; (iii) any ABL Lender Interest or other right the ABL Agent and the other ABL Secured Parties have in any Unsold Receivables and the Proceeds thereof; and (iv) any ABL Lender Interest or other right the ABL Agent and the other ABL Secured Parties have in any rights of the Borrowers under or in respect of the Receivables Documents; provided further, however, that, except as otherwise provided in Section 2.3(e), any ABL Lender Interest in such Returned Goods shall be junior and subject and subordinate to the Receivables Interest therein unless and until each of the applicable Originator and the Transferor shall have made all payments or adjustments required to be made by it under the Receivables Documents on account of the reduction of the Outstanding Balance of any Purchased Receivable related to such Returned Goods.  Except as otherwise provided in Section 2.3(e) hereof, if any goods or merchandise, the sale of which has given rise to a Purchased Receivable, are returned to or repossessed by the Receivables Servicer or the Receivables Agent, on behalf of the Transferor, then, upon payment or other adjustment by the applicable Originator and the Transferor to the Outstanding Balance of the relevant Purchased Receivable required on account thereof under the Receivables Purchase Agreement, the Receivables Interest in such Returned Goods shall automatically and without further action cease to exist and be released and extinguished and such Returned Goods shall thereafter not constitute Receivables Assets for purposes of this Agreement unless and until such Returned Goods have been resold so as to give rise to a Purchased Receivable.
 
2.2.            Respective Interests in Receivables Assets and ABL Lender Collateral.
 
(a)            Except for all rights of access to and use of Records granted to the Receivables Agent and the Receivables Purchasers pursuant to the Receivables Documents and except for the Receivables Interest of the Receivables Agent (for the benefit of itself and the Receivables Purchasers) in Returned Goods, which Receivables Interest is subject to the provisions of Section 2.1 and Section 2.3(e) hereof, each of the Transferor and the Receivables Agent (for itself and on behalf of each Receivables Purchaser) agrees that it does not have and shall not have any Receivables Interest in the ABL Lender Collateral.  Each of the Transferor and the Receivables Agent (for itself and on behalf of each Receivables Purchaser) agrees that it shall not request or accept, directly or indirectly (by assignment or otherwise) from any Originator any collateral security for payment of any Receivables Claims (other than any such collateral security included in the Receivables Assets and the right of access to and use of Records granted to the Receivables Agent and the Receivables Purchasers pursuant to the Receivables Documents) and hereby releases any Receivables Interest in any such collateral security so offered by any Originator.
 
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(b)            Except for rights in Returned Goods granted to the ABL Agent and the other ABL Secured Parties pursuant to the ABL Loan Documents, which ABL Lender Interest is subject to the provisions of Section 2.1 and Section 2.3(e) hereof, the ABL Agent (for itself and on behalf of each other ABL Secured Party) agrees that neither the ABL Agent nor the ABL Lenders have, nor shall they have, any ABL Lender Interest in the Receivables Assets.
 
2.3.            Distribution of Proceeds.  At all times, all proceeds of ABL Lender Collateral and Receivables Assets shall be distributed in accordance with the following procedure:
 
(a)            (i) All proceeds of the ABL Lender Collateral shall be paid to the ABL Agent for application on the ABL Lender Claim and other obligations and liabilities owing under the ABL Credit Agreement and other ABL Loan Documents until the ABL Lender Claim and such other obligations and liabilities have been paid and satisfied in full in cash; and (ii) except as otherwise provided in Section 2.3(e) hereof with respect to Returned Goods, any remaining proceeds of the ABL Lender Collateral shall be paid to the applicable Borrower or as otherwise required by applicable law, and, except as otherwise provided in Section 2.3(e) hereof with respect to Returned Goods, the Transferor and the Receivables Agent (for itself and on behalf of each Receivables Purchaser) agree that none of the Transferor, the Receivables Agent or the Receivables Purchasers have, nor shall they have, any Receivables Interest in such remaining proceeds.  The foregoing shall not, however, impair any claim or any right or remedy which the Transferor, the Receivables Agent or the Receivables Purchasers may have against any Originator under the Receivables Documents or otherwise.
 
(b)            (i) All proceeds of the Receivables Assets shall be paid to the Receivables Agent for application against the Receivables Claim and for application in accordance with the Receivables Documents until the Receivables Claim has been paid and satisfied in full in cash; and (ii) subject to Section 2.1 and Section 2.3(e) hereof, any remaining proceeds shall be paid to the Transferor or as otherwise required by applicable law. The ABL Agent (for itself and on behalf of each other ABL Secured Party) agrees that, except as set forth in Section 2.1 and Section 2.3(e) hereof, neither the ABL Agent nor the other ABL Secured Parties have, nor shall they have, any ABL Lender Interest in such remaining proceeds.  The foregoing shall not, however, impair any claim or any right or remedy which the ABL Agent or the ABL Lenders or any other ABL Secured Party may have against any Borrower under the ABL Loan Documents or otherwise.
 
(c)            In the event that any of the Transferor, the Receivables Agent or the Receivables Purchasers now or hereafter obtains possession of any ABL Lender Collateral, it shall, except as otherwise provided in Section 2.3(e) hereof with respect to Returned Goods, immediately deliver to the ABL Agent such ABL Lender Collateral (and until delivered to the ABL Agent such ABL Lender Collateral shall be held in trust for the ABL Agent).  Except as otherwise provided in Section 2.3(e) hereof with respect to Returned Goods, each of the Transferor, the Receivables Agent (for itself and on behalf of each Receivables Purchaser) further agrees to immediately turn over the proceeds of any Disposition of ABL Lender Collateral which it (or any Receivables Purchaser) might receive while any ABL Lender Claim, any other obligations or liabilities under the ABL Credit Agreement, any ABL Loan Document or any commitment to make financial accommodations thereunder remain outstanding, regardless of whether the ABL Agent has a perfected and enforceable lien in the assets of the applicable Borrower from which the proceeds of any such Disposition have been received.
 
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(d)            In the event that any Borrower, the ABL Agent or any other ABL Secured Party now or hereafter obtains possession of any Receivables Assets, it shall, except as otherwise provided in Section 2.3(e) hereof with respect to Returned Goods, immediately deliver to the Receivables Agent such Receivables Assets (and until delivered to the Receivables Agent such Receivables Assets shall be held in trust for the Receivables Agent).  Except as otherwise provided in Section 2.3(e) hereof with respect to Returned Goods, each of the Borrowers and the ABL Agent (for itself and on behalf of each other ABL Secured Party) further agrees to immediately turn over the proceeds of any Disposition of Receivables Assets to the Receivables Agent which it (or any Secured Party) might receive while any Receivables Claim, any other obligations or liabilities under the Receivables Documents or any commitment to make financial accommodations thereunder remain outstanding, regardless of whether the Receivables Agent has a perfected and enforceable lien in the assets from which the proceeds of such Disposition have been received.
 
(e)            If any Inventory of a Borrower is commingled with Returned Goods in which the Receivables Interest continues as provided in Section 2.1 above, then,
 
(i) if and so long as an Enforcement Period is not in effect, (x) such Returned Goods shall be deemed to have been sold in connection with the first Receivable or Receivables arising from the sale of such commingled inventory, and such Receivable or Receivables shall constitute Purchased Receivables, and (y) until such sale thereof in accordance with the preceding clause (x), (A) the Receivables Interest in such Returned Goods shall be junior in all respects to the ABL Lender Interest therein and (B) if the ABL Agent or any other ABL Secured Party receives any proceeds on account of the destruction or loss or other Disposition (not involving a sale in accordance with the preceding clause (x)) of such commingled inventory, all of such proceeds shall be paid to the ABL Agent, first, for application against the ABL Lender Claim and, second, to the extent of any remaining proceeds, to the Receivables Agent for application against the Receivables Claim, and
 
(ii) if and so long as an Enforcement Period is in effect, (x) the ABL Lender Interest in such Returned Goods shall be junior in all respects to the Receivables Interest therein and (y) all Receivables and other proceeds arising from the Disposition of such commingled inventory (whether by reason of sale or by reason of insurance payments for the destruction or loss thereof otherwise) shall be allocated or paid, first, as Receivables Assets relating to the Purchased Receivable or Receivables in respect of which such Returned Goods relate and, second, to the extent of any excess, to the ABL Agent for application against the ABL Lender Claim.
 
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(f)            Any payment by an Obligor in respect of any Receivable shall, except as otherwise specified by such Obligor or otherwise required by contract or law and unless otherwise instructed by the Receivables Agent, be applied as a Collection of any Purchased Receivable of such Obligor (starting with the oldest such Receivable) to the extent of any amounts then due and payable thereunder before being applied to any Unsold Receivable or other obligation of such Obligor.
 
2.4.            Unsold Receivables.
 
(a)            The Transferor and the Receivables Agent (for itself and on behalf of each Receivables Purchaser) hereby acknowledge that the ABL Agent on behalf of itself and the other ABL Secured Parties shall be entitled to Collections of Unsold Receivables.
 
(b)            Each of the parties hereto hereby agrees that all Collections received on account of Receivables Assets shall be paid or delivered to the Receivables Agent for application in accordance with Section 2.3(b) and all Collections received on account of Unsold Receivables shall be paid or delivered to the ABL Agent for application in accordance with Section 2.3(a).
 
(c)            The ABL Agent agrees that it shall not exercise any rights it may have under the ABL Loan Documents to send any notices to Obligors informing them of the ABL Lenders interest (if any) in the Receivables or directing such Obligors to make payments in any particular manner of any amounts due under the Receivables prior to the latest of payment in full of the Receivables Claim and the termination of the Commitments under (and as defined in) the Receivables Documents, except that, from and after any date on which (x) a Receivables Termination Notice has been delivered pursuant to Section 2.10, (y) the termination and cessation of transfers of Receivables is required to be effective under the terms of Section 2.10 and (z) the Receivables Claim has been paid in full or the Purchased Receivables giving rise to any unpaid Receivables Claim have been written off in accordance with their terms, the ABL Agent may, pursuant to the provisions of the ABL Loan Documents, inform any Obligors of Unsold Receivables that such Unsold Receivables have been assigned to the ABL Agent and direct such Obligors to make payments on account of such Unsold Receivables to any location or account to which payments on account of Purchased Receivables are not required to be made pursuant to the terms of the Receivables Documents.
 
2.5.            Enforcement Actions.  Each of the ABL Agent and the Receivables Agent agrees to use reasonable efforts to give an Enforcement Notice to the other prior to commencement of Enforcement (but failure to do so shall not prevent such Person from commencing Enforcement or affect its rights hereunder nor create any cause of action or liability against such Person).  Subject to the foregoing, each of the parties hereto agrees that during an Enforcement Period:
 
(a)            Subject to any applicable restrictions in the Receivables Documents, the Receivables Agent may at its option and without the prior consent of the other parties hereto, take any action to (i) accelerate payment of the Receivables Claim or any other obligations and liabilities under any of the Receivables Documents and (ii) liquidate the Receivables Assets or to foreclose or realize upon or enforce any of its rights with respect to the Receivables Assets; provided, however, that the Receivables Agent shall not take any action to foreclose or realize upon or to enforce any rights it may have with respect to any Receivables Assets constituting Returned Goods which have been commingled with other ABL Lender Collateral except in accordance with Section 2.3(e) hereof and clause (c) below.
 
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(b)            Subject to any applicable restrictions in the ABL Loan Documents, the ABL Agent or the other ABL Secured Parties may, at their option and without the prior consent of the other parties hereto, take any action to accelerate payment of the ABL Lender Claim or any other obligation or liability arising under any of the ABL Loan Documents, foreclose or realize upon or enforce any of their rights with respect to the ABL Lender Collateral or other collateral security, including, except as otherwise provided in Section 2.3(e) hereof and clause (c) below, with respect to any Receivables Assets constituting Returned Goods that have been commingled with other ABL Lender Collateral, or take any other actions as they deem appropriate; provided, however, that the ABL Agent shall not otherwise take any action to foreclose or realize upon or to enforce any rights it may have with respect to uncommingled Returned Goods without the Receivables Agents prior written consent unless the Receivables Claim or any other obligation or liability arising under any of the Receivables Documents shall have been first paid and satisfied in full and the Receivables Documents have terminated.
 
(c)            If Returned Goods are commingled with Inventory, the parties agree to cooperate in the disposition of such Returned Goods and Inventory and the application of the proceeds thereof as provided in Section 2.3(e) hereof.
 
2.6.            Access to Records.  Subject to and in accordance with any applicable restrictions in the Receivables Documents (but without limiting any rights under the Receivables Documents), each of the Receivables Purchasers and the Receivables Agent may enter one or more premises of any Originator, the Transferor or their respective affiliates, whether leased or owned, at any time during reasonable business hours, without force or process of law and without obligation to pay rent or compensation to such Originator, the Transferor, such affiliates, the ABL Agent or the other ABL Secured Parties, whether before, during or after an Enforcement Period, and may have access to and use of all Records located thereon and may have access to and use of any other property to which such access and use are granted under the Receivables Documents, in each case provided that such use is for the purpose of enforcing the Receivables Agents and/or the Receivables Purchasers rights with respect to the Receivables Assets.
 
2.7.            Accountings.  The ABL Agent agrees to render statements to the Receivables Agent upon reasonable request, which statements shall identify in reasonable detail the Unsold Receivables and shall render an account of the ABL Lender Claim, giving effect to the application of proceeds of ABL Lender Collateral as hereinbefore provided. The Receivables Servicer agrees to render statements to the ABL Agent upon reasonable request, which statements shall identify in reasonable detail the Purchased Receivables and shall render an account of the Receivables Claim, giving effect to the application of proceeds of Receivables Assets and ABL Collateral as hereinbefore provided; provided that the Receivables Agent agrees to render such statements to the ABL Agent upon reasonable request from and after the date (if any) on which Lyondell has ceased to be the Receivables Servicer; and provided, further, that on or prior to the Facility Termination Date, such statements shall consist of the reports and other information relating to the Receivables Assets delivered under the Receivables Documents.  Each of the Relevant Lyondell Parties, the Receivables Servicer and the Transferor hereby authorize the ABL Agent and the Receivables Agent to provide the statements described in this section.  None of the ABL Agent or the Receivables Agent shall bear any liability if their respective accounts are incorrect.
 
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2.8.           Agency for Perfection.  The Receivables Agent and the ABL Agent hereby appoint each other as agent for purposes of perfecting by possession or control their respective security interests and ownership interests and liens on the Receivables Assets and the ABL Collateral described hereunder.  In the event that the Receivables Agent obtains possession or control of any of the ABL Lender Collateral, the Receivables Agent shall notify the ABL Agent of such fact, shall hold such ABL Lender Collateral in trust and, except as otherwise provided in Section 2.3(e) hereof with respect to Returned Goods, shall deliver such ABL Lender Collateral to the ABL Agent upon request.  In the event that the ABL Agent obtains possession or control of any of the Receivables Assets, the ABL Agent shall notify the Receivables Agent of such fact, shall hold such Receivables Assets in trust and, except as otherwise provided in Section 2.3(e) hereof with respect to Returned Goods, shall deliver such Receivables Assets to the Receivables Agent upon request.
 
2.9.            UCC Notices.  In the event that any party hereto shall be required by the UCC or any other applicable law to give notice to the other of intended disposition of Receivables Assets or ABL Lender Collateral, respectively, such notice shall be given in accordance with Section 5.1 hereof and ten (10) days notice shall be deemed to be commercially reasonable.
 
2.10.           Termination and Cessation of Transfer of Receivables.  After the occurrence and during the continuance of a Lender Event of Default and upon written notice thereof by the ABL Agent or the Required Lenders to the Receivables Agent (a Receivables Termination Notice), the Transferor and each Originator, (i) all transfers of Receivables from the Originators to the Transferor shall terminate and cease and (ii) the Transferor and the Receivables Agent and the Receivables Purchasers shall terminate and cease, or shall cause the termination and cessation of, all transfers of Receivables (or interests therein) from the Transferor to the Receivables Purchasers (all such termination and cessation under clauses (i) and (ii) to be effective at the close of business on the second Business Day after such Receivables Termination Notice is effective in accordance with Section 5.1; provided that in the case of a Lender Event of Default resulting from the commencement of a bankruptcy, insolvency or similar proceeding relating to Lyondell, all transfers of Receivables immediately and automatically shall terminate and cease without notice of any kind (except to the extent otherwise required pursuant to an order entered by the bankruptcy court having jurisdiction over such  proceeding).  Except as set forth in the immediately preceding proviso, nothing contained in this Section shall affect the rights of the Transferor, the Receivables Agent or the Receivables Purchasers with respect to Receivables transferred prior to the time when termination and cessation of such transfers is required to be effective pursuant to the foregoing provisions of this Section 2.10. The parties hereto acknowledge and agree that, notwithstanding anything to the contrary in the Receivables Purchase Agreement or the Receivables Sale Agreement, delivery of a Receivables Termination Notice hereunder shall constitute an Event of Termination, and the Receivables Agent, the Transferor and the Receivables Purchasers shall be authorized to terminate and cease (or cause the termination and cessation of) transfers of Receivables as described in clause (ii) of the first sentence of this Section 2.10.  Neither the ABL Agent nor the Required Lenders shall deliver a Receivables Termination Notice on any date during the continuance of any Event of Default if on such date the Total Outstandings under (and as defined in) the ABL Credit Agreement are zero.
 
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2.11.            Accounts  The Receivables Agent further agrees that (i) it will not terminate any Receivables Document governing any of the Lockbox Accounts, the Receivables Concentration Account or the Receivables Funding Account (as such terms are defined in the ABL Security Agreement), (ii) it will not deliver any Activation Period Notice (as defined in the Receivables Document governing the Lockbox Accounts, the Receivables Concentration Account and the Receivables Funding Account) in respect of the Lockbox Accounts, the Receivables Concentration Account and the Receivables Funding Account unless and until a Triggering Event (as defined in the Receivables Purchase Agreement) has occurred and is continuing, (iii) it will deliver an Activation Period Termination Notice (as defined in the Receivables Document governing the Lockbox Accounts, the Receivables Concentration Account and the Receivables Funding Account) in respect of the Lockbox Accounts, the Receivables Concentration Account and the Receivables Funding Account promptly following the cessation of a Triggering Event and (iv) it will assign its rights under the Receivables Document governing the Lockbox Accounts, the Receivables Concentration Account and the Receivables Funding Account to the ABL Agent only if (x) the Receivables Claim has been paid in full and the Commitments under (and as defined in) the Receivables Purchase Agreement have been terminated, (y) no other Securitization Facility in replacement of the 2007 Securitization Facility (in each case as defined in the ABL Credit Agreement) is in effect and (z) the ABL Lender Claim has not been paid in full or the Commitments under (and as defined in) the ABL Credit Agreement have not been terminated.  The Receivables Agent, Lyondell (in its capacity as Servicer) and the Transferor agree not to change, or consent or permit to any change of, any instructions regarding the disposition of funds in the Lockbox Accounts, the Receivables Concentration Account or the Receivables Funding Account, in each case without the prior written consent of the ABL Agent.  The ABL Agent agrees that (i) it will not deliver any Activation Period Notice (as defined in the ABL Collateral Document governing the Inventory Concentration Account (as defined in the ABL Security Agreement)) in respect of the Inventory Concentration Account unless and until a Triggering Event (as defined in the ABL Credit Agreement) has occurred and is continuing and (ii) it will deliver an Activation Period Termination Notice (as defined in the ABL Collateral Document governing the Inventory Concentration Account) in respect of the Inventory Concentration Account promptly following the cessation of a Triggering Event.
 
2.12.           Withdrawals from Cash Assets and Cash Collateral Accounts.  With respect to the Cash Assets Account (as defined in the Receivables Purchase Agreement), the Receivables Agent agrees that it will not withhold its consent to any request by the Transferor (or Lyondell, in its capacity as servicer, on behalf of the Transferor) to withdraw funds from the Cash Assets Account if a certificate in the form of Exhibit A hereto is duly completed and delivered in connection with such request.  With respect to the Cash Collateral Account (as defined in the ABL Security Agreement), the ABL Agent agrees that it will not withhold its consent to any request by Lyondell to withdraw funds from the Cash Collateral Account if a certificate in the form of Exhibit B hereto is duly completed and delivered in connection with such request.
 
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ARTICLE 3.       INTERCREDITOR PROVISIONS ICA AGENT
 
3.1.           Respective Interests In Receivable Assets and ABL Lender Collateral.  The ICA Agent (for itself and on behalf of each ICA Secured Party) agrees that neither it nor any other ICA Secured Party has, nor shall it have any ICA Interest in the ABL Collateral or in the Receivables Assets.  Except for all rights of access to and use of Records granted to the Receivables Agents and the Receivables Purchasers pursuant to the Receivables Documents, the Receivables Agent (for itself and on behalf of each Receivables Purchaser) agrees that it does not have and shall not have any Receivables Interest in the ICA Collateral.  Except for all rights of access to and use of Records, trademarks and other property granted to the ABL Agent and the ABL Secured Parties pursuant to this Agreement, the ABL Agent (for itself and on behalf of each ABL Secured Party) agrees that it does not have and shall not have any ABL Lender Interest in the ICA Collateral.
 
3.2.           Distribution of Proceeds.  a) At all times, all proceeds of ABL Collateral and Receivables Assets shall be distributed in accordance with Section 2.3 above.  In the event that the ICA Agent or any other ICA Secured Party now or hereafter obtains possession of any Receivables Assets or ABL Collateral, it shall immediately deliver the same to the ABL Agent or the Receivables Agent, as appropriate.
 
(b)            At all times, all proceeds of ICA Collateral shall be distributed in accordance with the applicable provisions of the ICA Documents. If any of the Secured Parties (other than the ICA Secured Parties) now or hereafter obtains possession of any ICA Collateral, it shall immediately deliver such ICA Collateral to the ICA Agent.
 
(c)            The foregoing provisions of this Section 3.2 shall not, however, impair any claim or any right or remedy which any Secured Party may have against any Borrower or Originator or ICA Party under the Receivables Documents, the Loan Documents or otherwise.
 
3.3.           Waiver of Right to Contest.  Each Agent, for and on behalf of itself and its Related Secured Parties, agrees that it shall not (and hereby waive any right to), and they shall not have any right to (and hereby waives any right to), take any action to contest or challenge (or assist or support any other Person in contesting or challenging), directly or indirectly, whether or not in any insolvency or other proceeding, the validity, priority, enforceability or perfection of (i) the Lender Interests and/or Receivables Interest of the other Agents and the other Secured Parties or (ii) the provisions of this Agreement.
 
3.4.           Insurance.  Proceeds of Collateral include insurance proceeds and, therefore, Sections 2.3 and 3.2 shall govern the ultimate disposition of casualty insurance proceeds.  The ABL Agent and the ICA Agent shall each be named as additional insured or loss payee, as applicable, with respect to all insurance policies relating to the ABL Collateral and ICA Collateral, as applicable.  The ABL Agent shall have the sole and exclusive right, as against the ICA Agent, to adjust settlement of insurance claims in the event of any covered loss, theft or destruction of ABL Collateral.  The ICA Agent shall have the sole and exclusive right, as against the ABL Agent, to adjust settlement of insurance claims in the event of any covered loss, theft or destruction of ICA Collateral.  If any insurance claim includes both ABL Collateral and ICA Collateral and the insurer will not settle such claim separately with respect to ABL Collateral and ICA Collateral, the ABL Agent will have the sole and exclusive right, as against the ICA Agent to adjust settlement of such claims, and its determination shall be binding upon the parties.  
 
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3.5.           Inspection and Access Rights.  (a)  Without limiting any rights the ABL Agent, any other ABL Secured Party, the Receivables Agent or any other Receivables Purchaser may otherwise have under applicable law or by agreement, in the event of any Enforcement by or on behalf of the ABL Agent or Receivables Agent, as applicable, the ABL Agent, the Receivables Agent or any other Person (including the Borrowers and/or Originators) acting with the consent, or on behalf, of the ABL Agent or Receivables Agent, as applicable, shall have the right (a) during normal business hours on any business day, to access ABL Collateral or Receivables Assets, as applicable, that (i) is stored or located in or on, (ii) has become an accession with respect to (within the meaning of Section 9-335 of the Uniform Commercial Code), or (iii) has been commingled with (within the meaning of Section 9-336 of the Uniform Commercial Code), ICA Collateral, and (b) to use the ICA Collateral (including, without limitation, trademarks owned or licensed), in order to assemble, inspect, copy or download information stored on, take actions to perfect its lien on, complete a production run of Inventory involving, take possession of, move, prepare and advertise for sale, sell (by public auction, private sale or a store closing, going out of business or similar sale, whether in bulk, in lots or to customers in the ordinary course of business or otherwise and which sale may include augmented Inventory of the same type sold in the Borrowers and/or Originators business), store or otherwise deal with the ABL Collateral or Receivables Assets, in each case without notice to, the involvement of or interference by any ICA Secured Party (and whether or not the ICA Agent or any other ICA Secured Party has commenced and is continuing to exercise any secured creditor remedies) or liability to any ICA Secured Party.
 
(b)            The ABL Agent, the ABL Secured Parties, the Receivables Agent and the Receivables Purchasers shall not be obligated to pay any amounts to the ICA Agent or the ICA Secured Parties (or any person claiming by, through or under the ICA Secured Parties, including any purchaser of the ICA Collateral) or to any Borrower, for or in respect of the use by the ABL Agent, the ABL Secured Parties, the Receivables Agent or the Receivables Purchasers of the ICA Collateral and none of the ABL Agent, ABL Secured Parties, Receivables Agent or Receivables Purchasers shall be obligated to secure, protect, insure or repair any such ICA Collateral (other than for damages caused by the ABL Agent, ABL Secured Parties, the Receivables Agent or the Receivables Purchasers or their respective employees, agents and representatives). None of the ABL Agent, ABL Secured Parties, Receivables Agent or Receivables Purchasers shall have any liability to the ICA Agent or the ICA Secured Parties (or any person claiming by, through or under the ICA Agent or the ICA Secured Parties, including any purchaser of the ICA Collateral) as a result of any condition (including environmental condition, claim or liability) on or with respect to the ICA Collateral other than those arising from the gross negligence or willful misconduct of the ABL Agent, ABL Secured Parties, Receivables Agent or Receivables Purchasers or their respective employees, agents and representatives, and none of the ABL Agent, ABL Secured Parties, Receivables Agent or Receivables Secured Party shall have any duty or liability to maintain the ICA Collateral in a condition or manner better than that in which it was maintained prior to the use thereof by the ABL Agent, ABL Secured Parties, Receivables Agent or Receivables Purchasers.
 
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(c)     The ICA Agent and the other ICA Secured Parties shall use commercially reasonable efforts to not hinder or obstruct the ABL Agent, the ABL Secured Parties, Receivables Agent or Receivables Purchasers from exercising their rights described in clause (a) hereof.
 
(d)            Subject to the terms hereof, the ICA Agent may advertise and conduct public auctions or prosecute sales of the ICA Collateral without notice (except as required by applicable law) to, or involvement of or interference by any ABL Secured Party or liability to any ABL Secured Party.
 

ARTICLE 4.          INTERCREDITOR PROVISIONS GENERAL
 
4.1.          Independent Credit Investigations.  Neither the Receivables Purchasers, the Receivables Agent, the ABL Agent, the ICA Agent nor the other Secured Parties nor any of their respective directors, officers, agents or employees shall be responsible to the other or to any other person, firm or corporation for the solvency, financial condition or ability of any Relevant Lyondell Party or the Transferor, as applicable, to repay the Receivables Claim, the ABL Lender Claim or the ICA Claim, or for the worth of the Receivables Assets, any ABL Collateral or any ICA Collateral, or for statements of any Relevant Lyondell Party, the Receivables Servicer or the Transferor (as applicable), oral or written, or for the validity, sufficiency or enforceability of the Receivables Claim, the ABL Lender Claim or the ICA Claim, the Receivables Documents, the Loan Documents, the Receivables Agents interest in the Receivables Assets, the ABL Secured Parties or ABL Agents interest in any ABL Collateral, or the ICA Secured Parties or the ICA Agents interest in any ICA Collateral.  The Secured Parties  and the Receivables Purchasers have entered into their respective agreements with the Relevant Lyondell Parties, the Transferor and/or the Receivables Servicer, as applicable, based upon their own independent investigations.  None of the Secured Parties, the ABL Agent, the ICA Agent or the Receivables Agent makes any warranty or representation to the other nor does it rely upon any representation of the other with respect to matters identified or referred to in this Section 4.1.
 
4.2.            Limitation on Liability of Parties to Each Other.  Except with respect to liability for breach of express obligations under this Agreement, no party shall have any liability to any other party except for liability arising from the gross negligence or willful misconduct of such party or its representatives.
 
4.3.            Amendments to Loan and Receivables Arrangements or to this Agreement. Each party hereto shall, upon reasonable request of any other party hereto, provide copies of all modifications or amendments and copies of all other documentation relevant to the Receivables Assets or the ABL Collateral.  All modifications or amendments of this Agreement must be in writing and duly executed by an authorized officer of each party hereto to be binding upon and enforceable against such party.
 
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4.4.            Marshalling of Assets.  Nothing in this Agreement will be deemed to require any Agent (i) to proceed against certain property securing any Lender Claim (or any other obligation or liability under any other Loan Documents) or the Receivables Claim (or any other obligation or liability under the Receivables Documents), as applicable, prior to proceeding against other property securing such Claim or obligations or liabilities or against certain persons guaranteeing any such obligations or (ii) to marshal any ABL Collateral (or any other collateral), ICA Collateral or the Receivables Assets (as applicable) upon the enforcement of the such Agents remedies under the Loan Documents or Receivables Documents, as applicable.
 
4.5.            Relative Rights.
 
(a)            The relative rights of the ABL Lenders, as against each other, and the ICA Secured Parties, as against each other, shall be determined by agreement among such parties in accordance with the terms of the applicable Loan Documents.
 
(b)            Each Agent and its Related Secured Parties shall be entitled to rely on the power and authority of each other Agent to act on behalf of its Related Secured Parties to the extent the provisions hereof have such Agent so act.
 
4.6.            Effect Upon ABL Loan Documents and Receivables Documents.  By executing this Agreement, each of the Relevant Lyondell Parties and the Transferor agree to be bound by the provisions hereof (i) as they relate to the relative rights of the Agents and the other Secured Parties with respect to the property of the Relevant Lyondell Parties; and (ii) as they relate to the relative rights of the Originators, the Transferor, the Receivables Purchasers and/or the Receivables Agent as creditors of (or purchasers from) the Originators or the Transferor, as the case may be.  Each Relevant Lyondell Party acknowledges that the provisions of this Agreement shall not give it any substantive rights as against any Agent or other Secured Party and that nothing in this Agreement shall (except as expressly provided herein) amend, modify, change or supersede the terms of the Loan Documents as between such Relevant Lyondell Party, the applicable Agent and the other Secured Parties.  The Transferor and each Originator acknowledge that the provisions of this Agreement shall not give the Transferor or any Originator any substantive rights as against the Receivables Agent or the Receivables Purchasers and that nothing in this Agreement shall (except as expressly provided herein) amend, modify, change or supersede the terms of the Receivables Documents as among the Transferor,  the Originators, the Receivables Servicer, the Receivables Agent or the Receivables Purchasers.  Each Originator and the Transferor further acknowledge that the provisions of this Agreement shall not give any such party any substantive rights as against the other and that nothing in this Agreement shall amend, modify, change or supersede the terms of the Receivables Documents as between the Originators and the Transferor. Notwithstanding the foregoing, each of the Receivables Agent (for itself and on behalf of each Receivables Purchaser), the ABL Agent (for itself and on behalf of each other ABL Secured Party) and the ICA Agent (for itself and on behalf of each ICA Secured Party) agrees, that, as between themselves, to the extent the terms and provisions of the Loan Documents or the Receivables Documents are inconsistent with the terms and provisions of this Agreement, the terms and provisions of this Agreement shall control.
 
20
 
4.7.            Nature of the ABL Lender Claim and Modification of ABL Loan Documents.  Each of the Transferor, the Receivables Agent (for itself and on behalf of each Receivables Purchaser) and the ICA Agent (for itself and on behalf of each ICA Secured Party) acknowledges that the ABL Lender Claim and other obligations and liabilities owing under the ABL Loan Documents are revolving in nature and that the amount of such revolving indebtedness which may be outstanding at any time or from time to time may be increased or reduced and subsequently reborrowed.  The terms of the ABL Loan Documents may be modified, extended or amended from time to time, and the amount thereof may be increased or reduced, all without notice or consent by any of the Transferor, the Receivables Agent, the Receivables Purchasers, the ICA Agent or the ICA Secured Parties, and without affecting the provisions of this Agreement.  Without in any way limiting the foregoing, each of the Transferor, the Receivables Agent (for itself and on behalf of each Receivables Purchaser) and the ICA Agent (for itself and on behalf of each ICA Secured Party) hereby agrees that the maximum amount of the ABL Lender Claim and other obligations and liabilities owing under the ABL Loan Documents may be increased at any time and from time to time to any amount in accordance with the ABL Loan Documents.
 
4.8.            Nature of the Receivables Claim and Modification of Receivables Documents.  Each of the Borrowers, the ABL Agent (for itself and on behalf of each other ABL Secured Party) and the ICA Agent (for itself and on behalf of each ICA Secured Party) acknowledges that the Receivables Claim and other obligations and liabilities owing under the Receivables Documents are revolving in nature and that the amount of such revolving obligations which may be outstanding at any time or from time to time may be increased or reduced and subsequently reincurred.  The terms of the Receivables Documents may be modified, extended or amended from time to time, and the amount thereof may be increased or reduced, all without notice to or consent by any  of the ABL Secured Parties, ICA Secured Parties, the ABL Agent or the ICA Agent and without affecting the provisions of this Agreement; provided that nothing in this Section 4.8 (including, without limitation, the next succeeding sentence) shall be construed to relieve any Borrower of its obligation to comply with the covenants under the ABL Loan Documents.  Without in any way limiting the foregoing, each of the Borrower, the ABL Agent (for itself and on behalf of each other ABL Secured Party) and the ICA Agent (for itself and on behalf of each ICA Secured Party) hereby agrees that the maximum amount of the Receivables Claim and other obligations and liabilities owing under the Receivables Documents and the amount of Receivables which may be purchased or otherwise financed pursuant to the Receivables Documents may, in each case, be increased at any time and from time to time to any amount in accordance with the Receivables Documents.
 
4.9.            Nature of the ICA Claim and Modification of ICA Documents.  Each of the Transferor, the ABL Agent (for itself and on behalf of each other ABL Secured Party) and the Receivables Agent (for itself and on behalf of each Receivables Purchaser) acknowledges that the ICA Claim and other obligations and liabilities owing under the ICA Documents are, in part, revolving in nature and that the amount of such revolving indebtedness which may be outstanding at any time or from time to time may be increased or reduced and subsequently reborrowed.  The terms of the ICA Documents may be modified, extended or amended from time to time, and the amount thereof may be increased or reduced, all without notice or consent by any of the Transferor, the Receivables Agent, the Receivables Purchasers, the ABL Agent or the ABL Secured Parties and without affecting the provisions of this Agreement.  Without in any way limiting the foregoing, each of the Transferor, the Receivables Agent (for itself and on behalf of each Receivables Purchaser) and the ABL Agent (for itself and on behalf of each ABL Secured Party) hereby agrees that the maximum amount of the ICA Claim and other obligations and liabilities owing under the ICA Documents may be increased at any time and from time to time to any amount in accordance with the ICA Documents.
 
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4.10.           Further Assurances.  Each of the parties agrees to take such commercially reasonable actions as may be requested by any other party, whether before, during or after an Enforcement Period, in order to effect the rules of distribution and allocation herein above set forth and to otherwise effectuate the agreements made herein.
 
4.11.            No Petition.  Each of the ABL Agent (for itself and on behalf of each other ABL Secured Party) and the ICA Agent (for itself and on behalf of each other ICA Secured Party) hereby agrees that, prior to the date which is one year and one day after date upon which the Receivables Claim is paid in full, it will not institute against, or join any other Person in instituting against, the Transferor any bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding or other similar proceeding under any bankruptcy or similar law of the United States or any state of the United States.

4.12.            Set Off; Deposit Accounts, etc.  Each of the Receivables Agent (for itself and on behalf of each Receivables Purchaser), the ABL Agent (for itself and on behalf of each other ABL Secured Party) and the ICA Agent (for itself and on behalf of each other ICA Secured Party) agrees not to set off or apply any deposits (general or special, time or demand, provisional or final) at any time held or other obligations at any time owing by it to or for the credit or the account of any Relevant Lyondell Party or the Transferor against the obligations of such Relevant Lyondell Party or the Transferor in a manner inconsistent with the provisions of this Agreement.
 

ARTICLE 5.      MISCELLANEOUS
 
5.1.            Notices.  All notices and other communications provided for hereunder shall, unless otherwise stated herein, be in writing (including telecommunications and communication by facsimile copy) and delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy or facsimile as to each party hereto, at its address set forth under its name on the signature pages hereof or at such other address as shall be designated by such party in a written notice to the other parties hereto.  All such notices and communications shall be effective upon receipt or, in the case of notice by telex, when telexed against receipt of the answerback, or in the case of notice by facsimile copy, when verbal confirmation of receipt is obtained, in each case addressed as aforesaid.
 
Notices and other communications to any party hereunder may be delivered or furnished by electronic communications pursuant to procedures approved by such party; provided that the foregoing shall not apply to any Enforcement Notice or Receivables Termination Notice unless otherwise agreed by the Receivables Agent and the ABL Agent.
 
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5.2.            Agreement Absolute.  Each of the Agents and the Secured Parties shall be deemed to have entered into the Loan Documents or the Receivables Documents, as applicable, in express reliance upon this Agreement.  This Agreement may not be modified or amended, except in accordance with Section 4.3.  This Agreement shall be applicable both before and after the filing of any petition by or against any Relevant Lyondell Party or the Transferor under the U.S. Bankruptcy Code and all references herein to any Relevant Lyondell Party or the Transferor shall be deemed to apply to a debtor-in-possession for such party and all allocations of payments among the Secured Parties shall, subject to any court order to the contrary, continue to be made after the filing of such petition on the same basis that the payments were to be applied prior to the date of the petition.
 
5.3.            Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of each of the parties hereto and their respective successors and assigns.  The successors and assigns for each Relevant Lyondell Party and the Transferor shall include a debtor-in-possession or trustee of or for such party.  The successors and assigns for any Secured Party and any Agent, as the case may be, shall include any successor Secured Party or Agent, as the case may be, appointed under the terms of the Loan Documents or the Receivables Documents, as applicable.  Each of the ABL Agent (for itself and on behalf of each other ABL  Secured Party), the ICA Agent and the Receivables Agent (for itself and on behalf of each Receivables Purchaser), as the case may be, agrees not to transfer any interest it may have in the Loan Documents or the Receivables Documents unless such transferee has been notified of the existence of this Agreement and has agreed to be bound hereby.  In the event that the financing provided under the ABL Credit Agreement shall be refinanced, replaced or refunded, each of the Originators, the Transferor and the Receivables Agent hereby agree, at the request of the agent or lenders under the credit facility that so refinances, replaces or refunds the financing under the ABL Credit Agreement, to execute and deliver a new intercreditor agreement with such agent and/or lenders on substantially the same terms as herein provided (or on such other terms no less favorable to the Receivables Agent and the Receivables Purchasers) and in form and substance reasonably satisfactory to the Receivables Agent, the Originators and the Transferor.  In the event that the financing provided under the Receivables Documents shall be refinanced, replaced or refunded, each of the Borrowers and the ABL Agent (for itself and on behalf of each other ABL Secured Party) hereby agrees that, at the request of the agent or purchasers under the facility that so refinances, replaces or refunds the financing under the Receivables Documents, to execute and deliver a new intercreditor agreement with such agent and/or purchasers on substantially the same terms as herein provided (or on such other terms no less favorable to the ABL Agent and the other ABL Secured Parties) and in form and substance reasonably satisfactory to the ABL Agent and the Borrowers.
 
5.4.            Beneficiaries.  The terms and provisions of this Agreement shall be for the sole benefit of the parties hereto and the Secured Parties, and the Receivables Purchasers and their respective successors and assigns, and no other Person shall have any right, benefit or priority by reason of this Agreement.
 
5.5.            GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTIONS 5-1401 OF THE GENERAL OBLIGATIONS LAWS OF THE STATE OF NEW YORK, BUT OTHERWISE WITHOUT REGARD TO CONFLICTS OF LAW PROVISIONS).
 
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5.6.            Section Titles.  The article and section headings contained in this Agreement are and shall be without substantive meaning or content of any kind whatsoever and are not a part of the agreement between the parties hereto.
 
5.7.            Severability.  Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or thereof or affecting the validity or enforceability of such provision in any other jurisdiction.
 
5.8.            Execution in Counterparts.  This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement.
 
5.9.            Effectiveness.  This Agreement shall become effective as of the date hereof on the date on which each Agent shall have received duly executed counterparts hereof signed by each of the parties hereto (or, in the case of any such Person as to which an executed counterpart shall not have been received, receipt by each Agent in a form satisfactory to it of a telex, facsimile or other written confirmation from such Person that it has executed a counterpart hereof or a consent hereto, as applicable).
 
5.10            Additional Parties.   Each Person that becomes a Borrower under the ABL Credit Agreement or a Originator under the Receivables Purchase Agreement after the date hereof shall become a party to this Agreement upon execution and delivery by such Person of such documents or instruments as required in accordance with the terms of the ABL Credit Agreement or Receivables Purchase Agreement, as applicable.

24
 
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
 
 
CITIBANK, N.A., as Receivables Agent
  
       
       
 
By:
 /s/ Matthew Paquin   
   
Name:  Matthew Paquin
  
   
Title:    Vice President
  
       
 
Address:
388 Greenwich Street
  
   
19th Floor
  
   
New York, New York 10013
  
 
Attention:
David Jaffe
  
 
Telecopy:
(212) 816-2613
  
 
[Intercreditor Agreement]
 
 
CITIBANK, N.A., as ABL Agent
  
       
       
 
By:
 /s/ Matthew Paquin    
   
Name:  Matthew Paquin
  
   
Title:    Vice President
  
       
 
Address:
388 Greenwich Street
  
   
19th Floor
  
   
New York, New York 10013
  
 
Attention:
David Jaffe
  
 
Telecopy:
(212) 816-2613
  
 
[Intercreditor Agreement]
 
 
CITIBANK, N.A., as ICA Agent
  
       
       
   By:
/s/ Matthew Paquin
  
   
Name:  Matthew Paquin
  
   
Title:    Vice President
  
       
 
Address:  388 Greenwich Street
  
             19th Floor    
         New York, New York 10013    
 
Attention:  David Jaffe
  
 
Telecopy:   (212) 816-2613
  
 
[Intercreditor Agreement]
 
 
LYONDELLBASELL RECEIVABLES I, LLC,
  
 
as Transferor
    
       
 
By:
/s/ Karen A. Twitchell
  
     Name: Karen A. Twitchell  
     Title:   Vice President and Treasurer
       
 
Address:
12221 McKinney St., Suite700
  
   
Houston, Texas 77010
  
 
Attention:
 713/652-7200  
 
Telecopy:
 713/652-4598   
 
[Intercreditor Agreement]

 
LYONDELL CHEMICAL COMPANY,
 
as Originator, as Receivables Servicer and as Borrower
     
   By:
/s/ Karen A. Twitchell
  
   
Name:  Karen A. Twitchell
   
Title:    Authorized Representative
     
 
Address:
1221 McKinney St., Suite 700
   
Houston, Texas 77010
 
Attention:
 713/652-7200 
 
Telecopy:
 713/652-4598 
 
[Intercreditor Agreement]

 
EQUISTAR CHEMICALS, LP,
  
 
as Originator and as Borrower
  
     
   By:
/s/ Karen A. Twitchell
  
   
Name:  Karen A. Twitchell
  
   
Title:    Authorized Representative
  
     
 
Address:      1221 McKinney, Suite 700
             Houston, TX 77010
  
 
Attention:    Assistant Treasurer
  
  Telephone:   713/652-7200  
 
Telecopy:     713/652-4598
  
 
[Intercreditor Agreement]

 
HOUSTON REFINING LP,
  
 
as Originator and as Borrower
  
     
 
By:
/s/ Karen A. Twitchell
  
   
Name:  Karen A. Twitchell
  
   
Title:    Authorized Representative
  
     
 
Address:    1221 McKinney, Suite 700
           Houston, TX 77010
  
 
Attention:  Assistant Treasurer
  
   Telephone: 713/652-7200  
 
Telecopy:     713/652-4898
  
 
[Intercreditor Agreement]

 
BASELL USA INC.
  
 
as Borrower
  
     
 
By:
/s/ Francesco Svelto
  
   
Name:  Francesco Svelto
  
   
Title:    Authorized Representative
  
     
 
Address:      Delaware Corporation Center II
                      2 Righter Parkway, Suite 300
                      Wilmington, DE 19803
  
 
Attention:    Kevin E. Walsh
  
  Telephone:  302/683-8000  
 
Telecopy:    302/731-3971
  

[Intercreditor Agreement]

 

Exhibit A
 
[Date]
 

Citibank, N.A.
388 Greenwich Street
19th Floor
New York, NY  10013
Attention: ________________________
 
Re:  Request for Withdrawal Account No.____
 
Ladies and Gentlemen:
 
We refer to the Deposit Account Control Agreement dated as of December [__], 2007 among LyondellBasell Receivables I, LLC, us, Citibank, N.A. and you (the Deposit Account Agreement), a copy of which is attached, regarding the above-referenced deposit account (the Account).  Capitalized terms used, and not otherwise defined, in this letter have the meanings specified in the Deposit Account Agreement.
 
We hereby request a withdrawal of $________ from the Account for transfer to [specify account] and certify that [select applicable language depending on whether or not a Triggering Event exists:]
 
[no Shortfall Condition existed as of the date of the most recent Seller Report, and, both before and after giving effect to such withdrawal of such amount, no Triggering Event exists]
 
[we have, in connection with this request, delivered to you a Seller Report (as defined in the Receivables Purchase Agreement) demonstrating that, after giving effect to the withdrawal of such amount, a Shortfall Condition (as defined in the Receivables Purchase Agreement) does not exist [and [the conditions to an Investment Event (as defined in the Receivables Purchase Agreement) would be satisfied][ the aggregate Capital (as defined in the Receivables Purchase Agreement) is zero]]1.
 
 
 
  Very truly yours,
   
 
LYONDELL CHEMICAL COMPANY
       as Servicer
   
 
By:
    
   
Name:
  
   
Title:
  

1 Specify applicable condition if a Triggering Event exists.
 
 
Exhibit B
 
[Date]
 
Citibank, N.A.
388 Greenwich Street
19th Floor
New York, NY  10013
Attention: ________________________
 
Re:  Request for Withdrawal Account No.____
 
Ladies and Gentlemen:
 
We refer to the Deposit Account Control Agreement dated as of December [__], 2007 among us, Citibank, N.A. and you (the Deposit Account Agreement), a copy of which is attached, regarding the above-referenced deposit account (the Account).  Capitalized terms used, and not otherwise defined, in this letter have the meanings specified in the Deposit Account Agreement.
 
We hereby request a withdrawal of $________ from the Account for transfer to [specify account] and certify that [select applicable language depending on whether or not a Triggering Event exists:]
 
[Total Outstandings did not exceed the Borrowing Base as of the date of the most recent Borrowing Base Certificate, and, both before and after giving effect to such withdrawal of such amount, no Triggering Event exists]
 
[no Default (as defined in the ABL Credit Agreement) exists [and [the conditions to a Credit Event (as defined in the ABL Credit Agreement) would be satisfied][ the Total Outstandings (as defined in the ABL Credit Agreement) are zero]]2.
 
Very truly yours,
   
 
LYONDELL CHEMICAL COMPANY
      
 
 
By:
    
   
Name:
  
   
Title:
  

2 Specify applicable condition if a Triggering Event exists.
 
2
EX-4.12 16 lyo10k-032808ex412.htm LONG TERM INTERCOMPANY LOAN AGREEMENT DATED AS OF FEBRUARY 22, 2008 lyo10k-022808ex412.htm
EXHIBIT 4.12

 
LONG TERM INTERCOMPANY LOAN AGREEMENT
(Loan No. L42)



This agreement (hereinafter “Agreement”), dated as of February 22, 2008 and effective as of December 20, 2007 (hereinafter, the “Effective Date”), is made by and between

LyondellBasell Finance Company, a company incorporated under the laws of Delaware (hereinafter, the “Lender”) and

Lyondell Chemical Company, a company incorporated under the laws of Delaware (hereinafter, the "Borrower").

WHEREAS

A.  
The Lender and the Borrower are subsidiaries of LyondellBasell Industries AF S.C.A. (“LyondellBasell”, and together with subsidiaries of LyondellBasell, the “LyondellBasell Group”).
 
B.  
The Lender, as borrower, entered into the Bridge Loan Agreement dated as of December 20, 2007, with, among others, Citibank N.A., as collateral agent (the “Bridge”),
 
C.  
The Borrower has requested a loan from the Lender in order to finance its general corporate and business activities.
 
D.  
The Lender is available to grant such loan to the Borrower on the terms and conditions set forth in this Agreement.
 
 
Now, therefore, the Lender and the Borrower agree as follows:

1.  
Amount of the Loan

The Lender hereby grants to the Borrower a loan in the amount of seven billion, one hundred sixty five million, six hundred sixteen thousand nine hundred forty five and no cents USD ($7,165,616,945.00) (hereinafter the “Loan”).

2.  
Drawing

 
The Loan is deemed to be fully drawn on December 20, 2007 (the “Drawdown Date”).

3.  
Term

 
The term of the Loan shall be until and including December 20, 2014  (the “Repayment Date”).



 
 
 
 

   4.
Repayment, Voluntary Pre-payment, Mandatory prepayment

 
The Loan shall be repaid in full on the Repayment Date, provided, however, that:

(a)  
in the event that, at any time before the Repayment Date, for any reason or circumstance whatsoever, the Lender is required to repay any amount under any corporate financing of the LyondellBasell Group, the Lender shall be entitled to require the Borrower to make a mandatory prepayment of the Loan or  any portion thereof, and the Borrower shall immediately, upon written notice by the Lender, make such mandatory prepayment to the Lender, and any interest accrued thereon until the day of the pre-payment, without any cost, penalty or liability of any type for the Lender, and any and all rights of the Borrower in such respect, if any, are waived insofar as permissible under applicable law;

(b)  
in the event that, at any time before the Repayment Date, the lending by the Lender to the Borrower of the Loan or any portion thereof would conflict with any applicable law, the Lender shall be entitled to require the Borrower a make a mandatory prepayment of the Loan or any portion thereof, and the Borrower shall immediately, upon written notice by the Lender, make such mandatory prepayment to the Lender, and any interest accrued thereon until the day of the pre-payment, provided that each party shall bear the costs it incurs in relation to such prepayment without any further penalty or liability of any type of any party to the other, and any and all rights of the relevant party in such respect, if any, are waived insofar as permissible under applicable law;

(c)  
in the event that, at any time before the Repayment Date, the Borrower wishes to repay the Loan or any portion thereof to the Lender, it shall be entitled to make a voluntary pre-payment of the Loan, or any portion thereof, and any interest accrued thereon until the day of the pre-payment upon providing  written notice to Lender, provided that Borrower shall, unless otherwise agreed by the Lender at that time, pay to the Lender any fee, penalty, cost or expense of whatever type incurred by the Lender in connection with such voluntary prepayment.

(d)  
any Loan amount outstanding after the prepayments pursuant to Articles 4.a, 4.b and 4.c above, if any, and any interest accrued thereon, shall be repaid in full on the Repayment Date, unless otherwise agreed between the Lender and the Borrower when the payment pursuant to Article 4.b is made.

5.  
Interest period and interest rate

The period used for the calculation of the interest payable to Lender for the Loan (hereinafter the “Interest Period”) shall be the same as that in effect under the Bridge (or, if the Bridge is refinanced or replaced, the same interest period in effect under such other credit facilities or bond issuances). The first Interest Period shall be deemed to end on January 22, 2008. Not later than 3 Business Days prior to the end of each calendar month, the Borrower shall notify the Lender whether it intends to elect the period of time from the end of the last Interest Period to the end of the calendar month in question as an Interest Period.
 
The interest rate payable by the Borrower to the Lender for the Loan shall be the same applicable rate in effect under the Bridge (or, if the Bridge is refinanced or replaced, the same applicable rate in effect under such other credit facilities or bond issuances) at the time of such interest rate calculation, plus .5%.
 
All interest for each Interest Period shall be paid on the last Business Day of such Interest Period. The interest (including interest for late payments referred to in Section 7 below) shall be calculated on the basis of the number of days elapsed and on a 360-day year.

6.
Payments

Payments of principal and interest shall be made in USD on the relevant payment or repayment date in immediately available funds at such bank and for credit of such account as the Lender shall advise the Borrower in writing in advance. If any payment date is not a Business Day, payment shall be made on the immediately preceding Business Day.

7.  
Interest on late payments

 
If any repayment of principal or payment of interest or payment of costs hereunder is not made when due, and such non-payment is not consented to in writing by Lender no less than (2) Business Days prior to the due date thereof, the Borrower shall pay interest on all amounts at a per annum rate equal to the prime rate for the relevant currency as stated on the relevant Reuters page for such currency, plus one percent (1%) for the period from the due date to the date of actual payment.

8.
Representations and warranties

 
The Borrower hereby represents and warrants to the Lender that, as of the date hereof:

(a)  
it is a company duly incorporated and validly existing under the laws of the state and country of its incorporation;

(b)  
it has the power to execute and deliver this Agreement and to exercise its rights and perform its obligations hereunder;

(c)  
all necessary action has been taken to authorise the execution and delivery of and performance under this Agreement;

(d)  
the execution and delivery of and performance under this Agreement (i) are not prohibited by law or order or by its constitutional documentation, and (ii) do not require any approval, filing or exemption;

(e)  
the borrowing of the Loan by the Lender under this Agreement does not exceed any limit posed on the Lender by its constitutional documents, any contractual arrangement with any third party, and any applicable law;

(f)  
this Agreement constitutes its legal, valid and binding obligation enforceable against it in accordance with the terms hereof except to the extent such enforcement may be limited by applicable bankruptcy, insolvency, reorganisation or other similar laws, or by applicable general principles of equity.


 
 
 
 

9.
Events of Default.

 
If any of the following events shall occur:

(a)  
failure of the Borrower to pay any sum due hereunder within three (3) Business Days of the due date thereof (or within five (5) Business Days, where such failure is solely the result of a technical or administrative delay outside the control of the Borrower);

(b)  
the Borrower defaults in the performance or observance of any other provision contained in this Agreement and such is not remedied within ten (10) days of receipt of notice thereof from the Lender;

(c)  
any representation, warranty or other statement made by the Borrower hereunder shall prove to have been untrue when made, and if remediable, is not remedied within ten (10) days of written notice thereof from the Lender;

(d)  
the Borrower (i) initiates or has initiated against it bankruptcy, reorganisation, liquidation or similar proceedings; (ii) admits in writing that it is generally unable to pay its debts as they become due; (iii) makes an assignment for the benefit of it creditors of all or substantially all of its assets;

(e)  
the majority of the share capital of the Borrower ceases to be directly or indirectly owned or controlled by LyondellBasell;

 
then, by written notice to the Borrower, and while such event is continuing un-remedied, the Lender may declare any amount then outstanding hereunder immediately due and payable, without demand or any other notice, all of which are hereby expressly waived by the Borrower.

10.
General.

(a)           Taxes
Unless otherwise agreed by the parties in writing in advance, all payments hereunder by the Borrower to the Lender shall be made free and clear of and without deduction for any taxes, levies or other governmental charges.

                (b)           Notices
Except as otherwise stated herein, all notices to be provided hereunder, including demand for payment, shall be (a) by telephone (which shall be promptly confirmed by e-mail or telecopy) or (b) in writing (including e-mail, telecopy or similar writing).  Such notices shall be telephoned and confirmed, e-mailed, telexed, telegraphed, telecopied, mailed, or delivered to the intended recipient at the applicable number or address specified by such party to the other party.

                (c)            Successors and Assigns
This Agreement shall be binding upon and shall inure to the benefit of the parties’ respective successors and assigns, provided that the Borrower shall not assign or transfer its rights or obligations under this Agreement without the prior written consent of the Lender, and the Lender shall only assign or transfer its rights or obligations hereunder other once it has provided written notice of its intent to do so to the Borrower.


 
 
 
 

(d)           Severability
If any provision of this Agreement is held to be invalid by a court, the remaining provisions shall nevertheless remain in full force and effect. The Lender and the Borrower agree to negotiate in good faith a substitute, valid and enforceable provision that most nearly reflect the parties’ original intent and agree to be bound by such mutually agreed substitute provision.

(e)           Entire Agreement
This Agreement constitutes the entire, final, complete and exclusive agreement between the Lender and the Borrower and supersedes all previous Agreement or representation oral or in writing relating to this Agreement.

(f)            Assignment
This Agreement may not be transferred, in whole or in part, by either party without the prior written agreement of the other party.

               (g)            Modifications
This Agreement may not be modified or amended except in writing, signed by duly authorized representative of each party.

(h)           No Waivers
No failure or delay on the part of either party hereto in exercising any right, power or privilege hereunder shall operate as a waiver thereof.

(i)            Business Days
A Business Day is any day on which the banks are open for inter-bank payments in New York.

(j)            Counterparts
This Agreement may be executed in counterparts, each of which is deemed to be an original.

(k)           Accounts
The parties agree that the Loan and all payments hereunder shall, in the absence of manifest error, by evidenced by the accounts and records of the Lender.

(l)            Governing Law, Jurisdiction
This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware.  Any dispute arising in any manner in connection with this Agreement that the parties fail to settle amicably within a reasonable time, may be referred for settlement, upon request of either party, to the Chief Financial Officer of the LyondellBasell Group, who will act as arbitrator in accordance with applicable law and whose judgment will be final and binding upon the parties in absence of manifest error.

* * *

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the date set forth above.


Lyondell Chemical Company                                                                           LyondellBasell Finance Corporation


By: /s/ Karen A. Twitchell                                                               By:­­   /s/ Alan Bigman
     Karen A. Twitchell                                                                          Alan Bigman
     Vice President and Treasurer                                                         President




 EX-10.1(A) 17 lyo10k-032808ex101a.htm AMENDMENT TO EXECUTIVE SUPPLEMENTARY SAVINGS PLAN lyo10k-022808ex101a.htm
Exhibit 10.1(a)
 
INSTRUMENT AMENDING
 
LYONDELL CHEMICAL COMPANY
 
EXECUTIVE SUPPLEMENTARY SAVINGS PLAN
 

 
Lyondell Chemical Company hereby amends the Lyondell Chemical Company Executive Supplementary Savings Plan (“Plan”), effective as of January 1, 2008, as follows:
 
A new Section 8.2 is added to the Plan which shall read as follows:

If  Participant is a Key Employee, as defined in the Company’s Executive Deferral Plan, entitled to payment of Benefits due to separation from service, payment shall not begin until six (6) months following the Key Employee’s separation from service; provided, however, that this Section shall apply only if the Company is a corporation any stock in which is publicly traded on an established securities market or otherwise.

A new Section 13.4 is added to the Plan which shall read as follows:

Section 13.4           Effect of Legislation.
It is intended that the provisions of the Plan satisfy the requirements of Code Section 409A and that the Plan be operated in a manner consistent with such requirements to the extent applicable.  Therefore, the Administrative Committee may make adjustments to the Plan and may construe the provisions of the Plan in accordance with the requirements of Code Section 409A.  If any Plan provision would result in imposition of an excise tax under Code Section 409A, the terms of Code Section 409A shall apply and that Plan provision will be reformed to avoid the excise tax.

IN WITNESS WHEREOF, the undersigned, being duly authorized on behalf of the Company, has executed this Instrument on this 3rd day December, 2007.

ATTEST:                                                                            LYONDELL CHEMICAL COMPANY



BY:   /s/ Mindy G. Davidson                                            BY:            /s/ Dan F. Smith
Assistant Secretary                                                             Dan F. Smith
Chairman, President and
Chief Executive Officer
 EX-10.2(A) 18 lyo10k-032808ex102a.htm AMENDMENT TO SUPPLEMENTARY EXECUTIVE RETIRMENT PLAN lyo10k-022808ex102a.htm
Exhibit 10.2(a)
 
INSTRUMENT AMENDING
 
LYONDELL CHEMICAL COMPANY
 
SUPPLEMENTARY EXECUTIVE RETIREMENT PLAN
 

 
Lyondell Chemical Company hereby amends the Lyondell Chemical Company Supplementary Executive Retirement Plan (“Plan”), effective as of January 1, 2008, unless otherwise indicated, as follows:
 
Section 3.2 is amended and restated in its entirety, effective as of January 1, 2005, to read as follows:

Section 3.2        Benefit Form on Change in Control

A Participant’s Supplementary Benefits or any Survivor Benefit payable on Change in Control under Article II shall be paid as a lump sum.

Section 4.3 is amended and restated in its entirety to read as follows:

Section 4.3        Key Employees.

If  Participant is a Key Employee entitled to payment of Supplementary Benefits due to Separation from Service, payment shall not begin until six (6) months following the Key Employee’s Separation from Service; provided, however, that this Section shall apply only if the Company is a corporation any stock in which is publicly traded on an established securities market or otherwise.

Section 7.4 is amended and restated in its entirety to read as follows:

Section 7.4        Effect of Legislation.
It is intended that the provisions of the Plan satisfy the requirements of Code Section 409A and that the Plan be operated in a manner consistent with such requirements to the extent applicable.  Therefore, the Administrative Committee may make adjustments to the Plan and may construe the provisions of the Plan in accordance with the requirements of Code Section 409A.  If any Plan provision would result in imposition of an excise tax under Code Section 409A, the terms of Code Section 409A shall apply and that Plan provision will be reformed to avoid the excise tax.
 
IN WITNESS WHEREOF, the undersigned, being duly authorized on behalf of the Company, has executed this Instrument on this 3rd day December, 2007.

ATTEST:                                                                            LYONDELL CHEMICAL COMPANY


BY:   /s/ Mindy G. Davidson                                            BY:            /s/ Dan F. Smith
Assistant Secretary                                                             Dan F. Smith
Chairman, President and
Chief Executive Officer


 EX-10.4(A) 19 lyo10k-032808ex104a.htm AMENDMENT TO LYONDELL CHEMICAL COMPANY EXECUTIVE DEFERRAL PLAN lyo10k-022808ex104a.htm
Exhibit 10.4(a)
 
INSTRUMENT AMENDING
 
LYONDELL CHEMICAL COMPANY
 
EXECUTIVE DEFERRAL PLAN
 

 
Lyondell Chemical Company hereby amends the Lyondell Chemical Company Executive Deferral Plan (“Plan”), effective as of January 1, 2008, unless otherwise indicated, as follows:
Section 4.2(e) is amended and restated in its entirety to read as follows:

(e)            Key Employees.

If  Participant is a Key Employee entitled to payment of Supplementary Benefits due to Separation from Service, payment shall not begin until six (6) months following the Key Employee’s Separation from Service, whether in a lump sum or installment payment form.  Lump sum and installment payments shall be calculated on the Account value at the delayed Distribution date and shall commence as soon as administratively possible following the delayed Distribution date; provided, however, that this Section 4.2 (e) shall apply only if the Company is a corporation any stock in which is publicly traded on an established securities market or otherwise.

Section 7.4 is amended and restated in its entirety to read as follows:

Section 7.4             Effect of Legislation.
It is intended that the provisions of the Plan satisfy the requirements of Code Section 409A and that the Plan be operated in a manner consistent with such requirements to the extent applicable.  Therefore, the Administrative Committee may make adjustments to the Plan and may construe the provisions of the Plan in accordance with the requirements of Code Section 409A.  If any Plan provision would result in imposition of an excise tax under Code Section 409A, the terms of Code Section 409A shall apply and that Plan provision will be reformed to avoid the excise tax.

IN WITNESS WHEREOF, the undersigned, being duly authorized on behalf of the Company, has executed this Instrument on this 3rd day December, 2007.

ATTEST:                                                                            LYONDELL CHEMICAL COMPANY


BY:    /s/ Mindy G. Davidson                                       BY:            /s/ Dan F. Smith
Assistant Secretary                                                             Dan F. Smith
Chairman, President and
Chief Executive Officer

 EX-10.22 20 lyo10k-032808ex1022.htm AGREEMENT DATED JANUARY 23, 2008 BETWEEN MORRIS GELB AND REGISTRANT lyo10k-022808ex1022.htm
Exhibit 10.22
 
AGREEMENT
 
This Agreement (“Agreement”) is made as of the 22nd day of January, 2008, between Lyondell Chemical Company, a Delaware corporation (“Lyondell”), and _Morris Gelb__ (the “Executive”), each a “Party” and collectively the “Parties.”
 
WHEREAS, an Agreement and Plan of Merger dated July 16, 2007, was entered into by and among Lyondell, Basell AF (“Basell”), a Luxembourg company owned by Access Industries, Inc. (“Access”), and BIL Acquisition Holdings Limited (“BIL”), whereby BIL will merge with and into Lyondell and Lyondell will survive as a wholly-owned subsidiary of Basell upon the closing of the merger (the “Closing Date”); and
 
WHEREAS, Lyondell sponsors and maintains the Lyondell Chemical Company Executive Severance Pay Plan (the “ESPP”) under which severance benefit payments are made to certain executives upon employment termination within a specified period of time following a change in control; and
 
WHEREAS, the Executive’s position with Lyondell prior to the Closing Date was in the capacity of ___EVP & COO___________; and
 
WHEREAS, the Executive has been offered continued employment with Lyondell following the Closing Date in the capacity of _EVP, Office of the CEO, which is anticipated to continue for up to ___2 years_____ following the Closing Date.
 
NOW THEREFORE, for and in consideration of the mutual promises, covenants, and obligations contained herein, the Parties agree as follows:
 
1. Acknowledgment of Rights.  Lyondell acknowledges that, as a result of the change in the Executive’s position from _EVP & COO________ to the position of EVP, Office of the CEO following the Closing Date, the Executive would have grounds for a Constructive Termination for Good Reason under the terms of the ESPP and would thereby be eligible for the severance benefits provided to Level __1_ Participants under the terms of Section 4 of the ESPP in the event of a termination of employment within ninety days following the Closing Date.
 
2. Separation Benefits.   In order to induce the Executive to continue to serve Lyondell following the Closing Date in the position of _EVP, Office of the CEO, Lyondell agrees that in the event of the Executive’s termination of employment for any reason, without limitation, during the _2 year_____ period beginning on the Closing Date, Lyondell will provide the Executive the severance benefits set forth in Section 4(a)(i), the second paragraph of Section 4(c), 4(d), 4(e) and 4(f) of the ESPP (the “Severance Benefits”).  The Executive hereby waives any right to eligibility for participation in the ESPP, and agrees that the terms of this Agreement, including any provisions of the ESPP incorporated herein by reference, will be controlling.
 
3. Employment Period.  While it is anticipated that the Executive will remain employed with Lyondell for the _2 year___ period beginning on the Closing Date, the Parties acknowledge that the Executive is not obligated to remain employed with Lyondell and Lyondell  is not obligated to continue the Executive’s employment for any specified period.
 
4. Time of Payment.  Any cash payment under this Agreement shall be paid to the Executive within thirty (30) days of the Executive’s employment termination.
 
5. No Duty to Mitigate.  Severance Benefit entitlement shall not be governed by any duty to mitigate the Executive’s damages by seeking further employment nor offset by any compensation which the Executive may receive from future employment.
 
6. Company Benefit Agreements.  The specific arrangements referred to in this Agreement are not intended (i) to exclude or limit the Executive’s participation in other benefit agreements or programs in which the Executive currently participates or may participate including, without limit, retiree benefits, or benefits which are available to executive personnel generally in the same class or category as the Executive or (ii) to preclude or limit other compensation or benefits as may be authorized by Lyondell from time to time.
 
7. Payment Obligations Absolute.  The obligation to pay or provide, or to cause to be paid or provided, to the Executive the amounts and benefits and to make the arrangements provided in this Agreement shall be absolute and unconditional and shall not be affected by any circumstances (including, without limit, any claim, counterclaim, recoupment, defense or other right, which Lyondell may have against the Executive or anyone else).  All amounts payable by or on behalf of Lyondell shall be paid without notice or demand.  Each and every payment made by or on behalf of Lyondell shall be final and Lyondell and its subsidiaries or affiliates, for any reason whatsoever, shall not seek to recover all or any part of that payment from the Executive or from whomever shall be entitled to it.  In no event shall an asserted violation of any Agreement provision constitute a basis to defer or withhold any amount payable to, or on behalf of, the Executive.
 
8. Cooperation.  Following termination, the Executive will furnish information and render assistance and cooperation as reasonably requested in connection with any litigation or legal proceedings concerning Lyondell or any of its Subsidiaries (other than any legal proceedings arising out of or concerning the Executive’s employment or the Executive’s termination).  Lyondell will pay or reimburse the Executive for reasonable expenses in connection with this cooperation.
 
9. Release of Liability.  The Executive, as a further eligibility condition for Severance Benefits under Section 2, must execute and deliver to Lyondell a Waiver and Release in the form attached hereto as Exhibit A-1 or A-2, as applicable.  The Executive is advised to discuss the Waiver and Release with his lawyer.
 
10. Arbitration of Disagreements.  Any dispute, controversy or claim arising out of or relating to Agreement obligations shall be settled by final and binding arbitration according to the American Arbitration Association Employment Dispute Resolution Rules.  The arbitrator shall be selected by mutual agreement of the Parties, if possible.  If the Parties fail to reach agreement upon appointment of an arbitrator within thirty (30) days after one party receives the other party’s notice of desire to arbitrate, the arbitrator shall be selected from a panel or panels submitted by the American Arbitration Association (the “AAA”).  The selection process to be used is set forth in the AAA Employment Dispute Resolution Rules, but if the Parties fail to select an arbitrator from one or more panels, AAA shall not have the power to appoint an arbitrator, but shall continue to submit additional panels until an arbitrator has been selected.  All fees and expenses of the arbitration, including a transcript if requested, will be borne by the Parties equally.
 
11. Payment to Estate.  The Parties agree that, in the event of the Executive’s termination of employment with Lyondell due to death during the ___2 year______ period beginning on the Closing Date, or in the event of the Executive’s death following termination but prior to the payment of all Severance Benefits due hereunder, the Severance Benefits will be paid to the Executive’s estate.  Section 9 hereof shall not apply if termination occurs due to death or if death occurs following termination and prior to the expiration of the time period for execution of the Waiver and Release.
 
12. Assignment.  No right, benefit or interest hereunder shall be subject to assignment, anticipation, alienation, sale, encumbrance, charge, pledge, hypothecation or set-off for any claim, debt or obligation, or subject to execution, attachment, levy or similar process; but the Executive may assign any right, benefit or interest if the assignment is permitted under the terms of any Agreement or insurance policy, or annuity contract governing that right, benefit or interest.
 
13. Construction.  Nothing in this Agreement shall be construed to amend any provision of any agreement or policy of Lyondell or any Subsidiary except as otherwise expressly noted herein.  This Agreement is not, and shall not, be deemed to create any commitment by the Lyondell or any Subsidiary to continue the Executive’s employment.  The captions of this Agreement are not part of the provisions and shall have no force or effect.
 
14. Successors.  The Executive’s rights under this Agreement are personal to the Executive and shall not be assignable by the Executive other than by will or the laws of descent and distribution without the prior written consent of Lyondell.  This Agreement shall insure to the benefit of and be enforceable by the Executive’s legal representatives.
 
15. Taxes.  Any payment or delivery required under this Agreement shall be subject to all legal requirements regarding tax withholding, filing, reporting and other obligations.
 
16. Governing Law.  TO THE EXTENT THIS AGREEMENT IS NOT GOVERNED BY FEDERAL LAW, THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT GIVING EFFECT TO ITS CONFLICTS OF LAW PRINCIPLES.
 
17. Terms.  Unless otherwise indicated in this Agreement, capitalized terms used herein have the meaning given to them in the ESPP.
 
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.


[Executive]
 

By:            /s/ Morris Gelb         1/23/08                      

 
Lyondell Chemical Company
 

By:          /s/ Bard de Jong
Name:    Bart de Jong
Title:      Sr. VP HR
 

 

 
Exhibit A-1
 
RELEASE AND WAIVER

I, the undersigned employee, and [____________] (“Company”) agree as follows:

In exchange for this Release and Waiver (“Release”), I will receive a severance payment and other payments and benefits under the Agreement entered into between me and Access Industries, Inc. dated ___________ (the “Agreement”). I recognize that I am not entitled to receive these payments or other benefits under any other Company plan, policy, and/or arrangement. These payments and benefits are not otherwise due or owing to me under any existing company plan, policy, or contract.  I further understand that payments under the Agreement  are taxable income to me and that the Company may withhold any amount required by law and/or is authorized to offset any amount which I still owe the Company at my termination date from these payments.

I agree that my employment with the Company has ended or will end and that my termination date is/was _____________________.
 

In exchange for the consideration listed above, I irrevocably and unconditionally release and discharge the Company, its predecessors, successors, divisions, subsidiaries, affiliates, joint venture partners or co-owners and any employees, agents, officers, and directors of any of the entities listed above and any insurers if applicable (“the Released Parties”) from all the known or unknown claims, liabilities, demands and causes of action (“Claims”) which I presently or at any time may have or claim to have against the Released Parties as a result of my employment with and termination from the Company. I acknowledge that I am releasing Claims that I know about as well as Claims I may not know about, but which have accrued as of the date I signed this release, and I understand the significance of releasing Claims I may have. I agree not to file any claim, complaint, charge, or lawsuit against any Released Party to assert these Claims.

This includes, but is not limited to, Claims under the Workers Adjustment Retraining Notification Act (“WARN”), which requires advanced notice of certain work force reductions; the Age Discrimination in Employment Act, as amended by the Older Worker Benefit Protection Act and Executive Order 11141, which prohibit age discrimination in employment; Title VII of the Civil Rights Act of 1964, Section 1981 of the Civil Rights Act of 1866 and Executive Order 11246, which prohibit discrimination based on race, sex, color, national origin, or religion, each of the foregoing as amended by the Civil Rights Act of 1991; the Equal Pay Act, which prohibits paying men and women unequal pay for equal work; the American with Disabilities Act and Sections 503 and 504 of the Rehabilitation Act of 1973, which prohibit discrimination against the disabled; Section 510 of the Employee Retirement Income Security Act, which prohibits discrimination for exercising rights to benefits under employee benefit plans; claims under the Family & Medical Leave Act; claims under the Texas Commission on Human Rights Act; claims under Sarbanes-Oxley Act of 2002; claims under the Texas Payday Act; claims under the common law (including, but not limited to, claims of termination or discrimination for refusing to commit an illegal act); claims under any Workers Compensation Act; or claims arising under federal, state, or local laws prohibiting employment discrimination or claims growing out of any legal restrictions on the Company’s right to terminate its employees, including, but not limited to contract, tort or emotional distress claims. I acknowledge I am receiving sufficient and additional consideration in exchange for the Release contained herein.
 

In further consideration of the severance payment and other payments and benefits provided under the Agreement, I agree to indemnify and hold the Company harmless from and against any and all loss, cost, damage, or expense, including, without limitation, attorney fees incurred by the Company arising out of any breach of this Release.  Furthermore, if I breach this Release, I agree to immediately return and/or refund all monies previously paid by the Company hereunder and that the Company will thereafter have no further obligation to me.
 
I agree to comply with all the continuing provisions of the Confidentiality Agreement executed by me at the beginning of and/or during my term of employment.  Failure to comply with the continuing provisions of the Confidentiality Agreement shall entitle the Company to the remedies contained in the Confidentiality Agreement.
 

 
_________                                 __________
 
Initials                                 Date


 
I acknowledge that, before signing this Release, I was given 21 days to consider it and the Company advised me to discuss this Release with my lawyer. I also acknowledge that I carefully read and considered this Release, I fully understand and agree that I am entering into this Release voluntarily. I also understand that I have seven days from the date I signed this Release to revoke it and that I will not be eligible for any payment under this agreement until the Release is signed and this seven day revocation period has passed.
 

This Release sets forth the entire agreement between the Company and me. I acknowledge that I have not relied upon any written or oral representation or statement which is not set forth in this Release. If any provision of this Release is found to be unenforceable, all other provisions of this Release will remain fully enforceable. This release binds my heirs, administrators, representatives, executors, successors, and assigns and will inure to the benefit of the Released Parties, and their successors and assigns.
 


Name (Last, First, MI)
Gelb, Morris
Date
Signature
  

 
 
Exhibit A-2
 
RELEASE AND WAIVER

I, the undersigned employee, and [_____________] (“Company”) agree as follows:

In exchange for this Release and Waiver (“Release”), I will receive a severance payment and other payments and benefits under the Agreement entered into between me and Access Industries, Inc. dated ___________ (the “Agreement”). I recognize that I am not entitled to receive these payments or other benefits under any other Company plan, policy, and/or arrangement. These payments and benefits are not otherwise due or owing to me under any existing company plan, policy, or contract.  I further understand that payments under the Agreement are taxable income to me and that the Company may withhold any amount required by law and/or is authorized to offset any amount which I still owe the Company at my termination date from these payments.

I agree that my employment with the Company has ended or will end and that my termination date is/was _____________________.
 

In exchange for the consideration listed above, I irrevocably and unconditionally release and discharge the Company, its predecessors, successors, divisions, subsidiaries, affiliates, joint venture partners or co-owners and any employees, agents, officers, and directors of any of the entities listed above and any insurers if applicable (“the Released Parties”) from all the known or unknown claims, liabilities, demands and causes of action (“Claims”) which I presently or at any time may have or claim to have against the Released Parties as a result of my employment with and termination from the Company. I acknowledge that I am releasing Claims that I know about as well as Claims I may not know about, but which have accrued as of the date I signed this release, and I understand the significance of releasing Claims I may have. I agree not to file any claim, complaint, charge, or lawsuit against any Released Party to assert these Claims.

This includes, but is not limited to, Claims under the Workers Adjustment Retraining Notification Act (“WARN”), which requires advanced notice of certain work force reductions; the Age Discrimination in Employment Act, as amended by the Older Worker Benefit Protection Act and Executive Order 11141, which prohibit age discrimination in employment; Title VII of the Civil Rights Act of 1964, Section 1981 of the Civil Rights Act of 1866 and Executive Order 11246, which prohibit discrimination based on race, sex, color, national origin, or religion, each of the foregoing as amended by the Civil Rights Act of 1991; the Equal Pay Act, which prohibits paying men and women unequal pay for equal work; the American with Disabilities Act and Sections 503 and 504 of the Rehabilitation Act of 1973, which prohibit discrimination against the disabled; Section 510 of the Employee Retirement Income Security Act, which prohibits discrimination for exercising rights to benefits under employee benefit plans; claims under the Family & Medical Leave Act; claims under the Texas Commission on Human Rights Act; claims under Sarbanes-Oxley Act of 2002; claims under the Texas Payday Act; claims under the common law (including, but not limited to, claims of termination or discrimination for refusing to commit an illegal act); claims under any Workers Compensation Act; or claims arising under federal, state, or local laws prohibiting employment discrimination or claims growing out of any legal restrictions on the Company’s right to terminate its employees, including, but not limited to contract, tort or emotional distress claims. I acknowledge I am receiving sufficient and additional consideration in exchange for the Release contained herein.
 

In further consideration of the severance payment and other payments and benefits provided under the Agreement, I agree to indemnify and hold the Company harmless from and against any and all loss, cost, damage, or expense, including, without limitation, attorney fees incurred by the Company arising out of any breach of this Release.  Furthermore, if I breach this Release, I agree to immediately return and/or refund all monies previously paid by the Company hereunder and that the Company will thereafter have no further obligation to me.
 

 
I agree to comply with all the continuing provisions of the Confidentiality Agreement executed by me at the beginning of and/or during my term of employment.  Failure to comply with the continuing provisions of the Confidentiality Agreement shall entitle the Company to the remedies contained in the Confidentiality Agreement.
 

 

 
_________                                 __________
 
Initials                                 Date


 
I acknowledge that, before signing this Release, I was given 45 days to consider it and the Company advised me to discuss this Release with my lawyer. I also acknowledge that I carefully read and considered this Release, I fully understand and agree that I am entering into this Release voluntarily. I also understand that I have seven days from the date I signed this Release to revoke it and that I will not be eligible for any payment under this agreement until the Release is signed and this seven day revocation period has passed.
 

This Release sets forth the entire agreement between the Company and me. I acknowledge that I have not relied upon any written or oral representation or statement which is not set forth in this Release. If any provision of this Release is found to be unenforceable, all other provisions of this Release will remain fully enforceable. This release binds my heirs, administrators, representatives, executors, successors, and assigns and will inure to the benefit of the Released Parties, and their successors and assigns.
 


Name (Last, First, MI)
Gelb, Morris
Date
Signature
  


 
DISCLOSURE

Effective ___________________________


Your employment with the Company is terminated.   Severance and other payments and benefits are available under the Agreement in exchange for a waiver of rights and claims under the Age Discrimination in Employment Act (“ADEA”).  The Agreement and the waiver provide the information required by 29 U.S.C. § 626(7)(f)(l)(H) as follows:

1.  
You must sign the waiver and return it to the Vice President, Human Resources within 45 calendar days after receiving the waiver to receive payments and benefits under the Agreement.

2.  
Once the waiver is signed and returned to the Vice President, Human Resources you have seven (7) calendar days to revoke the waiver agreement.

3.  
You must meet all of the following requirements to be eligible for this severance package:

§  
terminated from employment within the two year period following a change in control;

§  
execute, deliver and do not revoke a Release and Waiver within 45 calendar days from the date the Company provides you the form.

4.  
The following is a listing of the ages and job titles of employees who are eligible for payments and benefits and those who are ineligible .
a 
 
Job Title
Age*
Eligible for Payments
 Ineligible for Payments
       
       
       
       
       
       
       

*Must be in one year increments.

Employee Name:
  
   
Age:
  
   
Job Title:
  
   
Notification Date:
  
   
Location:
  







EX-12 21 lyo10k-032808ex12.htm COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES Unassociated Document
 
 
 

Exhibit 12


LYONDELL CHEMICAL COMPANY
STATEMENT SETTING FORTH DETAIL FOR COMPUTATION OF
RATIO OF EARNINGS TO FIXED CHARGES

   
Successor
    
Predecessor
  
   
For the
period from
December 21
through
December 31,
    
For the
period from
January 1
through
December 20,
    
For the year ended December 31,
  
Millions of dollars, except ratio data
  
2007
    
2007
    
2006
    
2005
    
2004
    
2003
  
Income (loss) from continuing
operations before income taxes
   $ (169 )   $ 170     $ 1,146     $ 733     $ 152     $ (481 )
Deduct income (loss) from
equity investments
     - -       2       78       124       451       (103 )
Add distributions of earnings from
equity investments
     - -       - -       73       123       424       144  
Earnings adjusted for equity
investments
     (169 )     168       1,141       732       125       (234 )
Fixed charges:
                                                
Interest expense, gross
     56       614       648       634       464       415  
Portion of rentals representative of
interest
     3       96       69       59       25       22  
Total fixed charges before
capitalized interest
     59       710       717       693       489       437  
Capitalized interest
     - -       - -       - -       - -       - -       19  
Total fixed charges including
capitalized interest
     59       710       717       693       489       456  
Earnings before fixed charges
   $ (110 )   $ 878     $ 1,858     $ 1,425     $ 614     $ 203  
Ratio of earnings to fixed charges (a)
     - -       1.2       2.6       2.1       1.3       - -  

(a)  
For the eleven days ended December 31, 2007, and for the year 2003, earnings were insufficient to cover fixed charges by $169 million and $253 million, respectively.
 

 EX-21 22 lyo10k-032808ex21.htm SUBSIDIARIES OF THE REGISTRANT lyo10k-022808ex21.htm
Exhibit 21

LYONDELL CHEMICAL COMPANY
SUBSIDIARIES
(as of December 31, 2007)


NAME
Type of Entity
Jurisdiction
CUE Insurance Limited
corporation
Bermuda
DR Insurance Company
corporation
Kentucky
Equistar Bayport, LLC
limited liability
Delaware
Equistar Chemicals, LP
limited partnership
Delaware
Equistar Chemicals de Mexico, Inc.
corporation
Delaware
Equistar Funding Corporation
corporation
Delaware
Equistar Mont Belvieu Corporation
corporation
Delaware
Equistar Olefins Offtake, LP
limited partnership
Delaware
Equistar Olefins Offtake G.P., LLC
limited liability
Delaware
Equistar Olefins G.P., LLC
limited liability
Delaware
Equistar Polyproylene, LLC
limited liability
Delaware
Equistar Receivables, LLC
limited liability
Delaware
Equistar Receivables II, LLC
limited liability
Delaware
Equistar Transportation Company, LLC
limited liability
Delaware
Eurogen C.V.
limited partnership
Netherlands
Glidco Inc.
corporation
Delaware
Houston Refining LP
limited partnership
Delaware
H.W. Loud Co.
corporation
California
KIC Ltd.
corporation
Bermuda
LaPorte Methanol Company, L.P.
limited partnership
Delaware
Lyondell Asia Pacific, Ltd.
corporation
Delaware
Lyondell Asia Holdings Limited
corporation
Hong Kong
Lyondell Bayport, LLC
limited liability
Delaware
Lyondell Centennial Corp.
corporation
Delaware
Lyondell Chemical Delaware Company
corporation
Delaware
Lyondell Chemical Espana Co.
corporation
Delaware
Lyondell Chemical Europe, Inc.
corporation
Delaware
Lyondell Chemical Holding Company
corporation
Delaware
Lyondell Chemical International Company
corporation
Delaware
Lyondell Chemical Italia S.r.L.
corporation
Italy
Lyondell Chemical Nederland, Ltd.
corporation
Delaware
Lyondell Chemical Overseas Services, Inc.
corporation
Delaware
Lyondell Chemical Pan America, Inc.
corporation
Delaware
Lyondell Chemical Products Europe,LLC
limited liability
Delaware
Lyondell Chemical Properties, L.P.
limited partnership
Delaware
Lyondell Chemical Technology 1 Inc.
corporation
Delaware
Lyondell Chemical Technology, L.P.
limited partnership
Delaware
Lyondell Chemical Technology Management, Inc.
corporation
Delaware
Lyondell Chemical Wilmington, Inc.
corporation
Delaware
Lyondell Chimie France LLC
limited liability
Delaware
Lyondell Chimie France SAS
stock company
France
Lyondell Chimie TDI SCA
limited partnership
France
Lyondell China Holdings Limited
corporation
Hong Kong
Lyondell-DNT Limited Partnership
limited partnership
Delaware
Lyondell-Equistar Holdings Partners
general partnership
Delaware
Lyondell Europe Holdings Inc.
corporation
Delaware
Lyondell Funding II, LLC
limited liability
Delaware
Lyondell France Holdings SAS
stock company
France
Lyondell General Methanol Company
corporation
Delaware
Lyondell Greater China Holdings Limited
limited corporation
China
Lyondell Greater China, Ltd.
corporation
Delaware
Lyondell Greater China Trading Limited
limited corporation
PRC
Lyondell Houston Refinery Inc.
corporation
Delaware
Lyondell Intermediate Holding Company
corporation
Delaware
Lyondell LP3 GP, LLC
limited liability
Delaware
Lyondell LP3 Partners, LP
limited partnership
Delaware
Lyondell LP4 Inc.
corporation
Delaware
Lyondell (Pelican) Petrochemical L.P.1, Inc.
corporation
Delaware
Lyondell Petrochemical L.P. Inc.
corporation
Delaware
Lyondell PO11 C.V.
limited partnership
Netherlands
Lyondell POJVGP, LLC
limited liability
Delaware
Lyondell POJVLP, LLC
limited liability
Delaware
Lyondell POTechGP, Inc.
corporation
Delaware
Lyondell POTechLP, Inc.
corporation
Delaware
Lyondell Refining I LLC
limited liability
Delaware
Lyondell Refining Company LP
limited partnership
Delaware
LyondellBasell Receivables I LLC
limited liability
Delaware
MHC Inc.
corporation
Delaware
Millennium America Holdings Inc.
corporation
Delaware
Millennium America Inc.
corporation
Delaware
Millennium Chemicals Inc.
corporation
Delaware
Millennium Holdings, LLC
limited liability
Delaware
Millennium Methanol GP Inc.
corporation
Delaware
Millennium Methanol LP Inc.
corporation
Delaware
Millennium Petrochemical Corporation Limited
private limited
United Kingdom
Millennium Petrochemicals GP LLC
limited liability
Delaware
Millennium Petrochemicals Inc.
corporation
Virginia
Millennium Petrochemicals LP LLC
limited liability
Delaware
Millennium Petrochemicals Partners, LP
limited partnership
Delaware
Millennium Specialty Chemicals Inc.
corporation
Delaware
Millennium US Op Co, LLC
limited liability
Delaware
Millennium Worldwide Holdings I Inc.
corporation
Delaware
MWH South America LLC
limited liability
Delaware
National Distillers and Chemical Corporation
corporation
Delaware
Ningbo ZRCC Lyondell Chemical Co. Ltd.
joint venture
China
Olefins JV, LP
limited partnership
Delaware
PD Glycol LP
limited partnership
Texas
PO JV, LP
limited partnership
Delaware
PO Offtake, LP
limited partnership
Delaware
POSM Delaware, Inc.
corporation
Delaware
POSM II Limited Partnership, L.P.
limited partnership
Delaware
POSM II Properties Partnership, L.P.
limited partnership
Delaware
Quantum Acceptance Corporation
corporation
Delaware
Quantum Chemical Corporation
corporation
Delaware
Quantum Pipeline Company
corporation
Illinois
SCM Chemicals Inc.
corporation
Delaware
SCM Europe S.A.
corporation
Belgium
Smith Corona Marchant Finance A.G.
corporation
Switzerland
Steamelec B.V.
limited liability
Netherlands
Suburban Propane GP, Inc.
corporation
Delaware
Technology JV, LP
limited partnership
Delaware
U.S. Industries Worldwide Corporation
corporation
Panama


EX-31.1 23 lyo10k-032808ex311.htm CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER (302) Unassociated Document

Exhibit 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER


I, Morris Gelb, President and Chief Executive Officer of Lyondell Chemical Company, certify that:

1.  
I have reviewed this annual report on Form 10-K of Lyondell Chemical Company;

2.  
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.  
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.  
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
 
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
 
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
 
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter  (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
 

5.  
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
 
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
 


     
Date:  March 28, 2008
                                                 /s/ Morris Gelb
   
Morris Gelb
   
President and Chief Executive Officer
   
(Principal Executive Officer)


EX-31.2 24 lyo10k-032808ex312.htm CERTIFICATION OF PRINCIPAL FNANCIAL OFFICER (302) Unassociated Document

Exhibit 31.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER


I, Alan Bigman, Chief Financial Officer of Lyondell Chemical Company, certify that:

1.  
I have reviewed this annual report on Form 10-K of Lyondell Chemical Company;

2.  
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.  
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.  
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
 
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
 
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
 
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
 

5.  
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
 
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
 


     
Date:  March 28, 2008
  
                                             /s/ Alan Bigman
   
Alan Bigman
   
Chief Financial Officer
   
(Principal Financial Officer)


EX-32.1 25 lyo10k-032808ex321.htm CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER (906) Unassociated Document
Exhibit 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER


In connection with the accompanying Annual Report on Form 10-K for the year ended December 31, 2007 (the “Periodic Report”), I, Morris Gelb, President and Chief Executive Officer of Lyondell Chemical Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)  
the Periodic Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. Section 78m or 78o(d)); and

(2)  
the information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of Lyondell Chemical Company.



Date:  March 28, 2008                                                          /s/ Morris Gelb                                                
Morris Gelb
President and Chief Executive Officer



A signed original of this written statement required by Section 906 has been provided to Lyondell Chemical Company and will be retained by Lyondell Chemical Company and furnished to the Securities and Exchange Commission or its staff upon request.

 EX-32.2 26 lyo10k-032808ex322.htm CERTIFICATION OF PRINCIPAL FNANCIAL OFFICER (906) Unassociated Document
Exhibit 32.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER


In connection with the accompanying Annual Report on Form 10-K for the year ended December 31, 2007 (the “Periodic Report”), I, Alan Bigman, Chief Financial Officer of Lyondell Chemical Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)  
the Periodic Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. Section 78m or 78o(d)); and

(2)  
the information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of Lyondell Chemical Company.



Date:  March 28, 2008                                                          /s/ Alan Bigman                                               
Alan Bigman
Chief Financial Officer



A signed original of this written statement required by Section 906 has been provided to Lyondell Chemical Company and will be retained by Lyondell Chemical Company and furnished to the Securities and Exchange Commission or its staff upon request.


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