-----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, DPCo18epvx/W4/l2slK6KKPhYVY5nH/dfLdsKE3UmWbEBQtBwl82fK8zOyvjX9ZM psIva7OAIbw1ayM9Kfpbrw== 0000899243-02-001906.txt : 20020628 0000899243-02-001906.hdr.sgml : 20020628 20020628130833 ACCESSION NUMBER: 0000899243-02-001906 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20020625 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20020628 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: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-10145 FILM NUMBER: 02690811 BUSINESS ADDRESS: STREET 1: 1221 MCKINNEY ST STREET 2: STE 700 CITY: HOUSTON STATE: TX ZIP: 77010 BUSINESS PHONE: 7136527200 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 8-K 1 d8k.txt FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (date of earliest event reported): June 25, 2002 LYONDELL CHEMICAL COMPANY (Exact name of registrant as specified in its charter) Delaware (State or other jurisdiction of incorporation) 1-10145 95-4160558 (Commission File Number) (I.R.S. Employer Identification No.) 1221 McKinney Street, Suite 700, Houston, Texas 77010 (Address of principal executive offices) (Zip Code) (713) 652-7200 (Registrant's telephone number, including area code) Not Applicable (Former Name or Former Address, if Changed Since Last Report) Item 5. Other Events. On June 25, 2002, Lyondell Chemical Company (the "Company") entered into an Underwriting Agreement with Credit Suisse First Boston Corporation, SG Cowen Securities Corporation, UBS Warburg LLC and Salomon Smith Barney Inc., as representatives of the several underwriters named therein, relating to the offering and sale of 7,200,000 shares (and up to 1,080,000 additional shares upon exercise of the underwriter's overallotment option) of the Company's common stock, par value $1.00 per share, under its Registration Statement on Form S-3 (No. 333-88348) (the "Registration Statement"). In addition, on June 26, 2002, the Company, ARCO Chemical Technology, Inc., ARCO Chemical Technology, L.P. and Lyondell Chemical Nederland, Ltd. entered into an Underwriting Agreement with Salomon Smith Barney Inc., Banc of America Securities LLC, J.P. Morgan Securities Inc. and Credit Suisse First Boston Corporation, as representatives of the several underwriters named therein, relating to the issuance and sale of $278 million of 11 1/8% Senior Secured Notes due 2012 under the Registration Statement. The exhibits filed herewith are filed pursuant to the Registration Statement pursuant to Regulation S-K, Item 601. Pursuant to the Amended and Restated By-Laws of the Company, notice is hereby given that a special meeting of stockholders of the Company will be held on Wednesday, August 21, 2002, beginning at 9:00 a.m. in the Company's General Assembly Room, 42/nd/ Floor, One Houston Center, 1221 McKinney, in Houston, Texas. The special meeting will be held in connection with the Company's proposed sale of securities to Occidental Petroleum Corporation. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits. 1.1 Underwriting Agreement for 7,200,000 shares of Common Stock dated June 25, 2002 by and among Lyondell Chemical Company and Credit Suisse First Boston Corporation, SG Cowen Securities Corporation, UBS Warburg LLC and Salomon Smith Barney Inc., as representatives of the several underwriters named therein. 1.2 Underwriting Agreement for 11 1/8% Senior Secured Notes due 2012 dated June 26, 2002 by and among Lyondell Chemical Company, ARCO Chemical Technology, Inc., ARCO Chemical Technology, L.P. and Lyondell Chemical Nederland, Ltd. and Salomon Smith Barney Inc., Banc of America Securities LLC, J.P. Morgan Securities Inc. and Credit Suisse First Boston Corporation, as representatives of the several underwriters named therein. 5.1 Opinion of Baker Botts L.L.P. with respect to 11 1/8% Senior Secured Notes due 2012. 5.2 Opinion of Baker Botts L.L.P. with respect to Common Stock.
SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. LYONDELL CHEMICAL COMPANY By: /s/ Kerry A. Galvin --------------------------- Name: Kerry A. Galvin Title: Senior Vice President, General Counsel & Secretary Date: June 28, 2002 INDEX TO EXHIBITS
Exhibit Number Description - ------ ----------- 1.1 Underwriting Agreement for 7,200,000 shares of Common Stock dated June 25, 2002 by and among Lyondell Chemical Company and Credit Suisse First Boston Corporation, SG Cowen Securities Corporation, UBS Warburg LLC and Salomon Smith Barney Inc., as representatives of the several underwriters named therein. 1.2 Underwriting Agreement for 11 1/8% Senior Secured Notes due 2012 dated June 26, 2002 by and among Lyondell Chemical Company, ARCO Chemical Technology, Inc., ARCO Chemical Technology, L.P. and Lyondell Chemical Nederland, Ltd. and Salomon Smith Barney Inc., Banc of America Securities LLC, J.P. Morgan Securities Inc. and Credit Suisse First Boston Corporation, as representatives of the several underwriters named therein. 5.1 Opinion of Baker Botts L.L.P. with respect to 11 1/8% Senior Secured Notes due 2012. 5.2 Opinion of Baker Botts L.L.P. with respect to Common Stock.
EX-1.1 3 dex11.txt UNDERWRITING AGREEMENT FOR COMMON STOCK EXHIBIT 1.1 LYONDELL CHEMICAL COMPANY 7,200,000 SHARES OF COMMON STOCK UNDERWRITING AGREEMENT June 25, 2002 June 25, 2002 Credit Suisse First Boston Corporation SG Cowen Securities Corporation UBS Warburg LLC (the foregoing, collectively, the "Joint Bookrunners") Salomon Smith Barney Inc. As representatives (the "Representatives") of the several Underwriters listed in Schedule I hereto c/o Credit Suisse First Boston Corporation Eleven Madison Avenue New York, New York 10010-3629 Ladies and Gentlemen: Lyondell Chemical Company, a Delaware corporation (the "Company"), proposes to issue and sell to the several Underwriters listed in Schedule I hereto (the "Underwriters"), an aggregate of 7,200,000 shares (the "Underwritten Shares") and, at the election of the Underwriters, up to 1,080,000 additional shares (the "Option Shares") of common stock, par value $1.00 per share (the "Common Stock"), of the Company. The Underwritten Shares and the Option Shares are herein referred to as the "Shares". The Shares will have attached thereto share purchase rights (the "Rights") issued pursuant to the Rights Agreement (the "Rights Agreement") dated as of December 8, 1995 between the Company and The Bank of New York, as Rights Agent. The Company has prepared and filed with the Securities and Exchange Commission (the "Commission") in accordance with the provisions of the Securities Act of 1933, as amended, and the rules and regulations of the Commission thereunder (collectively, the "Securities Act"), a registration statement (the file number of which is 333-88348) on Form S-3, relating to the Common Stock and the related Rights and certain other equity and debt securities (the "Shelf Securities") to be issued from time to time by the Company. The Company also has filed with, or proposes to file with, the Commission pursuant to Rule 424 under the Securities Act a prospectus supplement specifically relating to the Shares. The registration statement as amended to the date of this Agreement is hereinafter referred to as the "Registration Statement" and the related prospectus covering the Shelf Securities in the form first used to confirm sales of the Shares is hereinafter referred to as the "Basic Prospectus". The Basic Prospectus as supplemented by the prospectus supplement specifically relating to the Shares in the form first used to confirm sales of the Shares is hereinafter referred to as the "Prospectus". If the Company has filed an abbreviated registration statement pursuant to Rule 462(b) under the Securities Act (the "Rule 462 Registration Statement"), then any reference herein to the term "Registration Statement" shall be deemed to include such Rule 462 Registration Statement. Any reference in this Agreement to the Registration Statement, the Basic Prospectus, any preliminary form of Prospectus (a "preliminary prospectus") previously filed with the Commission pursuant to Rule 424 or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to Item 12 of Form S-3 under the Securities Act which were filed under the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission thereunder (collectively, the "Exchange Act") on or before the date of this Agreement or the date of the Basic Prospectus, any preliminary prospectus or the Prospectus, as the case may be; and any reference to "amend", "amendment" or "supplement" with respect to the Registration Statement, the Basic Prospectus, any preliminary prospectus or the Prospectus shall be deemed to refer to and include any documents filed under the Exchange Act after the date of this Agreement, or the date of the Basic Prospectus, any preliminary prospectus or the Prospectus, as the case may be, which are deemed to be incorporated by reference therein. Concurrently with this offering of Shares, the Company is offering $278.0 million principal amount of its senior secured notes due 2012 pursuant to a separate prospectus supplement. In addition, the Company is amending and restating its credit agreement (as so amended, the "Credit Agreement"). Neither the closing of the notes offering nor the effectiveness of the Credit Agreement amendment and restatement is conditioned upon the closing of this offering, and this offering is not conditioned on the closing of such offering or effectiveness of such Credit Agreement amendment. The Company hereby agrees with the Underwriters as follows: 1. The Company agrees to sell the Underwritten Shares to the several Underwriters as hereinafter provided, and each Underwriter, upon the basis of the representations and warranties herein contained, but subject to the conditions hereinafter stated, agrees to purchase, severally and not jointly, from the Company 2 at a purchase price per share of $13.30 (the "Purchase Price") the number of Underwritten Shares set forth opposite such Underwriter's name on Schedule I hereto. In addition, the Company agrees to sell the Option Shares to the several Underwriters and the Underwriters shall have the option to purchase at their election up to 1,080,000 Option Shares for the sole purpose of covering over-allotments in the sale of the Underwritten Shares. Each Underwriter, on the basis of the representations and warranties herein contained, but subject to the conditions hereinafter stated, shall have the option to purchase, severally and not jointly, from the Company at the Purchase Price that portion of the number of Option Shares as to which such election shall have been exercised (to be adjusted by the Joint Bookrunners so as to eliminate fractional shares) determined by multiplying such number of Option Shares by a fraction, the numerator of which is the number of Underwritten Shares set forth opposite such Underwriter's name on Schedule I hereto and the denominator of which is the total number of Underwritten Shares set forth in Schedule I hereto, for the sole purpose of covering over-allotments (if any) in the sale of the Underwritten Shares by the several Underwriters. The Underwriters may exercise the option to purchase the Option Shares at any time on or before the thirtieth day following the date of this Agreement, by written notice to the Company from Credit Suisse First Boston Corporation on behalf of the several Underwriters. Such notice shall set forth the aggregate number of Option Shares as to which the option is being exercised and the date and time when the Option Shares are to be delivered and paid for which may be the same date and time as the Closing Date (as hereinafter defined) but shall not be earlier than the Closing Date nor later than the tenth full Business Day (as hereinafter defined) after the date of such notice (unless such time and date are postponed in accordance with the provisions of Section 8 hereof). Any such notice shall be given at least two Business Days prior to the date and time of delivery specified therein. 2. The Company understands that the Underwriters intend (i) to make a public offering of the Shares as soon after (A) the Registration Statement has become effective and (B) the parties hereto have executed and delivered this Agreement, as in the judgment of the Joint Bookrunners is advisable and (ii) initially to offer the Shares upon the terms set forth in the Prospectus. 3. Payment for the Shares shall be made by wire transfer in immediately available funds to the account specified to the Joint Bookrunners by the Company, in the case of the Underwritten Shares, on July 1, 2002, or at such other time on the same or such other date, not later than the fifth Business Day thereafter, as the Joint Bookrunners and the Company may agree upon in writing 3 or, in the case of the Option Shares, on the date and time specified by the Joint Bookrunners in the written notice of the Underwriters' election to purchase such Option Shares. The time and date of such payment for the Underwritten Shares is referred to herein as the "Closing Date" and the time and date for such payment for the Option Shares, if other than the Closing Date, is herein referred to as an "Additional Closing Date". As used herein, the term "Business Day" means any day other than a day on which banks are permitted or required to be closed in New York, New York or Houston, Texas. Payment for the Shares to be purchased on the Closing Date or any Additional Closing Date, as the case may be, shall be made against delivery to the Representatives for the respective accounts of the several Underwriters of the Shares to be purchased on such date registered in such names and in such denominations as the Joint Bookrunners shall request in writing not later than two full Business Days prior to the Closing Date or any Additional Closing Date, as the case may be, with any transfer taxes payable in connection with the transfer to the Underwriters of the Shares duly paid by the Company. Unless the Underwriters elect to take delivery of the Shares through the book-entry facilities of the Depository Trust Company, the certificates for the Shares will be made available for inspection and packaging by the Joint Bookrunners at the office of Credit Suisse First Boston Corporation set forth above not later than 1:00 P.M., New York City time, on the Business Day prior to the Closing Date or any Additional Closing Date, as the case may be. 4. The Company represents and warrants to each Underwriter that: (a) no order preventing or suspending the use of any preliminary prospectus has been issued by the Commission, and each preliminary prospectus filed as part of the Registration Statement as originally filed or as part of any amendment thereto, or filed pursuant to Rule 424 under the Securities Act, complied when so filed in all material respects with the Securities Act, and did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; provided that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information relating to any Underwriter furnished to the Company in writing by such Underwriter through the Representatives expressly for use therein, it being understood and agreed that the only such information is that described as such in the second paragraph of Section 7 hereof; (b) no stop order suspending the effectiveness of the Registration Statement has been issued and no proceeding for that purpose has been 4 instituted or, to the knowledge of the Company, threatened by the Commission; and the Registration Statement and Prospectus (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto) comply, or will comply, as the case may be, in all material respects with the Securities Act and do not and will not, as of the applicable effective date as to the Registration Statement and any amendment thereto and as of the date of the Prospectus and any amendment or supplement thereto, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and the Prospectus, as amended or supplemented, if applicable, at the Closing Date or any Additional Closing Date, as the case may be, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, except that the foregoing representations and warranties shall not apply to statements or omissions in the Registration Statement or the Prospectus made in reliance upon and in conformity with information relating to any Underwriter furnished to the Company in writing by such Underwriter through the Representatives expressly for use therein, it being understood and agreed that the only such information is that described as such in the second paragraph of Section 7 hereof; (c) the documents incorporated by reference in the Prospectus, when they become effective or were filed with the Commission, as the case may be, conformed in all material respects to the requirements of the Securities Act or the Exchange Act, as applicable, and none of such documents contained an untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and any further documents so filed and incorporated by reference in the Prospectus, when such documents are filed with the Commission, will conform in all material respects to the requirements of the Exchange Act, and will not contain an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (d) the financial statements, and the related notes thereto, included or incorporated by reference in the Registration Statement and the Prospectus present fairly the consolidated financial position of the Company and its consolidated subsidiaries as of the dates indicated and the results of their operations and changes in their consolidated cash flows for the periods specified; and said financial statements have been prepared in conformity with generally accepted accounting principles applied on a 5 consistent basis, and the supporting schedules, if any, included or incorporated by reference in the Registration Statement present fairly the information required to be stated therein; the financial statements, together with related schedules and notes, included or incorporated by reference in the Prospectus, comply as to form in all material respects with the requirements applicable to registration statements on Form S-3 under the Securities Act; the other financial and statistical information and data included or incorporated by reference in the Prospectus (and any amendment or supplement thereto) are, in all material respects, accurately presented and prepared on a basis consistent with such financial statements and the books and records of the Company; (e) since the date of the latest audited financial statements included or incorporated by reference in the Prospectus, there has not been any change in the capital stock or long-term debt of the Company or any of its subsidiaries, or any material adverse change in or affecting the business, prospects, condition (financial or other), stockholders' equity or results of operations of the Company and its subsidiaries, taken as a whole (a "Material Adverse Change"), except as set forth or contemplated in the Prospectus (as it stood at the time of execution and delivery of this Agreement); and except as set forth or contemplated in the Prospectus (as it stood at the time of execution and delivery of this Agreement) the Company has not declared, paid or made any dividend or distribution of any kind on any class of its capital stock and neither the Company nor any of its Significant Joint Ventures (defined below) or subsidiaries has entered into any transaction or agreement (whether or not in the ordinary course of business) material to the Company and its subsidiaries taken as a whole or incurred any material liability, direct or contingent; (f) the Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of its jurisdiction of incorporation with power and authority (corporate and other) to own its properties and conduct its business as described in the Prospectus, and has been duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each other jurisdiction in which it owns or leases properties, or conducts any business, so as to require such qualification, other than where the failure to be so qualified or in good standing would not, individually or in the aggregate, have a material adverse effect on or affecting the business, prospects, condition (financial or other), stockholders' equity or results of operations of the Company and its subsidiaries, taken as a whole (a "Material Adverse Effect"); 6 (g) the list of subsidiaries on Schedule II includes the only subsidiaries, direct or indirect, of the Company with assets, or in which the Company has an investment, in excess of $1,000,000 (the subsidiaries on such Schedule herein referred to as the "subsidiaries"), and each of the Company's subsidiaries has been duly organized and is validly existing under the laws of its jurisdiction of organization with power and authority (corporate and otherwise) under such laws to own its properties and conduct its business as described in the Prospectus, and has been duly qualified to do business and is in good standing under the laws of each jurisdiction in which it owns or leases properties, or conducts any business, so as to require such qualification, other than where the failure to be so qualified or in good standing would not, individually or in the aggregate, have a Material Adverse Effect; and all the outstanding shares of capital stock or other ownership interests of each subsidiary of the Company have been duly authorized and validly issued, are fully-paid and non-assessable, and (except (i) in the case of foreign subsidiaries, for directors' qualifying shares or (ii) to the extent pledged under various security documents (the "Security Documents") to secure debt and other obligations under the Credit Agreement, the Company's outstanding senior secured notes and certain other debt and obligations of the Company or as otherwise set forth in the Prospectus) are owned by the Company, directly or indirectly, free and clear of all liens, encumbrances, security interests and similar claims; (h) the joint ventures listed on Schedule III are the only joint ventures in which the Company or any of its subsidiaries participates as an owner or as a partner; each of Equistar Chemicals, LP ("Equistar") and LYONDELL-CITGO Refining LP ("LCR" and, together with Equistar, the "Significant Joint Ventures") has been duly organized and is validly existing as a limited partnership under the laws of its jurisdiction of organization, with power and authority (partnership and other) to own its properties and conduct its business as described in the Prospectus, and has been duly qualified for the transaction of business and is in good standing under the laws of each jurisdiction in which it owns or leases properties, or conducts any business, so as to require such qualification, other than where the failure to be so qualified or in good standing would not, individually or in the aggregate, have a Material Adverse Effect; and all the outstanding general and limited partnership interests of each Significant Joint Venture have been duly authorized and validly issued, are fully-paid and non-assessable (except insofar as any such general partnership interest carries with it liability for the debts and obligations of the relevant limited partnership). Except as set forth or contemplated in the Prospectus (as it stood at the time of execution and delivery of this Agreement), the 7 Company owns 41% of the outstanding general and limited partnership interests of Equistar and 58.75% of the outstanding general and limited partnership interests of LCR, and (except to the extent pledged under the Security Documents or as otherwise set forth in the Prospectus) the outstanding general and limited partnership interests of the Significant Joint Ventures owned by the Company are owned, directly or indirectly, free and clear of all liens, encumbrances (except for such restrictions on transfer of the Company's or its subsidiaries' owner or partner interest in a Significant Joint Venture as are set forth in the governing documents thereof), security interests and similar claims; (i) this Agreement has been duly authorized, executed and delivered by the Company; (j) the Rights Agreement has been duly authorized, executed and delivered by the Company; the Rights have been duly authorized by the Company and, when issued upon issuance of the Shares, will be validly issued and will conform to the description thereof in the Prospectus; (k) the Company has an authorized capitalization as set forth in the Prospectus and such authorized capital stock conforms as to legal matters in all material respects to the description thereof set forth in the Prospectus, and all of the outstanding shares of capital stock of the Company have been duly authorized and validly issued, are fully-paid and non-assessable and are not subject to any pre-emptive or similar rights; and, except as described in or expressly contemplated by the Prospectus, there are no outstanding rights (including, without limitation, pre-emptive rights), warrants or options to acquire, or instruments convertible into or exchangeable for, any shares of capital stock or other equity interest in the Company or any of its Significant Joint Ventures or subsidiaries, or any contract, commitment, agreement, understanding or arrangement of any kind relating to the issuance of any capital stock or other equity interest of the Company or any such Significant Joint Venture or subsidiary, any such convertible or exchangeable securities or any such rights, warrants or options; (l) the Shares have been duly authorized, and, when issued and delivered to and paid for by the Underwriters in accordance with the terms of this Agreement, will be duly issued and will be fully paid and non-assessable and will conform to the descriptions thereof in the Prospectus; and the issuance of the Shares is not subject to any preemptive or similar rights; 8 (m) neither the Company nor any of its Significant Joint Ventures or subsidiaries is, or with the giving of notice or lapse of time or both would be, in violation of or in default under, its Certificate of Incorporation or By-Laws or other constitutive documents or any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its Significant Joint Ventures or subsidiaries is a party or by which it or any of them or any of their respective properties is bound, except (other than in the case of the Credit Agreement) for violations and defaults which individually and in the aggregate would not have a Material Adverse Effect; the issue and sale of the Shares and the related Rights to be sold by the Company hereunder and the performance by the Company of its obligations under this Agreement and the consummation of the transactions contemplated herein will not conflict with or result in a breach of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its Significant Joint Ventures or subsidiaries is a party or by which the Company or any of its Significant Joint Ventures or subsidiaries is bound or to which any of the property or assets of the Company or any of its Significant Joint Ventures or subsidiaries is subject, nor will any such action result in any violation of the provisions of the Certificate of Incorporation or the By-Laws of the Company or any applicable law or statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company, its Significant Joint Ventures or subsidiaries or any of their respective properties; and no consent, approval, authorization, order, license, registration or qualification of or with any such court or governmental agency or body is required for the issue and sale of the Shares and the related Rights to be sold by the Company hereunder or the consummation by the Company of the transactions contemplated by this Agreement, except such consents, approvals, authorizations, orders, licenses, registrations or qualifications as have been obtained under the Securities Act and as may be required under state securities or Blue Sky Laws in connection with the purchase and distribution of the Shares and the related Rights by the Underwriters; (n) other than as set forth or contemplated in the Prospectus, there are no legal or governmental investigations, actions, suits or proceedings pending or, to the knowledge of the Company, threatened against or affecting the Company or any of its Significant Joint Ventures or subsidiaries or any of their respective properties or to which the Company or any of its Significant Joint Ventures or subsidiaries is or may be a party or to which any property of the Company or any of its Significant Joint Ventures or subsidiaries is or may be the subject which, if determined adversely to the Company or any of its Significant Joint 9 Ventures or subsidiaries, could individually or in the aggregate reasonably be expected to result in a Material Adverse Effect, and, to the best of the Company's knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others; and there are no statutes, regulations, contracts or other documents that are required to be described in the Registration Statement or Prospectus (including by way of incorporation of reference) or to be filed as exhibits to the Registration Statement that are not described or filed as required; (o) the Company and its Significant Joint Ventures and subsidiaries have good and marketable title in fee simple to all items of real property and good title to all personal property owned by them, in each case free and clear of all liens, encumbrances and defects (except (i) to the extent pledged under the Security Documents or as otherwise set forth in the Prospectus or (ii) such as do not materially affect the value of such property and do not interfere with the use made or proposed to be made of such property by the Company and its Significant Joint Ventures and subsidiaries); and any real property and buildings held under lease by the Company and its Significant Joint Ventures and subsidiaries are held by them under valid, existing and enforceable leases with such exceptions as are not material and do not interfere with the use made or proposed to be made of such property and buildings by the Company or its Significant Joint Ventures or subsidiaries; (p) no relationship, direct or indirect, exists between or among the Company or any of its Significant Joint Ventures or subsidiaries on the one hand, and the directors, officers, stockholders, customers or suppliers of the Company or any of its Significant Joint Ventures or subsidiaries on the other hand, which is required by the Securities Act to be described in the Registration Statement and the Prospectus (including by way of incorporation of reference) which is not so described; (q) no person has the right to require the Company to register any securities for offering and sale under the Securities Act by reason of the filing of the Registration Statement with the Commission or the issue and sale of the Shares to be sold by the Company hereunder; (r) the Company is not and, after giving effect to the offering and sale of the Shares, will not be an "investment company", as such term is defined in the Investment Company Act of 1940, as amended (the "Investment Company Act"); 10 (s) PricewaterhouseCoopers LLP who have certified certain financial statements of the Company and its subsidiaries, are independent public accountants as required by the Securities Act; (t) the Company and its Significant Joint Ventures and subsidiaries have filed all federal, state, local and foreign tax returns which have been required to be filed and have paid all taxes shown thereon and all assessments received by them or any of them to the extent that such taxes have become due and are not being contested in good faith; (u) the Company has not taken nor will it take, directly or indirectly, any action designed to, or that might be reasonably expected to, cause or result in stabilization or manipulation of the price of the Common Stock of the Company; (v) each of the Company and its Significant Joint Ventures and subsidiaries owns, possesses or has obtained all licenses, permits, certificates, consents, orders, approvals and other authorizations from, and has made all declarations and filings with, all federal, state, local and other governmental authorities (including foreign regulatory agencies), all self-regulatory organizations and all courts and other tribunals, domestic or foreign, necessary to own or lease, as the case may be, and to operate its properties and to carry on its business as conducted as of the date hereof, except such as would not, individually or in the aggregate, result in a Material Adverse Effect, and neither the Company nor any such Significant Joint Venture or subsidiary has received any actual notice of any proceeding relating to revocation or modification of any such license, permit, certificate, consent, order, approval or other authorization which, if determined adversely to the Company or any of its Significant Joint Ventures or subsidiaries could, individually or in the aggregate, result in a Material Adverse Effect; and each of the Company and its Significant Joint Ventures and subsidiaries is in compliance with all laws and regulations relating to the conduct of its business as conducted as of the date hereof, except where the failure to so comply would not, individually or in the aggregate, result in a Material Adverse Effect; (w) there are no existing or, to the best knowledge of the Company, threatened labor disputes with the employees of the Company or any of its Significant Joint Ventures or subsidiaries which are likely to have a Material Adverse Effect; (x) the Company and its Significant Joint Ventures and subsidiaries (i) are in compliance with any and all applicable foreign, federal, state and local laws and regulations relating to the protection of 11 human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants ("Environmental Laws"), (ii) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses and (iii) are in compliance with all terms and conditions of any such permit, license or approval, except where such noncompliance with Environmental Laws, failure to receive required permits, licenses or other approvals or failure to comply with the terms and conditions of such permits, licenses or approvals would not, individually or in the aggregate, have a Material Adverse Effect, and except as disclosed in the Registration Statement and the Prospectus; (y) in the ordinary course of its business, the Company conducts a periodic review of the effect of Environmental Laws on the business, operations and properties of the Company and its Significant Joint Ventures and subsidiaries, in the course of which it identifies and evaluates associated costs and liabilities (including, without limitation, any capital or operating expenditures required for clean-up, closure of properties or compliance with Environmental Laws or any permit, license or approval, any related constraints on operating activities and any potential liabilities to third parties). On the basis of such review, the Company has reasonably concluded that such associated costs and liabilities would not, singly or in the aggregate, have a Material Adverse Effect, except as disclosed in the Registration Statement and the Prospectus; (z) the Company has furnished true and correct copies of the forms of agreements with respect to the transactions with Occidental Petroleum Corporation and its subsidiaries described in the Prospectus under "Proposed Transactions with Occidental", and the Company is not aware of any material changes that are contemplated or expected to be made to such forms prior to or after execution thereof; the description of such transactions included and incorporated by reference into the Prospectus is a fair and accurate summary of such transactions in all material respects; and (aa) the Shares have been approved for listing on The New York Stock Exchange, subject to notice of issuance. 5. The Company covenants and agrees with each of the several Underwriters as follows: 12 (a) to use its best efforts to cause the Registration Statement to become effective at the earliest possible time and, if required, to file the final Prospectus with the Commission within the time periods specified by Rule 424(b) and Rule 430A under the Securities Act, and to furnish copies of the Prospectus to the Underwriters in New York City prior to 10:00 a.m., New York City time, on the Business Day next succeeding the date of this Agreement in such quantities as the Representatives may reasonably request; (b) to deliver, at the expense of the Company, to the Representatives two signed copies of the Registration Statement (as originally filed) and each amendment thereto, in each case including exhibits and documents incorporated by reference therein, and to each other Underwriter a conformed copy of the Registration Statement (as originally filed) and each amendment thereto, in each case without exhibits (but including the documents incorporated by reference therein), and, during the period mentioned in Section 5(e) below, to each of the Underwriters as many copies of the Prospectus (including all amendments and supplements thereto and documents incorporated by reference therein) as the Representatives may reasonably request; (c) before filing any amendment or supplement to the Registration Statement or the Prospectus, whether before or after the time the Registration Statement becomes effective, to furnish to the Representatives a copy of the proposed amendment or supplement for review and not to file any such proposed amendment or supplement to which the Representatives reasonably object; (d) to advise the Representatives promptly, and to confirm such advice in writing (i) when the Registration Statement has become effective, (ii) when any amendment to the Registration Statement has been filed or becomes effective, (iii) when any supplement to the Prospectus or any amended Prospectus has been filed and to furnish the Representatives with copies thereof, (iv) of any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Prospectus or for any additional information, (v) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or of any order preventing or suspending the use of any preliminary prospectus or the Prospectus or the initiation or threatening of any proceeding for that purpose, (vi) of the occurrence of any event, within the period referenced in Section 5(e) below, as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, 13 in the light of the circumstances when the Prospectus is delivered to a purchaser, not misleading, and (vii) of the receipt by the Company of any notification with respect to any suspension of the qualification of the Shares for offer and sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and to use its best efforts to prevent the issuance of any such stop order, or of any order preventing or suspending the use of any preliminary prospectus or the Prospectus, or of any order suspending any such qualification of the Shares, or notification of any such order thereof and, if issued, to obtain as soon as possible the withdrawal thereof; (e) if, during such period of time after the first date of the public offering of the Shares as a prospectus relating to the Shares is required by law to be delivered in connection with sales by the Underwriters or any dealer, any event shall occur as a result of which it is necessary to amend or supplement the Prospectus in order to make the statements therein, in light of the circumstances when the Prospectus is delivered to a purchaser, not misleading, or if it is necessary to amend or supplement the Prospectus to comply with law, forthwith to prepare and furnish, at the expense of the Company, to the Underwriters and to the dealers (whose names and addresses the Representatives will furnish to the Company) to which Shares may have been sold by the Representatives on behalf of the Underwriters and to any other dealers upon request, such amendments or supplements to the Prospectus as may be necessary so that the statements in the Prospectus as so amended or supplemented will not, in the light of the circumstances when the Prospectus is delivered to a purchaser, be misleading or so that the Prospectus will comply with law; (f) to endeavor to qualify the Shares and the related Rights for offer and sale under the securities or Blue Sky laws of such jurisdictions as the Representatives shall reasonably request and to continue such qualification in effect so long as reasonably required for distribution of the Shares and the related Rights; provided that the Company shall not be required to (x) file a general consent to service of process, (y) subject itself to taxation or (z) qualify as a foreign corporation in any jurisdiction in which it is not otherwise required to do so; (g) to make generally available to its security holders and to the Representatives as soon as practicable an earnings statement covering a period of at least twelve months beginning with the first fiscal quarter of the Company occurring after the effective date of the Registration Statement, which shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 of the Commission promulgated thereunder; 14 (h) for a period of five years, to furnish to the Representatives copies of all reports or other communications (financial or other) furnished to holders of the Shares (in the same manner as such documents are furnished to holders of the Shares), and copies of any reports and financial statements furnished to or filed with the Commission or any national securities exchange; (i) for a period of 90 days after the date hereof, not to offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, or file with the Commission a registration statement under the Act relating to, any additional shares of its Common Stock or securities convertible into or exchangeable or exercisable for any shares of its Common Stock, or publicly disclose the intention to make any such offer, sale, pledge, disposition or filing, without the prior written consent of Credit Suisse First Boston Corporation, except grants of employee stock options pursuant to the terms of a plan in effect on the date hereof or the exercise of any other employee stock options outstanding on the date hereof; provided that the Company may issue securities to Occidental Petroleum or its subsidiaries on terms that are not, in the aggregate, materially less favorable to the Company than the terms described in the Prospectus under "Proposed Transaction with Occidental"; (j) not to release transfer restrictions in the Stockholders' Agreement described in the Prospectus under "Proposed Transaction with Occidental" during the 90-day period beginning the date hereof without the prior written consent of Credit Suisse First Boston Corporation; (k) to use the net proceeds received by the Company from the sale of the Shares pursuant to this Agreement in the manner specified in the Prospectus under caption "Use of Proceeds"; and (l) whether or not the transactions contemplated in this Agreement are consummated or this Agreement is terminated, to pay or cause to be paid all costs and expenses incident to the performance of its obligations hereunder, including without limiting the generality of the foregoing, all costs and expenses (i) incident to the preparation, registration, transfer, execution and delivery of the Shares, including any transfer or other taxes payable thereon, (ii) incident to the preparation, printing and filing under the Securities Act of the Registration Statement, the Prospectus and any preliminary prospectus (including in each case all exhibits, amendments and supplements thereto), (iii) incurred in connection with the registration or qualification of the Shares under the laws of such jurisdictions as the Representatives may designate (including 15 fees of counsel for the Underwriters and their disbursements), (iv) in connection with the listing of the Shares on the New York Stock Exchange, (v) related to the filing with, and clearance of the offering by, the NASD (including fees of counsel for the Underwriters and their disbursements), (vi) in connection with the printing (including word processing and duplication costs) and delivery of this Agreement, the Preliminary and Supplemental Blue Sky Memoranda and the furnishing to the Underwriters and dealers of copies of the Registration Statement and the Prospectus, including mailing and shipping, as herein provided, (vii) any expenses incurred by the Company in connection with a "road show" presentation to potential investors, (viii) the cost of preparing stock certificates, and (ix) the cost and charges of any transfer agent and any registrar. 6. The several obligations of the Underwriters hereunder to purchase the Shares on the Closing Date or the Additional Closing Date, as the case may be, are subject to the performance by the Company of its obligations hereunder and to the following additional conditions: (a) the Registration Statement shall have become effective (or if a post-effective amendment is required to be filed under the Securities Act, such post-effective amendment shall have become effective) not later than 5:00 P.M., New York City time, on the date hereof; and no stop order suspending the effectiveness of the Registration Statement or any post-effective amendment shall be in effect, and no proceedings for such purpose shall be pending before or threatened by the Commission; the Prospectus shall have been filed with the Commission pursuant to Rule 424(b) within the applicable time period prescribed for such filing by the rules and regulations under the Securities Act and in accordance with Section 5(a) hereof; and all requests of the Representatives for additional information shall have been complied with to the reasonable satisfaction of the Representatives; (b) the representations and warranties of the Company contained herein are true and correct on and as of the Closing Date or the Additional Closing Date, as the case may be, as if made on and as of the Closing Date or the Additional Closing Date, as the case may be, and the Company shall have complied in all material respects with all agreements and all conditions on its part to be performed or satisfied hereunder at or prior to the Closing Date or the Additional Closing Date, as the case may be; (c) subsequent to the execution and delivery of this Agreement, there shall not have occurred (i) any change, or any development or event involving a prospective change, in the condition (financial or other), 16 business, properties or results of operations of the Company and its subsidiaries taken as one enterprise which, in the judgment of the Joint Bookrunners, is material and adverse and makes it impractical or inadvisable to proceed with completion of the public offering or the sale of and payment for the Offered Securities; (ii) any downgrading in the rating of any debt securities of the Company by any "nationally recognized statistical rating organization" (as defined for purposes of Rule 436(g) under the Act), or any public announcement that any such organization has under surveillance or review its rating of any debt securities of the Company (other than an announcement with positive implications of a possible upgrading, and no implication of a possible downgrading, of such rating) or any announcement that the Company has been placed on negative outlook; (iii) any change in U.S. or international financial, political or economic conditions or currency exchange rates or exchange controls as would, in the judgment of the Joint Bookrunners, be likely to prejudice materially the success of the proposed issue, sale or distribution of the Shares, whether in the primary market or in respect of dealings in the secondary market; (iv) any material suspension or material limitation of trading in securities generally on the New York Stock Exchange or any setting of minimum prices for trading on such exchange, or any suspension of trading of any securities of the Company on any exchange or in the over-the-counter market; (v) any banking moratorium declared by U.S. Federal or New York authorities; (vi) any major disruption of settlements of securities or clearance services in the United States or (vii) any attack on, outbreak or escalation of hostilities or act of terrorism involving the United States, any declaration of war by Congress or any other national or international calamity or emergency if, in the judgment of the Joint Bookrunners, the effect of any such attack, outbreak, escalation, act, declaration, calamity or emergency makes it impractical or inadvisable to proceed with completion of the public offering or the sale of and payment for the Shares; (d) the Representatives shall have received on and as of the Closing Date or the Additional Closing Date, as the case may be, a certificate of an officer of the Company, with specific knowledge about the Company's financial matters, satisfactory to the Representatives to the effect set forth in Sections 6(a) and 6(b) and to the further effect that there has not occurred any Material Adverse Change from that set forth or contemplated in the Prospectus (as it stood at the time of execution and delivery of this Agreement); (e) Baker Botts L.L.P., outside counsel for the Company, shall have furnished to the Representatives its written opinion, dated the Closing Date or the Additional Closing Date, as the case may be, in form 17 and substance reasonably satisfactory to the Representatives, to the effect that: (i) the Company is a corporation duly incorporated and validly existing in good standing under the laws of the State of Delaware, with corporate power and authority under such laws to own its properties and conduct its business as described in the Prospectus; (ii) this Agreement has been duly authorized, executed and delivered by the Company; (iii) the authorized capital stock of the Company conforms as to legal matters in all material respects to the description thereof contained in the Prospectus; (iv) the Shares to be issued and sold hereunder have been duly authorized by the Company, and when delivered to and paid for by the Underwriters in accordance with the terms of this Agreement, will be validly issued, fully paid and non-assessable and the issuance of the Shares is not subject to any preemptive rights of any stockholder of the Company or, to the knowledge of such counsel, of any other person; (v) the Rights Agreement has been duly authorized by the Company; the Rights have been duly authorized by the Company and, when issued upon issuance of the Shares, will be validly issued; (vi) such counsel does not know of any statutes, regulations, contracts or other documents that are required to be described (including by way of incorporation of reference) in the Registration Statement or Prospectus or to be filed as exhibits to the Registration Statement that are not described or filed as required; (vii) the Registration Statement and the Prospectus and any amendments and supplements thereto, excluding the documents incorporated by reference therein (other than the financial statements and related schedules and other financial and related statistical data therein, as to which such counsel need express no opinion) as of the dates they became effective or were filed with the Commission, as the case may be, appear on their face to be 18 appropriately responsive in all material respects to the requirements of the Securities Act; (viii) the documents incorporated by reference in the Prospectus or any further amendment or supplement thereto made by the Company prior to the Closing Date or the Additional Closing Date, as the case may be (other than the financial statements and related schedules and other financial and related statistical data therein, as to which such counsel need express no opinion), when they became effective or were filed under the Exchange Act with the Commission, as the case may be, appear on their face to be appropriately responsive in all material respects to the requirements of the Securities Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder; (ix) the issue and sale of the Shares and the related Rights being delivered on the Closing Date or the Additional Closing Date, as the case may be, and the performance by the Company of its obligations under this Agreement and the consummation of the transactions contemplated herein will not (1) result in any violation of the provisions of (a) the Certificate of Incorporation or the By-Laws of the Company or (b) any law or statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company, its Significant Joint Ventures or subsidiaries or any of their respective properties or (2) conflict with or result in a breach of any of the terms or provisions of, or constitute a default under, the Credit Agreement or the indentures relating to the Company's existing senior secured notes; (x) no consent, approval, authorization, order, license, registration or qualification of or with any court or governmental agency or body is required for the issuance by the Company of the Shares and the related Rights to be sold by it hereunder or the consummation by the Company of the other transactions contemplated by this Agreement, except such consents, approvals, authorizations, orders, licenses, registrations or qualifications as have been obtained under the Securities Act and as may be required under state securities or Blue Sky laws in connection with the purchase and distribution of the Shares by the Underwriters; and 19 (xi) the Company is not and, after giving effect to the offering and sale of the Shares, will not be an "investment company", as such term is defined in the Investment Company Act. Such counsel shall also state that they have participated in conferences with officers and other representatives of the Company, representatives of the independent accountants of the Company and representatives of the Underwriters and their counsel at which the contents of the Registration Statement and the Prospectus and related matters were discussed; and, although such counsel did not independently verify such information and is not passing upon, and does not assume any responsibility for, the accuracy, completeness or fairness of the statements contained in the Registration Statement and the Prospectus, on the basis of the foregoing, no facts have come to the attention of such counsel to lead such counsel to believe that (a) the Registration Statement (other than the financial statements, the notes thereto and the auditors' reports thereon and the other financial, related statistical and accounting information contained therein or omitted therefrom, as to which such counsel has not been asked to comment), at its effective date, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or (b) the Prospectus (other than the financial statements, the notes thereto and the auditors' reports thereon and the other financial, related statistical and accounting information contained therein or omitted therefrom, as to which such counsel has not been asked to comment), at the time the Prospectus was issued, or at the Closing Date, contained or contains an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. Such counsel may state that the opinions expressed are based on and are limited to the laws of the State of Texas, the General Corporation Law of the State of Delaware, the contract law of the State of New York and the federal laws of the United States, as currently in effect. (f) Kerry A. Galvin, Esq., general counsel for the Company (or Gerald A. O'Brien, deputy general counsel of the Company), shall have furnished to the Representatives her (or his) written opinion, dated the Closing Date or the Additional Closing Date, as the case may be, in form 20 and substance reasonably satisfactory to the Representatives, to the effect that: (i) the shares of capital stock of the Company outstanding prior to the issuance of the Shares to be sold hereunder have been duly authorized and are validly issued, fully paid and non-assessable; (ii) the Company has been duly qualified to do business and is in good standing as a foreign corporation under the laws of each jurisdiction in which it owns or leases properties, or conducts any business, so as to require such qualification, other than where the failure to be so qualified or in good standing would not have a Material Adverse Effect; (iii) each of the Company's subsidiaries has been duly organized and is validly existing under the laws of its jurisdiction of organization with power and authority (corporate and otherwise) under such laws to own its properties and conduct its business as described in the Prospectus and has been duly qualified to do business and is in good standing under the laws of each jurisdiction in which it owns or leases properties, or conducts any business, so as to require such qualification, other than where the failure to be so qualified and in good standing would not have a Material Adverse Effect; and all of the outstanding shares of capital stock or other ownership interests of each subsidiary have been duly and validly authorized and issued, are fully paid and non-assessable, and (except (i) in the case of foreign subsidiaries, for directors' qualifying shares, (ii) to the extent pledged under the Security Documents or as otherwise set forth in the Prospectus) are owned by the Company, directly or indirectly, free and clear of all liens, encumbrances, security interests and similar claims; (iv) each of the Significant Joint Ventures has been duly organized and is validly existing as a limited partnership under the laws of Delaware, with power and authority under its partnership agreement and the law of the State of Delaware to own its properties and conduct its business as described in the Prospectus, and has been duly qualified for the transaction of business and is in good standing under the laws of each jurisdiction in which it owns or leases properties, or conducts any business, so as to require such qualification, other than where the failure to be so qualified or in good standing would not have a Material Adverse Effect; and all the outstanding general and limited partnership interests of each 21 Significant Joint Venture have been duly authorized and validly issued, are fully-paid and non-assessable (except insofar as any such general partnership interest carries with it liability for the debts and obligations of the relevant limited partnership). The Company owns 41% of the outstanding general and limited partnership interests of Equistar and 58.75% of the outstanding general and limited partnership interests of LCR and (except to the extent pledged under the Security Documents or as otherwise set forth in the Prospectus) the outstanding general and limited partnership interests of the Significant Joint Ventures owned by the Company are owned, directly or indirectly by the Company, free and clear of all liens, encumbrances, security interests and similar claims; (v) other than as set forth or contemplated in the Prospectus, to the best of such counsel's knowledge, there are no legal or governmental investigations, actions, suits or proceedings pending or threatened or contemplated against the Company, any of its subsidiaries, or LCR or any of their respective properties or to which the Company, any of its subsidiaries, or LCR is or may be a party or to which any property of the Company, its subsidiaries or LCR is or may be the subject that, if determined adversely to the Company, its subsidiaries or LCR could individually or in the aggregate reasonably be expected to have a Material Adverse Effect; (vi such counsel does not know of any statutes, regulations, contracts or other documents that are required to be described (including by way of incorporation by reference) in the Registration Statement or the Prospectus or to be filed as exhibits to the Registration Statement (or any document incorporated by reference) that are not described or filed as required; (vii none of the Company, any of its subsidiaries or LCR is, or with the giving of notice or lapse of time or both would be, in violation of or in default under its Certificate of Incorporation or By-Laws or other constitutive documents, or to the best of such counsel's knowledge, any agreement or instrument to which the Company, any of its subsidiaries or LCR is a party or by which it or any of them or any of their respective properties is bound, except for violations and defaults which individually and in the aggregate are not material to the Company and its subsidiaries taken as a whole; 22 (viii the issue and sale of the Shares and the performance by the Company of its obligations under this Agreement and the consummation of the transactions contemplated herein will not conflict with or result in a breach of any of the terms or provisions of, or constitute a default under, any agreement or instrument known to such counsel to which the Company, any of its subsidiaries or LCR is a party or by which the Company, any of its subsidiaries or LCR is bound or to which any of the property or assets of the Company, its subsidiaries or LCR is subject, nor will any such action result in any violation of the provisions of the Certificate of Incorporation or the By-Laws of the Company or any applicable law or statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company, its subsidiaries or any of their respective properties or, to the knowledge of such counsel, LCR or any of its properties; and (ix each of the Company, its subsidiaries and LCR owns, possesses or has obtained all licenses, permits, certificates, consents, orders, approvals and other authorizations from, and has made all declarations and filings with, all federal, state, local and other governmental authorities (including foreign regulatory agencies), all self-regulatory organizations and all courts and other tribunals, domestic or foreign, necessary to own or lease, as the case may be, and to operate its properties and to carry on its business as conducted as of the date hereof, except such as could not reasonably be expected to have a Material Adverse Effect, and to the best of such counsel's knowledge, none of the Company, any of its subsidiaries or LCR has received any actual notice of any proceeding relating to revocation or modification of any such license, permit, certificate, consent, order, approval or other authorization which, if determined adversely to the Company, any of its subsidiaries or LCR could reasonably be expected to have a Material Adverse Effect, and each of the Company, its subsidiaries and LCR is in compliance with all laws and regulations relating to the conduct of its business as conducted as of the date hereof, except where the failure to so comply could not reasonably be expected to have a Material Adverse Effect. Such counsel shall also state that she (or he) has participated in conferences with officers and other representatives of the Company, and persons under her (or his) direction or control have participated in conferences with officers and other representatives of the Company, representatives of the independent accountants of the Company and representatives of the 23 Underwriters and their counsel at which the contents of the Registration Statement and the Prospectus and related matters were discussed; and, although she (or he) did not independently verify such information and is not passing upon, and does not assume any responsibility for, the accuracy, completeness or fairness of the statements contained in the Registration Statement and the Prospectus, on the basis of the foregoing, no facts have come to her (or his) attention to lead her (or him) to believe that (a) the Registration Statement (other than the financial statements, the notes thereto and the auditors' reports thereon and the other financial, related statistical and accounting information contained therein or omitted therefrom, as to which such counsel has not been asked to comment), at its effective date, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or (b) the Prospectus (other than the financial statements, the notes thereto and the auditors' reports thereon and the other financial, related statistical and accounting information contained therein or omitted therefrom, as to which such counsel has not been asked to comment), at the time the Prospectus was issued, or at the Closing Date, contained or contains an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. Such counsel may state that the opinions expressed are based on and are limited to the laws of the United States, the General Corporation Law of the State of Delaware and the Revised Uniform Limited Partnership Act of the State of Delaware, as currently in effect. (g Gerald A. O'Brien, Esq., general counsel for Equistar, shall have furnished to the Representatives his written opinion, dated the Closing Date or the Additional Closing Date, as the case may be, in form and substance reasonably satisfactory to the Representatives, to the effect that: (i other than as set forth or contemplated in the Prospectus, to the best of such counsel's knowledge, there are no legal or governmental investigations, actions, suits or proceedings pending or threatened or contemplated against Equistar or any of its subsidiaries or any of their respective properties or to which Equistar or any of its subsidiaries is or may be a party or to which 24 any property of Equistar or any of its subsidiaries is or may be the subject which, if determined adversely to Equistar or its subsidiaries, could individually or in the aggregate reasonably be expected to have a Material Adverse Effect; (ii neither Equistar nor any of its subsidiaries is, or with the giving of notice or lapse of time or both would be, in violation of or in default under its Limited Partnership Agreement or other constitutive documents, or to the best of such counsel's knowledge, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which Equistar or any of its subsidiaries is a party or by which it or any of them or any of their respective properties is bound, except for violations and defaults which individually and in the aggregate are not material to Equistar and its subsidiaries taken as a whole; (iii the issue and sale of the Shares and the related Rights being delivered on the Closing Date or the Additional Closing Date, as the case may be, and the performance by Equistar and its subsidiaries of its obligations under this Agreement and the consummation of the transactions contemplated herein will not conflict with or result in a breach of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument known to such counsel to which Equistar or any of its subsidiaries is a party or by which Equistar or any of its subsidiaries is bound or to which any of the property or assets of Equistar or any of its subsidiaries is subject, nor will any such action result in any violation of the provisions of the Limited Partnership Agreement of Equistar or, to the knowledge of such counsel, any applicable law or statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over Equistar, its subsidiaries or any of their respective properties; and (iv each of Equistar and its subsidiaries owns, possesses or has obtained all licenses, permits, certificates, consents, orders, approvals and other authorizations from, and has made all declarations and filings with, all federal, state, local and other governmental authorities (including foreign regulatory agencies), all self-regulatory organizations and all courts and other tribunals, domestic or foreign, necessary to own or lease, as the case may be, and to operate its properties and to carry on its business as conducted as of the date hereof, except such as could not reasonably be expected to have a Material Adverse Effect, and to 25 the best of such counsel's knowledge, neither Equistar nor any of its subsidiaries has received any actual notice of any proceeding relating to revocation or modification of any such license, permit, certificate, consent, order, approval or other authorization which, if determined adversely to Equistar or any of its subsidiaries could reasonably be expected to have a Material Adverse Effect, and each of Equistar and its subsidiaries is in compliance with all laws and regulations relating to the conduct of its business as conducted as of the date hereof, except where the failure to so comply could not reasonably be expected to have a Material Adverse Effect. Such counsel shall also state that the opinions expressed are based on and are limited to the laws of the United States, the General Corporation Law of the State of Delaware and the Revised Uniform Limited Partnership Act of the State of Delaware, as currently in effect. In rendering such opinions, Baker Botts L.L.P., Ms. Galvin and Mr. O'Brien may rely as to matters of fact, to the extent such counsel deems proper, on certificates of responsible officers of the Company and certificates or other written statements of officials of jurisdictions having custody of documents respecting the corporate existence or good standing of the Company. The opinions of Baker Botts L.L.P., Ms. Galvin and Mr. O'Brien described above shall be rendered to the Underwriters at the request of the Company and shall so state therein. (h the Representatives shall have received, at the time this Agreement is executed and at the Closing Date, letters dated the date hereof or the Closing Date, as the case may be, in form and substance satisfactory to you from PricewaterhouseCoopers LLP, independent public accountants, containing statements and information of the type customarily included in accountants' "comfort letters" to underwriters with respect to the financial statements and certain financial information contained in the Registration Statement and the Prospectus; (i the Representatives shall have received on and as of the Closing Date or Additional Closing Date, as the case may be, an opinion of Davis Polk & Wardwell, counsel to the Underwriters, with respect to the due authorization and valid issuance of the Shares, the Registration Statement, the Prospectus and other related matters as the Representatives may reasonably request, and such counsel shall have received such papers and information as they may reasonably request to enable them to pass upon such matters; 26 (j the shares have been approved for listing on the New York Stock Exchange, subject to official notice of issuance; (k on or prior to the Closing Date or Additional Closing Date, as the case may be, the Company shall have furnished to the Representatives such further certificates and documents as the Representatives shall reasonably request; and (l the "lock-up" agreements, each substantially in the form of Exhibit A hereto, between you and the directors and executive officers of the Company (other than the Company's retiring chief financial officer) relating to sales and certain other dispositions of shares of Common Stock or certain other securities, delivered to you on or before the date hereof, shall be in full force and effect on the Closing Date or Additional Closing Date, as the case may be. 7. The Company agrees to indemnify and hold harmless each Underwriter and each person, if any, who controls any Underwriter within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against any and all losses, claims, damages and liabilities (including, without limitation, the legal fees and other expenses incurred in connection with any suit, action or proceeding or any claim asserted, as such expenses are incurred) caused by any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or the Prospectus (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto) or any preliminary prospectus, or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages or liabilities are caused by any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with information relating to any Underwriter furnished to the Company in writing by such Underwriter through the Representatives expressly for use therein; it being understood and agreed that the only such information is that described as such in the second paragraph of Section 7 hereof; provided, however, that with respect to any such untrue statement in or omission from the preliminary prospectus, the indemnity agreement contained in this Section 7 shall not inure to the benefit of any such Underwriter to the extent that the sale to the person asserting any such loss, claim, damage or liability was an initial resale by such Underwriter and any such loss, claim, damage or liability of or with respect to such Underwriter results from the fact that both (A) to the extent required by applicable law, a copy of the Prospectus was not sent or given to such person at or prior to the written confirmation of the sale of the Shares to such person and (B) the untrue statement in or omission from the preliminary prospectus was corrected 27 in the Prospectus unless, in either case, such failure to deliver the Prospectus was a result of noncompliance by the Company with Section 5(b). Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the Company, its directors, its officers who sign the Registration Statement and each person who controls the Company within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act to the same extent as the foregoing indemnity from the Company to each Underwriter, but only with reference to information relating to such Underwriter furnished to the Company in writing by such Underwriter through the Representatives expressly for use in the Registration Statement, the Prospectus, any amendment or supplement thereto, or any preliminary prospectus; it being understood and agreed that the only such information furnished by any Underwriter consists of (i) the following information in the Prospectus furnished on behalf of each Underwriter: the concession and reallowance figures appearing in the fourth paragraph under the caption "Underwriting" and (ii) the following information in the Prospectus furnished on behalf of each of the Representatives (to the extent relevant to such Representative): the information appearing in the tenth paragraph under the caption "Underwriting". If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against any person in respect of which indemnity may be sought pursuant to the preceding paragraphs of this Section 7, such person (the "Indemnified Person") shall promptly notify the person or persons against whom such indemnity may be sought (each an "Indemnifying Person") in writing, and such Indemnifying Persons, upon request of the Indemnified Person, shall retain counsel reasonably satisfactory to the Indemnified Person to represent the Indemnified Person and any others the Indemnifying Persons may designate in such proceeding and shall pay the fees and expenses of such counsel related to such proceeding. In any such proceeding, any Indemnified Person shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Person and not the Indemnifying Persons unless (i) the Indemnifying Persons and the Indemnified Person shall have mutually agreed to the contrary, (ii) the Indemnifying Persons has failed within a reasonable time to retain counsel reasonably satisfactory to the Indemnified Person or (iii) the named parties in any such proceeding (including any impleaded parties) include both an Indemnifying Person and the Indemnified Person and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood that no Indemnifying Person shall, in connection with any proceeding or related proceeding in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all Indemnified Persons, and that all such fees and expenses shall be reimbursed as they are incurred. Any such separate firm for the Underwriters and 28 such control persons of Underwriters shall be designated in writing by Credit Suisse First Boston Corporation and any such separate firm for the Company, its directors, its officers who sign the Registration Statement and such control persons of the Company shall be designated in writing by the Company. No Indemnifying Person shall be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, each Indemnifying Person agrees to indemnify any Indemnified Person from and against any loss or liability by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an Indemnified Person shall have requested an Indemnifying Person to reimburse the Indemnified Person for fees and expenses of counsel as contemplated by the second and third sentences of this paragraph, such Indemnifying Person agrees that it shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 30 days after receipt by such Indemnifying Person of the aforesaid request and (ii) such Indemnifying Person shall not have reimbursed the Indemnified Person in accordance with such request prior to the date of such settlement. No Indemnifying Person shall, without the prior written consent of the Indemnified Person, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party and indemnity could have been sought hereunder by such Indemnified Person, unless such settlement includes an unconditional release of such Indemnified Person from all liability on claims that are the subject matter of such proceeding. If the indemnification provided for in this Section 7 is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then each Indemnifying Person, in lieu of indemnifying such Indemnified Person, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters on the other hand from the offering of the Shares or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and the Underwriters on the other hand in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriters on the other hand shall be deemed to be in the same respective proportions as the net proceeds from the offering (before deducting expenses) received by the Company and the total underwriting discounts and the commissions received by the Underwriters, in each case as set forth in the table on the cover of the Prospectus, bear to the aggregate public offering price of the Shares. The relative fault of the Company on the one hand and the Underwriters on the other hand 29 shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or by the Underwriters, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 7 were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purposes) or by any other method of allocation that does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an Indemnified Person as a result of the losses, claims, damages and liabilities referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses incurred by such Indemnified Person in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 7, in no event shall an Underwriter be required to contribute any amount in excess of the amount by which the total price at which the Shares underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages that such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters' obligations to contribute pursuant to this Section 7 are several in proportion to the respective number of Shares set forth opposite their names in Schedule I hereto, and not joint. The remedies provided for in this Section 7 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any indemnified party at law or in equity. The indemnity and contribution agreements contained in this Section 7 and the representations and warranties of the Company set forth in this Agreement shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of any Underwriter or any person controlling any Underwriter or by or on behalf of the Company, its officers or directors or any other person controlling the Company and (iii) acceptance of and payment for any of the Shares. 8. This Agreement shall become effective upon the later of (x) execution and delivery hereof by the parties hereto and (y) release of notification of the effectiveness of the Registration Statement (or, if applicable, any post-effective amendment) by the Commission. 30 If on the Closing Date or the Additional Closing Date, as the case may be, any one or more of the Underwriters shall fail or refuse to purchase Shares which it or they have agreed to purchase hereunder on such date, and the aggregate number of Shares which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase is not more than one-tenth of the aggregate number of Shares to be purchased on such date, the other Underwriters shall be obligated severally in the proportions that the number of Shares set forth opposite their respective names in Schedule I bears to the aggregate number of Shares set forth opposite the names of all such non-defaulting Underwriters, or in such other proportions as the Joint Bookrunners may specify, to purchase the Shares which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase on such date; provided that in no event shall the number of Shares that any Underwriter has agreed to purchase pursuant to Section 1 be increased pursuant to this Section 8 by an amount in excess of one-tenth of such number of Shares without the written consent of such Underwriter. If on the Closing Date or the Additional Closing Date, as the case may be, any Underwriter or Underwriters shall fail or refuse to purchase Shares which it or they have agreed to purchase hereunder on such date, and the aggregate number of Shares with respect to which such default occurs is more than one-tenth of the aggregate number of Shares to be purchased on such date, and arrangements satisfactory to the Joint Bookrunners and the Company for the purchase of such Shares are not made within 36 hours after such default, this Agreement (or the obligations of the several Underwriters to purchase the Option Shares, as the case may be) shall terminate without liability on the part of any non-defaulting Underwriter or the Company. In any such case either the Joint Bookrunners or the Company shall have the right to postpone the Closing Date (or, in the case of the Option Shares, the Additional Closing Date), but in no event for longer than seven days, in order that the required changes, if any, in the Registration Statement and in the Prospectus or in any other documents or arrangements may be effected. Any action taken under this paragraph shall not relieve any defaulting Underwriter from liability in respect of any default of such Underwriter under this Agreement. 9. If this Agreement shall be terminated by the Underwriters, or any of them, because of any failure or refusal on the part of the Company to comply with the terms or to fulfill the conditions of this Agreement, or if for any reason the Company shall be unable to perform its obligations under this Agreement or any condition of the Underwriters' obligations cannot be fulfilled or is not waived, the Company agrees to reimburse the Underwriters or such Underwriters as have so terminated this Agreement with respect to themselves, severally, for all out-of-pocket expenses (including the fees and expenses of its counsel) reasonably incurred by the Underwriters in connection with this Agreement and the offering contemplated hereunder. If the Agreement is terminated by the Company by reason of the default of one or more of the Underwriters, the Company shall not 31 be obligated to reimburse any defaulting Underwriter on account of such expenses. 10. This Agreement shall inure to the benefit of and be binding upon the Company, the Underwriters, any controlling persons referred to herein and their respective successors and assigns. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any other person, firm or corporation any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained. No purchaser of Shares from any Underwriter shall be deemed to be a successor merely by reason of such purchase. 11. Any action by the Underwriters or the Representatives hereunder may be taken by the Representatives or the Joint Bookrunners jointly or by Credit Suisse First Boston Corporation on behalf of the Underwriters or the Representatives, and any action by the Joint Bookrunners hereunder may be taken by the Joint Bookrunners jointly or by Credit Suisse First Boston Corporation on behalf of the Joint Bookrunners, and any such action taken by the Representatives or Joint Bookrunners jointly or by Credit Suisse First Boston Corporation shall be binding upon the Underwriters. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notices to the Underwriters shall be given to the Representatives, c/o Credit Suisse First Boston Corporation, Eleven Madison Avenue, New York, New York; Attention: Transactions Advisory Group (Telefax: (212) 325-4296), with copies to SG Cowen Securities Corporation, 1221 Avenue of the Americas, New York, New York, 10020, Attention: Jorge Pedreira, and UBS Warburg LLC, 299 Park Avenue, 28th Floor, New York, New York, Attention: Legal Department. Notices to the Company shall be given to it at Lyondell Chemical Company, One Houston Center, Suite 1600, 1221 McKinney Street, Houston, Texas (telefax: (713) 652-4140); Attention: General Counsel. 12. This Agreement may be signed in counterparts, each of which shall be an original and all of which together shall constitute one and the same instrument. 13. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAWS PROVISIONS THEREOF. 14. No amendment or waiver of any provision of this Agreement, nor consent or approval to any departure therefrom, shall be effective unless given in writing and signed by the parties hereto. 33 If the foregoing is in accordance with your understanding, please sign and return four counterparts hereof. Very truly yours, LYONDELL CHEMICAL COMPANY By: /s/ Lyondell Chemical Company ----------------------------- Name: Title: Accepted: June 25, 2002 CREDIT SUISSE FIRST BOSTON CORPORATION SG COWEN SECURITIES CORPORATION UBS WARBURG LLC SALOMON SMITH BARNEY INC. Actingseverally on behalf of themselves and the several Underwriters listed in Schedule I hereto. By: CREDIT SUISSE FIRST BOSTON CORPORATION By: /s/ Credit Suisse First Boston Corporation ------------------------------------------ Name: Title: By: SG Cowen Securities Corporation By: /s/ SG Cowen Securities Corporation ----------------------------------- Name: Title: By: UBS WARBURG LLC By: /s/ UBS Warburg LLC ------------------- Name: Title: By: SALOMON SMITH BARNEY INC. By: /s/ Salomon Smith Barney Inc. ----------------------------- Name: Title: SCHEDULE I ----------- ---------------- Underwriter Number of Shares To Be Purchased Credit Suisse First Boston Corporation .............. 2,160,000 SG Cowen Securities Corporation ..................... 2,160,000 UBS Warburg LLC ..................................... 2,160,000 Salomon Smith Barney Inc. ........................... 720,000 Total ..................................... 7,200,000 SCHEDULE II SUBSIDIARIES ARCO Chemical Properties, L.P. ARCO Chemical Technology Management, Inc. ARCO Chemical Technology, Inc. ARCO Chemical Technology, L.P. Eurogen C.V. Lyo-Bayer Mfg. Maasviakte VOF Lyondell Asia Pacific, Ltd. Lyondell Australia Pty Limited/1/ Lyondell Bayport, LLC Lyondell Centennial Corp. Lyondell Chemical (Deutschland) GmbH Lyondell Chemical Canada Inc./1/ Lyondell Chemical Central Europe Ges.m.b.H Lyondell Chemical Delaware Company Lyondell Chemical Espana Co. Lyondell Chemical Europe, Inc. Lyondell Chemical Holding Company Lyondell Chemical International Company Lyondell Chemical Italia S.r.L. Lyondell Chemical Nederland, Ltd. Lyondell Chemical Overseas Services, Inc. Lyondell Chemical Pan America Lyondell Chemical Products Europe, Inc. Lyondell Chemical Wilmington, Inc. Lyondell Chemie (PO-11) BV Lyondell Chemie (POSM) BV Lyondell Chemie International BV Lyondell Chemie Investment Nederland B.V. Lyondell Chemie Nederland BV Lyondell Chemie Technologie Nederland B.V. Lyondell Chemie Utilities B.V. Lyondell Chimie France Corporation Lyondell Chimie France SNC - ---------------------- /1/ In the process of being liquidated by the Company. 2 Lyondell Chimie TDI SCA Lyondell-Equistar Holdings Partners Lyondell France, Inc. Lyondell Funding LLC Lyondell General Methanol Company Lyondell Greater China, Ltd. Lyondell Indonesia, Inc./2/ Lyondell Intermediate Holding Company Lyondell Japan, Inc. Lyondell Limited Methanol Company Lyondell Methanol Company, L.P. Lyondell Petrochemical G.P. Inc. Lyondell Petrochemical L.P. Inc. Lyondell PO-11 C.V. Lyondell POJVGP, LLC Lyondell POJVLP1, LLC Lyondell POJVLP2, LLC Lyondell POJVLP3, LLC Lyondell POTechGP, Inc. Lyondell POTechLP, Inc. Lyondell Quimica do Brasil, Ltda Lyondell Refining Company Lyondell Refining LP, LLC Lyondell South Asia Pte Ltd Lyondell Taiwan, Inc./2/ Lyondell Thailand, Ltd. Lyondell-DNT Limited Partnership PO Offtake, LP POSM Delaware, Inc. POSM II Limited Partnership, L.P. POSM II Properties Partnership, L.P. Seinehaven BDO2 C.V. Steamelec B.V. Viritech, Inc. - ---------------------- /2/ Will be dissolved effective as of June 28, 2002. 3 SCHEDULE III JOINT VENTURES Equistar Chemicals, LP Eurogen C.V. Lyo-Bayer Mfg. Maasviakte VOF LYONDELL-CITGO Refining, LP Lyondell-DNT Limited Partnership Lyondell-Equistar Holdings Partners PO JV, LP POSM II Limited Partnership, L.P. Technology JV, LP Nihon Oxirane Co., Ltd. Steamelec B.V. 4 EXHIBIT A [FORM OF LOCK-UP AGREEMENT] Lyondell Chemical Company One Houston Center, Suite 700 1221 McKinney Street Houston, Texas 77010 Credit Suisse First Boston Corporation SG Cowen Securities Corporation UBS Warburg LLC c/o Credit Suisse First Boston Corporation Eleven Madison Avenue New York, New York 10010-3629 Dear Sirs: As an inducement to the Underwriters to execute the Underwriting Agreement, pursuant to which an offering will be made that is intended to result in an orderly market for the Common Stock, $1.00 par value (the "Securities"), of Lyondell Chemical Company, and any successor (by merger or otherwise) thereto, (the "Company"), the undersigned hereby agrees that from the date hereof and until 90 days after the public offering date set forth on the final prospectus used to sell the Securities (the "Public Offering Date") pursuant to the Underwriting Agreement, to which you are or expect to become parties, the undersigned will not offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, any shares of Securities or securities convertible into or exchangeable or exercisable for any shares of Securities, enter into a transaction which would have the same effect, or enter into any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic consequences of ownership of the Securities, whether any such aforementioned transaction is to be settled by delivery of the Securities or such other securities, in cash or otherwise, or publicly disclose the intention to make any such offer, sale, pledge or disposition, or to enter into any such transaction, swap, hedge or other arrangement, without, in each case, the prior written consent of Credit Suisse First Boston Corporation. In addition, the undersigned agrees that, without the prior written consent of Credit Suisse First Boston Corporation, it will not, during the period commencing on the date hereof and ending 90 days after the Public Offering Date, make any demand for or exercise any right with respect to, the registration of any Securities or any security convertible into or exercisable or exchangeable for the Securities. Any Securities received upon exercise of options granted to the undersigned will also be subject to this Agreement. Any Securities acquired by 5 the undersigned in the open market will not be subject to this Agreement. A transfer of Securities to (i) to members of the immediate family of the undersigned or a trust, partnership, limited liability company or other entity, all of the beneficial interests of which are held by the undersigned and/or members of the immediate family of the undersigned, (ii) to a spouse, former spouse, child, or other dependent pursuant to a domestic relations order, as defined in Section 414(p) of the Internal Revenue Code or Section 206(d)(3) of Title I of the Employee Retirement Income Security Act, or (iii) charitable organizations and other health and welfare organizations, including schools may be made, provided, in each case, that (x) the transferee agrees, prior to the transfer, to be bound in writing by the terms of this Agreement and (y) the undersigned is not required to, and does not voluntarily, file a report under Section 16(a) of the Securities Exchange Act of 1934 reporting a reduction in beneficial ownership of shares of Common Stock during such 90-day period. As used herein, "members of the immediate family" of a person include such person's spouse, lineal descendants (including adopted and step-children), father, mother, brother, sister, father-in-law, mother-in-law, brother-in-law and sister-in-law. In furtherance of the foregoing, the Company and its transfer agent and registrar are hereby authorized to decline to make any transfer of shares of Securities if such transfer would constitute a violation or breach of this Agreement. This Agreement shall be binding on the undersigned and the successors, heirs, personal representatives and assigns of the undersigned. This Agreement shall lapse and become null and void if the Public Offering Date shall not have occurred on or before August 1, 2002. Very truly yours, ________________________________ Name 6 EX-1.2 4 dex12.txt UNDERWRITING AGREEMENT FOR SENIOR SECURED NOTES EXHIBIT 1.2 LYONDELL CHEMICAL COMPANY ARCO CHEMICAL TECHNOLOGY, INC., ARCO CHEMICAL TECHNOLOGY, L.P. and LYONDELL CHEMICAL NEDERLAND, LTD., as Guarantors $278,000,000 11 1/8% Senior Secured Notes due 2012 UNDERWRITING AGREEMENT June 26, 2002 June 26, 2002 Salomon Smith Barney Inc. Banc of America Securities LLC J.P. Morgan Securities Inc. Credit Suisse First Boston Corporation As representatives (the "Representatives") of the several Underwriters listed in Schedule B hereto c/o Salomon Smith Barney Inc. 388 Greenwich Street New York, New York 10013 Ladies and Gentlemen: Lyondell Chemical Company, a Delaware corporation (the "Company"), proposes to issue and sell to the several Underwriters listed in Schedule B hereto (the "Underwriters"), an aggregate of $278,000,000 in principal amount of its 11 1/8% Senior Secured Notes due 2012 (the "Notes") subject to the terms and conditions set forth herein. The Notes are to be issued pursuant to the provisions of an indenture (the "Indenture"), to be dated as of the Closing Date (as defined below), among the Company, the Guarantors (as defined below) and The Bank of New York, as trustee (the "Trustee"). The Notes will be guaranteed (the "Subsidiary Guarantees") by ARCO Chemical Technology, Inc., a Delaware corporation ("ACTI"), ARCO Chemical Technology, L.P., a Delaware limited partnership ("ACTLP") and Lyondell Chemical Nederland, Ltd., a Delaware corporation (together with ACTI and ACTLP, the "Guarantors"). Obligations in respect of the Notes (the "Indenture Obligations") will be secured on an equal and ratable basis with indebtedness under the Credit Agreement dated as of July 23, 1998 among the Company, the lenders party thereto, JPMorgan Chase Bank, as administrative agent, and the syndication agent, documentation agents, arranger and co-arrangers named therein (as amended heretofore, the "Credit Agreement"), the Company's 9 5/8% Senior Secured Notes, Series A, due 2007, 9 7/8% Senior Secured Notes, Series B, due 2007 and 9 1/2% Senior Secured Notes due 2008 (the "Existing Secured Notes") and certain other debt of the Company (the "Existing ARCO Chemical Debt") and certain obligations owed to the Pension Benefit Guaranty Corporation pursuant to a settlement (the "PBGC Settlement") by perfected liens on certain of the Company's personal property, all of the stock of the Company's domestic subsidiaries directly owned by the Company, 65% of the stock of the Company's foreign subsidiaries directly owned by the Company and certain of the Company's manufacturing plants pursuant to the security agreements, pledge agreements, mortgages and deeds of trust listed on Schedule A hereto (the "Security Documents"). The parties to the Security Documents have agreed to amend the Security Documents (the "Security Documents Amendment") to add the holders of the Notes as secured parties. The Company and the Guarantors have prepared and filed with the Securities and Exchange Commission (the "Commission") in accordance with the provisions of the Securities Act of 1933, as amended, and the rules and regulations of the Commission thereunder (collectively, the "Securities Act"), a registration statement (the file number of which is 333-88348) on Form S-3, relating to the Notes and certain other equity and debt securities (the "Shelf Securities") to be issued from time to time by the Company and the Guarantors. The Company and the Guarantors also have filed with, or proposes to file with, the Commission pursuant to Rule 424 under the Securities Act a prospectus supplement specifically relating to the Notes. The registration statement as amended to the date of this Agreement is hereinafter referred to as the "Registration Statement" and the related prospectus covering the Shelf Securities in the form first used to confirm sales of the Notes is hereinafter referred to as the "Basic Prospectus". The Basic Prospectus as supplemented by the prospectus supplement specifically relating to the Notes in the form first used to confirm sales of the Notes is hereinafter referred to as the "Prospectus". If the Company and the Guarantors have filed an abbreviated registration statement pursuant to Rule 462(b) under the Securities Act (the "Rule 462 Registration Statement"), then any reference herein to the term "Registration Statement" shall be deemed to include such Rule 462 Registration Statement. Any reference in this Agreement to the Registration Statement, the Basic Prospectus, any preliminary form of Prospectus (a "preliminary prospectus") previously filed with the Commission pursuant to Rule 424 or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to Item 12 of Form S-3 under the Securities Act which were filed under the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission thereunder (collectively, the "Exchange Act") on or before the date of this Agreement or the date of the Basic Prospectus, any preliminary prospectus or the Prospectus, as the case may be; and any reference to "amend", "amendment" or "supplement" with respect to the Registration Statement, the Basic Prospectus, any preliminary prospectus or the Prospectus shall be deemed to refer to and 2 include any documents filed under the Exchange Act after the date of this Agreement, or the date of the Basic Prospectus, any preliminary prospectus or the Prospectus, as the case may be, which are deemed to be incorporated by reference therein. The parties to the Credit Agreement have agreed to amend and restate the Credit Agreement on the terms set forth in the Prospectus (the "Credit Agreement Amendment"). The Credit Agreement Amendment sets forth certain conditions precedent to the effectiveness thereof, including the sale of the Notes. The effectiveness of the Credit Agreement Amendment in accordance with its terms is a condition precedent to the purchase and sale of the Notes under this Agreement. The Company has sent a notice of prepayment to certain lenders under the term loan facility of the Credit Agreement and will use the net proceeds from the sale of the Notes to repay amounts owed to such lenders and to pay fees and expenses, as more fully described in the Prospectus. This Agreement, the Indenture (including the Subsidiary Guarantees), the Notes, the Security Documents (as amended by the Security Documents Amendment) and the Credit Agreement Amendment are herein referred to collectively as the "Transaction Documents." Concurrently with this offering of Notes, the Company is offering up to 8,280,000 shares of its Common Stock pursuant to a separate prospectus supplement. Closing of the common stock offering is not conditioned upon the closing of this offering, and this offering is not conditioned on the closing of such offering. The Company and each Guarantor hereby agrees with the Underwriters as follows: 1. The Company agrees to sell the Notes to the several Underwriters as hereinafter provided, and each Underwriter, upon the basis of the representations and warranties herein contained, but subject to the conditions hereinafter stated, agrees to purchase, severally and not jointly, from the Company at a purchase price equal to 96.998% of the principal amount thereof (the "Purchase Price") (plus accrued interest, if any, from July 2, 2002 to the date of payment and delivery) the principal amount of Notes set forth opposite such Underwriter's name on Schedule B hereto. Except as may otherwise be agreed pursuant to Section 9 hereof, the Company shall not be obligated to deliver any of the Notes except upon payment for all of the Notes to be purchased as provided herein. 3 2. The Company understands that the Underwriters intend (i) to make a public offering of the Notes as soon after (A) the Registration Statement has become effective and (B) the parties hereto have executed and delivered this Agreement, as in the judgment of the Representatives is advisable and (ii) initially to offer the Notes upon the terms set forth in the Prospectus. Such price may be changed at any time without notice. 3. Payment for the Notes shall be made by wire transfer in immediately available funds to the account specified to the Representatives by the Company on July 2, 2002, or at such other time on the same or such other date, not later than the fifth Business Day thereafter, as the Representatives and the Company may agree upon in writing. The time and date of such payment for the Notes is referred to herein as the "Closing Date". As used herein, the term "Business Day" means any day other than a day on which banks are permitted or required to be closed in New York, New York or Houston, Texas. The Company will deliver to the Underwriters against payment of the purchase price thereof the Notes to be purchased by each Underwriter hereunder in the form of one or more global Notes in registered form without interest coupons which will be deposited with the Trustee as custodian for The Depository Trust Company ("DTC") and registered in the name of Cede & Co., as nominee for DTC. Interests in the global Notes will be held only in book-entry form through DTC except in the limited circumstances described in the Prospectus when they may be transferred in the form of definitive certificated Notes. 4. The Company and each Guarantor jointly and severally represent and warrant to each Underwriter that: (a) No order preventing or suspending the use of any preliminary prospectus has been issued by the Commission, and each preliminary prospectus filed as part of the Registration Statement as originally filed or as part of any amendment thereto, or filed pursuant to Rule 424 under the Securities Act, complied when so filed in all material respects with the Securities Act, and did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; provided that this representation and warranty shall not apply to (A) any statements or omissions made in reliance upon and in conformity with information relating to any Underwriter furnished to the Company in writing by such Underwriter through the Representatives expressly for use therein or (B) that part of the Registration Statement that constitutes the Statement of 4 Eligibility (Form T-1) under the Trust Indenture Act of 1939, as amended (the "TIA" or the "Trust Indenture Act"), of the Trustee. (b) No stop order suspending the effectiveness of the Registration Statement has been issued and no proceeding for that purpose has been instituted or, to the knowledge of the Company, threatened by the Commission; and the Registration Statement and Prospectus (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto) comply, or will comply, as the case may be, in all material respects with the Securities Act and do not and will not, as of the applicable effective date as to the Registration Statement and any amendment thereto and as of the date of the Prospectus and any amendment or supplement thereto, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and the Prospectus, as amended or supplemented, if applicable, at the Closing Date will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; except that the foregoing representations and warranties shall not apply to (A) statements or omissions in the Registration Statement or the Prospectus made in reliance upon and in conformity with information relating to any Underwriter furnished to the Company in writing by such Underwriter through the Representatives expressly for use therein; or (B) that part of the Registration Statement that constitutes the Form T-1 referred to above. (c) The documents incorporated by reference in the Prospectus, when they become effective or were filed with the Commission, as the case may be, conformed in all material respects to the requirements of the Securities Act or the Exchange Act, as applicable, and none of such documents contained an untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and any further documents so filed and incorporated by reference in the Prospectus, when such documents are filed with the Commission, will conform in all material respects to the requirements of the Exchange Act, and will not contain an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. (d) The financial statements, and the related notes thereto, included or incorporated by reference in the Registration Statement and the Prospectus present fairly the consolidated financial position of the Company and its consolidated subsidiaries as of the dates indicated and 5 the results of their operations and changes in their consolidated cash flows for the periods specified; and said financial statements have been prepared in conformity with generally accepted accounting principles applied on a consistent basis, and the supporting schedules, if any, included or incorporated by reference in the Registration Statement present fairly the information required to be stated therein. The historical financial statements, together with related schedules and notes, included or incorporated by reference in the Prospectus, comply as to form in all material respects with the requirements applicable to registration statements on Form S-3 under the Securities Act; the other financial and statistical information and data included or incorporated by reference in the Prospectus (and any amendment or supplement thereto) are, in all material respects, accurately presented and prepared on a basis consistent with such financial statements and the books and records of the Company. (e) There has not been any change in the capital stock or long-term debt of the Company or any of its subsidiaries, or any material adverse change in or affecting the business, prospects, condition (financial or other), stockholders' equity or results of operations of the Company and its subsidiaries, taken as a whole (a "Material Adverse Change"), from that set forth or contemplated in the Prospectus (as it stood at the time of execution and delivery of this Agreement); and, except as set forth or contemplated in the Prospectus (as it stood at the time of execution and delivery of this Agreement), neither the Company nor any of its Significant Joint Ventures (as defined below) or subsidiaries has entered into any transaction or agreement (whether or not in the ordinary course of business) material to the Company and its subsidiaries taken as a whole or incurred any material liability, direct or contingent. (f) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of its jurisdiction of incorporation, with power and authority (corporate and other) to own its properties and conduct its business as described in the Prospectus, and has been duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each other jurisdiction in which it owns or leases properties, or conducts any business, so as to require such qualification, other than where the failure to be so qualified or in good standing would not have a material adverse effect on or affecting the business, prospects, condition (financial or other), stockholders' equity or results of operations of the Company and its subsidiaries, taken as a whole (a "Material Adverse Effect"). 6 (g) the list of subsidiaries on Schedule C includes the only subsidiaries, direct or indirect, of the Company with assets, or in which the Company has an investment, in excess of $1,000,000 (the subsidiaries on such Schedule herein referred to as the "subsidiaries"). Each has been duly organized and is validly existing under the laws of its jurisdiction of organization, with power and authority (corporate and other) to own its properties and conduct its business as described in the Prospectus, and has been duly qualified for the transaction of business and is in good standing under the laws of each jurisdiction in which it owns or leases properties, or conducts any business, so as to require such qualification, other than where the failure to be so qualified or in good standing would not have a Material Adverse Effect; and all the outstanding shares of capital stock or other ownership interests of each subsidiary of the Company have been duly authorized and validly issued, are fully-paid and non-assessable, and (except (i) in the case of foreign subsidiaries, for directors' qualifying shares, (ii) the pledge of such stock or other ownership interests pursuant to the Security Documents as set forth in the Prospectus and (iii) as otherwise set forth in the Prospectus) are owned by the Company, directly or indirectly, free and clear of all liens, encumbrances, security interests or similar claims (each, a "Lien"). (h) The joint ventures listed on Schedule D are the only joint ventures in which the Company or any of its subsidiaries participates as an owner or partner. Each of Equistar Chemicals, LP ("Equistar"), LYONDELL-CITGO Refining, LP ("LCR" and, together with Equistar, the "Significant Joint Ventures") has been duly organized and is validly existing as a limited partnership under the laws of its jurisdiction of organization, with power and authority (partnership and other) to own its properties and conduct its business as described in the Prospectus, and has been duly qualified for the transaction of business and is in good standing under the laws of each jurisdiction in which it owns or leases properties, or conducts any business, so as to require such qualification, other than where the failure to be so qualified or in good standing would not have a Material Adverse Effect; and all the outstanding general and limited partnership interests of each Significant Joint Venture have been duly authorized and validly issued, are fully-paid and non-assessable (except insofar as any such general partnership interest carries with it liability for the debts and obligations of the relevant limited partnership). Except as set forth or contemplated in the Prospectus (as it stood at the time of execution and delivery of this Agreement), the Company owns 41% of the outstanding general and limited partnership interests of Equistar and 58.75% of the outstanding general and limited partnership interests of LCR and (except for (i) the pledge under the Security Documents and (ii) otherwise, in each case as set forth in the Prospectus) the outstanding 7 general and limited partnership interests of the Significant Joint Ventures owned by the Company are owned by it, directly or indirectly, free and clear of all Liens (except for such restrictions on transfer of the Company's or its subsidiaries' owner or partner interest in a Significant Joint Venture as are set forth in the governing documents thereof), security interests and similar claims. (i) The Company has an authorized capitalization as set forth in the Prospectus, and all of the outstanding shares of capital stock of the Company have been duly authorized and validly issued, are fully-paid and non-assessable and are not subject to any pre-emptive or similar rights. (j) Neither the Company nor any of its Significant Joint Ventures or subsidiaries is, or with the giving of notice or lapse of time or both would be, in violation of or in default under, its Certificate of Incorporation or By-Laws or other constitutive documents or any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its Significant Joint Ventures or subsidiaries is a party or by which it or any of them or any of their respective properties is bound, except (other than in the case of the Credit Agreement and the Security Documents) for violations and defaults which individually and in the aggregate would not have a Material Adverse Effect. The issue and sale of the Notes and the Subsidiary Guarantees hereunder and the performance by the Company and its subsidiaries of their obligations under this Agreement and the consummation of the transactions contemplated herein and in the other Transaction Documents will not (A) conflict with or result in a breach of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its Significant Joint Ventures or subsidiaries is a party or by which the Company or any of its Significant Joint Ventures or subsidiaries is bound or to which any of the property or assets of the Company or any of its Significant Joint Ventures or subsidiaries is subject or (B) result in the imposition or creation of (or the obligation to create or impose) a Lien under, any agreement or instrument to which the Company or any of its Significant Joint Ventures or subsidiaries is party or by which the Company or any of its Significant Joint Ventures or any of its subsidiaries or their respective property is bound (other than the Liens created by the Security Documents), nor will any such action result in any violation of the provisions of the Certificate of Incorporation or the By-Laws of the Company or any applicable law or statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company, its Significant Joint Ventures or subsidiaries or any of their respective properties; and no consent, approv- 8 al, authorization, order, license, registration or qualification of or with any such court or governmental agency or body is required for the issue and sale of the Notes to be sold by the Company hereunder or the consummation by the Company of the transactions contemplated by this Agreement or in the other Transaction Documents except such consents, approvals, authorizations, orders, licenses, registrations or qualifications as have been obtained under the Securities Act and as may be required under state securities or Blue Sky Laws in connection with the purchase and distribution of the Notes by the Underwriters. (k) Other than as set forth or contemplated in the Prospectus, there are no legal or governmental investigations, actions, suits or proceedings pending or, to the knowledge of the Company, threatened against or affecting the Company or any of its Significant Joint Ventures or subsidiaries or any of their respective properties or to which the Company or any of its Significant Joint Ventures or subsidiaries is or may be a party or to which any property of the Company or any of its Significant Joint Ventures or subsidiaries is or may be the subject which, if determined adversely to the Company or any of its Significant Joint Ventures or subsidiaries, could individually or in the aggregate reasonably be expected to result in a Material Adverse Effect, and, to the best of the Company's knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others; and there are no statutes, regulations, contracts or other documents that are required to be described (including by way of incorporation by reference) in the Prospectus or the Registration Statement and are not so described. (l) The Company and its Significant Joint Ventures and subsidiaries have good and marketable title in fee simple to all items of real property and good title to all personal property owned by them, in each case free and clear of all liens, encumbrances and defects except (i) (A) the liens thereon created pursuant to the Security Documents and (B) otherwise, in each case as described or referred to in the Prospectus or (ii) such liens permitted by the Security Documents and such other encumbrances and defects that do not affect the value of such property and do not interfere with the use made or proposed to be made of such property by the Company and its Significant Joint Ventures and subsidiaries in any manner which would have a Material Adverse Effect; and any real property and buildings held under lease by the Company and its Significant Joint Ventures and subsidiaries are held by them under valid, existing and enforceable leases with such exceptions as are not material and do not interfere with the use made or proposed to be made of such property and buildings by the Company or its Significant Joint Ventures or subsidiaries. 9 (m) No relationship, direct or indirect, exists between or among the Company or any of its Significant Joint Ventures or subsidiaries on the one hand, and the directors, officers, stockholders, customers or suppliers of the Company or any of its Significant Joint Ventures or subsidiaries on the other hand, which is required by the Securities Act to be described (including by way of incorporation by reference) in the Prospectus or the Registration Statement, which is not so described. (n) PricewaterhouseCoopers LLP, who have certified certain financial statements of the Company and its subsidiaries or its Significant Joint Ventures, are independent public accountants as required by the Act. (o) The Company and its Significant Joint Ventures and subsidiaries have filed all federal, state, local and foreign tax returns which have been required to be filed and have paid all taxes shown thereon and all assessments received by them or any of them to the extent that such taxes have become due and are not being contested in good faith. (p) Each of the Company and its Significant Joint Ventures and subsidiaries owns, possesses or has obtained all licenses, permits, certificates, consents, orders, approvals and other authorizations from, and has made all declarations and filings with, all federal, state, local and other governmental authorities (including foreign regulatory agencies), all self-regulatory organizations and all courts and other tribunals, domestic or foreign, necessary to own or lease, as the case may be, and to operate its properties and to carry on its business as conducted as of the date hereof, except such as would not result in a Material Adverse Effect, and neither the Company nor any such Significant Joint Venture or subsidiary has received any actual notice of any proceeding relating to revocation or modification of any such license, permit, certificate, consent, order, approval or other authorization which, if determined adversely to the Company or any of its Significant Joint Ventures or subsidiaries could result in a Material Adverse Effect; and each of the Company and its Significant Joint Ventures and subsidiaries is in compliance with all laws and regulations relating to the conduct of its business as conducted as of the date hereof, except where the failure to so comply would not, singly or in the aggregate, result in a Material Adverse Effect. (q) There are no existing or, to the best knowledge of the Company, threatened labor disputes with the employees of the Company or any of its Significant Joint Ventures or subsidiaries which are likely to have a Material Adverse Effect. 10 (r) The Company and its Significant Joint Ventures and subsidiaries (i) are in compliance with any and all applicable foreign, federal, state and local laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants ("Environmental Laws"), (ii) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses and (iii) are in compliance with all terms and conditions of any such permit, license or approval, except where such noncompliance with Environmental Laws, failure to receive required permits, licenses or other approvals or failure to comply with the terms and conditions of such permits, licenses or approvals would not, singly or in the aggregate, have a Material Adverse Effect, and except as disclosed in the Prospectus. (s) In the ordinary course of its business, the Company conducts a periodic review of the effect of Environmental Laws on the business, operations and properties of the Company and its Significant Joint Ventures and subsidiaries, in the course of which it identifies and evaluates associated costs and liabilities (including, without limitation, any capital or operating expenditures required for clean-up, closure of properties or compliance with Environmental Laws or any permit, license or approval, any related constraints on operating activities and any potential liabilities to third parties). On the basis of such review, the Company has reasonably concluded that such associated costs and liabilities would not, singly or in the aggregate, have a Material Adverse Effect, except as disclosed in the Prospectus. (t) The Security Documents Amendment has been duly authorized by the Company and each of its subsidiaries party thereto and, on the Closing Date, will have been validly executed and delivered by the Company and each of its subsidiaries party thereto and the Security Documents (as amended by the Security Documents Amendment) will be valid and binding agreements of the Company and its subsidiaries party thereto, enforceable in accordance with their terms except as (i) the enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting creditors' rights generally and (ii) rights of acceleration and the availability of equitable remedies may be limited by equitable principles of general applicability (which principles may include implied duties of good faith and fair dealing). (u) The Security Documents create valid security interests or mortgage liens in the collateral purported to be covered thereby securing the Indenture Obligations, which security interests or mortgage liens are and will remain perfected security interests or liens prior to all other Liens 11 (subject to the exceptions contemplated by the Security Documents). Each of the representations and warranties made by the Company and its subsidiaries in each Security Document to which it is a party is true and correct in all material respects. (v) This Agreement has been duly authorized, executed and delivered by the Company and the Guarantors. (w) The Indenture has been duly qualified under the Trust Indenture Act and authorized by the Company and each of the Guarantors and, on the Closing Date, will have been validly executed and delivered by the Company and each of the Guarantors. When the Indenture has been duly executed and delivered by the Company and each of the Guarantors, the Indenture will be a valid and binding agreement of the Company and each Guarantor, enforceable against the Company and each Guarantor in accordance with its terms except as (i) the enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting creditors' rights generally and (ii) rights of acceleration and the availability of equitable remedies may be limited by equitable principles of general applicability (which principles may include implied duties of good faith and fair dealing). (x) The Notes have been duly authorized and, on the Closing Date, will have been validly executed and delivered by the Company. When the Notes have been issued, executed and authenticated in accordance with the provisions of the Indenture and delivered to and paid for by the Underwriters in accordance with the terms of this Agreement, the Notes will be entitled to the benefits of the Indenture and will be valid and binding obligations of the Company, enforceable in accordance with their terms except as (i) the enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting creditors' rights generally and (ii) rights of acceleration and the availability of equitable remedies may be limited by equitable principles of general applicability (which principles may include implied duties of good faith and fair dealing). On the Closing Date, the Notes will conform as to legal matters to the description thereof contained in the Prospectus. (y) The Subsidiary Guarantees of the Notes by each Guarantor have been duly authorized by such Guarantor and, when the Notes have been issued, executed and authenticated in accordance with the Indenture and delivered to and paid for by the Underwriters in accordance with the terms of this Agreement, the Subsidiary Guarantees of each Guarantor will be entitled to the benefits of the Indenture and will be the valid and binding obligations of such Guarantor, enforceable against such Guarantor 12 in accordance with their terms, except as (i) the enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting creditors' rights generally and (ii) rights of acceleration and the availability of equitable remedies may be limited by equitable principles of general applicability (which principles may include implied duties of good faith and fair dealing). On the Closing Date, the Subsidiary Guarantees will conform as to legal matters to the description thereof contained in the Prospectus. (z) The Credit Agreement Amendment has been duly authorized by the Company and each of the Guarantors and, on the Closing Date, will have been duly executed and delivered by the Company and each of the Guarantors. When the Credit Agreement Amendment has been duly executed and delivered by the Company and each of the Guarantors, the Credit Agreement (as amended by the Credit Agreement Amendment) will be a valid and binding agreement of the Company and each Guarantor, enforceable against the Company and each Guarantor in accordance with its terms except as (i) the enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting creditors' rights generally and (ii) rights of acceleration and the availability of equitable remedies may be limited by equitable principles of general applicability (which principles may include implied duties of good faith and fair dealing). (aa) Neither the Company or any Guarantor is and, after giving effect to the offering and sale of the Notes and the application of the net proceeds thereof as described in the Prospectus, neither will be, an "investment company," as such term is defined in the Investment Company Act of 1940, as amended. (bb) Neither the Company nor any of its subsidiaries nor any agent thereof acting on the behalf of them has taken, and none of them will take, any action that might cause this Agreement or the issuance or sale of the Notes to violate Regulation T (12 C.F.R. Part 220), Regulation U (12 C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224) of the Board of Governors of the Federal Reserve System. (cc) No "nationally recognized statistical rating organization" as such term is defined for purposes of Rule 436(g)(2) under the Act (i) has imposed (or has informed the Company or any Guarantor that it is considering imposing) any condition (financial or otherwise) on the Company's or any Guarantor's retaining any rating assigned to the Company or any Guarantor, any securities of the Company or any Guarantor or (ii) has indicated to the Company or any Guarantor that it is 13 considering (A) the downgrading, suspension, or withdrawal of, or any review for a possible change that does not indicate the direction of the possible change in, any rating so assigned or (B) any change in the outlook for any rating of the Company, any Guarantor or any securities of the Company or any Guarantor. (dd) All indebtedness of the Company and the Guarantors that will be repaid with the proceeds of the issuance and sale of the Notes was incurred, and the indebtedness represented by the Notes is being incurred, for proper purposes and in good faith and each of the Company and the Guarantors was, at the time of the incurrence of such indebtedness that will be repaid with the proceeds of the issuance and sale of the Notes, and will be on the Closing Date (after giving effect to the application of the proceeds from the issuance of the Notes) solvent, and had at the time of the incurrence of such indebtedness that will be repaid with the proceeds of the issuance and sale of the Notes and will have on the Closing Date (after giving effect to the application of the proceeds from the issuance of the Notes) sufficient capital for carrying on their respective business and were, at the time of the incurrence of such indebtedness that will be repaid with the proceeds of the issuance and sale of the Notes, and will be on the Closing Date (after giving effect to the application of the proceeds from the issuance of the Notes) able to pay their respective debts as they mature. (ee) Each certificate signed by any officer of the Company or the Guarantors and delivered to the Underwriters or counsel for the Underwriters shall be deemed to be a representation and warranty by the Company or the Guarantors to the Underwriters as to the matters covered thereby. (ff) The Company has complied with all provisions of Section 517.075, Florida Statutes relating to doing business with the Government of Cuba or with any person or affiliate located in Cuba. (gg) The Company has furnished the Underwriters and their counsel true and correct copies of the forms of agreements with respect to the transactions with Occidental Petroleum Corporation and its subsidiaries described in the Prospectus under "Proposed Transactions with Occidental", and the Company is not aware of any material changes that are contemplated or expected to be made to such forms prior to, or after, their execution by the parties thereto; the description of such transactions included and incorporated by reference into the Prospectus is a fair and accurate summary of such transactions in all material respects. 14 The Company and the Guarantors acknowledge that the Underwriters and, for purposes of the opinions to be delivered to the Underwriters pursuant to Section 6 hereof, counsel to the Company and the Guarantors and counsel to the Underwriters will rely upon the accuracy and truth of the foregoing representations and hereby consents to such reliance. 5. The Company and each of the Guarantors jointly and severally covenants and agrees with each of the several Underwriters as follows: (a) to use its best efforts to cause the Registration Statement to become effective at the earliest possible time and, if required, to file the final Prospectus with the Commission within the time periods specified by Rule 424(b) and Rule 430A under the Securities Act, and to furnish copies of the Prospectus to the Underwriters in New York City prior to 10:00 a.m., New York City time, on the Business Day next succeeding the date of this Agreement in such quantities as the Representatives may reasonably request; (b) to deliver, at the expense of the Company, to the Representatives four signed copies of the Registration Statement (as originally filed) and each amendment thereto, in each case including exhibits and documents incorporated by reference therein, and to each other Underwriter a conformed copy of the Registration Statement (as originally filed) and each amendment thereto, in each case without exhibits (but including the documents incorporated by reference therein), and, during the period mentioned in Section 5(e) below, to each of the Underwriters as many copies of the Prospectus (including all amendments and supplements thereto and documents incorporated by reference therein) as the Representatives may reasonably request; (c) before filing any amendment or supplement to the Registration Statement or the Prospectus, whether before or after the time the Registration Statement becomes effective, to furnish to the Representatives a copy of the proposed amendment or supplement for review and not to file any such proposed amendment or supplement to which the Representatives reasonably object; (d) to advise the Representatives promptly, and to confirm such advice in writing (i) when the Registration Statement has become effective, (ii) when any amendment to the Registration Statement has been filed or becomes effective, (iii) when any supplement to the Prospectus or any amended Prospectus has been filed and to furnish the Representatives with copies thereof, (iv) of any request by the Commission for any amendment to the Registration Statement or any amendment or 15 supplement to the Prospectus or for any additional information, (v) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or of any order preventing or suspending the use of any preliminary prospectus or the Prospectus or the initiation or threatening of any proceeding for that purpose, (vi) of the occurrence of any event, within the period referenced in Section 5(e) below, as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances when the Prospectus is delivered to a purchaser, not misleading, and (vii) of the receipt by the Company of any notification with respect to any suspension of the qualification of the Notes for offer and sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and to use its best efforts to prevent the issuance of any such stop order, or of any order preventing or suspending the use of any preliminary prospectus or the Prospectus, or of any order suspending any such qualification of the Notes, or notification of any such order thereof and, if issued, to obtain as soon as possible the withdrawal thereof; (e) if, during such period of time after the first date of the public offering of the Notes as in the opinion of counsel for the Underwriters a prospectus relating to the Notes is required by law to be delivered in connection with sales by the Underwriters or any dealer, any event shall occur as a result of which it is necessary to amend or supplement the Prospectus in order to make the statements therein, in light of the circumstances when the Prospectus is delivered to a purchaser, not misleading, or if it is necessary to amend or supplement the Prospectus to comply with law, forthwith to prepare and furnish, at the expense of the Company, to the Underwriters and to the dealers (whose names and addresses the Representatives will furnish to the Company) to which Notes may have been sold by the Representatives on behalf of the Underwriters and to any other dealers upon request, such amendments or supplements to the Prospectus as may be necessary so that the statements in the Prospectus as so amended or supplemented will not, in the light of the circumstances when the Prospectus is delivered to a purchaser, be misleading or so that the Prospectus will comply with law; (f) to endeavor to qualify the Notes (and the Subsidiary Guarantees) for offer and sale under the securities or Blue Sky laws of such jurisdictions as the Representatives shall reasonably request and to continue such qualification in effect so long as reasonably required for distribution of the Notes; provided that neither the Company nor any Guarantor shall be required to (x) file a general consent to service of 16 process, (y) subject itself to taxation or (z) qualify as a foreign corporation in any jurisdiction in which it is not otherwise required to do so; (g) to make generally available to its security holders and to the Representatives as soon as practicable an earnings statement covering a period of at least twelve months beginning with the first fiscal quarter of the Company occurring after the effective date of the Registration Statement, which shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 of the Commission promulgated thereunder; (h) for a period of five years, to furnish to the Representatives copies of all reports or other communications (financial or other) furnished to holders of the Company's securities (in the same manner as such documents are furnished to holders of the Company's securities), and copies of any reports and financial statements furnished to or filed with the Commission or any national securities exchange; (i) during the period beginning on the date hereof and continuing to and including the Closing Date, not to offer, sell, contract to sell or otherwise transfer or dispose of any debt securities of the Company or the Guarantors or any warrants, rights or options to purchase or otherwise acquire debt securities of the Company or any Guarantor substantially similar to the Notes and the Subsidiary Guarantees (other than (i) the Notes and the Subsidiary Guarantees, (ii) borrowings under the Credit Agreement and (iii) commercial paper issued in the ordinary course of business), without the prior written consent of the Representatives; (j) to use the net proceeds received by the Company from the sale of the Notes pursuant to this Agreement in the manner specified in the Prospectus under caption "Use of Proceeds"; (k) whether or not the transactions contemplated in this Agreement are consummated or this Agreement is terminated, to pay or cause to be paid all costs and expenses incident to the performance of the obligations of the Company and the Guarantors hereunder, including without limiting the generality of the foregoing, all costs and expenses (i) the fees, disbursements and expenses of counsel to the Company and the Guarantors and accountants of the Company and the Guarantors in connection with the sale and delivery of the Notes to the Underwriters, (ii) incident to the preparation, registration, transfer, execution and delivery of the Notes, including any transfer or other taxes payable thereon, (iii) incident to the preparation, printing and filing under the Securities Act of the Registration Statement, the Prospectus and any 17 preliminary prospectus (including in each case all exhibits, amendments and supplements thereto), (iv) incurred in connection with the registration or qualification of the Notes under the laws of such jurisdictions as the Representatives may designate (including fees of counsel for the Underwriters and their disbursements), (v) related to the filing with, and clearance of the offering by, the NASD (including fees of counsel for the Underwriters and their disbursements), (vi) in connection with the printing (including word processing and duplication costs) and delivery of this Agreement, the Indenture, the Notes, the Subsidiary Guarantees, the Security Documents and the Security Documents Amendment and any other agreements or documents in connection with the offering, purchase, sale or delivery of the Notes, the Preliminary and Supplemental Blue Sky Memoranda and the furnishing to the Underwriters and dealers of copies of the Registration Statement and the Prospectus, including mailing and shipping, as herein provided, (vii) any expenses incurred by the Company in connection with a "road show" presentation to potential investors, (viii) the cost of preparing certificates for the Notes, (ix) the fees and expenses of the Trustee and counsel to the Trustee in connection with the Indenture, the Notes, the Subsidiary Guarantees, the Security Documents and the Security Documents Amendment, (x) the costs and charges of any transfer agent, registrar and/or depositary (including DTC), (xi) any costs relating to the creation or perfection of the liens under the Security Documents and (xii) any fees charged by rating agencies for the rating of the Notes; (l) not to voluntarily claim, and to actively resist any attempts to claim, the benefit of any usury laws against the holders of any Notes and the related Subsidiary Guarantees; and (m) to use its best efforts to do and perform all things required or necessary to be done and performed under this Agreement by it prior to the Closing Date and to satisfy all conditions precedent to the delivery of the Notes and the Subsidiary Guarantees. 6. The several obligations of the Underwriters hereunder to purchase the Notes on the Closing Date are subject to the performance by the Company and the Guarantors of their obligations hereunder and to the following additional conditions: (a) The Registration Statement shall have become effective (or if a post-effective amendment is required to be filed under the Securities Act, such post-effective amendment shall have become effective) not later than 5:00 P.M., New York City time, on the date hereof; and no stop order suspending the effectiveness of the Registration Statement or any post-effective amendment shall be in effect, and no proceedings for such 18 purpose shall be pending before or threatened by the Commission; the Prospectus shall have been filed with the Commission pursuant to Rule 424(b) within the applicable time period prescribed for such filing by the rules and regulations under the Securities Act and in accordance with Section 5(a) hereof; and all requests of the Representatives for additional information shall have been complied with to the reasonable satisfaction of the Representatives. (b) The representations and warranties of the Company and each of the Guarantors contained herein are true and correct on and as of the Closing Date, as if made on and as of the Closing Date, and the Company and each of the Guarantors shall have complied in all material respects with all agreements and all conditions on their part to be performed or satisfied hereunder at or prior to the Closing Date. (c) Subsequent to the execution and delivery of this Agreement, there shall not have occurred (i) any change, or any development or event involving a prospective change, in the condition (financial or other), business, properties or results of operations of the Company and its subsidiaries taken as one enterprise which, in the judgment of the Representatives, is material and adverse and makes it impractical or inadvisable to proceed with completion of the public offering or the sale of and payment for the Notes; (ii) any downgrading in the rating of any debt securities of the Company by any "nationally recognized statistical rating organization" (as defined for purposes of Rule 436(g) under the Act), or any public announcement that any such organization has under surveillance or review its rating of any debt securities of the Company (other than an announcement with positive implications of a possible upgrading, and no implication of a possible downgrading, of such rating) or any announcement that the Company has been placed on negative outlook; (iii) any change in U.S. or international financial, political or economic conditions or currency exchange rates or exchange controls as would, in the judgment of the Representatives, be likely to prejudice materially the success of the proposed issue, sale or distribution of the Notes, whether in the primary market or in respect of dealings in the secondary market; (iv) any material suspension or material limitation of trading in securities generally on the New York Stock Exchange, or any setting of minimum prices for trading on such exchange, or any suspension of trading of any securities of the Company on any exchange or in the over-the-counter market; (v) any banking moratorium declared by U.S. Federal or New York authorities; (vi) any major disruption of settlements of securities or clearance services in the United States or (vii) any attack on, outbreak or escalation of hostilities or act of terrorism involving the United States, any declaration of war by Congress or any 19 other national or international calamity or emergency if, in the judgment of the Representatives, the effect of any such attack, outbreak, escalation, act, declaration, calamity or emergency makes it impractical or inadvisable to proceed with completion of the public offering or the sale of and payment for the Notes. (d) The Representatives shall have received on and as of the Closing Date (i) a certificate of an officer of the Company and each Guarantor, with specific knowledge about the financial matters of the Company or such Guarantor, satisfactory to the Representatives to the effect set forth in Sections 4(e), 4(cc), 6(a) and 6(b) and (ii) a certificate in the form of Exhibit 1 hereto signed by the chief financial officer of the Company. (e) You shall have received on the Closing Date an opinion (reasonably satisfactory to you and counsel for the Underwriters), dated the Closing Date, of Baker Botts L.L.P., counsel for the Company and the Guarantors, to the effect that: (i) Each of the Company and the Guarantors is duly organized and validly existing in good standing under the laws of the State of Delaware, with corporate (or limited partnership) power and authority under such laws to own, lease and operate its properties and conduct its business as described in the Prospectus. (ii) The Notes have been duly authorized and, when executed and authenticated in accordance with the provisions of the Indenture and delivered to and paid for by the Underwriters in accordance with the terms of this Agreement, will be entitled to the benefits of the Indenture and will be valid and binding obligations of the Company, enforceable in accordance with their terms except as (x) the enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting creditors' rights generally and (y) rights of acceleration and the availability of equitable remedies may be limited by equitable principles of general applicability (which principles may include implied duties of good faith and fair dealing). (iii) The Subsidiary Guarantees have been duly authorized and, when the Notes are executed and authenticated in accordance with the provisions of the Indenture and delivered to and paid for by the Underwriters in accordance with the terms of this 20 Agreement, the Subsidiary Guarantees will be entitled to the benefits of the Indenture and will be valid and binding obligations of the Guarantors, enforceable in accordance with their terms except as (x) the enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting creditors' rights generally and (y) rights of acceleration and the availability of equitable remedies may be limited by equitable principles of general applicability (which principles may include implied duties of good faith and fair dealing). (iv) The Indenture has been duly authorized, executed and delivered by the Company and the Guarantors and is a valid and binding agreement of the Company and the Guarantors, enforceable against the Company and the Guarantors in accordance with its terms except as (x) the enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting creditors' rights generally and (y) rights of acceleration and the availability of equitable remedies may be limited by equitable principles of general applicability (which principles may include implied duties of good faith and fair dealing). (v) This Agreement has been duly authorized, executed and delivered by the Company and the Guarantors. (vi) The Notes and the Indenture conform as to legal matters in all material respects to the descriptions thereof contained in the Prospectus; the statements under the caption "Certain United States Federal Income Tax Consequences to Non-U.S. Holders" in the Prospectus are a fair and accurate summary in all material respects of the legal matters described therein; and such counsel does not know of any statutes, regulations, contracts or other documents that are required to be described (including by way of incorporation by reference) in the Registration Statement or the Prospectus or to be filed as exhibits to the Registration Statement (or any document incorporated by reference) that are not described or filed as required. (vii) The Registration Statement and the Prospectus and any amendments and supplements thereto, excluding the documents incorporated by reference therein (other than the financial statements and related schedules and other financial and statistical data therein, as to which such counsel need express no opinion) as of the dates they became effective or were filed with the Commission, as the case may be, appear on their face to be 21 appropriately responsive in all material respects to the requirements of the Securities Act. (viii) The documents incorporated by reference in the Prospectus or any further amendment or supplement thereto made by the Company prior to the Closing Date (other than the financial statements and related schedules and other financial and statistical data therein, as to which such counsel need express no opinion), when they became effective or were filed under the Exchange Act with the Commission, as the case may be, appear on their face to be appropriately responsive in all material respects to the requirements of the Securities Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder. (ix) The issue and sale of the Notes and the performance by the Company of its obligations under this Agreement and the consummation of the transactions contemplated herein and in the other Transaction Documents will not (1) result in any violation of the provisions of (a) the Certificate of Incorporation or the By-Laws of the Company or any Guarantor or (b) any law or statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company, its Significant Joint Ventures or subsidiaries or any of their respective properties or (2) constitute a default under, the Credit Agreement, the Existing ARCO Chemical Debt, the Existing Secured Notes or the Company's Senior Subordinated Notes due 2009. (x) No consent, approval, authorization, order, license, registration or qualification of or with any court or governmental agency or body is required for the issuance by the Company of the Notes to be sold by it hereunder or the consummation by the Company of the other transactions contemplated by this Agreement or the other Transaction Documents, except such as have been obtained under the Securities Act and as may be required under the Blue Sky Laws of the various states. (xi) None of the Company or the Guarantors is and, after giving effect to the offering and sale of the Notes, none will be an "investment company", as such term is defined in the Investment Company Act. (xii) The Indenture has been duly qualified under the TIA. 22 (xiii) The Credit Agreement Amendment has been duly authorized, executed and delivered by the Company and the Credit Agreement, as amended and restated by the Credit Agreement Amendment, is a valid and binding agreement of the Company, enforceable in accordance with its terms, except as (x) the enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting creditors' rights generally, and (y) rights of acceleration and the availability of equitable remedies may be limited by equitable principles of general applicability (which principles may include implied duties of good faith and fair dealing). (xiv) The Security Documents Amendment has been duly authorized, executed and delivered by the Company and each of its subsidiaries party thereto and each Security Document (other than the Louisiana Mortgage (as defined on Schedule A hereto)), as amended by the Security Documents Amendment, is a valid and binding agreement of the Company and each of its subsidiaries party thereto. (xv) Each Security Document listed on Schedule A hereto (in each case, as amended by the applicable Security Documents Amendment), other than the Deeds of Trust (the "Texas Mortgages") and the Louisiana Mortgage, creates a valid security interest in favor of the Collateral Agent for the benefit of the "Secured Parties" (including the Trustee and the holders of the Notes) as defined and to the extent provided therein, in all right, title and interest of the Company and its subsidiaries party thereto (the "Debtors") in that portion of the "Collateral" as defined therein in which a security interest may be created under the Uniform Commercial Code (the "New York Code") in effect in the State of New York (the "UCC Collateral"). (xvi) Except as otherwise provided by Sections 9-303 through 9-306 of the New York Code, the perfection of such security interests will be determined under the local laws of the jurisdiction in which the debtor is located, which is the State of Delaware for each debtor. On the proper filing in the office of the Secretary of State of the State of Delaware of UCC-1 financing statements executed by each applicable Debtor (copies of which shall be attached to such opinion), which financing statements were filed in December 2001, the Collateral Agent has a perfected security interest in that portion of the UCC Collateral in which a security interest may be perfected by filing and in the proceeds 23 thereof, subject, however, with respect to proceeds, to Sections 9-315 of the New York Code and any comparable provision of the Delaware Uniform Commercial Code. Such financing statements have continued the effectiveness of the previously-filed financing statements referred to therein. (xvii) Assuming (a) continued possession and control (within the meaning of Section 8-106 of the New York Code) in New York by, the Collateral Agent, of the stock certificates representing the issued and outstanding shares of capital stock of the Company's subsidiaries pledged pursuant to the Security Documents (the "Subsidiary Shares"), together with stock powers properly executed in blank with respect thereto (which Subsidiary Shares have previously been delivered to the Collateral Agent), and (b) the Collateral Agent acquired its interest in the Subsidiary Shares in good faith and without notice of any adverse claims (as defined in Section 8-103 of the New York Code), the Collateral Agent has a perfected security interest in the Subsidiary Shares, free of any adverse claims to the extent provided by Articles 8 and 9 of the New York Code, for the benefit of the Secured Parties (including the Trustee and the holders of the Notes). (xviii) Each Texas Mortgage (as amended by the applicable Security Documents Amendment) creates a valid security interest in favor of the Collateral Agent for the benefit of the Secured Parties (including the Trustee and the holders of the Notes) as defined and to the extent provided therein in all right, title and interest of the Company in that portion of the "Trust Property" (as defined in each Texas Mortgage) (the "Texas UCC Collateral") in which a security interest may be created under Chapter 9 of the Texas Uniform Commercial Code (the "Texas Code"). As a result of the filing in the office of the Secretary of State of the State of Texas and in the real property records of the County Clerk of Harris County, Texas of UCC financing statements (the "Texas Fixture Filings"), which financing statements were filed in May 1999, as amended by UCC-3 financing statements filed in December 2001, the Collateral Agent has a perfected security interest in that portion of the Texas UCC Collateral which may be perfected by so filing the Texas Fixture Filings and in the proceeds thereof in which a security interest may be created under Chapter 9 of the Texas Code and perfected by so filing those financing statements, subject, however, with respect to the proceeds, to Section 9.315 of the Texas Code. 24 (xix) The applicable Security Documents Amendment ("Texas Amendment No. 2") to each Texas Mortgage is in form satisfactory for recording or filing. The recording and indexing of such Amendment is the only recording or filing necessary or advisable in the State of Texas to publish notice of, protect the validity of, and establish of record the rights of the parties thereto and the priority of the liens modified and extended thereby in respect of the Trust Property (as defined in each Texas Mortgage). Other than the documents referred to above, no other documents need be filed in any public office in the State of Texas in order to publish notice, protect the validity of the instruments referred to herein or to establish of record the rights of the parties thereto and the priority of the liens created thereby in connection with the transactions contemplated by the Texas Mortgages and the Indenture or the ability of the Beneficiary (as defined in each Texas Mortgage) to seek enforcement of such rights. (xx) The Security Documents Amendment to each Texas Mortgage, upon recording as set forth in Section 6(xviii) above, will (a) be enforceable against the Company in accordance with its terms, (b) extend the lien of such mortgage upon, and the security interest of such mortgage in, such of the Trust Property (as defined in each Texas Mortgage) as is owned by the Company, as of the date of its recording and indexing, to secure the obligations arising under the Indenture in addition to the "Additional Senior Secured Obligations" described in such mortgage prior to giving effect to Texas Amendment No. 2, and (c) cause the lien of such mortgage to equally and ratably secure (i) the Notes, and (ii) the other Additional Secured Obligations. (xxi) No recording, filing, stamp or transfer tax is payable in connection with recording or filing of Texas Amendment No. 2 except for customary recording and filing fees charged by applicable governmental authorities. (xxii) If all material facts and issues of law were presented and properly argued, a Texas court, or a federal court sitting in the State of Texas, should give effect to the governing law provisions of each of the Transaction Documents, subject to Section 35.51(f)(4) of the Texas Business and Commerce Act. Such counsel shall also state that they have participated in conferences with officers and other representatives of the Company, representatives of the independent accountants of 25 the Company and representatives of the Underwriters and their counsel at which the contents of the Registration Statement and the Prospectus and related matters were discussed; and, although such counsel did not independently verify such information and is not passing upon, and does not assume any responsibility for, the accuracy, completeness or fairness of the statements contained in the Registration Statement and the Prospectus, on the basis of the foregoing (relying as to materiality, to the extent such counsel deems reasonable, upon officers and other representatives of the Company), no facts have come to the attention of such counsel to lead such counsel to believe that (a) the Registration Statement (other than the financial statements, the notes thereto and the auditors' reports thereon and the other financial, statistical and accounting information contained therein or omitted therefrom and except for that part of the Registration Statement that constitutes the Form T-1 heretofore referred to, as to which such counsel has not been asked to comment), at its effective date, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or (b) the Prospectus (other than the financial statements, the notes thereto and the auditors' reports thereon and the other financial, statistical and accounting information contained therein or omitted therefrom and except for that part of the Registration Statement that constitutes the Form T-1 heretofore referred to, as to which such counsel has not been asked to comment), at the time the Prospectus was issued, or at the Closing Date, contained or contains an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. Such counsel may state that the opinions expressed are based on and are limited to the laws of the State of Texas, the General Corporation Law of the State of Delaware, the contract law of the State of New York and the federal laws of the United States, as currently in effect (and may assume that the Uniform Commercial Code in Delaware is identical to the New York Code). (f) You shall have received on the Closing Date an opinion (reasonably satisfactory to you and counsel for the Underwriters) of Kerry A. Galvin, Esq., general counsel for the Company (or Gerald A. O'Brien, deputy general counsel of the Company), to the effect that: 26 (i) The Company has been duly qualified to do business and is in good standing as a foreign corporation under the laws of each jurisdiction in which it owns or leases properties, or conducts any business, so as to require such qualification, other than where the failure to be so qualified or in good standing would not have a Material Adverse Effect. (ii) Each of the Company's subsidiaries has been duly organized and is validly existing under the laws of its jurisdiction of incorporation with power and authority (corporate and otherwise) under such laws to own its properties and conduct its business as described in the Prospectus and has been duly qualified to do business and is in good standing under the laws of each jurisdiction in which it owns or leases properties, or conducts any business, so as to require such qualification, other than where the failure to be so qualified and in good standing would not have a Material Adverse Effect; and all of the outstanding shares of capital stock or other ownership interests of each subsidiary have been duly and validly authorized and issued, are fully paid and non-assessable, and (except (A) in the case of foreign subsidiaries, for directors' qualifying shares and (B) the pledge of such stock or other ownership interests under the Security Documents as set forth in the Prospectus and (C) as otherwise set forth in the Prospectus) are owned directly or indirectly by the Company, free and clear of all liens, encumbrances, equities or similar claims. (iii) Each of the Significant Joint Ventures has been duly organized and is validly existing as a limited partnership under the laws of Delaware, with power and authority under its partnership agreement and the law of the State of Delaware to own its properties and conduct its business as described in the Prospectus, and has been duly qualified for the transaction of business and is in good standing under the laws of each jurisdiction in which it owns or leases properties, or conducts any business, so as to require such qualification, other than where the failure to be so qualified or in good standing would not have a Material Adverse Effect; and all the outstanding general and limited partnership interests of each Significant Joint Venture have been duly authorized and validly issued, are fully-paid and non-assessable (except insofar as any such general partnership interest carries with it liability for the debts and obligations of the relevant limited partnership). The Company owns 41% of the outstanding general and limited partnership interests in Equistar and 58.75% of the outstanding general and limited partnership interests of LCR and (except for 27 (A) the pledge under the Security Documents and (B) otherwise, in each case as set forth in the Prospectus) the outstanding general and limited partnership interests of the Significant Joint Ventures owned by the Company are owned, directly or indirectly by the Company, free and clear of all liens, encumbrances, security interests and similar claims. (iv) Other than as set forth or contemplated in the Prospectus, to the best of such counsel's knowledge, there are no legal or governmental investigations, actions, suits or proceedings pending or threatened or contemplated against the Company, any of its subsidiaries, LCR or any of their respective properties or to which the Company, any of its subsidiaries or LCR is or may be a party or to which any property of the Company, its subsidiaries or LCR is or may be the subject which, if determined adversely to the Company, its subsidiaries or LCR, could individually or in the aggregate reasonably be expected to have a Material Adverse Effect. (v) Such counsel does not know of any statutes, regulations, contracts or other documents that are required to be described (including by way of incorporation by reference) in the Registration Statement or the Prospectus or to be filed as exhibits to the Registration Statement (or any document incorporated by reference) that are not described or filed as required. (vi) None of the Company, any of its subsidiaries or LCR is, or with the giving of notice or lapse of time or both would be, in violation of or in default under its Certificate of Incorporation or By-Laws or other constitutive documents, or to the best of such counsel's knowledge, any agreement or instrument to which the Company, any of its subsidiaries or LCR is a party or by which it or any of them or any of their respective properties is bound, except for violations and defaults which individually and in the aggregate are not material to the Company and its subsidiaries taken as a whole. (vii) The issue and sale of the Notes and the performance by the Company and its subsidiaries of its obligations under this Agreement and the consummation of the transactions contemplated herein and in the other Transaction Documents will not conflict with or result in a breach of any of the terms or provisions of, or constitute a default under, any agreement or instrument known to such counsel to which the Company, any of its subsidiaries or LCR 28 is a party or by which the Company, any of its subsidiaries or LCR is bound or to which any of the property or assets of the Company, its subsidiaries or LCR is subject, nor will any such action (A) result in any violation of the provisions of the Certificate of Incorporation or the By-Laws of the Company or any applicable law or statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company, its subsidiaries or any of their respective properties or, to the knowledge of such counsel, LCR or any its properties or (B) result in the imposition or creation of (or the obligation to create or impose) a Lien under any agreement or instrument to which the Company, any of its subsidiaries or LCR is a party or by which the Company, any of its subsidiaries or LCR or their respective property is bound (other than the Liens created under the Security Documents). (viii) Each of the Company, its subsidiaries and LCR owns, possesses or has obtained all licenses, permits, certificates, consents, orders, approvals and other authorizations from, and has made all declarations and filings with, all federal, state, local and other governmental authorities (including foreign regulatory agencies), all self-regulatory organizations and all courts and other tribunals, domestic or foreign, necessary to own or lease, as the case may be, and to operate its properties and to carry on its business as conducted as of the date hereof, except such as could not reasonably be expected to have a Material Adverse Effect, and to the best of such counsel's knowledge, none of the Company, any of its subsidiaries or LCR has received any actual notice of any proceeding relating to revocation or modification of any such license, permit, certificate, consent, order, approval or other authorization which, if determined adversely to the Company, any of its subsidiaries or LCR could reasonably be expected to have a Material Adverse Effect, and each of the Company, its subsidiaries and LCR is in compliance with all laws and regulations relating to the conduct of its business as conducted as of the date hereof, except where the failure to so comply could not reasonably be expected to have a Material Adverse Effect. Such counsel shall also state that she (or he) has participated in conferences with officers and other representatives of the Company, and persons under her (or his) direction or control have participated in conferences with officers and other representatives of the Company, representatives of the independent accountants of the Company and representatives of 29 the Underwriters and their counsel at which the contents of the Registration Statement and the Prospectus and related matters were discussed; and, although she (or he) did not independently verify such information and is not passing upon, and does not assume any responsibility for, the accuracy, completeness or fairness of the statements contained in the Registration Statement and the Prospectus, on the basis of the foregoing (relying as to materiality, to the extent such counsel deems reasonable, upon officers and other representatives of the Company), no facts have come to her (or his) attention to lead her (or him) to believe that (a) the Registration Statement (other than the financial statements, the notes thereto and the auditors' reports thereon and the other financial, statistical and accounting information contained therein or omitted therefrom and except for that part of the Registration Statement that constitutes the Form T-1 heretofore referred to, as to which such counsel has not been asked to comment), at its effective date, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or (b) the Prospectus (other than the financial statements, the notes thereto and the auditors' reports thereon and the other financial, statistical and accounting information contained therein or omitted therefrom and except for that part of the Registration Statement that constitutes the Form T-1 heretofore referred to, as to which such counsel has not been asked to comment), at the time the Prospectus was issued, or at the Closing Date, contained or contains an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. Such counsel may state that the opinions expressed are based on and are limited to the laws of the United States, the General Corporation Law of the State of Delaware and the Revised Uniform Limited Partnership Act of the State of Delaware, as currently in effect. (g) You shall have received on the Closing Date an opinion (reasonably satisfactory to you and counsel for the Underwriters) of Gerald A. O'Brien, general counsel of Equistar, to the effect that: (i) Other than as set forth or contemplated in the Prospectus, to the best of such counsel's knowledge, there are no legal or governmental investigations, actions, suits or proceedings pending or threatened or contemplated against Equistar or any of 30 its subsidiaries or any of their respective properties or to which Equistar or any of its subsidiaries is or may be a party or to which any property of Equistar or any of its subsidiaries is or may be the subject which, if determined adversely to Equistar or its subsidiaries, could individually or in the aggregate reasonably be expected to have a Material Adverse Effect. (ii) Neither Equistar nor any of its subsidiaries is, or with the giving of notice or lapse of time or both would be, in violation of or in default under its Limited Partnership Agreement or other constitutive documents, or to the best of such counsel's knowledge, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which Equistar or any of its subsidiaries is a party or by which it or any of them or any of their respective properties is bound, except for violations and defaults which individually and in the aggregate could not reasonably be expected to have a Material Adverse Effect. (iii) The issue and sale of the Notes and the performance by the Company and its subsidiaries of its obligations under this Agreement and the consummation of the transactions contemplated herein and in the other Transaction Documents will not conflict with or result in a breach of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument known to such counsel to which Equistar or any of its subsidiaries is a party or by which Equistar or any of its subsidiaries is bound or to which any of the property or assets of Equistar or any of its subsidiaries is subject, nor will any such action (A) result in any violation of the provisions of the Limited Partnership Agreement of Equistar or, to the knowledge of such counsel, any applicable law or statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over Equistar, its subsidiaries or any of their respective properties or (B) result in the imposition or creation of (or the obligation to create or impose) a Lien under any agreement or instrument to which the Company or any of its subsidiaries is a party or by which Equistar or any of its subsidiaries or their respective property is bound (other than the Liens created under the Security Documents). (iv) Each of Equistar and its subsidiaries owns, possesses or has obtained all licenses, permits, certificates, consents, orders, approvals and other authorizations from, and has made all declarations and filings with, all federal, state, local and other 31 governmental authorities (including foreign regulatory agencies), all self-regulatory organizations and all courts and other tribunals, domestic or foreign, necessary to own or lease, as the case may be, and to operate its properties and to carry on its business as conducted as of the date hereof, except such as could not reasonably be expected to have a Material Adverse Effect, and to the best of such counsel's knowledge, neither Equistar nor any of its subsidiaries has received any actual notice of any proceeding relating to revocation or modification of any such license, permit, certificate, consent, order, approval or other authorization which, if determined adversely to Equistar or any of its subsidiaries could reasonably be expected to have a Material Adverse Effect, and each of Equistar and its subsidiaries is in compliance with all laws and regulations relating to the conduct of its business as conducted as of the date hereof, except where the failure to so comply could not reasonably be expected to have a Material Adverse Effect. Such counsel shall also state that the opinions expressed are based on and are limited to the laws of the United States, the General Corporation Law of the State of Delaware and the Revised Uniform Limited Partnership Act of the State of Delaware, as currently in effect. (h) You shall have received on the Closing Date an opinion (reasonably satisfactory to you and counsel for the Underwriters) of Kean, Miller, Hawthorne, D'Armond, McCowan & Jarman, L.L.P., special Louisiana counsel for the Company, to the effect that (i) Amendment No. 2 to Mortgage, Assignment of Leases and Rents, Security Agreement and Financing Statement dated as of the Closing Date ("Louisiana Amendment No. 2") between the Company (as successor to Lyondell Chemical Worldwide, Inc.) and JP Morgan Chase Bank (formerly The Chase Manhattan Bank, successor by merger to Morgan Guaranty Trust Company of New York) is in form satisfactory for recording or filing. The recording and indexing of Louisiana Amendment No. 2 is the only recording or filing necessary or advisable in the State of Louisiana to publish notice of, protect the validity of, and establish of record the rights of the parties thereto and the priority of the liens modified and extended thereby in respect of the Mortgaged Property (as defined in the Louisiana Mortgage). Other than the document referred to above, no other documents need be filed in any public office in the State of Louisiana in order to publish notice, protect the validity of the instruments referred to herein or to 32 establish of record the rights of the parties thereto and the priority of the liens created thereby in connection with the transactions contemplated by the Transaction Documents and the ability of the Mortgagee (as defined in the Louisiana Mortgage) to seek enforcement of such rights. (ii) Louisiana Amendment No. 2, upon recording as set forth in Paragraph 6(h)(i) above, will (a) be enforceable against the Company in accordance with its terms, (b) extend the lien of the Louisiana Mortgage upon, and the security interest of the Louisiana Mortgage in, such of the Mortgaged Property (as defined in the Louisiana Mortgage) as is owned by the Company, as of the date of its recording and indexing, to secure the obligations arising under the Indenture in addition to the "Additional Senior Secured Obligations" described in the Louisiana Mortgage, prior to giving effect to Louisiana Amendment No. 2, and (c) cause the lien of the Louisiana Mortgage to equally and ratably secure (i) the Notes, and (ii) the other Additional Secured Obligations. (iii) No recording, filing, stamp or transfer tax is payable in connection with recording or filing of Louisiana Amendment No. 2 except for customary recording and filing fees charged by applicable governmental authorities. (iv) Except for the filings already accomplished and the filings referred to above, no governmental consent, authorization, order, approval, registration, declaration or filing is required under the laws of the State of Louisiana in connection with the authorization, execution, delivery and performance of any of the Transaction Documents by any of the parties thereto. (v) The transactions contemplated by the Transaction Documents will not be in conflict with any law, statute, ordinance or governmental rule or regulation generally in effect in the State of Louisiana. In rendering such opinions, Baker Botts L.L.P., Kerry A. Galvin, Gerald O'Brien and Kean, Miller, Hawthorne, d'Armond, McCowan & Jarman, L.L.P. may rely as to matters of fact, to the extent they deem proper, on certificates of responsible officers of the Company and certificates or other written statements of officials of jurisdictions having custody of documents respecting the corporate existence or good standing of the Company. 33 The opinions of Baker Botts L.L.P., Kerry A. Galvin, Gerald O'Brien and Kean, Miller, Hawthorne, d'Armond, McCowan & Jarman, L.L.P. described above shall be rendered to the Underwriters at the request of the Company and the Guarantors and shall so state therein. (i) The Representatives shall have received, at the time this Agreement is executed and at the Closing Date, letters dated the date hereof or the Closing Date, as the case may be, in form and substance satisfactory to you from PricewaterhouseCoopers LLP, independent public accountants, containing statements and information of the type customarily included in accountants' "comfort letters" to underwriters with respect to the financial statements and certain financial information contained in the Registration Statement and the Prospectus. (j) The Representatives shall have received on and as of the Closing Date, an opinion of Davis Polk & Wardwell, counsel to the Underwriters, with respect to the due authorization and valid issuance of the Notes, the Registration Statement, the Prospectus and other related matters as the Representatives may reasonably request, and such counsel shall have received such papers and information as they may reasonably request to enable them to pass upon such matters. (k) The Representatives shall have received an original copy of the Indenture which shall have been duly executed and delivered by the Company, the Guarantors and the Trustee. (l) The Security Documents Amendment shall have been duly authorized, executed and delivered by the Company and each of its subsidiaries party thereto and the Representatives shall have received (i) an original copy of such agreement, duly executed by the Company and its subsidiaries party thereto, and (ii) evidence reasonably satisfactory to them of the effectiveness of the security contemplated thereby and the perfection of the security interests created thereby (including evidence of the filing of UCC-1s, the delivery of any stock certificates or promissory notes comprising the collateral under the Security Documents and arrangements for the recordation of any mortgages or deeds of trust). (m) The Credit Agreement Amendment shall have been authorized, executed and delivered by each party thereto and shall constitute a valid and binding agreement of each party thereto (with terms as set forth in the Prospectus); all conditions precedent to the effectiveness of the Credit Agreement Amendment shall have been either satisfied or waived by the lenders party thereto (with the consent of the Representatives), the Credit Agreement Amendment shall have become 34 effective in accordance with its terms and no default or even of default thereunder shall have occurred and be continuing. (n) The Company shall have made arrangements satisfactory to the Underwriters to (x) use the net proceeds from the sale of the Notes to repay $200.0 million owed under the term loan facility of the Credit Agreement and (y) reduce the revolving credit facility thereunder to $350.0 million. (o) On or prior to the Closing Date, the Company shall have furnished to the Representatives such further certificates and documents as the Representatives shall reasonably request. 7. The Company and the Guarantors agree, jointly and severally, to indemnify and hold harmless each Underwriter and each person, if any, who controls any Underwriter within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against any and all losses, claims, damages and liabilities (including, without limitation, the legal fees and other expenses incurred in connection with any suit, action or proceeding or any claim asserted) caused by any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or the Prospectus (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto) or any preliminary prospectus, or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages or liabilities are caused by any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with information relating to any Underwriter furnished to the Company in writing by such Underwriter through the Representatives expressly for use therein; provided, however, that with respect to any such untrue statement in or omission from the preliminary prospectus, the indemnity agreement contained in this Section 7 shall not inure to the benefit of any such Underwriter to the extent that the sale to the person asserting any such loss, claim, damage or liability was an initial resale by such Underwriter and any such loss, claim, damage or liability of or with respect to such Underwriter results from the fact that both (A) to the extent required by applicable law, a copy of the Prospectus was not sent or given to such person at or prior to the written confirmation of the sale of the Notes to such person and (B) the untrue statement in or omission from the preliminary prospectus was corrected in the Prospectus unless, in either case, such failure to deliver the Prospectus was a result of noncompliance by the Company with Section 5(b). Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the Company, each Guarantor, their directors, their officers who sign the 35 Registration Statement and each person who controls the Company or any Guarantor within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act to the same extent as the foregoing indemnity from the Company and the Guarantors to each Underwriter, but only with reference to information relating to such Underwriter furnished to the Company in writing by such Underwriter through the Representatives expressly for use in the Registration Statement, the Prospectus, any amendment or supplement thereto, or any preliminary prospectus. If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against any person in respect of which indemnity may be sought pursuant to the preceding paragraphs of this Section 7, such person (the "Indemnified Person") shall promptly notify the person or persons against whom such indemnity may be sought (each an "Indemnifying Person") in writing, and such Indemnifying Persons, upon request of the Indemnified Person, shall retain counsel reasonably satisfactory to the Indemnified Person to represent the Indemnified Person and any others the Indemnifying Persons may designate in such proceeding and shall pay the fees and expenses of such counsel related to such proceeding. In any such proceeding, any Indemnified Person shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Person and not the Indemnifying Persons unless (i) the Indemnifying Persons and the Indemnified Person shall have mutually agreed to the contrary, (ii) the Indemnifying Persons has failed within a reasonable time to retain counsel reasonably satisfactory to the Indemnified Person or (iii) the named parties in any such proceeding (including any impleaded parties) include both an Indemnifying Person and the Indemnified Person and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood that no Indemnifying Person shall, in connection with any proceeding or related proceeding in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all Indemnified Persons, and that all such fees and expenses shall be reimbursed as they are incurred. Any such separate firm for the Underwriters and such control persons of Underwriters shall be designated in writing by Salomon Smith Barney Inc. and any such separate firm for the Company, the Guarantors, their directors, their officers who sign the Registration Statement and such control persons of the Company and the Guarantors shall be designated in writing by the Company. No Indemnifying Person shall be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, each Indemnifying Person agrees to indemnify any Indemnified Person from and against any loss or liability by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an Indemnified Person shall have requested an Indemnifying Person to reimburse the Indemnified Person for fees and expenses of counsel as contem- 36 plated by the second and third sentences of this paragraph, such Indemnifying Person agrees that it shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 30 days after receipt by such Indemnifying Person of the aforesaid request and (ii) such Indemnifying Person shall not have reimbursed the Indemnified Person in accordance with such request prior to the date of such settlement. No Indemnifying Person shall, without the prior written consent of the Indemnified Person, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party and indemnity could have been sought hereunder by such Indemnified Person, unless such settlement includes an unconditional release of such Indemnified Person from all liability on claims that are the subject matter of such proceeding. If the indemnification provided for in this Section 7 is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then each Indemnifying Person, in lieu of indemnifying such Indemnified Person, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Company and the Guarantors on the one hand and the Underwriters on the other hand from the offering of the Notes or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company and the Guarantors on the one hand and the Underwriters on the other hand in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company and the Guarantors on the one hand and the Underwriters on the other hand shall be deemed to be in the same respective proportions as the net proceeds from the offering (before deducting expenses) received by the Company and the total underwriting discounts and the commissions received by the Underwriters, in each case as set forth in the table on the cover of the Prospectus, bear to the aggregate public offering price of the Notes. The relative fault of the Company and the Guarantors on the one hand and the Underwriters on the other hand shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company and the Guarantors or by the Underwriters, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company, the Guarantors and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 7 were determined by pro rata allocation (even if the Underwriters were treated as one 37 entity for such purposes) or by any other method of allocation that does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an Indemnified Person as a result of the losses, claims, damages and liabilities referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses incurred by such Indemnified Person in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 7, in no event shall an Underwriter be required to contribute any amount in excess of the amount by which the total price at which the Notes underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages that such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters' obligations to contribute pursuant to this Section 7 are several in proportion to the respective principal amount of Notes set forth opposite their names in Schedule B hereto, and not joint. The remedies provided for in this Section 7 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any indemnified party at law or in equity. The indemnity and contribution agreements contained in this Section 7 and the representations and warranties of the Company and the Guarantors set forth in this Agreement shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of any Underwriter or any person controlling any Underwriter or by or on behalf of the Company, any Guarantor, their officers or directors or any other person controlling the Company or any Guarantor and (iii) acceptance of and payment for any of the Notes. 8. This Agreement shall become effective upon the later of (x) execution and delivery hereof by the parties hereto and (y) release of notification of the effectiveness of the Registration Statement (or, if applicable, any post-effective amendment) by the Commission. If on the Closing Date, any one or more of the Underwriters shall fail or refuse to purchase Notes which it or they have agreed to purchase hereunder on such date, and the aggregate principal amount of Notes which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase is not more than one-tenth of the aggregate principal amount of Notes to be purchased hereunder, the other Underwriters shall be obligated severally in the proportions 38 that the principal amount of Notes set forth opposite their respective names in Schedule B bears to the aggregate principal amount of Notes set forth opposite the names of all such non-defaulting Underwriters, or in such other proportions as the Representatives may specify, to purchase the Notes which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase on such date; provided that in no event shall the principal amount of Notes that any Underwriter has agreed to purchase pursuant to Section 1 be increased pursuant to this Section 8 by an amount in excess of one-tenth of such principal amount of Notes without the written consent of such Underwriter. If on the Closing Date, any Underwriter or Underwriters shall fail or refuse to purchase Notes which it or they have agreed to purchase hereunder on such date, and the aggregate principal amount of Notes with respect to which such default occurs is more than one-tenth of the aggregate principal amount of Notes to be purchased, and arrangements satisfactory to the Representatives and the Company for the purchase of such Notes are not made within 36 hours after such default, this Agreement shall terminate without liability on the part of any non-defaulting Underwriter or the Company. In any such case either you or the Company shall have the right to postpone the Closing Date, but in no event for longer than seven days, in order that the required changes, if any, in the Registration Statement and in the Prospectus or in any other documents or arrangements may be effected. Any action taken under this paragraph shall not relieve any defaulting Underwriter from liability in respect of any default of such Underwriter under this Agreement. 9. If this Agreement shall be terminated by the Underwriters, or any of them, because of any failure or refusal on the part of the Company or any Guarantor to comply with the terms or to fulfill the conditions of this Agreement, or if for any reason the Company or any Guarantor shall be unable to perform its obligations under this Agreement or any condition of the Underwriters' obligations cannot be fulfilled or is not waived, the Company and the Guarantors jointly and severally agree to reimburse the Underwriters or such Underwriters as have so terminated this Agreement with respect to themselves, severally, for all out-of-pocket expenses (including the fees and expenses of their counsel) reasonably incurred by the Underwriters in connection with this Agreement and the offering contemplated hereunder. If the Agreement is terminated by the Company by reason of the default of one or more of the Underwriters, the Company and the Guarantors shall not be obligated to reimburse any defaulting Underwriter on account of such expenses. 10. This Agreement shall inure to the benefit of and be binding upon the Company, the Guarantors, the Underwriters, any controlling persons referred to herein and their respective successors and assigns. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any other person, firm or corporation any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained. No purchaser of 39 Notes from any Underwriter shall be deemed to be a successor merely by reason of such purchase. 11. Any action by the Underwriters or the Representatives hereunder may be taken by the Representatives jointly or by Salomon Smith Barney Inc. on behalf of the Underwriters or the Representatives, and any such action taken by the Representatives jointly or by Salomon Smith Barney Inc. shall be binding upon the Underwriters. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notices to the Underwriters shall be given to the Representatives, c/o Salomon Smith Barney Inc., 388 Greenwich Street, New York, New York 10013; Attention: E. Thomas Massey. Notices to the Company shall be given to it at Lyondell Chemical Company, One Houston Center, Suite 1600, 1221 McKinney Street, Houston, Texas (telefax: (713) 652-4140); Attention: Kerry Galvin, Esq. 12. This Agreement may be signed in counterparts, each of which shall be an original and all of which together shall constitute one and the same instrument. 13. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAWS PROVISIONS THEREOF. 14. No amendment or waiver of any provision of this Agreement, nor consent or approval to any departure therefrom, shall be effective unless given in writing and signed by the parties hereto. 40 If the foregoing is in accordance with your understanding, please sign and return four counterparts hereof. Very truly yours, LYONDELL CHEMICAL COMPANY By: /s/ Lyondell Chemical Company -------------------------------------- Name: Title: ARCO CHEMICAL TECHNOLOGY, INC. By: /s/ ARCO Chemical Technology, Inc. -------------------------------------- Name: Title: ARCO CHEMICAL TECHNOLOGY, L.P. By: /s/ ARCO Chemical Technology, L.P. -------------------------------------- Name: Title: LYONDELL CHEMICAL NEDERLAND, LTD. By: /s/ Lyondell Chemical Nederland, Ltd -------------------------------------- Name: Title: Accepted: June 26, 2002 SALOMON SMITH BARNEY INC. BANC OF AMERICA SECURITIES LLC J.P. MORGAN SECURITIES INC. CREDIT SUISSE FIRST BOSTON CORPORATION Acting severally on behalf of themselves and the several Underwriters listed in Schedule B hereto. By: SALOMON SMITH BARNEY INC. By: /s/ Salomon Smith Barney Inc. ---------------------------------- Name: Title: SCHEDULE A SECURITY DOCUMENTS (1) Pledge Agreement dated as of July 28, 1998 (as amended) between the Company and the Administrative Agent relating to the pledge of shares of capital stock of Lyondell General Methanol Company and Lyondell Limited Methanol Company; (2) Pledge Agreement dated as of July 28, 1998 (as amended) between the Company and the Administrative Agent relating to the pledge of shares of capital stock of Lyondell Petrochemical G.P. Inc. and Lyondell Petrochemical L.P. Inc.; (3) Pledge Agreement dated as of July 28, 1998 (as amended) between the Company and the Administrative Agent relating to the pledge of shares of capital stock of Lyondell Refining Company; (4) Pledge Agreement dated as of December 31, 1998 (as amended) between the Company and the Administrative Agent relating to the pledge of shares of capital stock of Lyondell Refining LP, LLC; (5) Pledge Agreement dated as of May 17, 1999 between Lyondell Chemical Worldwide, Inc. and the Administrative Agent relating to the pledge of the Subsidiary Shares (as defined therein); (6) Pledge Agreement dated as of March 31, 2000 between Company and the Administrative Agent relating to the pledge of limited liability company interests in each of Lyondell POJVGP, LLC, Lyondell POJVLP1, LLC, Lyondell POJVLP2, LLC and Lyondell POJVLP3, LLC; (7) Security Agreement dated as of July 28, 1998 (as amended) between Lyondell Petrochemical G.P. Inc., Lyondell Petrochemical L.P. Inc. and the Administrative Agent; (8) Security Agreement dated as of July 28, 1998 (as amended) between Lyondell Refining Company and the Administrative Agent; (9) Security Agreement dated as of July 28, 1998 (as amended) between Lyondell General Methanol Company, Lyondell Limited Methanol Company and the Administrative Agent; 1 (10) Security Agreement dated as of December 31, 1998 (as amended) between Lyondell Refining LP, LLC and the Administrative Agent; (11) Security Agreement dated as of May 17, 1999 (as amended) between Lyondell Chemical Company and Morgan Guaranty Trust Company of New York, as Collateral Agent (the "Collateral Agent"); (12) Deed of Trust dated as of May 13, 1999 (but effective as of May 17, 1999) (as amended) relating to Bayport, TX facility from LCW to the trustee named therein for the benefit of the Collateral Agent; (13) Deed of Trust dated as of May 13, 1999 (but effective as of May 17, 1999) (as amended) relating to Channelview, TX facility from Lyondell Chemical Worldwide, Inc. ("LCW") to the trustee named therein for the benefit of the Collateral Agent; (14) Mortgage dated as of May 13, 1999 (as amended) (but effective as of May 17, 1999) relating to Lake Charles, LA facility from LCW to the Collateral Agent (the "Louisiana Mortgage"); (15) Security Agreement dated as of May 17, 1999 (as amended) between LCW and the Collateral Agent; (16) Security Agreement dated as of March 31, 2000 between PO Offtake, LP and the Administrative Agent; and (17) Security Agreement dated as of March 31, 2000 among Lyondell POTechGP, Inc., Lyondell POTechLP, Inc. and the Administrative Agent. 2 SCHEDULE B Principal Amount of Notes To Be Underwriter Purchased ----------- ------------------ Salomon Smith Barney Inc. ......................... $ 79,230,000 Banc of America Securities LLC .................... $ 79,230,000 J.P. Morgan Securities Inc. ....................... $ 79,230,000 Credit Suisse First Boston Corporation ............ $ 26,410,000 Scotia Capital (USA) Inc. ......................... $ 13,900,000 ------------ Total .................................... $278,000,000 ============ SCHEDULE C SUBSIDIARIES ARCO Chemical Properties, L.P. ARCO Chemical Technology Management, Inc. ARCO Chemical Technology, Inc. ARCO Chemical Technology, L.P. Eurogen C.V. Lyo-Bayer Mfg. Maasviakte VOF Lyondell Asia Pacific, Ltd. Lyondell Australia Pty Limited/1/ Lyondell Bayport, LLC Lyondell Centennial Corp. Lyondell Chemical (Deutschland) GmbH Lyondell Chemical Canada Inc./1/ Lyondell Chemical Central Europe Ges.m.b.H Lyondell Chemical Delaware Company Lyondell Chemical Espana Co. Lyondell Chemical Europe, Inc. Lyondell Chemical Holding Company Lyondell Chemical International Company Lyondell Chemical Italia S.r.L. Lyondell Chemical Nederland, Ltd. Lyondell Chemical Overseas Services, Inc. Lyondell Chemical Pan America Lyondell Chemical Products Europe, Inc. Lyondell Chemical Wilmington, Inc. Lyondell Chemie (PO-11) BV Lyondell Chemie (POSM) BV Lyondell Chemie International BV Lyondell Chemie Investment Nederland B.V. Lyondell Chemie Nederland BV Lyondell Chemie Technologie Nederland B.V. Lyondell Chemie Utilities B.V. Lyondell Chimie France Corporation Lyondell Chimie France SNC Lyondell Chimie TDI SCA Lyondell-Equistar Holdings Partners Lyondell France, Inc. - ---------- /1/In the process of being liquidated by the Company. 1 Lyondell Funding LLC Lyondell General Methanol Company Lyondell Greater China, Ltd. Lyondell Indonesia, Inc./2/ Lyondell Intermediate Holding Company Lyondell Japan, Inc. Lyondell Limited Methanol Company Lyondell Methanol Company, L.P. Lyondell Petrochemical G.P. Inc. Lyondell Petrochemical L.P. Inc. Lyondell PO-11 C.V. Lyondell POJVGP, LLC Lyondell POJVLP1, LLC Lyondell POJVLP2, LLC Lyondell POJVLP3, LLC Lyondell POTechGP, Inc. Lyondell POTechLP, Inc. Lyondell Quimica do Brasil, Ltda Lyondell Refining Company Lyondell Refining LP, LLC Lyondell South Asia Pte Ltd Lyondell Taiwan, Inc./2/ Lyondell Thailand, Ltd. Lyondell-DNT Limited Partnership PO Offtake, LP POSM Delaware, Inc. POSM II Limited Partnership, L.P. POSM II Properties Partnership, L.P. Seinehaven BDO2 C.V. Steamelec B.V. Viritech, Inc. - -------- /2/Will be dissolved effective as of June 28, 2002. 2 SCHEDULE D JOINT VENTURES Equistar Chemicals, LP Eurogen C.V. Lyo-Bayer Mfg. Maasviakte VOF LYONDELL-CITGO Refining, LP Lyondell-DNT Limited Partnership Lyondell-Equistar Holdings Partners PO JV, LP POSM II Limited Partnership, L.P. Technology JV, LP Nihon Oxirane Co., Ltd. Steamelec B.V. 3 Exhibit 1 Certificate of Chief Financial Officer of Lyondell Chemical Company This Officer's Certificate is delivered pursuant to Section 6(d)(ii) of the Underwriting Agreement (the "Underwriting Agreement") dated June 26, 2002 among Lyondell Chemical Company (the "Company"), Lyondell Chemical Nederland, Ltd., ARCO Chemical Technology, Inc. and ARCO Chemical Technology, L.P. (together, the "Subsidiary Guarantors") and the Underwriters named therein relating to the Company's 11 % Senior Secured Notes due 2012 (the "Notes"). Capitalized terms used herein but not defined herein shall have the meanings ascribed to them in the Underwriting Agreement. 1. The Company has been advised by the arrangers of its Credit Agreement that, as a result of market conditions in the revolving credit market, the Company is not currently able to extend the maturity of the $500.0 million revolving credit component of the Credit Agreement on commercially reasonable terms beyond its current maturity date of June 30, 2003. Instead, the Company has been able to extend the maturity of $350.0 million of revolving credit capacity. 2. The Company believes it appropriate, and has been advised by its financial advisors that the rating agencies and investors will deem it desirable, for the Company to have more than $350.0 million of available liquidity at all times, which available liquidity could consist of revolving credit availability and/or cash on hand. 3. The Company has therefore determined to issue the Notes and invest a portion of the proceeds in cash and cash equivalents to be available for liquidity needs as a partial replacement for the revolving credit facility, and to reduce availability under the revolving credit facility in connection therewith to $350.0 million. 4. The Company has no current plan or intent to increase the commitments under the revolving credit facility, or obtain additional revolving credit facility capacity in any other manner within one year from the date hereof absent a Board of Directors determination in good faith that the Company has experienced a change in circumstances that require it to obtain additional liquidity. 4 IN WITNESS WHEREOF, I have signed this certificate on behalf of the Company. By: __________________________ Name: T. Kevin DeNicola Title: Senior Vice President, Chief Financial Officer Dated: July 2, 2002 5 EX-5.1 5 dex51.txt OPINION OF BAKER BOTTS L.L.P. FOR SECURED NOTES EXHIBIT 5.1 [LETERHEAD BAKER BOTTS LLP] June 28, 2002 Lyondell Chemical Company Lyondell Chemical Nederland, Ltd. ARCO Chemical Technology, Inc. ARCO Chemical Technology, L.P. One Houston Center 1221 McKinney, Suite 700 Houston, Texas 77010 Gentlemen: Lyondell Chemical Company, a Delaware corporation ("Lyondell"), Lyondell Chemical Nederland, Ltd., a Delaware corporation ("LCNL"), ARCO Chemical Technology, Inc., a Delaware corporation ("ACTI"), and ARCO Chemical Technology, L.P., a Delaware limited partnership ("ACTLP") (together, the "Co-registrants"), have engaged us to render the opinions we express below in connection with Lyondell's offering of $278,000,000 of 111/8% Senior Secured Notes due 2012 (the "Notes") and the issuance of the related guarantees of the Notes by LCNL, ACTI and ACTLP (the "Guarantees"), under the Registration Statement on Form S-3 (Reg. No. 333-88348) filed with the Securities and Exchange Commission (the "Commission") under the Securities Act of 1933 (the "1933 Act") by the Co-registrants and Lyondell Trust I, Lyondell Trust II and Lyondell Trust III, each a statutory business trust formed under the laws of the State of Delaware. The Registration Statement provides for the offering, issuance and sale from time to time of the securities described in the Registration Statement at an aggregate initial offering price that will not exceed $3,335,000,000. At your request, this opinion is being furnished to you for filing on a Current Report on Form 8-K of Lyondell and incorporation by reference as Exhibit 5.1 to the Registration Statement. In our capacity as counsel to Lyondell, LCNL, ACTI and ACTLP in connection with the matters referred to above, we have examined the following: (i) the Amended and Restated Certificate of Incorporation and the Amended and Restated Bylaws of Lyondell, the Certificate of Incorporation and Bylaws of LCNL, the Certificate of Incorporation and the Bylaws of ACTI, and the Certificate of Limited Partnership and Partnership Agreement of ACTLP, each as amended to date, (ii) the form of Indenture for the Notes (the "Indenture") and the form of Notes included therein filed as Exhibit 4.1 to the Current Report on Form 8-K of Lyondell dated June 21, 2002, and (iii) the originals, or copies certified or otherwise identified, of corporate records of Lyondell, LCNL, ACTI and ACTLP, including minute books of Lyondell, LCNL, ACTI and ACTLP as furnished to us by Lyondell, LCNL, ACTI and ACTLP, certificates of public officials and of representatives of Lyondell, LCNL, ACTI and ACTLP, statutes and other instruments and documents as a basis for the opinions hereinafter expressed. In giving such an opinion, we have relied upon certificates of officers of Lyondell, LCNL, ACTI and ACTLP with respect to the accuracy of the material factual matters contained in such 2 certificates. We have assumed that all signatures on documents examined by us are genuine, all documents submitted to us are authentic and all documents submitted as certified or photostatic copies conform to the originals thereof. For purposes of the opinions we express below, we have also examined the following: . the Registration Statement and its exhibits; . the prospectus the Registration Statement includes; . the prospectus supplement dated June 26, 2002 and filed with the SEC on June 27, 2002 pursuant to Rule 424(b)(5) of the 1933 Act; and . the Underwriting Agreement (the "Underwriting Agreement") dated June 26, 2002 by and among the Company, the Co-registrants, Salomon Smith Barney, Inc., Banc of America Securities LLC, J. P. Morgan Securities Inc. and Credit Suisse First Boston Corporation, relating to the offering and sale of the Notes. On the basis of the foregoing, we are of the opinion that: 1. The Company is a corporation duly organized and validly existing in good standing under the laws of the State of Delaware. 2. When the Notes have been duly executed, authenticated and delivered in accordance with the provisions of the Indenture and duly purchased and paid for in accordance with the terms of the Underwriting Agreement, (a) the Notes will constitute legal, valid and binding obligations of Lyondell, enforceable against it in accordance with their terms, except to the extent that the enforceability thereof may be limited by bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium or other laws relating to or affecting creditors' rights generally and by general principles of equity and public policy (regardless of whether such enforceability is considered in a proceeding in equity or at law), and (b) the Guarantees will constitute legal, valid and binding obligations of LCNL, ACTI and ACTLP enforceable against LCNL, ACTI and ACTLP in accordance with their terms, except to the extent that the enforceability thereof may be limited by bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium or other laws relating to or affecting creditors' rights generally and by principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). The opinion set forth above is based on and limited in all respects to matters of the federal laws of the United States, the General Corporation Law of the State of Delaware, the contract law of the State of New York, each as currently in effect. 3 We hereby consent to the filing of this opinion of counsel as Exhibit 5.1 to the Current Report on Form 8-K of Lyondell dated June 28, 2002, to the incorporation by reference of this opinion of counsel into the Registration Statement and to the reference to our Firm under the heading "Legal Matters" in the prospectus forming a part of the Registration Statement. In giving this consent, we do not hereby admit that we are in the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Commission thereunder. Very truly yours, BAKER BOTTS L.L.P. EX-5.2 6 dex52.txt OPINION OF BAKER BOTTS L.L.P. FOR COMMON STOCK EXHIBIT 5.2 [LETERHEAD BAKER BOTTS LLP] June 28, 2002 Lyondell Chemical Company One Houston Center, Suite 700 1221 McKinney Street Houston, Texas 77010 Gentlemen: Lyondell Chemical Company, a Delaware corporation ("Lyondell"), has engaged us to render the opinions we express below in connection with its offering of up to 8,280,000 shares of common stock, par value $1.00 per share (the "Shares"), under the Registration Statement on Form S-3 (Reg. No. 333-88348) (the "Registration Statement") filed with the Securities and Exchange Commission (the "Commission") under the Securities Act of 1933 (the "1933 Act") by Lyondell, Lyondell Chemical Nederland, Ltd., a Delaware corporation, ARCO Chemical Technology, Inc., a Delaware corporation, ARCO Chemical Technology, L.P., a Delaware limited partnership, and Lyondell Trust I, Lyondell Trust II and Lyondell Trust III, each a statutory business trust formed under the laws of the State of Delaware. The Registration Statement provides for the offering, issuance and sale from time to time of the securities described in the Registration Statement at an aggregate initial offering price that will not exceed $3,335,000,000. At your request, this opinion is being furnished to you for filing on a Current Report on Form 8-K of Lyondell and incorporation by reference as Exhibit 5.2 to the Registration Statement. In our capacity as counsel to Lyondell in connection with the matters referred to above, we have examined the following: (i) the Amended and Restated Certificate of Incorporation and the Amended and Restated Bylaws of Lyondell and (ii) the originals, or copies certified or otherwise identified, of corporate records of Lyondell, including minute books of Lyondell, as furnished to us by Lyondell, certificates of public officials and of representatives of Lyondell, statutes and other instruments and documents as a basis for the opinions hereinafter expressed. In giving such an opinion, we have relied upon certificates of officers of Lyondell with respect to the accuracy of the material factual matters contained in such certificates. We have assumed that all signatures on documents examined by us are genuine, all documents submitted to us are authentic and all documents submitted as certified or photostatic copies conform to the originals thereof. For purposes of the opinions we express below, we have also examined the following: . the Registration Statement and its exhibits; . the prospectus the Registration Statement includes; 2 . the prospectus supplement dated June 25, 2002 and filed with the SEC on June 27, 2002 pursuant to Rule 424(b)(5) of the 1933 Act; and . the Underwriting Agreement (the "Underwriting Agreement") dated June 25, 2002 by and among the Company, Credit Suisse First Boston Corporation, SG Cowen Securities Corporation, UBS Warburg LLC and Salomon Smith Barney Inc., relating to the offering and sale of the Shares. On the basis of the foregoing, we are of the opinion that: 1. The Company is a corporation duly organized and validly existing in good standing under the laws of the State of Delaware. 2. The Shares, when issued against payment therefor in accordance with the terms of the Underwriting Agreement, will have been duly authorized and validly issued and will be fully paid and non assessable. The opinion set forth above is based on and limited in all respects to matters of the federal laws of the United States and the General Corporation Law of the State of Delaware, each as currently in effect. We hereby consent to the filing of this opinion of counsel as Exhibit 5.2 to the Current Report on Form 8-K of Lyondell dated June 28, 2002, to the incorporation by reference of this opinion of counsel into the Registration Statement and to the reference to our Firm under the heading "Legal Matters" in the prospectus forming a part of the Registration Statement. In giving this consent, we do not hereby admit that we are in the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Commission thereunder. Very truly yours, BAKER BOTTS L.L.P. -----END PRIVACY-ENHANCED MESSAGE-----